4.1 This chapter sets out the approach for firms and CRR consolidation entities transitioning out of the SDDT regime.

4.2 If an SDDT or SDDT consolidation entity ceases to meet the SDDT criteria or SDDT consolidation criteria, it must notify the PRA. (The remainder of the chapter refers only to firms and the SDDT criteria. Those references should be read, with any necessary modifications, as applying also to CRR consolidation entities and the SDDT consolidation criteria.)

4.3 The firm should expect that the PRA will then decide to revoke its modification direction so that it stops being subject to the SDDT measures and becomes subject to rules and policies that do not apply to SDDTs. In many cases, such a firm will be able to prepare for ceasing to meet the SDDT criteria and should therefore be able to comply almost immediately with the measures that will apply to it when it ceases to be a SDDT. In some circumstances, a firm might reasonably need some further time to prepare for complying with those measures. The PRA will consider this when deciding when to revoke the firm's modification direction.

4.4 If an SDDT ceases to meet the SDDT criteria because it receives an internal ratings based (IRB) approval, the PRA will engage with the firm in the period before the approval decision to support the firm's readiness to move from the SDDT regime measures to the measures that will apply to it when it ceases to be an SDDT.