We hope this page has helped in navigating the high number of publications that were published in December 2020. Please note we will update this page as and when we publish a number of high profile publications, within a close timescale and that have a significant impact on firms.
Please see the ‘Upcoming prudential regulation communications’ page for more information.
What is going to change for PRA-regulated firms?We have published a number of important communications throughout December, including policy statements for Nationalising the Acquis (NtA) and Capital Requirements Directive V (CRD V) capital standards. We have also published a policy statement (PS) setting out Bank Recovery and Resolution Directive II (BRRD II) resolvability requirements, and will issue the final NtA and CRD V rules later on in December.
Nationalising the Acquis (NtA)
Rules and Binding Technical Standards (BTS)
The EU (Withdrawal) Act 2018 (as amended by the EU (Withdrawal Agreement) Act 2020) provides for directly applicable EU law to form part of UK law at the end of the transition period, saves UK law implementing EU directives (including regulator rules), and allows both of these to be amended to make them operable after the end of the transition period. This process in known as NtA or ‘onshoring’.
The Bank and PRA have set out a series of consultation papers (CP) and PSs, including EU Exit Instruments, detailing the onshoring changes to regulator rules and BTS in the Bank and PRA remits that will apply at the end of the transition period.
PS27/20 ‘UK withdrawal from the EU: Changes before the end of the transition period’ , contains final EU Exit Instruments relating to BTS and ‘near final’ updated PRA Rulebook EU Exit Instrument and PRA transitional direction. The PRA Rulebook EU Exit Instrument and PRA transitional direction will be made final by a further PS before the end of the transition period.
Temporary transitional power (TTP)
The TTP gives the UK’s financial services regulators power to modify or delay the application of firms’ regulatory obligations, where they have changed as a result of a Statutory Instrument made under Section 8 of the EU (Withdrawal) Act 2018 (ie an onshoring change).
The Bank’s final transitional direction Opens in a new window Opens in a new window was published with PS27/20. The PRA transitional direction Opens in a new window Opens in a new window was published as near-final and will be made final before the end for the transition period.
We have created a dedicated TTP page to bring together guidance and policy, and provide clear information on TTP. On Friday 13 November 2020, we also published a statement confirming that no additional exceptions from the application of the transitional power are expected to be required in relation to onshoring changes to new rules and legislation implementing CRD V and BRRD II.
How to interpret EU based references in non-binding PRA regulatory and supervisory materials
Subject to any transitional relief, PRA supervisory statements and statements of policy applicable before the end of the transition period should be read in conjunction with Supervisory Statement (SS) 1/19 which sets out how we expect firms to interpret EU-based references in non-binding PRA regulatory and supervisory materials after the UK’s withdrawal from the EU and the end of the transition period.
Subject to any transitional relief, forms and templates applicable before the end of the transition period should be read in conjunction with Supervisory Statement (SS) 2/19, which sets out how we expect firms to interpret EU-based references in reporting and disclosure requirements and regulatory transactions forms after the UK’s withdrawal from the EU and the end of the transition period.
Approach to European supervisory authorities (ESA) guidelines
Guidelines issues by the ESAs do not form part of retained EU law. In the Bank and PRA Statement of Policy (SoP) on EU Guidelines and Recommendations , the Bank and PRA have set out their expectations on how firms and financial market infrastructures should interpret EU Guidelines and Recommendations after the end of the transition period. Future updates to guidelines issued from the ESAs will no longer directly apply to the UK. We have taken a snapshot of the guidelines applicable at the end of the transition period, in order to provide a set of guidelines for firms to reference. These are available through the annex to the SoP.
Capital Requirements Directive V (CRD V)
We have published CP12/20, CP17/20 and CP22/20, and our feedback to responses, on proposed changes to implement elements of CRD V. PS26/20 was published on Wednesday 9 December 2020, containing near-final rules, to provide firms with information on Pillar II. A further policy statement (PS29/20) will bring the near-final rules into effect at the end of 2020.
Bank Recovery and Resolution Directive II (BRRD II)On Monday 21 December 2020 we published PS28/20 ‘Bank Recovery and Resolution Directive II’, which provides feedback to CP18/20 ‘Bank Recovery and Resolution Directive II’ and includes two final PRA Rules. This PS is relevant to BRRD undertakings.
Capital Requirements Regulation I (CRR I)
The CRR ‘quick fix’ package accelerates certain CRR II measures, and a temporary prudential filter on certain unrealised gains and losses. We published a statement on Tuesday 30 June 2020, setting out the PRA’s view on various elements of the package.