1.12 When making rules, the PRA is required by the Financial Services and Markets Act 2000 (FSMA 2000) to have regard to representations made to it, and to publish an account, in general terms, of its feedback to them. Where the final rules differ from the draft in the CP in a way that the PRA considers is significant, FSMA 2000 [Sections 138J(5) and 138K(4) of FSMA 2000.] requires the PRA to publish:

• details of the difference together with a cost benefit analysis (CBA); and

• a statement setting out in the PRA's opinion whether or not the impact of the final rule on mutuals is significantly different to (i) the impact that the draft rule would have had on mutuals; and (ii) the impact that the final rule will have on other PRA-authorised firms, and if so, details of the difference.

1.13 Taking into account the responses to CP16/22, the PRA has identified a number of adjustments and corrections to the draft policy where it considers them appropriate. The most material changes include:

• removing the ability for firms to receive permission to use the market risk IM for the default risk of exposures to sovereigns, to address an inconsistency between the proposed treatment of default risk of sovereigns in the credit risk and market risk frameworks (see Chapter 3 - Market risk); and