4.1 In this chapter, the PRA sets out a proposal to change the scope of Chapter 4 of the Definition of Capital Part of the PRA Rulebook, to refer to CRR (Capital Requirements Regulation) firms rather than UK banks. The proposal would result in:

• deletion of Rule 4.1 in the Definition of Capital Part of the PRA Rulebook (Appendix 9); and

• an update to SS7/13 'Definition of capital (CRR firms)' (Appendix 10).

4.2 This chapter is relevant to CRR firms.

Proposals

4.3 Chapter 4 of the Definition of Capital Part of the PRA Rulebook requires firms to assess whether funding to connected counterparties is of a capital nature and, if it is, requires firms to treat it in a similar way under the relevant CRR requirements. The scope is currently limited to UK banks only, which has been inherited from the General Prudential sourcebook, within the FCA's Handbook [GENPRU 2.2.233.].