Strategic Shareholder Climate and Risk Financial Financial Barclays PLC 371 report information sustainability report Governance review review statements Annual Report 2022 Supervision and regulation (continued) Supervision in the US the Federal Deposit Insurance Corporation Prudential regulation (FDIC), the FRB and the Consumer Barclays PLC, Barclays Bank PLC and its Certain Basel III standards were Financial Protection Bureau (CFPB). The New York branch, and Barclays Bank PLC’s implemented in EU law through the Capital deposits of Barclays Bank Delaware are US subsidiaries are subject to a Requirements Regulation (CRR) and the insured by the FDIC, up to applicable limits. comprehensive regulatory framework Capital Requirements Directive IV (CRD Barclays PLC, Barclays Bank PLC, BUSHL, IV), as amended by CRR II and CRD V. involving numerous statutes, rules and BUSL, and BGUS are required to act as a regulations in the US. For example, the These standards were retained in the UK source of strength for Barclays Bank Group’s US activities and operations are regulatory framework via a series of Delaware. This could, among other things, subject to supervision and regulation by onshoring instruments as part of the UK’s require these entities to provide capital the Board of Governors of the Federal withdrawal from the European Union. support to Barclays Bank Delaware if it fails Beyond the minimum standards required Reserve System (FRB), as well as additional to meet applicable regulatory capital supervision, requirements and restrictions by CRR, the PRA has expected the Group, requirements. imposed by other federal and state in common with other major UK banks and regulators and self-regulatory building societies, to meet a 7% Common The Group’s US securities broker/dealer organisations (SROs). In some cases, US Equity Tier 1 (CET1) ratio at the level of the and investment banking operations are consolidated group since 1 January 2016. requirements may impose restrictions on conducted primarily through BCI, and are the Group’s global activities, in addition to The 7% CET1 ratio is made up of a Pillar 1 also subject to ongoing supervision and its activities in the US. minimum capital requirement of 4.5% regulation by the Securities and Exchange CET1 and a capital conservation buffer Commission (SEC), the Financial Industry Barclays PLC, Barclays Bank PLC, Barclays which must be met entirely with CET1 Regulatory Authority (FINRA) and other US Holdings Limited (BUSHL), Barclays US capital. government agencies and SROs under US LLC (BUSL), and Barclays Group US Inc. federal and state securities laws. BCI is also (BGUS) are regulated as bank holding Global systemically important banks (G- registered as a Futures Commission companies (BHCs) by the FRB. SIBs), such as the Barclays Group, are Merchant with the Commodity Futures subject to a number of additional BUSL is the Group’s ultimate US holding Trading Commission (CFTC), through prudential requirements, including the company that holds substantially all of the which the Group conducts its US futures requirement to hold additional loss- Group’s US subsidiaries (including Barclays and options on futures business, including absorbing capacity and additional capital Capital Inc. (BCI) and Barclays Bank client clearing operations, which are buffers above the level required by Basel III Delaware). BUSL is subject to subject to ongoing supervision and standards. The level of the G-SIB buffer is requirements in respect of capital regulation by the CFTC, the National set by the Financial Stability Board (FSB) adequacy, capital planning and stress Futures Association and other SROs. according to a bank’s systemic importance testing, risk management and governance, and can range from 1% to 3.5% of risk- Under the US framework for regulating liquidity, leverage limits, large exposure weighted assets (RWAs). The G-SIB buffer swaps and security-based swaps limits, activities restrictions and financial must be met with CET1. In November established under Title VII of the Dodd- regulatory reporting. Barclays Bank PLC’s 2022, the FSB published an update to its Frank Act, the CFTC has regulatory New York branch is also subject to list of G-SIBs, maintaining the 1.5% G-SIB authority over swaps, the SEC has enhanced prudential standards relating to, buffer that applies to the Group. regulatory authority over security-based among other things, liquidity and risk swaps, and the CFTC and SEC jointly management. The Group is also subject to a ‘combined regulate mixed swaps (as such terms are buffer requirement’ consisting of (i) a Barclays PLC, Barclays Bank PLC, BUSHL defined in the relevant legislation). capital conservation buffer of 2.5%, and (ii) and BUSL have financial holding company Accordingly, the Group’s activities related a countercyclical capital buffer (CCyB). The (FHC) status under the Bank Holding to US swaps and security-based swaps are CCyB is based on rates determined by the Company Act of 1956. FHC status allows principally conducted by Barclays Bank regulatory authorities in each jurisdiction in these entities to engage in a variety of PLC and are subject to ongoing which the Group maintains exposures. In financial and related activities, directly or supervision and regulation by the CFTC March 2020, the FPC cut the UK CCyB rate through subsidiaries, including and the SEC, respectively. Barclays Bank to 0% with immediate effect in order to underwriting, dealing and market making in PLC is provisionally registered as a swap support the supply of credit expected as a securities. Failure to maintain FHC status dealer with the CFTC and conditionally result of the COVID-19 pandemic. In could result in increasingly stringent registered as a Security-based swap dealer December 2021, the FPC raised the UK penalties and, ultimately, in the closure or with the SEC. Barclays Bank PLC is also CCyB to 1% with effect from 13 December cessation of certain operations in the US. subject to the FRB swaps rules with 2022. In July 2022, the FPC announced In addition to oversight by the FRB, respect to margin and capital that it would raise the UK CCyB rate to 2% Barclays Bank PLC’s New York branch and requirements. In addition, Barclays Bank with effect from 5 July 2023. many of the Group’s subsidiaries are Ireland PLC is provisionally registered as a The PRA requires UK firms to hold regulated by additional US authorities swap dealer with the CFTC and is subject additional capital to cover risks which the based on the location or activities of those to the FRB swaps rules with respect to PRA assesses are not fully captured by the entities. The New York branch of Barclays margin and capital. Pillar 1 capital requirement. The PRA sets Bank PLC is subject to supervision and Supervision in Asia Pacific this additional capital requirement (Pillar regulation by the New York State The Group’s operations in Asia Pacific are 2A) at least annually, derived from each Department of Financial Services supervised and regulated by a broad range firm’s individual capital guidance. Under (NYSDFS). Barclays Bank Delaware, a of national banking and financial services current PRA rules, the Pillar 2A must be Delaware chartered bank, is subject to regulators. met with at least 56.25% CET1 capital and supervision and regulation by the Delaware no more than 25% tier 2 capital. In addition, Office of the State Bank Commissioner,