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 5.1 Application and purpose

Application

BIPRU 5.1.1RRP

1BIPRU 5 applies to a BIPRU firm.

Purpose

BIPRU 5.1.2GRP

Pursuant to the third paragraph of article 95(2) of the UK CRR3, BIPRU 5 applies requirements that correspond3, in part, to3 Articles 78(1) and 91 to 93 and Annex VIII of the Banking Consolidation Directive.

2
BIPRU 5.1.3GRP

BIPRU 5 sets out the principles for the recognition of credit risk mitigation in the calculation of risk weighted exposure amounts for the purposes of the calculation of the credit risk capital component.

BIPRU 5.1.4GRP

BIPRU 4.10 applies requirements that correspond to3 those parts of Articles 91 to 93 and Annex VIII of the Banking Consolidation Directive which are specific to the recognition of credit risk mitigation by firms using the IRB approach, and modifies the application of the provisions in BIPRU 5 to those firms.

BIPRU 5.1.5GRP

In certain cases provisions specific to the IRB approach have been kept in BIPRU 5 in order to reduce duplication. The main examples are certain references to expected loss and references in the IRB approach in the provisions in BIPRU 5.7 about basket CRM techniques.