CP12/21 – Financial holding companies: Further implementation

Consultation Paper 12/21
Published on 21 June 2021

Overview

This Consultation Paper (CP) sets out the Prudential Regulation Authority’s (PRA) proposed rules in respect of the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies (holding companies) that have been approved or designated in accordance with Part 12B of the Financial Services and Markets Act 2000 (FSMA). It also proposes guidance with respect to directions and penalties over holding companies under Part 12B FSMA, covering the taking of measures, including directions; the imposition of penalties; and the amount of penalties.

The proposals in this CP would result in changes to several parts of the PRA Rulebook (Appendix 1). The proposals would also result in a new Statement of Policy (SoP) ‘Supervisory measures and penalties in relation to financial holding companies’ (Appendix 2), and amendments to the SoP ‘The Prudential Regulation Authority's approach to enforcement: statutory statements of policy and procedure’ (Appendix 3).

This CP is relevant to financial holding companies, mixed financial holding companies, and banks and PRA-designated investment firms (firms) that are part of a UK consolidation group controlled by a UK parent financial holding company or UK parent mixed financial holding company.

The purpose of these proposals is to give effect to the changes in the Capital Requirements Directive V (CRD V), as transposed, and Capital Requirements Regulation II (CRR II), as onshored, which impose direct responsibility for compliance with consolidated prudential requirements on approved or designated holding companies. The proposed new SoP would discharge the PRA’s statutory duty under Part 12B FSMA.

Implementation

The PRA proposes that the implementation date for the changes resulting from this CP would be Wednesday 15 September 2021.

Responses and next steps

This consultation closes on Thursday 22 July 2021. The PRA invites feedback on the proposals set out in this consultation. Please address any comments or enquiries to CP12_21@bankofengland.co.uk.

The proposals in this CP have been designed in the context of the UK having now left the EU and the transition period having come to an end. Unless otherwise stated, any references to EU or EU derived legislation refer to the version of that legislation which forms part of retained EU law. 

Consultation Paper 12/21

Appendices

Consultation end date:
22 July 2021

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