Posted on: June 19, 2024
Basel 3.1
Publication of the final policy statement covering credit risk, output floor, reporting and disclosures has been delayed and is not expected until after the UK General Election. It is understood that a ‘Statutory Instrument’ has to be presented to Parliament, before publication can be made. This action is on hold for the time being.
In the meantime, Whistlebrook will continue its ongoing software development work to support the requirements. Any changes following publication by the PRA, will be incorporated into the WIRES solution, where appropriate.
Small Domestic Deposit Takers Regime (SDDT)
Capital
It had been expected that a PRA consultation paper detailing the capital rules under SDDT, would be available by the end of Q2 2024. This paper has not been issued yet, but was anticipated to be provided alongside the Basel 3.1 documents. At a recent Basel 3.1 presentation, it was generally viewed that the time of publication of the SDDT consultation is likely to be delayed.
It is understood that from the November 2023 PRA Initiatives Grid, the capital requirements under SDDT will take the standardised approach to credit risk (under Basel 3.1) as the starting point.
Liquidity
With effect from report reference date 30th June 2024, SDDT firms will qualify for reduced reporting of Additional Liquidity Monitoring Metrics. Only form C 68 will be necessary. Institutions that have a Retail Deposit Ratio (average over four consecutive quarters) of at least 50%, will not be required to submit Net Stable Funding returns. Full details are in PRA policy statement 15-23.
Net Stable Funding templates C 82 and C 83 will be withdrawn with effect from 1st July 2024 in accordance with the requirements of the aforementioned policy statement. This change has been made in the latest version of WIRES.
Leverage Ratio Reporting
Templates for Contingent Leverage are being introduced from report reference 30th June 2024. The forms (LV49, 50, 51 and 52) are part of the Bank of England’s Banking taxonomy 3.6.0. This taxonomy was added to WIRES release 6.7, made available in October 2023 and is also in version 6.8.
Reporting is applicable to LREQ firms, only. To qualify as an LREQ institution, the following criteria must be met:
- Retail deposits of at least £50bn or
- Non-UK assets of at least £10bn (averaged over 3 accounting year ends before 1 January 2023 and rolling thereafter)
WIRES Releases
| Release | Content | Approximate Timing |
| 6.9 | Enhancements and minor fixes | End August 2024 |
| 7.0 | Changes for Basel 3.1 | End December 2024 – the timing is subject to change as it is dependent on publication of the Basel 3.1 final policy statement (date currently unknown). |
This regulatory update is Whistlebrook’s understanding of the position as at 19th June 2024.