Regulation (EU) No 575/2013 of the European Parliament and of the CouncilDangos y teitl llawn

Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (Text with EEA relevance)

[X1PART NINE U.K.[F1Regulations, enhanced prudential measures and technical standards]

Article 456U.K. [F2Regulations modifying this Regulation]

1.[F3The Treasury may make regulations] concerning the following matters:

(a)clarification of the definitions set out in Articles 4, 5, 142, 153, 192, 242, 272 [F4and 381] F5...;

(b)clarification of the definitions set out in Articles 4, 5, 142, 153, 192, 242, 272 [F6and 381] in order to take account, in the application of this Regulation, of developments on financial markets;

(c)amendment of the list of exposure classes in Articles 112 and 147 in order to take account of developments on financial markets;

(d)the amount specified in point (c) of Article 123, Article 147(5)(a), Article 153(4) and Article 162(4), to take into account the effects of inflation;

(e)the list and classification of the off-balance sheet items in Annexes I and II, in order to take account of developments on financial markets;

F7(f). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F8(g). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(h)amendment of the own funds requirements as set out in F9... Articles 50a to 50d of Regulation (EU) No 648/2012 to take account of developments or amendments of the international standards for exposures to a central counterparty;

F10(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F10(j). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.[F11The Treasury may by regulations amend Articles 381, 382(1) to (3) [F12, 383, 384 and 386] concerning—]

(a)the treatment of CVA risk as a stand-alone charge versus an integrated component of the market risk framework;

(b)the scope of the CVA risk charge including the exemption in Article 482;

(c)eligible hedges;

(d)calculation of capital requirements of CVA risk.

F13...

Textual Amendments

Article 457U.K. Technical adjustments and corrections

[F14The Treasury may by regulations] make technical adjustment and corrections of non-essential elements in the following provisions in order to take account of developments in new financial products or activities, to make adjustments taking into account developments [F15after IP completion day in the law of the United Kingdom, or any part of it,] on financial services and accounting [F16including UK-adopted international accounting standards]:

(a)

the own funds requirements for credit risk laid down in [F17Articles 111 to 127, 129 to 131, 133, 134, 143 to 151, 153 to 157 and 159 to 191];

(b)

the effects of credit risk mitigation in accordance with Articles 193 to 241;

(c)

[F18the own funds requirements for securitisation laid down in Articles 242 to 270a;]

(d)

the own funds requirements for counterparty credit risks in accordance with Articles 272 [F19and 283 to 299];

(e)

the own funds requirements for operational risk laid down in [F20Articles 315 and 317 to 324];

(f)

the own funds requirements for market risk laid down in Articles 325 to 377;

(g)

the own funds requirements for settlement risk laid down in Articles 378 and 379;

(h)

the own funds requirements for credit valuation adjustment risk laid down in Articles 383, 384 and 386;

(i)

Part Two F21... only as a result of developments in accounting standards or requirements which take account of [F22the law of the United Kingdom, or any part of it].

Textual Amendments

[F23Article 458U.K.Enhanced prudential measures directions & recommendations: Interpretation

1.In this Article and in Articles 458A to 458C—

  • ‘enhanced prudential measures direction’ means a direction of the Financial Policy Committee under section 9H of the 1998 Act to a competent authority describing stricter measures in relation to a relevant prudential area than are required by this Regulation or any legislation made under it;

  • ‘enhanced prudential measures recommendation’ means a recommendation of the Financial Policy Committee under section 9Q of the 1998 Act to a competent authority, describing stricter measures in relation to a relevant prudential area than are required by this Regulation or any legislation made under it;

  • ‘enhanced prudential implementation action’ means action to comply with an enhanced prudential measures direction or enhanced prudential measures recommendation;

  • ‘FPC’ means the Financial Policy Committee;

  • ‘regulated person’ has the meaning given in section 9H(2) of the 1998 Act;

  • ‘relevant prudential area’ means—

    (i)

    the level of own funds provided for in Article 92,

    (ii)

    F24...

    (iii)

    F24...

    (iv)

    F24...

    (v)

    risk weights for targeting asset bubbles in the residential and commercial property sector, or

    (vi)

    intra financial sector exposures.

  • ‘the 1998 Act’ means the Bank of England Act 1998;

  • F25...

Textual Amendments

Article 458AU.K.Enhanced prudential measures

1.Where the FPC issues an enhanced prudential measure direction or enhanced prudential measure recommendation, the competent authority may exercise its functions to introduce an enhanced prudential implementation action.

2.An enhanced prudential implementation action shall have effect notwithstanding any provision to the contrary in this Regulation or any legislation made under it.

Textual Amendments

Article 458BU.K.Enhanced prudential measures: effect of revocation

1.Paragraph 2 applies where—

(a)the FPC revokes an enhanced prudential measures direction in accordance with section 9J of the 1998 Act; or

(b)the FPC withdraws an enhanced prudential measures recommendation and notifies the competent authority of that withdrawal.

2A competent authority which has introduced an enhanced prudential implementation action must consider whether it is appropriate to cease to implement that action.

Textual Amendments

Article 458CU.K.Enhanced prudential measures: publication and application

1Once the Bank has published the relevant information concerning the enhanced prudential measure direction or enhanced prudential measure recommendation in accordance with section 9U and, where relevant, section 9V(3) of the 1998 Act, a competent authority must publish on its website the following information—

(a)the fact that it has introduced an enhanced prudential implementation action;

(b)any requirements of this Regulation or any delegated legislation made under it that the competent authority considered inconsistent with the enhanced prudential implementation action; and

(c)a statement that the relevant enhanced prudential implementation action shall have effect notwithstanding any provision to the contrary in this Regulation or any legislation made under it.

2.Until the Bank has published the relevant information concerning the enhanced prudential measure direction or enhanced prudential measure recommendation in accordance with section 9U and, where relevant, section 9V(3) of the 1998 Act, the competent authority must take reasonable steps to bring the enhanced prudential implementation action to the attention of the regulated persons subject to it.

3.A failure by the competent authority to publish information as required by paragraph 1 does not affect the validity, continuing operation or enforcement of the enhanced prudential implementation action to which the requirement to publish relates.]

Textual Amendments

Article 459U.K. Prudential requirements

[F26The Treasury may by regulations impose], for a period of one year, stricter prudential requirements for exposures where this is necessary to address changes in the intensity of microprudential and macroprudential risks which arise from market developments [F27in the United Kingdom or outside the United Kingdom], and where the instruments of this Regulation and [F28Directive 2013/36/EU UK law] are not sufficient to address these risks F29... concerning:

(a)

the level of own funds laid down in Article 92;

(b)

F30...

(c)

F30...

F31...]

Textual Amendments

F32 Article 460U.K. Liquidity

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Textual Amendments

F33 Article 461U.K. Review of the phasing-in of the liquidity coverage requirement

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Textual Amendments

F34 Article 461aU.K. Alternative standardised approach for market risk

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Textual Amendments

F35 Article 462 U.K. Exercise of the delegation

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Textual Amendments

F36 Article 463 U.K. Objections to regulatory technical standards

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Textual Amendments

F37 Article 464 U.K. European Banking Committee

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Textual Amendments

[F38Article 464AU.K.Regulations: general provisions

1.Any power to make regulations conferred on the Treasury by this Regulation, is exercisable by statutory instrument.

2.Such regulations may—

(a)contain incidental, supplemental, consequential and transitional provision, and

(b)may make different provision for different purposes.

3.A statutory instrument containing regulations made under Article 456 of this Regulation may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.

4.A statutory instrument containing regulations made under any other provision of this Regulation is subject to annulment in pursuance of a resolution of either House of Parliament.

Textual Amendments

Article 464BU.K.Power to make technical standards

F391.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.In addition to the powers to make technical standards set out elsewhere in this Regulation, [F40the PRA may] make technical standards for the following purposes—

(a)to specify—

(i)the information to be provided to the relevant competent authority in the application for authorisation of a credit institution under Part 4A of FSMA;

(ii)the requirements applicable to shareholders and members with qualifying holdings; and

(iii)obstacles which may prevent effective exercise of the supervisory functions of the competent authority;

(b)to define what is meant by ‘exposures to specific risk which are material in absolute terms’ and the thresholds for large numbers of material counterparties and positions in debt instruments of different issuers;

(c)to specify—

(i)the procedure for sharing assessments of the quality of institutions' internal approaches for calculating own funds requirements between competent authorities;

(ii)the standards for the assessment of the quality of institutions' internal approaches for calculating own funds requirements by competent authorities;

(d)to specify—

(i)the template, the definitions and the IT-solutions to be applied in the UK for institutions to report the results of the calculations of their internal approaches for their exposures or positions that are included in their benchmark portfolios;

(ii)the benchmark portfolio or portfolios which institutions must report;

(e)to specify the classes of instruments that can be fully converted to Common Equity Tier 1 instruments or written down, and qualitative and appropriate quantitative criteria to identify categories of staff whose professional activities have a material impact on the institution's risk profile;

(f)to specify the method for the identification of the geographical location of an institution's credit exposures for the purposes of calculating institution-specific countercyclical capital buffer rates.

3.In addition to the powers to make technical standards set out elsewhere in this Regulation, the PRA F41... may make technical standards to specify—

(a)the methodology in accordance with which the PRA shall identify a UK parent institution or UK parent financial holding company or UK parent mixed financial holding company as a global systemically important institution (‘G-SII’); and

(b)the methodology for the definition of the sub-categories and the allocation of G-SIIs in sub-categories based on their systemic significance; taking into account any international agreed standards.]

Textual Amendments

Editorial Information

Textual Amendments