Alongside a News Release, the Bank and PRA published:
The Bank of England (Bank) and Prudential Regulation Authority (PRA) have today published proposals to further protect the economy and taxpayers from bank failure by putting in place the final major piece in the UK's resolution regime for banks.
See the joint Bank/PRA introduction and the consultations below in ‘Banking publications and updates', readers are encouraged to refer first to the joint introduction for an overview of the resolvability assessment framework (RAF), before reading the consultations.
Over the summer, the Bank of England, in conjunction with Pay.UK and the Payment Systems Regulator (PSR), consulted on the adoption of a common global messaging standard, known as ‘ISO 20022’, for payments in the UK. The Bank have published their response.
This Consultation Paper (CP) contains two consultations to fix deficiencies arising from the UK’s withdrawal from the EU and make consequential changes:
This CP is relevant to all firms authorised and regulated by the PRA (including those that expect to have a deemed permission under the ‘temporary permissions regime’ (TPR) or Financial Services Contracts Regime (FSCR), or that seek to apply for PRA authorisation in the future. It is also relevant to firms which are treated as exempt in relation to certain regulated activities under the FSCR.
Note: As set out in the PRA Direction, firms that choose to enter the TPR by notifying the PRA should make their notification using the form available on the FCA Connect system between Monday 7 January 2019 and Thursday 28 March 2019.
The PRA published a joint statement with the Financial Conduct Authority (FCA), ‘Securitisation Regulation: PRA and FCA joint statement on reporting of private securitisations’. This direction is intended to apply to all UK established originators, sponsors and securitisation special purpose entities (SSPEs) from Tuesday 15 January 2019.
If a firm wishes to raise concerns regarding the approach described in this statement, it should contact both private.securitisation@fca.org.uk and securitisation.information@bankofengland.co.uk by Friday 11 January 2019.
The Government published a draft of the statutory instrument, the Financial Services Contracts (Transitional and Saving Provision) (EU Exit) Regulations 2019, that will establish, subject to parliamentary approval, a Financial Services Contracts Regime to ensure that those EEA firms that do not enter the temporary permissions regime (TPR), and those that exit the TPR without UK authorisation, are able to wind down their UK regulated activities in an orderly manner. See the Financial Services Contracts Regime webpage for more information.
The annual firm feedback survey gives PRA-authorised firms the opportunity to comment on their experience of being supervised.
For more information about the firm feedback survey, see the Supervision webpage.
This SS was corrected to include an amendment related to the institutional investor due diligence requirements in Article 5 of the Securitisation Regulation. This amendment was included in PS29/18 ‘Securitisation: the new EU framework and Significant Risk Transfer’, but was not reflected in the SS published on Thursday 15 November 2018.
For information on cross-cutting activity, view the following webpages:
This PRA Policy Statement (PS) provides feedback to responses, and the final rules (Appendix 1) and Branch Return form (Appendix 2), to Chapter 2 of CP24/18 ‘Occasional Consultation Paper’. The final rules amend the Incoming Firms and Third Country Firms Part of the PRA Rulebook.
This PS is relevant to all PRA-supervised firms operating through branches in the United Kingdom which are not UK-headquartered firms (‘firms’). These firms are required by Incoming Firms and Third Country Firms 3.1 to submit the Branch Return form on a semi-annual basis.
Alongside the Bank’s consultation on ‘The Bank of England’s approach to assessing resolvability’, the PRA published a joint ‘Introduction to the Resolvability Assessment Framework’, and CP31/18. Readers are encouraged to refer first to the joint introduction for an overview of the resolvability assessment framework (RAF), before reading the consultations.
In CP31/18, the PRA sets out proposed rules for UK banks and building societies with £50 billion or more in retail deposits on an individual or consolidated basis, as at the date of their most recent annual accounts, to assess their preparations for resolution, submit a report of their assessment to the PRA, and publish a summary of their report (‘public disclosure’). The CP also contains a draft Supervisory Statement (‘SS’) setting out the PRA’s expectations relevant to those rules. Drafts of the proposed rules are attached in Appendices 1 and 2 (‘Rules’) and the SS in Appendix 3 of this CP.
The proposals are relevant to PRA-authorised firms in scope of the proposed rules (‘in-scope firms’).
This CP may result in a new Resolution Assessment Part of the PRA Rulebook and a new SS.
The PRA published version 3 of the PRA110 Q&As which has been updated to include additional Q&A in existing sections, as well as a new section on contingencies. For more information see the Interim reporting of PRA110 section, on the Regulatory Reporting – Banking sector webpage.
This PS provides the PRA’s final Statement of Policy (SoP) (see Appendix) following CP29/18 ‘The systemic risk buffer: Updates to the Statement of Policy’.
The PS is relevant to ring-fenced bodies within the meaning of section 142A of the Financial Services and Markets Act 2000 (FSMA) and large building societies that hold more than £25 billion in deposits (where one or more of the account holders is a small business) and shares (excluding deferred shares) – jointly ‘SRB institutions’.
In this joint CP, the Financial Conduct Authority (FCA) and the PRA set out proposals for new reporting requirements that would apply to mortgage lenders and home finance administrators. The CP contains proposals made solely by the FCA in relation to its objectives as well as joint proposals that are given effect through a combination of PRA and FCA rules. To make the proposed requirements clear for firms, the proposals are presented under the relevant reporting return or template.
This consultation will be directly relevant to:
The FCA and PRA invite feedback on the proposals in this paper. Please send any comments or enquiries by Friday 22 March 2019 to cp18-41@fca.org.uk.
This PS contains final policy following CP16/18 ‘Regulatory reporting: occasional consultation paper’. It contains:
This PS is relevant to banks, building societies, PRA-designated investment firms, and dormant account fund operator(s).
The PRA has made the changes to the PRA110 reporting instructions as proposed in CP16/18. However, the changes to the reporting level of consolidation in PRA110 rules are subject to the outcome of CP22/18 ‘Liquidity reporting: FSA047 and FSA048'.
This SS was updated following PS30/18 ‘Regulatory reporting: Responses to CP16/18’, and takes effect from Tuesday 1 January 2019. It is available under ‘Future version’ on the SS32/15 ‘Pillar 2 reporting, including instructions for completing data items FSA071 to FSA082, and PRA 111’ webpage.
This SS (available under ‘Current version’ on SS34/15 ‘Guidelines for completing regulatory reports’ webpage) was updated following PS30/18 ‘Regulatory reporting: Responses to CP16/18’. There are different effective dates for the following:
Final policy relating to PS21/18 ‘Solvency II: Changes to reporting format’, SS6/18 'Solvency II: National Specific Templates LOG files', and PS24/18 ‘Solvency II: Updates to internal model output reporting’ took effect. Policy documents, including relevant templates and LOG files on the Regulatory reporting – insurance sector webpage, were updated to reflect this.
More information on the stress tests and timescales can be found on EIOPA's website.
The PRA published a letter from David Rule, PS31/18 ‘Solvency II: Equity release mortgages’ together with an updated SS3/17 ‘Solvency II: Matching adjustment - illiquid unrated assets and equity release mortgages’. The policy will effect from Tuesday 31 December 2019.
The Senior Managers and Certification Regime (SM&CR) has been extended to insurers. This change has been reflected on the PRA section of the Bank’s website.
Updated forms to reflect the extension are available on the Senior Managers Regime: approvals webpage.
For more details on the extension, please see PS15/18 ‘Strengthening individual accountability in insurance: Extension of the SM&CR to insurers’ and SS35/15 ‘Strengthening individual accountability in insurance’. The FCA has also updated its website to reflect the extension.
These items are selected from Latest Bank of England news. Readers may also find it useful to refer to the Statistics and Research sections of the Bank’s website.
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This month, KnowledgeBank includes a guide on: ‘How much do we spend at Christmas?’
From interest rates and inflation through to bank failures and financial crises, KnowledgeBank uses everyday examples and engaging visuals to bring economics to life.
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