Top news and publications
- Changes to FCA Firm Reference Numbers (FRNs) and Product Reference Numbers (PRNs)
- Prudential Regulation Authority Annual Report 2022/23
- CP14/23 – Pillar 3 remuneration disclosure
- CP13/23 – Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251
- CP15/23 – Securitisation: General requirements
- CP16/23 – Updating UK Technical Standards on the identification of global systemically important institutions (G-SIIs)
- PS11/23 – Credit Unions: Changes to the regulatory regime
- PS10/23 – Complaints against the regulators (the Bank of England, the FCA, and the PRA)
News and speeches
Changes to FCA Firm Reference Numbers (FRNs) and Product Reference Numbers (PRNs)
20 July 2023
The PRA and the Financial Conduct Authority (FCA) use six and seven-digit Firm Reference Numbers (FRNs) to uniquely identify firms, and six and seven-digit Product Reference Numbers (PRNs) to identify funds. The FCA issued the first seven-digit reference numbers on Tuesday 18 July 2023.
In June 2022, the FCA announced its plan to move to seven-digit FRNs and PRNs for newly registered firms and funds respectively. Firms and funds previously allocated six-digit references FRN or PRN will continue to maintain those numbers.
Prudential Regulation Authority Annual Report 2022/23
6 July 2023
The Bank of England and the Prudential Regulation Authority (PRA) have published their annual reports. The PRA report includes information on our activities for the year ended 28 February 2023. The PRA Annual Report 2022/23 was prepared ahead of the Financial Services and Markets Act 2023 receiving Royal Assent on 29 June. The Bill is now an Act of Parliament.
The PRA Annual Report outlines the work completed in pursuit of our 2022/23 strategic goals and in advancing our statutory objectives, and contains the:
- annual report of the PRC to the Chancellor of the Exchequer;
- report on certain aspects of ring-fencing following its implementation on 1 January 2019;
- landmark policy consultation including the implementation of the Basel 3.1 standards;
- improvements to the PRA’s approach to supervising firms;
- continued work with HM Treasury on the review of Solvency UK; and
- Annual Competition Report (June 2023).
Prudential Regulation Authority Annual Report 2022/23
'Yesterday’s logic' − speech by Nathanaël Benjamin
3 July 2023
In the last 12 months, a number of risks have crystallised, which are symptoms of the transition to a new macro-economic environment. In that context, the supervisory priorities for international banks that the PRA set out in January 2023 remain as live as ever. Nathanaël Benjamin says that banks must be proactive in anticipating these risks.
Cross cutting publications and updates
CP15/23 – Securitisation: General requirements
27 July 2023
This CP sets out the PRA’s proposed rules to replace retained EU law requirements on PRA-authorised persons in:
- provisions of the Securitisation Regulation for which the PRA has supervisory responsibility;
- the related Risk Retention Technical Standards; and
- the related Disclosure Technical Standards.
This CP also covers adjustments to the scope of PRA supervisory statement (SS) 10/18 – Securitisation: General requirements and capital framework. Further, it explains the circumstances in which the PRA envisages using a new power under section 138BA of the Financial Services and Markets Act 2000 (FSMA) for disapplying or modifying proposed rules on the use of resecuritisations.
CP15/23 – Securitisation: General requirements
CP16/23 – Updating UK Technical Standards on the identification of global systemically important institutions (G-SIIs)
27 July 2023
The proposals in this CP would result in changes to the UK Technical Standards (the UKTS) for the methodology used to identify G-SIIs. This CP sets out policy proposals to align the UKTS with updates made to the BCBS framework.
The PRA’s proposals aim to maintain the alignment of the UKTS with the BCBS framework. Identifying and setting an additional capital buffer for G-SIIs in accordance with the BCBS methodology developed at international level advances the PRA’s primary safety and soundness objective. It does this by helping to ensure G-SIIs hold appropriate levels of capital, in line with the greater costs of their distress or failure to the financial system and economy. Ensuring consistency with the BCBS framework also provides clarity to firms and avoids incurring any duplicative operational costs for firms and the PRA.
PS10/23 – Complaints against the regulators (the Bank of England, the FCA, and the PRA)
27 July 2023
The FCA, the Prudential Regulation Authority (PRA) and the Bank of England have finalised a revised scheme for those who have complaints about the regulators, following a consultation.
The revised scheme provides clarity around what people can expect when they complain, making it more transparent and user-friendly.
Complaints are a valuable source of feedback that inform changes and improvements across the regulators. Regulators take all complaints seriously and welcome the transparency and accountability that the scheme provides.
The new scheme will apply from 1 November 2023. Complaints made prior to this date will be considered under the existing scheme.
PS10/23 – Complaints against the regulators (the Bank of England, the FCA, and the PRA)
The 2023 update to the PRA’s Supervisory Approach documents for Banking and Insurance Supervision
31 July 2023
The PRA has published updated versions of the PRA’s Approach documents for Banking and Insurance Supervision.
The supervisory approach documents provide a high-level overview of the policies and standards that supervisors follow. In doing so, they contribute to providing clarity as to what we expect of the firms we supervise, how we assess the risks that they pose to our objectives, and how they can expect us to engage with them.
PRA’s approach to supervision of the banking and insurance sectors
Banking publications and updates
PS11/23 – Credit Unions: Changes to the regulatory regime
26 July 2023
This PRA PS provides feedback on responses to CP7/23 – Credit Unions: changes to the regulatory regime. It also contains the PRA’s final policy, as follows:
- amendments to the Credit Unions Part of the PRA Rulebook (Appendix 1); and
- a new supervisory statement (SS) 2/23 – Supervising credit unions (Appendix 2) which supersedes SS2/16 – The prudential regulation of credit unions, which has been deleted
This PS is relevant to all UK credit unions. Certain amendments apply only to Great Britain credit unions.
PS11/23 – Credit Unions: Changes to the regulatory regime
CP14/23 – Pillar 3 remuneration disclosure
19 July 2023
This CP sets out the PRA’s proposals to enhance proportionality of Pillar 3 remuneration disclosure requirements, by reducing the number of remuneration disclosures required for many smaller banks and building societies. This consultation follows on from the PRA’s February 2023 consultations: CP4/23 – The Strong and Simple Framework: Liquidity and Disclosure requirements for Simpler-regime Firms and CP5/23 – Remuneration: Enhancing proportionality for small firms.
CP4/23 and CP5/23 stated that the PRA would consider the interaction of the disclosure and remuneration proposals and intended to consult on the new remuneration disclosure requirements in the near future; both of which have been set out in this CP. The proposals in this CP should not be taken as an indication of the PRA’s views on the responses to CP4/23 and CP5/23 as the PRA is still considering these. The PRA is consulting at this time with the aim of delivering a complete disclosure package for firms in scope of CP4/23 and CP5/23; therefore, the PRA is consulting with reference to the proposed policy set out in CP4/23 and CP5/23.
This CP is relevant to PRA-authorised banks and building societies, and prospective entities interested in, and currently applying for, authorisation as a deposit-taker. The PRA considers that the proposals in this CP would be of particular interest to firms that expect to meet the proposed Simpler-regime criteria set out in CP16/22, firms that expect to meet the proposed criteria to apply the simpler remuneration regime as per CP5/23, and current small and non-complex institution (SNCI) firms who will not be Simpler-regime Firms, but may fall under the scope of the CP5/23 proposals in the future. The proposals in this CP are also relevant to the users of the Pillar 3 disclosures made by the aforementioned firms.
CP14/23 – Pillar 3 remuneration disclosure
CP13/23 – Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251
18 July 2023
This CP sets out the PRA’s and FCA’s proposal to extend the temporary exemptions for single-stock equity options and index options from the UK bilateral margining requirements from 4 January 2024 until 4 January 2026. This CP also sets out the PRA’s and the FCA’s proposed approach to model pre-approval in relation to bilateral initial margin models.
The proposal to extend the temporary exemptions for single-stock equity options and index options from the UK bilateral margining requirements in this CP would result in changes to the UK version of Commission Delegated Regulation (EU) 2016/2251 of 4 October 2016 and the regulatory technical standards for risk-mitigation techniques for over-the-counter (OTC) derivative contracts not cleared by a central counterparty (hereafter Binding Technical Standards (BTS) 2016/2251). This BTS supplements Article 11(15) of Regulation (EU) 648/2012 on OTC derivatives, central counterparties, and trade repositories (UK European Market Infrastructure Regulation (EMIR)) (Appendix 1).
The proposals in this CP aim to:
- maintain the status quo under the temporary exemptions for single-stock equity options and index options from the UK bilateral margining requirements until 4 January 2026, allowing the PRA and the FCA to gather the evidence necessary to create a permanent regime; and
- set out the PRA’s and the FCA’s approach to model pre-approval in relation to bilateral initial margin models.
This CP is relevant to banks, building societies, and PRA-designated investment firms in scope of the margin requirements under UK EMIR. In addition, this CP is relevant to all FCA solo-regulated entities and non-financial counterparties in scope of the margin requirements under UK EMIR (FCA firms).
CP13/23 – Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251
Insurance publications and updates
PRA statement on the recalculation of the Transitional Measure on Technical Provisions (TMTP)
17 July 2023
In line with supervisory statement (SS) 6/16 – Maintenance of the transitional measure on technical provisions under Solvency II, the PRA has been monitoring market conditions since the previous biennial TMTP recalculation in December 2021. The PRA also considers whether any changes in market conditions since previous recalculation points can reasonably be considered to have been sustained. In the PRA’s view, movements in risk free rates during the first half of 2023 meet the threshold for a material change in market conditions as set out in SS6/16, potentially leading to a change in risk profile for firms.
The PRA would be willing to accept applications from firms to recalculate TMTP as at Friday 30 June 2023. In any application, the PRA expects firms to be able to demonstrate that a material change in risk profile has occurred.
Firms should note that in order to expedite the application process, the PRA would expect applications at this time to use firms’ existing TMTP calculation methodologies.
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-size post summarises a piece of analysis that support a policy or operational decision.
Explainers – from interest rates and inflation through to bank failures and financial crises, Explainers uses everyday examples and engaging visuals to bring economics to life.
European and International developments – readers are referred to the following websites: