The FCA has created a new webpage concerning Article 493(4) to (7) of the Capital Requirements Regulation (CRR). This provides for a transitional arrangement for the exemption from large exposure limits available to exposures to certain public sector debt of Member States denominated in the domestic currencies of any Member States. The transitional period will have a duration of three years starting from 1 January 2018 for exposures of this type incurred on or after 12 December 2017.
The webpage states that IFPRU investment firms may apply for a permission under Article 493 (4 – 7) CRR. Subject to FCA discretion, this permission would allow IFPRU investment firms to incur any of the exposures provided for in the new paragraph 5 of Article 493 CRR meeting the conditions set out in paragraph 6, up to the following limits:
- 100% of the institution’s Tier 1 capital until 31 December 2018;
- 75% of the institution’s Tier 1 capital until 31 December 2019; and
- 50% of the institution’s Tier 1 capital until 31 December 2020.