Prudential Regulation Authority Rulebook

4.1

In the statement of policy on its approach to setting MREL, the Bank, as UK resolution authority, indicates that it expects to direct firms to comply with an end-state MREL from 1 January 2022. To ensure that firms make progress towards meeting their end-state requirements, the Bank expects to direct relevant firms to also meet an interim MREL. Please refer to Chapter 7 of the Bank statement of policy for these transitional arrangements.^[11]

4.2

The PRA will apply the MREL buffer and Threshold Conditions policies in respect of MREL set by the Bank with respect to both interim and end-state requirements.

4.3

If a firm expects that it will not meet its interim or end-state MREL at the end of the relevant transitional period it should notify the PRA promptly and should expect the PRA to investigate whether the firm is failing or likely to fail to satisfy Threshold Conditions with a view to taking further action as necessary. However, a firm being likely to not meet its interim or end-state MREL at the end of the relevant transitional period will not automatically mean the PRA will consider the firm is failing or likely to fail to meet Threshold Conditions.

4.4

If a firm expects that it will not have sufficient CET1 to meet its interim or end-state MREL and its buffers at the end of the relevant transitional period, it should notify the PRA promptly. The PRA may consider requiring the firm to take steps to strengthen its capital position.