On 10 June 2019, the PRA published a direction for modification by consent, modifying in its Rulebook the Definition of Capital 7.1 and 7.5.

In an accompanying press release, the PRA notes that, following amendments to Article 26(3) of the Capital Requirements Regulation (CRR), firms may classify as Common Equity Tier 1 (CET1) instruments subsequent issuances of a form of CET1 instruments for which they have already received the competent authority’s permission, where certain conditions are met.

In light of the changes to Article 26(3) of the CRR, the PRA recognises that Rules 7.1 and 7.5 of the Definition of Capital Part of the PRA Rulebook can no longer achieve their purpose. Therefore, the PRA has been decided to offer a modification by consent to amend the rules accordingly.