CRR article 493(4-7) permission - Transitional arrangement for exemption from certain large exposures limits

The Capital Requirements Regulation (CRR) has been updated by article 1(2) of Regulation (EU) 2017/2395 which incorporates the new paragraphs 4 to 7 in article 493 of the CRR. It now provides for a transitional arrangement for the exemption from large exposure limits available to exposures to certain public sector debt of Member States denominated in the domestic currencies of any Member States. The transitional period will have duration of three years starting from 1 January 2018 for exposures of this type incurred on or after 12 December 2017.

IFPRU investment firms may apply for a permission under CRR article 493(4-7). Subject to the FCA discretion, this permission would allow IFPRU investment firms to incur any of the exposures provided for in the new paragraph 5 of CRR article 493 meeting the conditions set out in paragraph 6, up to the following limits:

  1. 100% of the institution's Tier 1 capital until 31 December 2018
  2. 75% of the institution's Tier 1 capital until 31 December 2019
  3. 50% of the institution's Tier 1 capital until 31 December 2020

See how to apply for a capital requirements permission.

For more information see Article 1(2) of Regulation (EU) 2017/2395.