Strengthening individual accountability: Resolution assessments and reporting amendments

Policy Statement 20/19 | Consultation Paper 12/19

Published 27 September 2019

Strengthening individual accountability: Resolution assessments and reporting amendments - PS20/19

Overview

This Prudential Regulation Authority (PRA) Policy Statement (PS) provides feedback to responses to Consultation Paper (CP) 12/19 ‘Strengthening individual accountability: Resolution assessments and reporting amendments’.

This PS also contains the PRA’s final policy in respect of amendments to:

  • the prescribed responsibility (PR) for recovery plans and resolution packs contained in the Allocation of Responsibilities part of the PRA Rulebook (Appendix 1);
  • Supervisory Statement (SS) 28/15 ‘Strengthening individual accountability in banking’ (Appendix 2); and
  • the form ‘Senior Managers Regime: Statement of Responsibilities’ (SoR form) (Appendix 3).

Responses

The PRA received one response to the points raised in CP12/19. This was supportive of the proposed amendments to the wording of the PR for recovery and resolution and minor amendments to the SoR form. This response additionally called for the alignment of the wording used in the PRA Rulebook and the FCA Handbook as well as with the SoR form to describe the prescribed responsibilities that must be assigned to one or more Senior Management Function (SMF) holders under the Senior Managers and Certification Regime (SM&CR). It noted that at present there are some differences in the wording used between the PRA Rulebook and the FCA Handbook. There were no other comments directed to the specific policy and administrative proposed changes set out in CP12/19, or the policy development process in respect of these proposals.

Changes to draft policy

In the absence of feedback questioning the proposed changes set out in CP12/19, the PRA will implement these proposals with a small modification to the revised wording for SS28/15. This decision also reflects the PRA’s publication of its final rules and PS15/19 ‘Resolution assessment and public disclosure by firms’ setting out the PRA’s requirements in respect of resolution assessments.

In respect of SS28/15, the PRA has amended the illustrative text to refer to the Senior Manager with a PR covering resolution assessments overseeing the ‘report of the’ resolution assessment being presented to the management body for approval before submission to the PRA. This would better align the wording with Part 3 of the Resolution Assessment Part of the PRA Rulebook and the wording of SS4/19 ‘Resolution assessment and public disclosure by firms’. The PRA has also added a cross reference to the Resolution Assessment part of the Rulebook.

Implementation

All changes outlined in this PS will take effect from Monday 9 December 2019.

PDFPolicy Statement 20/19

Appendices


Published on 7 June 2019

Strengthening individual accountability: Resolution assessments and reporting amendments - CP12/19

Overview

In this Consultation Paper (CP), the Prudential Regulation Authority (PRA) sets out its proposal to amend the prescribed responsibility (PR) for recovery plans and resolution packs that forms part of the Senior Managers and Certification Regime (SM&CR) for strengthening individual accountability. It also sets out consequential changes to Supervisory Statement (SS) 28/15 ‘Strengthening individual accountability in banking’ and the form ‘Senior Managers Regime: Statement of Responsibilities’ (‘SoR form’), together with other administrative changes to this form.

The proposed amendment to the PR is relevant to those UK banks and building societies with £50 billion or more in retail deposits on an individual or consolidated basis at the date of their most recent annual accounts (‘in scope’ firms). It would result in the existing PR in respect of recovery plans and resolution packs being extended to include an equivalent responsibility for resolution assessments (conditional on the PRA introducing new rules in respect of such assessments).

The proposed amendments to the SoR form are relevant to all PRA-regulated firms including credit unions and small non-Directive insurers. However, for firms that are not subject to any future PRA rules in regard to resolution assessments, there will be no change to the PRA’s requirements and expectations of them.

Firms that are part of a group that contains a FCA solo-regulated firm should also be aware of the FCA’s proposed changes to ‘MIFID members of the management body and key function holders - Article 4 Information Form (SMR)’. The FCA is also proposing changes to the ‘MiFID Article 4 APER Information Form’. Since the changes will affect solo-regulated firms the changes are not set out in this CP and firms should refer to the FCA’s simultaneous Quarterly Consultation Paper.

Responses and next steps

The consultation closed on Wednesday 7 August 2019. 

The PRA invites feedback on the proposals set out in this consultation. Please address any comments or enquiries to CP12_19@bankofengland.co.uk.

Implementation

The PRA intends to publish the final policy, rules, expectations, and SoR form in Q4 2019. This is dependent on the PRA introducing new rules in respect of resolution assessments.

PDFConsultation Paper 12/19

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