Update 6 April 2020: On Thursday 2 April we issued a statement on our approach to regulatory reporting in response to the Covid-19 outbreak. We will not require UK branches of non-UK headquartered banks to submit the new version of the Branch Return template as set out in PS17/19 ‘Supervising international banks: Revision of the Branch Return’, for the reporting of their H1 2020 data. To ease the burden on firms at this time, we strongly encourage firms instead to submit branch return data for H1 2020 using the old version of the branch return template (as set out in PS33/18 ‘Responses to Chapter 2 of CP24/18 ‘Occasional Consultation Paper’). Firms considering submitting the new branch return template are advised to discuss this with their Supervisor. The submission mechanism for the Branch Return remains unchanged from H2 2019.
Update 17 January 2020: We have identified that the Branch Return Form published on Thursday 12 September 2019 contains incorrect validations in Part 3. Specifically validation BRv011 should only apply to column 005 rather than all columns of Part 3 Also, incorrect validations which were embedded in Part 3 of the template at Row 80 in Columns 040, 050 and 060 which should be removed. We provide a corrected version of the template on the Regulatory reporting – Banks, building societies and investment firms page, in which the scope of BRv011 has been narrowed and the other validations embedded in Part 3 have been deleted. We expect to consult on making these changes in March with a view that revisions would take effect from May.
Published on 12 September 2019
Supervising international banks: Revision of the Branch Return
This Prudential Regulation Authority (PRA) Policy Statement (PS) provides feedback to responses to Consultation Paper (CP) 8/19 ‘Supervising international banks: Revision of the Branch Return’ (page 2 of 2). It also contains the PRA’s final policy, as follows:
- amendments to the Regulatory Reporting and Incoming Firms and Third Country Firms Parts of the PRA Rulebook (Appendix 1);
- reporting guidance included in updated Supervisory Statement (SS) 34/15 ‘Guidelines for completing regulatory reports’ (Appendix 2); and
- revised Branch Return template (‘the Return’) (Appendix 3).
This PS is relevant to all existing and prospective PRA-supervised branches of deposit takers and PRA-designated investment firms which are not UK headquartered firms (‘international banks’).
Summary of responses
The PRA received six responses to the consultation, including one from a trade association. The responses were generally supportive of proposals (i) –(iv) above though they were not supportive of proposal (v). Respondents also proposed further improvements to the reporting guidance and amendments to the Return to give reporters greater clarity or reduce their need to amend systems to deliver the required data. The PRA’s response to this feedback is set out in Chapter 2.
The changes to the Return and the reporting guidance will take effect for the reporting of the H1 2020 Return, ie for the six-month period ending Tuesday 30 June 2020 and firms will need to submit their first revised Return by no later than Tuesday 11 August 2020.
Firms will be able to submit in Excel format and further details of the submission mechanism and validation rules will be provided by the end of 2019.
The policy set out in this PS has been designed in the context of the current UK and EU regulatory framework. The PRA has assessed that the policy will be affected in the event that the UK leaves the EU with no implementation period in place. As outlined in CP8/19 at paragraphs 1.9 and 1.10, this primarily affects changes required to ensure the revised rules remain consistent with the PRA’s approach to regulation in the event that the UK leaves the EU with no implementation period. The PRA will ensure that the relevant version of the Branch Rules Instrument (as set out in Appendix 1 and Appendix 2 of CP8/19) will be implemented and published accordingly. 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’.
Published on 08 April 2019
Supervising international banks: Revision of the Branch Return
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’.