Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.


Status: This chapter was amended on 31 December 2020 as a result of Brexit. However, it is subject to the FCA Prudential Transitional Direction, which means that firms should not comply with these provisions yet. Instead, firms must follow this link and continue to comply with pre-IP completion day requirements https://www.handbook.fca.org.uk/handbook?date=31-12-2020&timeline=True (unless specified otherwise in the Direction). To see a full list of Handbook modules affected, please see Section B of the Annex to the Direction.

BIPRU 1.3 Applications for advanced approaches and waivers2

Application

BIPRU 1.3.1RRP

This section of the Handbook applies to every BIPRU firm that wishes to apply for a permission to use any of the approaches set out in BIPRU 1.3.2 G.

Purpose

BIPRU 1.3.2GRP
  1. (1)

    A firm may apply for 7a waiver in respect of:

    1. (a)

      the IRB approach;

    2. (b)

      [deleted]5

      5
    3. (c)

      the CCR internal model method; and

    4. (d)

      the VaR model approach.

  2. (2)

    A firm should apply for a waiver if it wants to:

    1. (a)

      apply the CAD 1 model approach; or2

    2. (b)

      apply the master netting agreement internal models approach; or2

    3. (c)

      disapply consolidated supervision under BIPRU 8 for its UK consolidation group or non-UK sub-group7; or2

    4. (d)

      apply the treatment in BIPRU 2.1 (Solo-consolidation waiver); or

    5. (da)

      2apply the treatment for a core UK group in BIPRU 3.2.25 R (Zero risk-weighting for intra-group exposures).5

      5
    6. (e)

      [deleted]512

      25
    7. (f)

      [deleted]5

      25

Article 129

BIPRU 1.3.3GRP

[deleted]7

4
BIPRU 1.3.4GRP

[deleted]7

4
BIPRU 1.3.5GRP

[deleted]7

BIPRU 1.3.6GRP

[deleted]7

Article 129 permissions and waivers - specific conditions

BIPRU 1.3.7DRP

6[deleted]

BIPRU 1.3.8DRP

6[deleted]

BIPRU 1.3.9DRP

6[deleted]

Waiver - general

BIPRU 1.3.10GRP

As explained in SUP 8, under section 138A3 of the Act, the appropriate regulator may not grant a waiver to a firm unless it is satisfied that:

3
  1. (1)

    compliance by the firm with the rules, or with the rules as modified, would be unduly burdensome or would not achieve the purpose for which the rules were made; and

  2. (2)

    the waiver would not adversely affect the advancement of any of the appropriate regulator's objectives.3

    3
BIPRU 1.3.11GRP

The conditions relating to the use of an approach listed in BIPRU 1.3.2 G referred to in the relevant chapter of BIPRU are minimum standards. Satisfaction of those conditions does not automatically mean the appropriate regulator will grant a waiver referred to in those paragraphs. The appropriate regulator will in addition also apply the tests in section 138A of the Act.

BIPRU 1.3.12G

In the appropriate regulator's view, if the minimum standards referred to in BIPRU 1.3.11 G are satisfied, the conditions referred to in BIPRU 1.3.10 G (1) will generally be met.

Forms and method of application

BIPRU 1.3.13DRP

Subject to BIPRU 1.3.14 D to BIPRU 1.3.20 D1, if a firm wishes to apply for a waiver to apply an approach set out in BIPRU 1.3.2 G, it must comply with SUP 8.3.3 D.

BIPRU 1.3.14D

[deleted]5

5
BIPRU 1.3.15DRP

If a firm wishes to apply for a waiver 7to use the IRB approach, it must complete and submit the form in BIPRU 1 Annex 2D D.

BIPRU 1.3.16DRP

If a firm wishes to apply for a waiver 7to use the CCR internal model method, it must complete and submit the form in BIPRU 1 Annex 3D D.

BIPRU 1.3.17DRP

[deleted]7

BIPRU 1.3.18DRP

[deleted]7

BIPRU 1.3.19GRP

In respect of the application for waivers to apply the approaches set out in BIPRU 1.3.2 G (1), the appropriate regulator will aim to give decisions on applications as soon as practicable. However, the appropriate regulator expects that it will take a significant period to determine and give a decision due to the complexity of the issues raised by the applications. Details of timelines for applications for waivers to use advanced approaches 7are set out on the appropriate regulator website.

BIPRU 1.3.20DRP

Where a firm applies for a solo consolidation waiver, it must demonstrate how each of the conditions set out in BIPRU 2.1.20 R to BIPRU 2.1.24 R are met and address the criteria set out in the guidance in BIPRU 2.1.25 G as part of its application in accordance with BIPRU 1.3.13 D.

BIPRU 1.3.21GRP

Before sending in an application for a waiver,7 a firm may find it helpful to discuss the application with its usual supervisory contact at the appropriate regulator. However, the firm should still ensure that all relevant information is included in the application.