Ring-fenced bodies (RFBs)

Supervisory Statement 8/16

Update on 11 December 2017: This SS was updated following publication of Policy Statement 29/17 ‘Recovery planning’. See the appendix for details. For more information on ring-fencing see the Structural reform.

PDFSupervisory Statement 8/16 - December 2017

Update on 1 February 2017: This SS was updated following publication of Policy Statement 3/17 ‘The implementation of ring-fencing: reporting and residual matters – responses to CP25/16 and Chapter 5 of CP36/16’. See the appendix for details. For more information on ring-fencing related policy see ‘Supporting materials – ring-fencing’ webpage.

PDF Supervisory Statement 8/16 - February 2017 

Published on 7 July 2016

Overview

This Prudential Regulation Authority (PRA) supervisory statement is aimed at ring-fenced bodies (RFBs), as defined in Section 142A of the Financial Services and Markets Act 2000 (the Act), parent undertakings of RFBs as defined in Section 192JA of the Act and other PRA-authorised persons that are members of a group containing an RFB. This supervisory statement is also aimed at firms currently below the core deposits threshold for ring-fencing of £25 billion but which may approach that threshold over time. The purpose of this statement is to set out the PRA’s expectations of an RFB and members of its group in relation to the ring-fencing of core activities and services.

This statement should be read alongside the PRA Rulebook, the Capital Requirements Regulation (CRR)  and ring-fencing legislation set out in the Act and statutory instruments.  The Ring-fenced Bodies Part of the PRA Rulebook in particular sets out PRA rules applicable to RFBs.

This supervisory statement sets out expectations for the following areas:

  • Legal structure and holdings of capital 
  • Establishment of an RFB sub-group and application of requirements on a sub-consolidated basis
  • Application of capital and liquidity standards to an RFB sub-group 
  • Intragroup concessions 
  • Distributions
  • Intragroup transactions and exposures 
  • Continuity of services and facilities of RFBs 
  • Use of financial market infrastructures 
  • Exceptions to excluded activities and prohibitions
  • Reporting requirements

PDF Supervisory Statement 8/16 

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