Update on modification by consent of the Liquidity Coverage Ratio part of the PRA Rulebook – Third Country Covered Bonds

On 8 April 2025, the PRA (Prudential Regulation Authority) offered a modification by consent that would allow certain third country covered bonds under Article 11(1)(d) of the Liquidity Coverage Ratio (CRR) Part of the PRA Rulebook to be included in Level 2A High Quality Liquid Assets (HQLA), subject to a cap on the amount recognised. 

The PRA has received a number of technical comments and requests for clarification. As a result, the PRA has decided to pause the process and withdraw the modification, in order to consider and address the points raised appropriately. Once that process is complete, the PRA will clarify its approach.

In the interim, the PRA considers firms do not need to amend their approach to recognising third country covered bonds under the Liquidity Coverage Ratio (CRR) and Liquidity (CRR) Parts of the PRA Rulebook.