PS13/23 – Updating UK Technical Standards on the identification of global systemically important institutions (G-SIIs)

1: Overview

1.1 This Prudential Regulation Authority (PRA) policy statement (PS) provides feedback to responses to consultation paper (CP) 16/23 – Updating UK Technical Standards on the identification of global systemically important institutions (G-SIIs). It also contains the PRA’s final policy, as shown below:

• amendments to the UK Technical Standards^{footnote [1]} (the UKTS) for the methodology used to identify G-SIIs^{footnote [2]} (Appendix 1).

1.2 This PS is relevant to PRA-authorised UK headquartered banks, building societies, PRA-designated UK headquartered investment firms, and their qualifying parent undertakings. The PS is particularly relevant to UK headquartered firms in scope of supplementary reporting for the purposes of identifying and assigning G-SII buffer rates.

Background

1.3 In CP16/23, the PRA proposed to align the UKTS with updates made to the Basel Committee for Banking Supervision (BCBS) framework. In line with the changes introduced to the BCBS framework, the proposed updates to the UKTS were:

• adding ‘trading volume’ as a new indicator under the ‘substitutability/financial institution infrastructure’ category;
• updating indicator weights for the ‘substitutability/financial institution infrastructure’ category; and
• adding insurance subsidiaries to data consolidation for several indicators.

1.4 The proposed amendments also included deleting transitional provisions for initial implementation in 2015, which are no longer relevant.

Summary of responses

1.5 The PRA received one response to CP16/23. The respondent welcomed the PRA’s proposals, expressing support for alignment of the UKTS with the updated BCBS framework. The respondent also shared broader comments on the BCBS framework, which are outside the scope of this consultation.

Implementation

1.6 The amended UKTS will take effect on 31 October 2023.

1.7 Unless otherwise stated, any remaining references to EU or EU-derived legislation refer to the version of that legislation which forms part of retained EU law.^{footnote [3]}

2: Feedback to responses

2.1 The PRA must consider representations that are made to it in accordance with its duty to consult on its general policies and practices and must publish, in such manner as it thinks fit, responses to the representations.

2.2 The PRA has considered the one response received to CP16/23. This chapter sets out the PRA’s feedback to this response, and its final decisions.

2.3 The PRA proposed to maintain the alignment of the UKTS with the BCBS framework. The respondent supported implementing the BCBS framework updates in the UKTS. The respondent also shared broader comments on the BCBS framework, which it encouraged the PRA to promote. These comments are outside the scope of this consultation.

2.4 Having considered the response, the PRA has decided to finalise amendments to the UKTS as consulted on in CP16/23.