Firms can apply for permissions to vary the capital requirements, set out in the UK legislation implementing the CRD IV (UK CRD IV).
The Capital Requirements Regulation (UK CRR) has been amended in UK law by the Capital Requirements Regulation (Amendment) (EU Exit) Regulations 2018.
It sets out minimum expectations on firms that wish to apply for permissions to vary their capital requirements.
Capital requirements set how much capital your firm must hold.
We oversee UK CRR permissions with the Prudential Regulation Authority (PRA). Together, we try to make sure firms are operated and managed prudently. This protects firms, customers and the broader economy.
Permission to vary a firm’s capital requirement is individually assessed, as these regulations attempt to make sure firms do not take on excess risk and become insolvent.
The strengthened prudential requirements for banks across the UK were a response to the 2008 global financial crisis. The requirements aim to make banks stronger in crises and periods of stress.
Our Prudential sourcebook for Investment Firms (IFPRU) provides the full outline of these requirements for UK firms. They include capital requirements, liquidity measures and transparent leverage ratios.
Please note that on 1 January 2022 a new prudential regime for UK investment firms authorised under MIFID (the Investment Firm Prudential Regime (IFPR)) will come into force.
- the majority of existing waivers and modifications to prudential rules in the FCA handbook will no longer apply
- the majority of existing CRR permissions will no longer apply to FCA investment firms
- the new rules contain transitional provisions that give some existing waivers and permissions status under the new regime − firms should consider the transitional provisions in the IFPR rules for more details
- firms will need to consider applying for permissions, or rule waivers and modifications, of rules in the new sourcebook (MIFIDPRU)
Find out more about IFPR.
UK CRD IV
UK CRD IV introduced new prudential requirements. We are responsible for prudentially regulating nearly all the UK investment firms under these requirements.
See our pages on UK CRR/CRD IV.