Published on 15 December 2017
Responses to CP18/17 Occasional Consultation Paper – Chapters 7 and 8 - PS31/17
Update 21 December 2017: This policy statement (PS) was updated to include the MiFID II Passporting Instrument 2007 on 21 December 2017. Firms wishing to passport under MiFID II should notify the PRA by using the relevant form in Commission Implementing Regulation (EU) 2017/2382 of 14 December 2017 laying down implementing technical standards with regard to standard forms, templates and procedures for the transmission of information in accordance with Directive 2014/65/EU of the European Parliament and of the Council. The PS is near final and will be updated in due course to include the reference to this Regulation.
This Prudential Regulation Authority (PRA) PS provides final policy as part of changes to the PRA Rulebook as outlined in Chapter 7 of Occasional Consultation Paper (CP) 18/17. These changes relate to the second Markets in Financial Instruments Directive (MiFID II), Insurance Distribution Directive (IDD) forms, and European Union Benchmarks Regulation (BMR). This PS also includes a consequential amendment to Short Form A, as outlined in Chapter 8 of CP18/17.
This PS provides the majority of final rules and form changes associated with MiFID II and IDD. It will be updated to include the MiFID II Passporting Amendment Instrument (without reference to the relevant implementing technical standard) which includes consequential IDD-related changes to the Branch Notification and Cross Border Services Notification forms. Following publication of the relevant technical standard in the Official Journal of the European Union, we will update this PS with a further MiFID II Passporting Instrument, referencing the technical standard.
Following completion of the relevant legislative procedure by Parliament, this PS will also be updated to include the final BMR instrument and associated form changes.
This PS is relevant to:
- MiFID II: PRA designated investment firms and Financial Conduct Authority (FCA) regulated MiFID firms, all PRA regulated firms and all common platform firms;
- IDD: UK Relevant Authorised Persons (RAPs), third-country RAPs, Solvency II firms, small non-directive insurers and large non-directive insurers, as well as all firms completing the Authorisation form for banks, the supplements for insurance companies and Lloyd’s managing partners, the controller appendices for corporates and partnerships, the owners and influencers appendix, and the waiver application form;
- Consequential Amendments to Short Form A: Banks, building societies, credit unions, PRA designated investment firms, RAPs and third-country branches; and
- BMR: All firms completing the Senior Management Regime: Statements of Responsibilities form.
Updates to this PS, as outlined in paragraphs 1.3 to 1.5 of this PS, will be made accordingly. Firms should check the PS31/17 landing page on the PRA website for further updates and the PRA will communicate updates to firms as appropriate.
BMR will apply from 1 January 2018. We consulted on this in CP17/18. We have not yet published final rules, as the legislative framework for our Rulebook changes is not yet in place. Once the necessary legislative processes are complete, we intend to make these as final rules, and update this PS. MiFID II changes will apply from 3 January 2018. IDD changes will apply from 23 February 2018, along with Short Form A amendments.
Published on 03 October 2017
Occasional Consultation Paper - CP18/17
This Occasional Consultation Paper (OCP) sets out proposed changes to Prudential Regulation Authority (PRA) Rulebook Parts and supervisory statements (SS). Chapter 7 also contains joint PRA and Financial Conduct Authority (FCA) proposals.
This consultation is relevant to all PRA-authorised firms. Chapter 7 is also relevant to FCA-regulated Markets in Financial Instruments Directive (MiFID) firms. The chapters contained in this OCP, the Rulebook Parts, SSs they propose to change, and the appendices where the draft policy is set out, are listed in the table below.
|Chapter||Rulebook Part/Supervisory statement||Appendix|
|1. Overview||Administration instrument - minor amendments to multiple Rulebook Parts||15|
|2. Conditions governing business – minor amendment||Conditions Governing Business||1|
|3. Market risk – Capital Requirements Directive (CRD) IV amendment||Internal Capital Adequacy Assessment (ICAA)||2|
|4. Transitional measures - references||Transitional Measures||3|
|5. Application requirements – Capital Requirements Regulation (CRR) and CRD amendments||Amendments to multiple Rulebook Parts||4|
|6. Whistleblowing – UK branches of non-EEA deposit-takers||General Organisational Requirements||5|
|7. Joint PRA and FCA form, PRA Rulebook, and FCA Handbook changes - Markets in Financial Instruments Directive II (MiFID II), Insurance Distribution Directive (IDD), and Benchmarking Regulation (BMR) amendments||Amendments to multiple Rulebook Parts and forms and the FCA Handbook||6-12|
|8. Short Form A - consequential amendments||Amendments to Short Form A||9|
|9. Application of EBA’s Guidelines on corrections to modified duration for debt instruments||SS13/13 ‘Market risk’||13|
|10. Naming convention for life insurers when reporting data by homogeneous risk group||SS36/15 ‘Solvency II: life insurance product reporting codes’||14|
The policy contained in this (CP) has been designed in the context of the current UK and EU regulatory framework. The PRA will keep the policy under review to assess whether any changes would be required due to changes in the UK regulatory framework, including changes arising once any new arrangements with the European Union take effect.
Responses and next steps
The consultation will close on:
- Tuesday 17 October 2017 for the administration instrument (Appendix 15);
- Friday 3 November 2017 for Chapters 7 and 8;
- Tuesday 9 January 2018 for Chapters 2 – 6, 9 and 10.