On 15 November 2021, the PRA issued Policy Statement 26/21: Domestic Liquidity Sub-Groups (PS26/21).
In PS26/21 the PRA provides feedback to the responses it received to Consultation Paper 19/21: Domestic Liquidity Sub-Groups. It also sets out its final policy in the form of amendments to the:
- Glossary, Liquidity (CRR), and Internal Liquidity Adequacy Assessment Parts of the PRA Rulebook (Appendix 1).
- Statement of Policy ‘Liquidity and Funding Permissions’ (Appendix 2).
The implementation date for the policy changes resulting from PS26/21 will be 1 January 2022. This policy is intended to take effect at the same time as HM Treasury’s revocation of the relevant parts of the onshored Capital Requirements Regulation.
The PRA states that:
- HM Treasury did not implement a savings provision for Liquidity Coverage Ratio (LCR) Domestic Liquidity Sub-Group (DoLSub) permissions that are currently in force or would enter into force before the Net Stable Funding Ratio (NSFR) implementation date of 1 January 2022. This means that DoLSub permissions in existence before 1 January 2022 that disapply the LCR requirements at an individual level would not continue to apply after that date.
- The PRA expects firms to apply formally for LCR and NSFR DoLSub permissions at the earliest opportunity under the final revised DoLSub framework included in PS26/21. All applications will be assessed under the final revised framework, and permissions will take effect from 1 January 2022.