#2026/682UK starts further financial services rule changes for bank capital and CCP exposure rules
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This regulation brings more parts of the Financial Services and Markets Act 2023 into force, mainly from 1 January 2027. It revokes selected retained EU financial services rules in the Capital Requirements Regulation, covering areas such as bank capital treatment, credit risk approaches, exposures to governments and public bodies, large exposures, and capital requirements for exposures to central counterparties. Banks, investment firms, central counterparties, and compliance teams should treat this as a timing and transition measure rather than a standalone policy overhaul. The practical task is to check which EU-derived prudential rules will fall away on 1 January 2027 and align internal rulebooks, reporting, and capital planning with the UK replacement framework.
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Key Changes
- Brings selected provisions of the Financial Services and Markets Act 2023 into force, with the main changes taking effect on 1 January 2027
- Revokes specific retained EU capital requirements rules covering bank capital, credit risk, government and public sector exposures, large exposures, and CCP exposures
- Includes saving and transitional provisions so firms can move from the old retained EU framework to the UK replacement rules
Obligations
What this law requires
From 1 January 2027, firms must not rely on the revoked Capital Requirements Regulation provisions listed in these Regulations, including Articles 81, 82, 107(3) and (4), 114(7), and 115(4), to the extent revoked.
Before 1 January 2027, affected firms should update prudential capital treatment, credit-risk approach documentation, exposure classifications, and internal compliance rulebooks to reflect the revocation of the specified assimilated EU Capital Requirements Regulation provisions.
From 1 January 2027, firms calculating consolidated Common Equity Tier 1 capital must account for the revocation of Article 81 of the Capital Requirements Regulation on minority interests qualifying for inclusion, to the extent not already revoked.
From 1 January 2027, firms calculating Additional Tier 1, Tier 1, Tier 2 capital or qualifying own funds must account for the revocation of Article 82 of the Capital Requirements Regulation, to the extent not already revoked.
From 1 January 2027, firms applying credit-risk approaches must account for the revocation of Article 107(3) and (4) of the Capital Requirements Regulation.