Background (paras. 1.4-1.7)
1.4 In CP5/22, the PRA proposed a set of criteria to define a type of UK bank or building society (hereafter 'firm') that would be subject to a simpler, but robust, set of prudential rules in the future. Following the responses to CP5/22, the PRA proposed a revised set of criteria in CP16/22, which proposed to use the criteria for determining eligibility for the Transitional Capital Regime (TCR).
1.5 The revised SDDT criteria proposed in CP16/22 are set out in Table A.
Table A: SDDT criteria proposed in CP16/22
| Element | Proposal |
|
Size |
Maximum size threshold of £20 billion. - Average of a firm's assets over past 36 months. |
|
Domestic Activity |
At least 85% of a firm's credit exposures must be to obligors located in the UK [As identified using the geographical location of exposures reported in COR001a, table C 09.04]. - Average of a firm's exposures over past 36 months. - UK exposures must remain above 75% at all times. |