PRA Regulatory Digest - April 2020

The PRA Regulatory Digest is for people working in the UK financial services industry and highlights key regulatory news and publications delivered for the month.
Published on 01 May 2020

Top news and publications

  • Regulatory measures for firms in response to Covid-19
  • The PRA published the ‘PRA Business Plan 2020/21’ that sets out its strategy, workplan, and budget for the coming year
  • Consultation Paper (CP) 4/20 ‘Regulated fees and levies: Rates proposals 2020/21’

Regulatory measures for firms in response to Covid-19

Statement on the regulatory treatment of the UK Coronavirus Business Interruption Loan Scheme (CBILS) and the UK Coronavirus Large Business Interruption Loan Scheme (CLBILS)

27 April 2020

The PRA published a statement in response to HM Treasury’s announced changes to UK Coronavirus (Covid-19) business interruption loan schemes.

Statement by the PRA on key financial workers who are critical to the Covid-19 response

24 April 2020

The PRA published an update to the statement published on Wednesday 20 March.

The government and the Devolved Administrations have recently expanded coronavirus testing in England, Wales and Northern Ireland to include essential workers with symptoms who are self-isolating to helping them return to work if they test negative.

Follow-up note to insurers on the letter from Sam Woods ‘Covid-19: IFRS 9, capital requirements and loan covenants’

23 April 2020

The PRA published a follow-up note for PRA-regulated insurers on the letter from Sam Woods ‘Covid-19: IFRS 9, capital requirements and loan covenants’, clarifying the PRA’s position on the treatment of loans.

Q&A on the usability of liquidity and capital buffers

20 April 2020

The PRA published a set of Q&As to answer some commonly asked questions on the usability of liquidity and capital buffers and their operation as set out in PRA rules and guidelines and in response to the Covid-19 outbreak. The document is relevant to all banks to which Capital Requirements Directive IV applies.

PRA decision on Systemic Risk Buffer rates

9 April 2020

With support from the Financial Policy Committee, the PRA published a statement on the ‘PRA decision on Systemic Risk Buffer rates’, in response to the Covid-19 outbreak. The PRA also published a ‘Modification by consent of the calculation of the total exposure measure of the Leverage Ratio’, available on the Waivers and modification of rules webpage.

Covid-19 regulatory reporting and disclosure amendments

9 April 2020

On Thursday 9 April the PRA updated the ‘Covid-19 regulatory reporting and disclosure amendments’ statement to extend the deadline of two additional returns.

The statement was originally published on Thursday 2 April to outline the PRA’s approach to regulatory reporting and Pillar 3 disclosures for UK banks, building societies, designated investment firms and credit unions in response to Covid-19 and the EBA’s statement on ‘Supervisory reporting and Pillar 3 disclosures in light of Covid-19’ which was published on Tuesday 31 March 2020.

Letter from Credit Union Supervision Team to Directors, Staff members and Volunteers of PRA-regulated credit unions

8 April 2020

The PRA sent a letter to all PRA-regulated credit unions inviting them to consent to a modification of Rule 3.11 of the Credit Unions Part of the PRA Rulebook in accordance with the direction available on the Waivers and modification of rules webpage.

Joint PRA and FCA Statement on ‘Senior Managers and Certification Regime and Coronavirus: Our expectations of firms’

3 April 2020

Joint with the FCA, the PRA published a statement setting out a joint approach to the Senior Managers and Certification Regime for dual-regulated firms in light of the Covid-19 outbreak.

Joint PRA and HMT statement on the delay to implementation of the Basel 3.1 standards

2 April 2020

The PRA and HM Treasury published a joint statement that relates to the Group of Central Bank Governors and Heads of Supervision decision to delay the implementation of the Basel 3.1 standards.

News and speeches

Supervisor-centred automation – the role of human-centred automation in judgement-centred prudential supervision

27 April 2020

The PRA published a speech by Senior Advisor James Proudman, 'Supervisor-centred automation – the role of human-centred automation in judgement-centred prudential supervision’, given as part of an online webinar.

PRA Business Plan 2020/21

9 April 2020

The PRA published the PRA Business Plan 2020/21 that sets out the PRA’s strategy, workplan, and budget for the coming year, as well as some of its highest-level actions to mitigate the impact of Coronavirus. Alongside this the PRA published CP4/20 ‘Regulated fees and levies: Rates proposals 2020/21’ which explains how the PRA proposes to fund its budget, see the cross-cutting section for more information.

Cross cutting publications and updates

Joint Bank and PRA statement on the proposed use of temporary transitional powers at the end of the transition period

30 April 2020

Joint with the Bank, the PRA published a statement, which relates to HM Treasury’s publication of their intention to ‘shift’ the temporary transitional power.

CP4/20 ‘Regulated fees and levies: Rates proposals 2020/21’

9 April 2020

This CP sets out proposals for the PRA’s fees for 2020/21. The proposals would make amendments to the Fees Part of the PRA Rulebook, and Supervisory Statement (SS) 3/16 ‘Fees: PRA approach and application’.

This consultation is relevant to all firms that currently pay PRA fees or are expecting to do so within the 2020/21 fee year.

This consultation closes on Friday 15 May 2020.

Further information

Insurance publications and updates

PS10/20 ‘Solvency II: Group availability of subordinated liabilities and preference shares’

30 April 2020

This PRA Policy Statement (PS) provides feedback to responses to CP16/19 ‘Solvency II: Group availability of subordinated liabilities and preference shares’. It also contains the PRA’s final policy in an updated version of SS9/15 ‘Solvency II: Group supervision’.

This PS is relevant to all insurance firms within the scope of group supervision under the Solvency II Directive and the Society of Lloyd’s.

PS9/20 ‘Solvency II: Income producing real estate loans and internal credit assessments for illiquid, unrated assets’

2 April 2020

This PRA PS provides feedback to responses to CP23/19 ‘Solvency II: Income producing real estate loans and internal credit assessment for illiquid, unrated assets’. It also contains the PRA’s final SS3/17 ‘Solvency II: Illiquid unrated assets’.

The PS is relevant to UK insurance and reinsurance companies holding or intending to hold income producing real estate loans. It is also relevant to firms investing in illiquid, unrated assets within their Solvency II matching adjustment portfolios.

Further information

For information on insurance regulatory returns and how to report them, visit the Regulatory reporting – insurance sector page.

Your inputs and views on open PRA consultations and other requests closing in May 2020

Closing date: 15 May 2020

Also in the month

16 April 2020

More information

Bank Underground - a blog for Bank of England staff to share views that challenge – or support – prevailing policy orthodoxies. The views expressed here are those of the authors, and are not necessarily those of the Bank of England or its policy committees.

Bank Overground - the purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision.

KnowledgeBank - from interest rates and inflation through to bank failures and financial crises, KnowledgeBank uses everyday examples and engaging visuals to bring economics to life.

European and international developments - readers are also referred to the following websites:

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