On 28 June 2018, the PRA published Policy Statement 14/18: changes to the PRA’s large exposures framework (PS14/18). PS14/18 is relevant to PRA-authorised banks, building societies, PRA designated investment firms and their qualifying parent undertakings, which for this purpose comprise financial holding companies and mixed financial holding companies, as well as credit institutions, investment firms and financial institutions that are subsidiaries of these firms, regardless of their location.

PS14/18 contains updates to:

  • PRA rules on large exposures and regulatory reporting (Appendix 1);
  • Supervisory Statement 16/13: large exposures (Appendix 2); and
  • Supervisory Statement 34/15: guidelines for completing regulatory reports (Appendix 3).

PS14/18 also contains a simplified worked example of the application of the large exposures limits at the level of the UK consolidated group (Appendix 4).

The changes to the PRA’s rules and expectations take effect from 29 June 2018.

The PRA proposed that firms will no longer be required to submit FSA018. As a consequence, the PRA has removed reference to this requirement from the Regulatory Reporting Part of the PRA Rulebook (Regulatory Reporting 7.1, 7.2 and 7.3, 9.2, 9.3 and 9.4, and 16.10) and updated Supervisory Statement 34/15. Firms are still required to report exposures to their own group, which includes exposures to NCLEG entities, on an individual basis in COREP002.