PRA Regulatory Digest - January 2020

The PRA Regulatory Digest is for people working in the UK financial services industry and highlights key regulatory news and publications delivered for the month.
Published on 03 February 2020

Top news and publications

PRA updates on the Implementation Period (United Kingdom withdrawal from the European Union)

Next steps on LIBOR transition

Cross cutting publications and updates

PRA updates on the Implementation Period (United Kingdom withdrawal from the European Union)

31 January 2020

These Prudential Regulation webpages were produced before the UK’s withdrawal from the EU. The UK has now entered into an Implementation Period, due to end on 31 December 2020, during which EU law will continue to apply. The PRA will update their pages at a later date, as appropriate, to reflect the legal and regulatory framework applicable at the end of the Implementation Period.

Next steps on LIBOR transition

16 January 2020

The PRA and Financial Conduct Authority (FCA) published a joint letter to nominated Senior Managers of major banks and insurers supervised in the UK with responsibility for LIBOR transition.

CP1/20 ‘Financial Services Compensation Scheme – Management Expenses Levy Limit 2020/21

15 January 2020

In this Consultation Paper (CP), the PRA and FCA set out proposals for the Management Expenses Levy Limit for the Financial Services Compensation Scheme (FSCS) for 2020/21. This CP is supported by the publication of the FSCS’s Plan and Budget for 2020/21.

This CP is relevant to all PRA- and FCA-authorised firms, but contains no material of direct relevance to retail financial services consumers or consumer groups upon which they might need to act. As costs may be passed on to consumers in the form of higher prices, consumers may indirectly contribute to part of the FSCS levies. However, an efficient and adequately funded compensation scheme is beneficial to all consumers.

This consultation closes on Monday 17 February 2020.

Transforming data collection from the UK financial sector

7 January 2020

The Bank of England (the Bank) published a Discussion Paper, ‘Transforming data collection from the UK financial sector’, to improve the timeliness and effectiveness of data collection from firms across the financial system.

The Bank is interested in speaking to individuals who are able to represent their organisations’ views and/or contribute relevant expertise in the regulatory reporting, technology and data domains. This includes regulated firms, industry bodies, specialist third-party providers, professional advisors, standards bodies and other regulators.

Further information

Banking publications and updates

PS2/20 ‘Pillar 2 capital: Updates to the framework’

23 January 2020

This PRA Policy Statement (PS) provides feedback to responses to CP5/19 ‘Pillar 2 capital: Updates to the framework’. The PS contains the final amendments to the Pillar 2 framework and the updates to the following Statement of Policy (SoP) and Supervisory Statements (SS):  

  • SoP ‘The PRA’s methodologies for setting Pillar 2 capital’;
  • SS31/15 ‘The Internal Capital Adequacy Assessment Process (ICAAP) and the Supervisory Review and Evaluation Process (SREP)’; and
  • SS6/14 ‘Implementing CRD IV: Capital buffers’.

This PS is relevant to PRA-authorised banks, building societies and PRA-designated investment firms. It is not relevant to credit unions, insurance and reinsurance firms.

Letter from Sarah Breeden and David Bailey ‘Removal of bespoke liquidity risk appetite’

23 January 2020

The PRA published a letter to Chief Financial Officers of PRA Regulated UK Deposit Takers and International Banks.

PRA Annual Conference for CEOs of the Non-Systemic UK Bank and Building Societies

20 January 2020

Melanie Beaman, Director of UK Deposit Takers Supervision hosted a conference for the CEOs of Non-Systemic UK Bank and Building Societies on Tuesday 14 January 2020.

Further information

For information on banking regulatory returns and how to report them, visit the Regulatory reporting – banking sector page.

For details of forms used to collect data through the online statistical data application (OSCA), visit the Forms, definitions, and validation page.

Insurance publications and updates

Insurance data release: information and format: A call for feedback

15 January 2020

The Bank of England and PRA are preparing to publish regular, aggregated data relating to the UK Insurance market on a quarterly basis. The PRA published a ‘call for feedback’ to inform potential users of such data and the proposed content and presentation, and to invite comment and feedback that may help shape the publication.

PS1/20 ‘Solvency II: Longevity risk transfers – simplification of pre-notification expectations’

9 January 2020

This PRA PS provides feedback to responses to CP3/19 ‘Solvency II: Longevity risk transfers – simplification of pre notification expectations’. It also contains the PRA’s final policy in an updated version of SS18/16 ‘Solvency II: longevity risk transfers’.

This PS is relevant to UK firms that fall within the scope of the Solvency II Directive and to the Society of Lloyd’s.

Further information

For information on insurance regulatory returns and how to report them, visit the Regulatory reporting – insurance sector page.

Your inputs and views on open PRA consultations and other requests closing in February 2020

Closing date: 17 February 2020

Also in the month

23 January 2020

9 January 2020

More information

Bank Underground - a blog for Bank of England staff to share views that challenge – or support – prevailing policy orthodoxies. The views expressed here are those of the authors, and are not necessarily those of the Bank of England or its policy committees.

Bank Overground - the purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

This month Bank Overground published ‘How reliant are banks and insurers on cloud outsourcing?’

KnowledgeBank - from interest rates and inflation through to bank failures and financial crises, KnowledgeBank uses everyday examples and engaging visuals to bring economics to life.

European and international developments - readers are also referred to the following websites:

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