CP13/6 - CRD IV for Investment Firms - Financial Conduct Authority

CP13/6
CRD IV for Investment Firms
Table 9: section b): transitional provisions with timetable from 2014 to 2024
CRR
article
Transitional Provision
Issue
486 Limit for Grandfathering
items
469(1)
(c)
Deductions from CET1:
DTAs (see Article 36(1)(c))
Relevant CRR Article
for transition
percentage rate
Timetable – From
January of each of the
following years
Rate
486(3) 2014 80%
478(2) for DTAs that
existed prior to 1
January 2014
2015 70%
2016 60%
2017 50%
2018 40%
2019 30%
2020 20%
2021 10%
2014 10%
2015 20%
2016 30%
2017 40%
2018 50%
2019 50%
2020 60%
2021 70%
2022 80%
2023 90%
2024 100%
Note: The following transitional provisions in articles 473 and 481(2) of the CRR are not included in
table 9 because we think that they are not applicable.
Q11: Do you agree that these proposals meet our approach of
applying the transitional provisions whilst ensuring that
we do not materially reduce the standards of the current
FCA framework? If not, please indicate why not stating
your reasons and your alternative proposal.
Capital transitional provisions: Cost benefit analysis
4.24 The capital arrangements originally proposed under Basel III were formulated for internationally
active banks. We estimate that 80% to 90% of the current FCA BIPRU population are SMEs.
Accordingly, we do not see it to be proportionate to accelerate the capital arrangements
beyond the minimums permitted by the CRD IV package.
4.25 This approach allows the maximum possible time to raise additional capital, rather than
requiring an accelerated transitional period that we do not perceive to be proportionate
to the risks posed. Of the options available, this approach imposes the lowest costs on
investment firms.
36 July 2013
Financial Conduct Authority