Supervising international banks: Revision of the Branch Return

Consultation Paper 8/19
Published on 08 April 2019

Overview

In this consultation paper (CP), the Prudential Regulation Authority (PRA) sets out its proposals for changes to the format and content of the Branch Return Form (the Return), and additional guidance to assist firms in completing it.

This CP is relevant to all existing and prospective PRA-supervised branches of deposit-takers and designated investment firms which are not UK headquartered firms (‘international banks’).

The Return informs the PRA’s understanding of branches’ systemic importance and economic functions and facilitates the PRA’s approach to the supervision of branches, as set out in Supervisory Statement (SS) 1/18 ‘International banks: the Prudential Regulation Authority’s approach to branch authorisation and supervision’. The changes would improve the quality of the information provided by firms and enhance the Return’s ability to meet these objectives in SS1/18.

The proposals would amend the Return in Rule 4.1 of the Incoming Firms and Third Country Firms Part of the PRA Rulebook and create reporting instructions for the form in SS34/15 ‘Guidelines for completing regulatory reports’.

Summary of proposals

The PRA proposes to:

  • provide guidance for completion of the Return in SS34/15 alongside the other reporting guidance for deposit takers and investment firms;
  • align balance sheet concepts used in the Return with concepts and guidance used in the PRA’s wider reporting framework, eg by requiring assets to be broken down into the standard categories of ‘Loans and advances’, ‘Derivatives’ etc;
  • amend the reporting content, slightly reducing the number of data points reported by most firms; 
  • clarify that firms must report within 30 business days; and
  • replace the current Excel reporting format for the Return with the XBRL reporting format.

The draft Return and guidance are set out as appendices to this CP.

Responses and next steps

This consultation closed on Sunday 7 July 2019. The PRA invites feedback on the proposals set out in this consultation. Please address any comments or enquiries to CP8_19@bankofengland.co.uk.

The PRA proposes that the changes to the Return take effect for the reporting of the H1 2020 Branch Return, ie for the period ending 30 June 2020.

The proposals set out in this CP have been designed in the context of the current UK and EU regulatory framework. The PRA has assessed that the proposals will be affected in the event that the UK leaves the EU with no implementation period in place. All the changes relating to the UK’s withdrawal from the EU should be read in conjunction with the near-final PRA transitional direction published in PS5/19 ‘The Bank of England’s amendments to financial services legislation under the European Union (Withdrawal) Act 2018’.

A second version of the proposed rules which includes the relevant changes relating to the UK’s withdrawal from the EU is set out in Appendix 2. As these changes relate to reporting they should be read in conjunction with SS2/19 ‘PRA approach to interpreting reporting and disclosure requirements and regulatory transactions forms after the UK’s withdrawal from the EU’.

PDF Consultation Paper 8/19

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