Prudential Regulation Authority Rulebook

1.1

This Part applies to:

1. (a) a firm that is a CRR firm; and
2. (b) a CRR consolidation entity.

1.2

In this Part, the following definitions shall apply:

1. (a) exposure
1. means any asset or off balance sheet item referred to in Part Three, Title II, Chapter 2 of the CRR, without applying the risk weights or degrees of risk.
2. [Note: This definition corresponds to Article 389 of the CRR as it applied immediately before revocation by the Treasury.]
2. (b) large exposure
1. means an institution’s exposure to a client or group of connected clients where the value of the exposure is equal to or exceeds 10% of its Tier 1 capital.
2. [Note: This definition corresponds to Article 392 of the CRR as it applied immediately before revocation by the Treasury.]

1.3

For the purposes of calculating the value of exposures in accordance with this Part the term ‘institution’ shall include a private or public undertaking, including its branches, which, were it established in the United Kingdom, would fulfil the definition of the term ‘institution’ and has been authorised in a third country that applies prudential supervisory and regulatory requirements determined by the Treasury to be at least equivalent to those applied in the United Kingdom.

[Note: Rule 1.3 corresponds to the first subparagraph of Article 391 of the CRR. The second subparagraph of Article 391 containing the power for the Treasury to determine equivalence remains in the CRR. The third subparagraph of Article 391 of the CRR contains transitional provisions]

1.4

For the purposes of Chapter 5 of this Large Exposures (CRR) Part of the PRA Rules the following definitions shall apply:

1. (a) 'transactions'
2. mean transactions referred to in points (m) and (o) of Article 112 of the CRR and other transactions where there is an exposure to underlying assets;
3. (b) 'unknown client'
4. means a single hypothetical client to which the institution assigns all exposures for which it has not identified the obligor, provided that Article 6(2)(a) and (b) and Article 6(3)(a) of Chapter 5 of this Large Exposures (CRR) Part are not applicable.

[Note: This rule corresponds to Article 2 of Part 2 of Regulation (EU) No 1187/2014 as it applied immediately before revocation by the Treasury.]