8.1 The PRA proposed to implement in PRA rules the Basel III capital requirements for firms' equity exposures to collective investment undertakings (CIUs) in the non-trading book.

Hierarchy of approaches

8.2 The proposed rules set out a revised hierarchy of approaches to determine capital requirements for CIUs exposures under the standardised approach (SA) and the internal ratings based (IRB) approaches to credit risk: a revised look-through approach (LTA), a mandate based approach (MBA), and a fall-back approach (FBA). The PRA proposed to permit firms to apply a combination of the LTA, MBA, and FBA to its CIUs exposures, provided the relevant conditions for their use are met.

8.3 No responses were received in relation to this proposal. The PRA will therefore publish the policy as proposed.

Additional criteria for using the LTA and the MBA: Criteria relating to supervisory oversight of CIUs