Company: HBCYF
Filing Date: 2025-02-20
Form Type: 20-F
Source: 0001089113-25-000040
Chunk: 192

Company: HSBC HOLDINGS PLC
Filing Date: 2025-02-20
Form: 20-F
Chunk 192
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 consolidated basis, the PRA receives information on the capital adequacy of, and sets requirements for, the Group as a whole. In addition, it conducts stress tests both on HSBC’s UK entities and more widely on the Group. Individual banking subsidiaries in the Group are directly regulated by their local banking supervisors, who set and monitor, inter-alia, their capital adequacy requirements. The Group is subject to capital requirements as set out in Regulation (EU) No. 575/2013 on prudential requirements for credit institutions and investment firms of the European Parliament and of the Council of 26 June 2013, as amended or supplemented, as it forms part of domestic law in the UK by virtue of the EUWA (the ‘UK CRR’), the PRA Rulebook and the UK law implementing the Capital Requirements Directive (the ‘CRD’ and together with the UK CRR, and the relevant rules of the PRA Rulebook, the ‘Capital Requirements Legislative Package’). The Pillar 1 regulatory capital framework has been, and continues to be, significantly enhanced. The UK implemented the first tranche of changes associated with Basel 3.1 in January 2022. This included changes in relation to counterparty risk, equity investments in funds and market risk RWAs and the leverage ratio. The second and final tranche of Basel 3.1 includes the changes to credit and operational risk and credit valuation adjustment RWAs, further changes to the market risk RWAs and the implementation of an RWA output floor. In December 2023, the PRA published its first set of near final rules for the second tranche of Basel 3.1 covering market risk, credit valuation adjustment and operational risk requirements. In September 2024, the PRA published its second set of near final rules for the implementation of Basel 3.1 covering credit risk, the output floor and reporting and disclosures. The PRA also set out its intention to streamline the Pillar 2A capital framework and capital communications process. Alongside this, HM Treasury published its policy statement on the implementation of Basel 3.1 in the UK. This sets out the process for transferring parts of the UK CRR out of UK legislation and into the PRA Rulebook. In September 2024, the PRA proposed implementation date for the Basel 3.1 package was 1 January 2026, with a phase-in period of four years for the output floor until 31 December 2029; however, in