Article 4 Conditions for use of the Simplified Approach
1.
Institutions may apply the simplified approach described in this Chapter 2 of this Chapter 4 of the Trading Book (CRR) Part of the PRA Rulebook only if the sum of the absolute value of fair-valued assets and liabilities, as stated in the institution's financial statements under the applicable accounting framework, is less than GBP 13 billion.
- 01/01/2022
2.
Exactly matching, offsetting fair-valued assets and liabilities shall be excluded from the calculation of paragraph 1. For fair-valued assets and liabilities for which a change in accounting valuation has a partial or zero impact on Common Equity Tier 1 ('CET1') capital, their values shall only be included in proportion to the impact of the relevant valuation change on CET1 capital.
- 01/01/2022
3.
The threshold referred to in paragraph 1 shall apply on an individual and consolidated basis. Where the threshold is breached on a consolidated basis, the core approach shall be applied to all entities included in the consolidation.
- 01/01/2022
4.
Where institutions applying the simplified approach fail to meet the condition of paragraph 1 for two consecutive quarters, they shall immediately notify the relevant competent authority and shall agree on a plan to implement the approach referred to in Chapter 3 of this Chapter 4 of the Trading Book (CRR) Part of the PRA Rulebook within the following two quarters.
[Note: This rule corresponds to Article 4 of Part 2 Regulation (EU) No 2016/101 as it applied immediately before revocation by the Treasury.]
- 01/01/2022