Top news and publications
- DP4/22 – The Prudential Regulation Authority’s future approach to policy
- The PRA's future approach to policy − speech by Vicky Saporta
- CP7/22 – Credit Unions: Changes to the Regulatory Regime
- PS 8/22 - Definition of capital: Updates to PRA Rules and supervisory expectations
- CP9/22 – Depositor Protection
News and speeches
The PRA's future approach to policy − speech by Vicky Saporta
27 September 2022
Vicky explains how regulation that is strong and responsive can avoid unnecessary trade-offs between competitiveness and resilience.
The Financial Services and Markets Bill 2022 introduces new powers and a new secondary objective on competitiveness and growth for the PRA. Vicky argues that the PRA can use these new powers to regulate responsively, and better tailor rules to the needs of the UK. Vicky sets out the PRA’s intention to take a proactive approach to the new objective. She explains that as a global financial hub, the UK’s competitiveness in financial services rests on its skilled workforce, and its deep and specialised markets.
The PRA's future approach to policy − speech by Vicky Saporta
DECL Taskforce
23 September 2022
The Taskforce on Disclosures about Expected Credit Losses (DECL) has published updated guidance (the Taskforce’s third report) on a complete set of high quality IFRS 9 Expected Credit Loss accounting (ECL) disclosures.
Who’s concentrating? Trends in the life insurance sector and the need for strong reinsurance and investment risk management − speech by Charlotte Gerken
20 September 2022
Charlotte Gerken speaks about concentration risks in Life Insurance, coming from:
- increasing longevity reinsurance;
- use of funded reinsurance;
- and growth of illiquid assets.
Charlotte says the Prudent Person Principle (PPP) is important to address these risks. But regulatory requirements need to support good risk management.
The PRA is thinking about how to address concentration risk. This includes how to manage risk from reinsurance, and the matching adjustment (MA) review.
Cross cutting publications and updates
DP4/22 – The Prudential Regulation Authority’s future approach to policy
8 September 2022
This Discussion Paper (DP) describes how we, the PRA, intend to approach policy-making as we take on wider rulemaking responsibilities under the Financial Services and Markets Bill (‛FSM Bill’). It is relevant for all PRA-regulated firms.
The FSM Bill will implement the outcomes of the Future Regulatory Framework (FRF) Review, which was established by the Government to consider how the UK’s financial services regulatory framework should adapt for the future, and in particular to reflect the UK’s position outside of the European Union. The proposals in this DP have been developed based on the FSM Bill as it was introduced in Parliament on Wednesday 20 July.
Our ambition is to be a strong, accountable, responsive, and accessible policymaker. To deliver on this, our approach will remain similar in some areas, and change in others. We will continue to be driven by the pursuit of strong prudential standards, which are a cornerstone of UK financial stability and the international reputation of the UK as a safe and attractive place to do financial services business. However, the move to a more British style of regulation, with most of the technical rules made by independent regulators, will enable us to be more agile and deliver policies which are better suited to the UK’s financial sector.
We welcome views on the ideas set out in this DP from all interested parties. The period for comment runs until Thursday 8 December. After analysing responses, we will publish a consultation paper, followed by a final publication on our policy approach. This final publication will be the policy equivalent of the PRA’s approach to supervision publications.
Please send your comments to DP4_22@bankofengland.co.uk by Thursday 8 December.
12 September 2022 update: the PRA is aware that an email alert incorrectly stated that this DP is relevant to UK banks, building societies and PRA-designated UK investment firms only. Please note that this DP is relevant to all PRA-regulated firms.
DP4/22 – The Prudential Regulation Authority’s future approach to policy
Banking publications and updates
PS 8/22 - Definition of capital: Updates to PRA Rules and supervisory expectations
26 September 2022
This PS provides feedback to responses to CP 2/22 ‘Definition of capital: updates to PRA Rules and supervisory expectations’. It also contains the PRA’s final policy, as follows:
- amendments to the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook (Appendix 1); and
- updated SS7/13 ‘Definition of capital (CRR firms)’ (Appendix 2).
This PS is relevant to banks, building societies, PRA-designated investment firms, and PRA-approved, or PRA-designated, financial or mixed financial holding companies.
PS8/22 | CP2/22 Definition of capital: Updates to PRA Rules and supervisory expectations
CP9/22 – Depositor Protection
23 September 2022
This CP sets out the PRA’s proposals to amend the Depositor Protection Part of the PRA Rulebook (DP), delete the Dormant Account Scheme Part of the PRA Rulebook, and make minor amendments to the PRA’s Supervisory Statement 18/15 on ‘Depositor and dormant account protection’ (SS18/15), the PRA’s Statement of Policy on ‘Deposit Guarantee Schemes’ (SoP – DGS), and the PRA’s SoP on ‘Calculating Risk-Based Levies for the Financial Services Compensation Scheme deposits class’ (‘SoP – RBL’).
The proposals in this CP would result in changes to the Dormant Account Scheme Part of the PRA Rulebook (DAS), DP rules, SS18/15, SoP – DGS, and SoP – RBL. More details on the structure of this CP, including where the proposed changes are located, are set out in paragraph 1.10.
This CP includes proposals to:
Delete and/or amend the following rules from the PRA Rulebook:
- Delete the rules in DP 13.4 – 13.8 and amend the rules in DP 15.2 – 15.4 and 15.7, together the Continuity of Access Rules (‘CoA Rules’) (Continuity of Access Rules section); and
- Delete the DAS chapter from the PRA Rulebook and make other necessary consequential amendments (Dormant Account Scheme section).
These proposals are subject to a 4-week consultation period to allow the COA Rules to be revoked before the current waiver by consent expires on 1 December 2022.
Amend the rules in:
- DP 10 to confirm that a trust can hold monies that fall within the scope of the temporary high balance (THB) regime and set out when a joint account holder is entitled to THB protection (Temporary high balances section);
- DP 6.2 to protect eligible customers of e-money institutions, authorised payment institutions, small payment institutions, and credit unions (in respect of e-money), if a credit institution holding such firms’ safeguarded funds were to fail (Protection for deposits that are safeguarded funds section);
- DP 3.2 to set out that depositors of overseas firms that have their Part 4A permission removed and exit the UK market do not continue to benefit from Financial Services Compensation Scheme (FSCS) protection (FSCS protection for firms in default section);
- DP 19.1(2) to provide that depositors only have a right of withdrawal, without penalty, when a deposit taker merges with or transfers their deposits to another deposit taker, if the operation results in a reduction in FSCS protection (Withdrawal rights on deposit transfer section); and
- DP 17.1(3) so that the annual FSCS notification requirement for depositors does not apply to depositors that are not entitled to FSCS protection by virtue of their legal personality (FSCS notification requirements section).
Due to the more complex nature of these proposals, they are subject to a 12-week consultation period.
Delete PRA Rules and amend and update existing policy documents:
- Update SoP – RBL to account for changes made to reporting requirements and the leverage ratio (Risk based levies section); and
- Delete PRA Rules in DP 17.3 and 20.3 as given the period of time since IP Completion Day, the Rules are now spent and amend and update SS18/15, SoP – DGS SoP, and SoP – RBL to reflect the UK’s withdrawal from the EU, expired transition periods, and rules that may be removed pending the outcome of this CP (Consequential amendments to PRA rules, Supervisory Statements and Statements of Policy section).
These proposals are subject to a 12-week consultation period.
The purpose of the proposals in this CP is to ensure that the deposit protection framework provides for an effective compensation scheme for deposits which minimises the adverse effect that the failure of an FSCS member could be expected to have on the stability of the UK financial system. The PRA has identified a number of areas where rules are no longer achieving the expected benefits and so need to be revoked, are redundant so need to be deleted, or require amendment to ensure they reflect the original policy intent.
The proposals in this CP are relevant to the FSCS and different types of firms as follows:
- The Continuity of Access Rules section is relevant to all PRA-authorised UK banks and building societies, but not credit unions. It is also relevant to overseas firms with permission to accept deposits where the deposits are held by a UK branch or subsidiary of the firm.
- The Protection for deposits that are safeguarded funds section is relevant to e-money institutions, authorised payment institutions, small payment institutions, credit unions (in respect of e-money), and PRA-authorised credit institutions.
- The remaining sections are relevant to all PRA-authorised credit institutions and credit unions. They are also relevant to overseas firms with permission to accept deposits where the deposits are held by a UK branch or subsidiary of the firm.
CP7/22 – Credit Unions: Changes to the Regulatory Regime
21 September 2022
This CP sets out the PRA’s proposed amendments to the regulatory regime that applies to credit unions.
The proposals would result in:
- amendments to the Credit Union Part of the PRA Rulebook (Appendix 1); a new Supervisory Statement (SS) ‘Supervising credit unions’ which the PRA proposes would supersede SS2/16 ‘The prudential regulation of credit unions’ (Appendix 2), which will be deleted.
The CP is relevant to all UK credit unions.
Your input and views on open PRA consultations and other requests closing in October 2022
CP10/22 – Insurance special purpose vehicles: Further updates to authorisation and supervision
Closing date: 11 October 2022
CP11/22 - Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251
Closing date: 12 October 2022
CP6/22 – Model risk management principles for banks
Closing date: 21 October 2022
Closing date: 21 October 2022 for proposals relating to the Continuity of Access Rules and Dormant Account Scheme rules
More information
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