On 14 November 2018, the PRA published Policy Statement 28/18: UK leverage ratio – applying the framework to systemic ring-fenced bodies and reflecting the systemic risk buffer (PS28/18) UK leverage ratio: applying the framework to systemic ring-fenced bodies and reflecting the systemic risk buffer (SRB).

PS28/18 provides feedback to PRA ‘Consultation Paper 14/18: UK leverage ratio – applying the framework to systemic ring-fenced bodies and reflecting the systemic risk buffer’ (CP14/18). It also contains the PRA’s final policy to update:

• the Leverage Ratio, Public Disclosure, Reporting Leverage Ratio, and Ring-fenced Bodies Parts of the PRA Rulebook (Appendix 1);
• Supervisory Statement (SS) 45/15 ‘The UK leverage ratio framework’ (Appendix 2);
• SS46/15 ‘UK leverage ratio: instructions for completing data items FSA083’ (Appendix 3); and
• FSA083 Leverage Ratio Reporting template, and reporting instructions (Appendix 4).

The PRA proposed in CP14/18 to apply the UK leverage ratio framework on a sub-consolidated basis to ring-fenced bodies (RFBs) in scope; amend the additional leverage ratio buffer to reflect the SRB; and  where applicable, expect firms to hold capital on a group consolidated basis to address RFB group risk. The PRA has not altered these proposals.

A detailed response to the feedback received in CP14/18 is provided in chapter 2 of PS28/18.The appendices provide links to the updated PRA instructions. The changes to the rules and expectations, and new versions of the FSA083 template and accompanying instructions, will take effect from Tuesday 1 January 2019