The rule in plain words
In column "Amount" (0010) of Capital adequacy - memorandum items (CA4) (C04.00.01.01): "Holdings of CET1 capital of financial sector entities where the institution does not have a significant investment, net of short positions" (row 0230) must equal the sum of "Direct holdings of CET1 capital of financial sector entities where the institution does not have a significant investment" (row 0240), "Indirect holdings of CET1 capital of financial sector entities where the institution does not have a significant investment" (row 0270) and "Synthetic holdings of CET1 capital of financial sector entities where the institution does not have a significant investment" (row 0291).
The headline gives only the template and the kind of check, because the rule is too long to say in a headline. The plain words above say all of it.
What to do if your return fails it
- 01Open the tables below and find the cells the rule reads.
- 02Add up the parts in your return and compare the result with the total.
- 03If they differ, a part is missing, a value sits in the wrong cell, or the total is out of date.
- 04The Bank of England allows a small rounding difference, worked out from the decimals each value is reported with.
- 05It runs only when your filing indicators mark C04.00.01 as reported.
- 06This is a blocking check. A return that fails it is normally rejected, so fix it before you submit.
The cells it reads
Capital adequacy - memorandum items (CA4) (C04.00.01.01)
Rows
- R0230Holdings of CET1 capital of financial sector entities where the institution does not have a significant investment, net of short positions
- R0240Direct holdings of CET1 capital of financial sector entities where the institution does not have a significant investment
- R0270Indirect holdings of CET1 capital of financial sector entities where the institution does not have a significant investment
- R0291Synthetic holdings of CET1 capital of financial sector entities where the institution does not have a significant investment
Column
- C0010Amount
Memorandum Items (CA4) (CP04.00.04.01)
Rows
- R0230Holdings of CET1 capital of financial sector entities where the institution does not have a significant investment, net of short positions
- R0240Direct holdings of CET1 capital of financial sector entities where the institution does not have a significant investment
- R0270Indirect holdings of CET1 capital of financial sector entities where the institution does not have a significant investment
- R0291Synthetic holdings of CET1 capital of financial sector entities where the institution does not have a significant investment
Column
- C0010Current reporting month
Memorandum items for SDDTs (CA4 SDDT) (SC04.00.01.01)
Rows
- R0230Holdings of CET1 capital of financial sector entities where the institution does not have a significant investment, net of short positions
- R0240Direct holdings of CET1 capital of financial sector entities where the institution does not have a significant investment
- R0270Indirect holdings of CET1 capital of financial sector entities where the institution does not have a significant investment
- R0291Synthetic holdings of CET1 capital of financial sector entities where the institution does not have a significant investment
Column
- C0010Amount
A worked example
With simple numbers.
Holdings of CET1 capital of financial sector entities where the institution does not have a significant investment, net of short positions must then be 2,450.
A file that reports 2,450 passes. One that reports 2,550 fails, by 100.
The numbers are illustrative, reported to the unit, so the rounding tolerance does not change the result.
Which returns it applies to
Line4 Check runs it on the own funds (PRA001), capital+ actuals and forecasts (PRA112) and own funds for SDDTs (PRA116) returns on Bank of England banking taxonomy 4.1.1. The Bank of England applies it to own funds for SDDTs (PRA116), own funds (PRA001) and capital+ actuals and forecasts (PRA112) returns, as a blocking check.
The Bank’s own words and formula
The plain words above spell out the Bank’s formula, with each cell named from its templates. In the Bank of England’s list of validations, word for word:
v0227_m: [C04.00.01.01] {r0230, c0010} = {r0240, c0010} + {r0270, c0010} + {r0291, c0010}
Show the formulaShowHide
The Bank of England's formula. Cells are written as {t: table, r: row, c: column}.
{t: C04.00.01.01, r: 0230, c: 0010} = {t: C04.00.01.01, r: 0240, c: 0010} + {t: C04.00.01.01, r: 0270, c: 0010} + {t: C04.00.01.01, r: 0291, c: 0010}Other rules on Capital adequacy - memorandum items (CA4) (C04.00.01.01)
- Capital adequacy - memorandum items (CA4): a total must equal the sum of its parts (v0226_m)Blocking
- Capital adequacy - memorandum items (CA4): a total must equal the sum of its parts (v0228_m)Blocking
- Capital adequacy - memorandum items (CA4): values must agree (v0225_m)Blocking
- Capital adequacy - memorandum items (CA4): a total must equal the sum of its parts (v0229_m)Blocking
- Capital adequacy - memorandum items (CA4): a total must equal the sum of its parts (v0224_m)
- Capital adequacy - memorandum items (CA4): a total must equal the sum of its parts (v0230_m)Blocking
- Capital adequacy - memorandum items (CA4): a total must equal the sum of its parts (v0231_m)Blocking
- Capital adequacy - memorandum items (CA4): a total must equal the sum of its parts (v0232_m)Blocking
Every PRA banking rule on C04.00.01.01
Checks like this one, run at the point of submission, are the first step to real-time supervision. Line4 builds SupTech software for financial regulators that runs checks like these as each return arrives.