8.23 The PRA proposed that the ICR would be in place for the period from the implementation date of the Basel 3.1 standards to the implementation date of the SDDT capital rules.

8.24 The respondents were generally supportive of the ICR's overarching objectives. Five respondents caveated their support for the ICR with broader concerns regarding the current uncertainty about the design of the SDDT capital rules. Two respondents called for an expedited consultation date for those capital rules to provide greater certainty.

8.25 One respondent was concerned that the ICR might end up continuing for several years, expressing fears that this risked an adverse divergence with prudential requirements in the EU. The respondent advised the PRA to set out sunset provisions so that the rules underpinning the ICR cease to be effective after their intended end date.

8.26 After considering the responses, the PRA has decided not to change the draft policy. As set out in PS15/23 - The Strong and Simple Framework: Scope Criteria, Liquidity and Disclosure Requirements, the PRA intends to consult on a simplified capital framework for SDDTs in Q2 2024 (Phase 2 of the SDDT regime). As part of that consultation paper (CP), the PRA intends to propose how the ICR will end when the SDDT capital regime is implemented. Therefore, firms will be able to compare the Phase 2 proposals with the Basel 3.1 standards when deciding whether to take up the ICR modification by consent. The ICR would be a temporary measure that the PRA does not intend to continue for several years.

PRA objectives and 'have regards' analysis