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

CP13/6
CRD IV for Investment Firms
Large exposures
4.32 The FCA does not prudentially regulate deposit-takers. We therefore perceive two of the large
exposures exemptions inherited from the FSA’s implementation of the CRD III that were carried
over to the FCA – as no longer being relevant to the solely FCA regulated CRD IV firm population.
4.33 The FCA currently implements three of the exemptions permitted in Article 400(2) of the CRR
through BIPRU 10.6. These are:
• Article 400(2)(c) of the CRR concerns intra-group exposures, and we propose to continue
to carry forward this exemption.
• Article 400(2)(g) of the CRR concerns reserves held at overseas central banks. As the solely
FCA regulated CRD IV firm population does not contain banks, we do not believe that
any affected firms would benefit from this exemption, and so we do not propose to carry
forward this exemption.
• Article 400(2)(h) of the CRR concerns asset items constituting claims on central governments
that are in the form of statutory liquidity requirements held in government securities
denominated and funded in their national currencies. We do not believe that this is
applicable to the solely FCA regulated CRD IV firm population, and so we do not propose
to carry forward this exemption.
4.34 Other than the items mentioned in the preceding paragraph, we propose to continue with
our existing framework and we do not intend to exercise the other discretions on the large
exposures framework.
Q14: Do you agree with our approach to these exemptions? If
not, which exemptions under Article 400(2) of the CRR do
you believe should be included, or should not be included?
4.35 In addition, article 400(2)(k) includes a new exposure to assets constituting ‘claims on and other
exposures to recognised exchanges’. We are not aware of any problems with the size of such
exposures being subject to the normal large exposures limit under the current regime. Therefore,
we propose not to exercise this exemption, but welcome views from firms on this exposure item.
Q15: Do you agree with our proposal not to exercise the
exemption in article 400(2)(k) of the Regulation? If not,
please explain the reasons why not.
4.36 The framework will continue to only apply to full scope firms.
4.37 We do not propose lowering the exposure limit from the higher of 25% of eligible capital or
€150 million, as permitted by Article 395 of the Regulation.
4.38 As permitted by Article 396 of the CRR, we will consider applications to exceed the €150m limit
on a case-by-case basis.
Q16: Do you agree with this approach in relation to articles
395 and 396 of the Regulation? If not, please explain
why not and propose alternative approaches and the
rationale for those approaches.
38 July 2013
Financial Conduct Authority