Waivers and modifications of rules | Waivers and modifications: what should an application include? | Waivers and modifications by consent
This page provides the following information on the PRA waivers and modifications application process:
- What is a waiver or modification
- How to apply
- Where to submit an application
- What happens when an application is submitted and a decision reached
- Publication of a waiver
- Revoking a waiver or modification
Firms that wish to extend a liquidity modification or access supplementary forms for submitting a waiver under the Solvency II directive should follow the link at the top of the page to 'Waivers and modifications: what should an application include?'.
What is a waiver or modification?
Under Section138A of the Financial Services and Markets Act 2000 (FSMA), the PRA has the power to waive or modify rules. A 'waiver' from a rule means that the applicant does not have to comply with that rule. A 'modification' to a rule enables the applicant to comply with an amended rule that better fits its own circumstances.
The PRA can grant a waiver or modification on application or with the consent of a person who is subject to the rules. The PRA does not automatically grant applications for waivers or modifications: it assesses the merits of individual application against the statutory tests laid out in FSMA.
s.138A(4) of FSMA sets out the statutory tests which must be met:
1. compliance by a firm with the unmodified rules would be unduly burdensome or would not achieve the purpose for which the rules were made; and
2. the direction would not adversely affect the advancement of any of the PRA’s objectives.
In addition to the statutory tests, the PRA will consider other relevant factors before a waiver or modification is granted, including whether it is compatible with European law.
In exceptional circumstances, the PRA may decide to grant a 'general' waiver (known as a 'waiver or modification by consent'). The waivers and modifications by consent page contains details of available waivers by consent.
The PRA has a statutory duty to publish the details of waivers and modifications it approves, unless it considers it inappropriate or unnecessary to do so. Waivers and modifications are published on the Financial Services Register.
A waiver or modification will not apply retrospectively.
How to apply
Dual-regulated firms should apply to the PRA to waive or modify a PRA rule using the waiver/modification application form provided below under Key Resources.
A dual-regulated firm seeking a waiver or modification of a Financial Conduct Authority (FCA) rule should apply direct to the FCA.
When it is not immediately clear whether a rule is PRA or FCA designated, firms should discuss with their supervisory contact to clarify which regulator the application should be submitted to. The PRA can only waive or modify provisions that are designated ‘PRA’. The complete list can be found in the PRA Handbook.
Details of waivers the PRA has given are available on the FCA’s website: see 'Publication of waivers/modifications' under External Links.
For further details on what to include with an application, please follow the link at the top of the page to 'Waivers and modifications: what should an application include?'.
Submitting a waiver application to the PRA
Firms should complete the below waiver/modification application form and submit it, along with supporting documentation, to PRA-Waivers@bankofengland.co.uk.
Alternatively, hard copies of the application may be sent to:
PRA Authorisations - Assessment and Monitoring Team
Prudential Regulation Authority
London EC2R 6DA
What happens once my application is submitted?
All applications will be acknowledged upon receipt.
In the course of its assessment, the PRA may ask for further information to help in assessing the application.
During the assessment of the application the PRA will consult with the FCA before deciding on waiving or modifying a rule to determine whether granting the waiver or modification may have a material impact on the FCA's objectives.
There are no statutory deadlines for assessing waiver applications. Firms should submit in good time, and the PRA will endeavour to meet a firm's request to receive a response by a particular date. However, if an application raises complex issues this may not be possible.
What happens once a decision is reached?
If the PRA decides to grant the waiver or modification it will issue an approval letter and a Direction setting out how the rule has been waived/modified, to which entities the Direction is applicable, and the time period for which the Direction is valid. The PRA will also set out any relevant conditions in the Direction, for example new reporting requirements.
The waiver or modification will be granted for a specific duration after which it will cease to apply. A firm can then apply for a new waiver or modification by submitting a new application.
Failure to comply with a rule as modified, or with any condition which is attached to a waiver or modification, may incur enforcement action by the PRA and (if applicable) a right of action under s138D of FSMA (Actions for damages).
The majority of waivers and modifications are published in full. Certain waivers are published in abridged form, generally to protect the commercial interests of the firm concerned. A firm can make representations to the PRA if it objects to the publication of the waiver. If the PRA decides to publish a waiver or modification against the wishes of a firm, it will give the firm an opportunity to withdraw the application before the waiver is granted.
The decision to withhold a waiver, modification, or the identity of a firm from publication will usually only last for the duration of the relevant grounds for non-publication. If the PRA decides to publish a waiver or modification which has previously been withheld, it will first give the firm an opportunity to make representations.
The PRA will update the Financial Services register with the firm's Direction detailing the waiver or modification.
A consolidated list of waiver directions in effect as at 5 January 2017 is available under Key Resources below.
Revoking a waiver or modification
The PRA may revoke a waiver or modification at any time. In deciding whether to revoke a waiver or modification, the PRA will consider whether the conditions in s.138A (4) of FSMA are no longer satisfied and whether the waiver or modification is otherwise no longer appropriate.