Consultation Responses

AFME has responded to the Prudential Regulation Authority’s consultation on proposed amendments to the market risk framework, as part of the implementation of the Fundamental Review of the Trading Book (FRTB) in the UK. In our response we welcome the PRA’s flexibility shown in response to the continued uncertainty on the implementation of Basel standards in other jurisdictions. However, we caution that the PRA's proposal for different implementation timelines for FRTB-IMA and FRTB-SA will lead to significant operational complexities that risk undermining competitiveness. We therefore propose that the PRA introduce an opt-out to permit firms to remain on the Basel 2.5 standardised approach framework until FRTB-IMA is implemented. Wider changes should also be considered to further support implementation and the objectives of the Basel standards.