On 29 November 2024, the Bank of England (BoE) published a policy statement, PS19/24, on the Strong and Simple Framework: The definition of an Interim Capital Regime (ICR) firm.
PS19/24 sets out the final PRA statement of policy (SoP) on operating the ICR, as well as rules relating to the definition of an ICR firm and an ICR consolidation entity, which were published as near final in PS17/23 and PS9/24. Specifically, PS19/24 sets out:
- An explanation of the mechanism by which firms can join (and exit) the ICR. Joining the ICR will enable eligible firms essentially to preserve their current capital requirements from the implementation date (1 January 2026) of the Basel 3.1 standards, as set out in PS17/23 and PS9/24, until the Small Domestic Deposit Taker (SDDT) capital regime is implemented.
- The final definition of an ICR firm, which will enable the PRA to offer a modification to its rules to allow firms to become subject to the ICR.
Next steps
The rules on the definition of an ICR firm, and the ability for eligible firms and consolidation entities to become ICR firms and ICR consolidation entities, along with PRA Rulebook Glossary changes, application rules and definitions, took effect on 29 November 2024.
The final rules for the reproduced CRR provisions and technical standards, and the disapplied Rulebook amendments, for ICR firms, are due to be published separately alongside the final Basel 3.1 policy statement in 2025 Q1.
The PRA also notes that the proposals to revoke the ICR when the SDDT capital regime is implemented are set out in CP7/24 (which closes on 12 December 2024).