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

CP13/6
CRD IV for Investment Firms
7.14 The FCA has already started contacting firms holding eligible advanced prudential calculation
approaches waivers to inform them of the steps that will be followed ahead of the entry into
force of the CRR. In short, the process will be as follows:
• first, the affected firms will have to submit to the FCA a confirmation of compliance in
relation to each relevant waiver by no later than 31 August 2013, unless they have done
so already;
• at the same time, if the FCA has identified any instances of non-compliance, it will require
those firms to remediate them before the end of 2013 or to put in place a credible
remediation plan where compliance cannot be fully restored within this time period; and
• the FCA expects to review the responses and engage in bilateral discussions with the
affected firms during the Autumn. By no later than 30 November 2013, the FCA will notify
its decision to the affected firms on whether they may rely on the existing waiver direction
as the equivalent permission under the CRR with effect from 1 January 2014 and, if so:
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whether it will be subject to the same terms; or
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the permission will be subject to certain modified terms. Among these, the FCA may
decide to exclude certain models, exposures or products from the scope due to the firm
being unable to restore compliance before the end of 2013. As an alternative, the FCA
may add an agreed remediation plan as a condition for the firm to maintain certain
models, exposures or products within scope.
BIPRU 12 intra-group modification
7.15 As permitted under Article 412(5) of the Regulation, we intend to maintain the existing
domestic liquidity regime until binding minimum standards for liquidity coverage requirements
are specified and fully introduced in the CRR in 2015 (see our proposals in Chapter 4).
7.16 Therefore, where a firm holds an ‘intra-group liquidity modification’ to the overall liquidity
adequacy rule in BIPRU 12, it should engage with its FCA supervisory contact on a bilateral
basis to determine whether the existing waiver can be extended until the discretion in Article
412(5) of the Regulation falls away in 2015. Any firm requests for liquidity permissions under
the CRR will be covered by the process for new CRR permissions.
Existing waivers where there is no equivalent CRR provision
7.17 Any waivers granted to firms under BIPRU or GENPRU rules which are repealed or disapplied
on 1 January 2014 and not otherwise listed as eligible waivers in tables 12 and 13 will cease to
have effect on that date.
7.18 The FCA will update the Financial Services Register and communicate this to firms in due
course.
Processes for new CRR permissions
7.19 We are also working to have in place new processes to grant firms’ regulatory ‘permission’ in
those areas under CRD IV where they will be required. For this purpose we have also engaged
with the Treasury (and the PRA) to ensure that suitable procedures to be applied to the new
CRR permissions are in place.
7.20 We will communicate the new procedures to firms later in 2013.
58 July 2013
Financial Conduct Authority