10.1 The PRA proposed to restate provisions in relation to the Business Indicator Approach (BIA) in PRA rules [Article 316 of the CRR.]. It proposed to modify requirements for the calculation of the Relevant Indicator (RI) to permit firms to include interest income and expenses from financial and operating leases in the calculation of the RI.

10.2 The PRA received two responses to this proposal. One respondent agreed that it is desirable to restate the BIA provisions as proposed. The second respondent did not consider it necessary to revoke this aspect from the CRR, and suggested that the same effect could be achieved by the PRA providing guidance on the application of the RI instead. The respondent also asked for clarification regarding the scope of the proposed change, considering it to be appropriate not only to the BIA but also to the Standardised Approach (SA) to Operational Risk.

10.3 Having considered the responses, the PRA has decided to maintain its proposal and transfer Article 316 of the CRR to PRA rules. This approach is consistent with the PRA's overall approach to the implementation of Basel III standards.

10.4 The PRA also clarifies that the modifications to the calculation of the RI are applicable under the SA. Article 317(2) of the CRR references use of the RI in the SA calculation; the SA will consequentially reference the amended RI, and no changes are required under the SA framework.