You are viewing the Rulebook in thepresenton15/09/2024
View Rulebook as at01/01/2016
View Rulebook as at14/12/2016
View Rulebook as at03/10/2017
View Rulebook as at30/03/2018
View Rulebook as at01/01/2019
View Rulebook as at31/12/2020
View Rulebook as at01/01/2022
View Rulebook as at01/01/2023
Application Provision
Used in
- CRR Firms
- Legal Instruments that change this PartLeverage Ratio – Capital Requirements and Buffers
Related links to this Part
- PS27/15 - Implementing a UK leverage ratio framework
- PS35/16 - Responses to CP26/16
- PS21/17 - UK Leverage Ratio treatment of claims on central banks
- PS6/18 - "Responses to CP18/17 Occasional Consultation Paper – Chapters 2 to 6, 9 and 10"
- PS28/18 - UK leverage ratio: Applying the framework to systemic ring-fenced bodies and reflecting the systemic risk buffer
- PS30/20 - The Bank of England’s amendments under the European Union (Withdrawal) Act 2018: Changes before the end of the transition period
- PS21/21 - The UK leverage ratio framework
Export part as
1
Application and Definitions
1.1
Unless otherwise stated, this Part applies to:
- (1) every CRR firm that:
- (a1) on the firm’s last accounting reference date, had retail deposits equal to or greater than £50 billion on an individual basis; or
- (a2) that has foreign assets equal to or greater £10 billion, as determined in accordance with 1.1A, on an individual basis;
- (a) [deleted]
- (b) [deleted]
- (c) [deleted]
- (1A) every CRR consolidation entity that:
- (a) on the CRR consolidation entity’s last accounting reference date, had retail deposits equal to or greater than £50 billion;
- (b) has foreign assets equal to or greater than £10 billion, as determined in accordance with 1.1A,
- in each case, on the basis of its consolidated situation; and
- (2) a ring-fenced body that is required to comply with Parts Two and Three of the CRR on a sub-consolidated basis and that:
- (a) on its last accounting reference date, had retail deposits equal to or greater than £50 billion; or
- (b) has foreign assets equal to or greater than £10 billion, as determined in accordance with 1.1A,
- in each case, on an RFB sub-consolidated basis.
- 01/01/2023
- Pastversion of 1.1 before 01/01/2023
- Legal Instruments that change this rule1.1
1.1A
The foreign assets thresholds referred to in 1.1 above are determined on the basis of the arithmetic mean of the value of foreign assets held as at the three most recent accounting reference dates of the firm or CRR consolidation entity (as applicable). If the firm or CRR consolidation entity has been in existence for less than three years, the period for the calculation is the period during which the firm or CRR consolidation entity has existed.
- 01/01/2023
- Legal Instruments that change this rule1.1A
1.2
In this Part, the following definitions shall apply:
capital plan
means the plan described in Chapter 6.
deposit
has the meaning given in the Table of Part 2 of Annex II to Regulation (EU) No 1071/2013 of the European Central Bank of 24 September 2013 concerning the balance sheet of the monetary financial institutions sector as it had effect in EU law immediately before IP completion day.
foreign assets
means assets for which the counterparty is resident in a country or territory outside the UK that a firm is required to report on row 0050 of Annex X Template LV 44.00 of Chapter 6 of the Reporting (CRR) Part.
FPC
means the Financial Policy Committee of the Bank of England.
retail deposit
means deposits from “households” as defined in paragraph 42(f) of Part 1 of Annex V to the Reporting (CRR) Part.
- 01/01/2023
- Pastversion of 1.2 before 01/01/2023
- Legal Instruments that change this rule1.2
1.3
Unless otherwise defined, any italicised expression used in this Part and in the CRR has the same meaning as in the CRR.
- 01/01/2016
- Legal Instruments that change this rule1.3
Export chapter as
- Legal Instruments that change this ChapterApplication and Definitions
2
Basis of Application
2.1
A firm that is in scope of this Part by virtue of 1.1(1) must comply with this Part on an individual basis, unless it is:
- (a) a CRR consolidation entity subject to 2.2; or
- (b) a ring-fenced body subject to 2.4 which is the ultimate parent undertaking within its sub-consolidation group.
- 01/01/2023
- Pastversion of 2.1 before 01/01/2023
- Legal Instruments that change this rule2.1
2.1A
Where a firm has been given permission under Article 9(1) of the CRR it shall incorporate relevant subsidiaries in the calculation undertaken to comply with rule 2.1.
- 01/01/2022
- Pastversion of 2.1A before 01/01/2022
- Legal Instruments that change this rule2.1A
2.1B
A firm may apply to the PRA for a permission that:
- (a) disapplies 2.1; and
- (b) provides for the requirements in this Part to apply on a sub-consolidated basis in relation to the firm, with such modifications as may be specified in that permission.
[Note: This is a permission under section 144G of FSMA to which Part 8 of the Capital Requirements Regulations applies]
- 01/01/2023
- Legal Instruments that change this rule2.1B
2.2
A CRR consolidation entity which is in scope of this Part by virtue of 1.1(1A) must comply with this Part on the basis of its consolidated situation.
- 01/01/2023
- Pastversion of 2.2 before 01/01/2023
- Legal Instruments that change this rule2.2
2.2A
The expression “consolidated situation” applies for the purposes of this Part as it does for the purposes of Parts Two and Three of the CRR.
[Note: the term “consolidation situation” is defined in Article 4(1)(47) of the CRR]
- 01/01/2022
- Legal Instruments that change this rule2.2A
2.2B
For the purposes of 2.2, references to a firm in this Part (other than in 1.1) include a CRR consolidation entity.
- 01/01/2022
- Legal Instruments that change this rule2.2B
2.3
[Deleted]
- 01/01/2022
- Pastversion of 2.3 before 01/01/2022
- Legal Instruments that change this rule2.3
2.4
A ring-fenced body which is in scope of this Part by virtue of 1.1(2), must comply with this Part on the same sub-consolidated basis as it is required to comply with Parts Two and Three of the CRR.
- 01/01/2023
- Pastversion of 2.4 before 01/01/2023
- Legal Instruments that change this rule2.4
Export chapter as
- Legal Instruments that change this ChapterBasis of Application
3
Minimum Leverage Ratio
3.1
A firm must hold sufficient tier 1 capital (leverage) to maintain, at all times, a minimum leverage ratio of 3.25%.
- 01/01/2022
- Pastversion of 3.1 before 01/01/2022
- Legal Instruments that change this rule3.1
3.2
For the purposes of complying with 3.1, at least 75% of the firm’s tier 1 capital (leverage) must consist of common equity tier 1 capital.
- 01/01/2022
- Pastversion of 3.2 before 01/01/2022
- Legal Instruments that change this rule3.2
Export chapter as
- Legal Instruments that change this ChapterMinimum Leverage Ratio
4
Countercyclical Leverage Ratio Buffer
4.1
A firm must calculate a countercyclical leverage ratio buffer of common equity tier 1 capital equal to:
- (1) the firm’s institution-specific countercyclical capital buffer rate multiplied by 35% with the product expressed as a percentage rounded to the nearest tenth of a percentage; multiplied by
- (2) the firm’s total exposure measure.
- 14/12/2016
- Pastversion of 4.1 before 14/12/2016
- Legal Instruments that change this rule4.1
4.2
A firm must not count common equity tier 1 capital that is maintained for the purposes of 3.1 towards the calculation in 4.1.
- 01/01/2016
- Legal Instruments that change this rule4.2
Export chapter as
- Legal Instruments that change this ChapterCountercyclical Leverage Ratio Buffer
5
Notification
5.1
A firm must notify the PRA immediately if, at any time, it does not hold, or is likely not to hold, an amount and quality of capital that is:
- (1) necessary to comply with 3.1; and
- (2) equal to or greater than its countercyclical leverage ratio buffer.
- 01/01/2016
- Legal Instruments that change this rule5.1
Export chapter as
- Legal Instruments that change this ChapterNotification
6
Capital Plan
6.1
When a firm is required to make a notification to the PRA under rule 5.1(2), it must prepare a capital plan and submit it to the PRA no later than 5 business days after the firm identified that the notification was necessary.
- 01/01/2016
- Legal Instruments that change this rule6.1
6.2
The capital plan must include the following:
- (1) measures to secure that the amount of the firm’s common equity tier 1 capital is equal to or greater than the firm’s countercyclical leverage ratio buffer; and
- (2) a plan and timeframe for the measures outlined for the purposes of rule 6.2(1).
- 01/01/2016
- Legal Instruments that change this rule6.2
Export chapter as
- Legal Instruments that change this ChapterCapital Plan
Back to top