On 12 September 2024, the PRA published Consultation Paper 8/24: Definition of Capital; restatement of CRR requirements in PRA Rulebook (CP8/24).

CP8/24 is relevant to banks, building societies, PRA-designated investment firms and PRA-approved, or PRA-designated, financial or mixed financial holding companies. It is not relevant to credit unions or third-country branches.

Following HM Treasury’s announcement of its intention to bring into force the revocation of Capital Requirements Regulation requirements relating to the definition of own funds the PRA has set out in CP8/24 proposed rules to restate, and in some cases modify, these requirements in the PRA Rulebook.

In chapter 2 of CP8/24 the PRA summarises the effects of the proposed rules. These consist of new rules to replace relevant provisions in the CRR, to be included in the renamed Own Funds (CRR) Part of the Rulebook, and consequential amendments to some existing rules in the Definition of Capital Part. In chapter 3 the PRA proposes consequential amendments to Supervisory Statement 7/13: Definition of capital. Chapter 4 sets out a proposal for a new statement of policy on the PRA’s approach to Definition of Capital-related permissions.

Next steps

The deadline for comments on CP8/24 is 12 December 2024.