Introduction

9.1 This chapter sets out the updated near-final policy following feedback to responses to chapter 2 of consultation paper (CP) 16/22 - Implementation of the Basel 3.1 standards, which proposed that firms meeting the Small Domestic Deposit Taker (SDDT) criteria would not have to apply the Basel 3.1 standards set out in the CP.

9.2 The Prudential Regulation Authority (PRA) received 14 responses regarding the Interim Capital Regime (ICR) proposals in CP16/22. The respondents generally welcomed the PRA's proposal to introduce an interim regime based on the existing Capital Requirements Regulation (CRR) capital provisions. In chapter 8 of near-final policy statement (PS) 17/23 - Implementation of the Basel 3.1 standards near- final part 1, the PRA set out its feedback to those responses, and the various amendments made to the draft policy.

9.3 In PS17/23, the PRA set out its near-final policy to introduce the ICR that would allow firms that meet the SDDT criteria to remain subject to existing CRR provisions until the permanent risk-based capital framework for SDDTs (SDDT capital rules) is implemented. Likewise, the ICR would allow consolidation entities meeting the SDDT consolidation entity criteria to remain subject to existing CRR provisions until the SDDT capital rules are implemented. PS17/23 also included the near-final statement of policy (SoP) - Operating the Interim Capital Regime, and the first iteration of near-final ICR rules relating to market and operational risk.