8.39 For the ICR, the PRA intends to make rules to replace the CRR articles and technical standards that HM Treasury (HMT) revokes, in order to preserve their effect as appropriate for firms meeting the SDDT criteria. The PRA does not intend to change the policy or make substantive alterations to the ICR instrument before the making of the final policy material. The near-final rule instrument (Appendix 6) contains the first iteration of near-final ICR rules relating to market risk and operational risk.

8.40 A firm that is part of a group based outside of the UK - be that a subsidiary of a foreign headquartered banking group or a firm with a foreign holding company - cannot meet the SDDT criteria but could apply for a modification of the criteria that would enable it to be subject to the ICR. The near-final statement of policy included in Appendix 7 sets out circumstances in which the PRA might grant a modification to the SDDT criteria (subject to the statutory conditions being met) that would enable a firm that is part of a group based outside of the UK to consent to the modification for joining the ICR.

8.41 The near-final statement of policy included in Appendix 7 also sets out the modification-by-consent process by which firms become ICR firms and CRR consolidation entities become ICR consolidation entities.

8.42 Respondents were generally supportive of the proposal for ICR firms and ICR consolidation entities to be removed from the Basel 3.1 standards' scope of application.