PRA published the Policy Statement PS30/17, which provides feedback to the responses to the consultation paper CP12/17 on Pillar 2A capital requirements and disclosure. PRA also sets out, in Appendices, the final amendments to SS31/15 on the Internal Capital Adequacy Assessment Process (ICAAP) and the Supervisory Review and Evaluation Process (SREP) and the Statement of Policy on PRA methodologies for setting Pillar 2 capital. The Statement of Policy was updated following updates on PS30/17 and SS31/15. PS30/17 will be effective from January 01, 2018.
In CP12/17, PRA had proposed to:
- Set Pillar 2A capital as a firm-specific capital requirement under section 55M of the Financial Services and Markets Act 2000 (FSMA), rather than as individual guidance
- Update existing capital terminology, in particular to introduce the term “Total Capital Requirement” (TCR) to refer to the amount and quality of capital a firm must maintain to comply with the minimum capital requirements under the Capital Requirements Regulation (575/2013) (CRR) (Pillar1) and the Pillar 2A capital requirement
- Revise PRA’s Pillar 2A disclosure policy, introducing an expectation that firms disclose their TCR or, where a Pillar 2A capital requirement has not yet been set, total Pillar 1 and Pillar 2A guidance
- Provide clarity on when and how individual Pillar 2A capital requirements may be set
As a result of feedback, PRA made a minor change to the draft Supervisory Statement to the TCR disclosure expectation for sub-consolidated ring-fenced bodies (RFBs). This change clarifies that the disclosure expectation for RFBs applies only at the sub-consolidated group level, where one has been set up, and not at subsidiary or individual (solo) level. Minor further corrections to the Supervisory Statement and Statement of Policy have been made to reflect the change of terminology from individual capital guidance (ICG) to TCR, and minor linguistic corrections. The updates are intended to provide additional clarity and transparency to the Pillar2A framework of PRA. PS30/17 is relevant to banks, building societies, and PRA-designated investment firms.
Effective Date: January 01, 2018
Keywords: Europe,UK, Banking, Pillar2a,Capital Requirements, Disclosure, PRA
Next ArticleAPRA Announces Stronger Capital Benchmarks for Banks
MAS and Temasek jointly released a report to mark the successful conclusion of the fifth and final phase of Project Ubin, which focused on building a blockchain-based multi-currency payments network prototype.
EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.
APRA updated the lists of the Direct to APRA (D2A) validation rules for authorized deposit-taking institutions, insurers, and superannuation entities.
PRA updated the statement that provides guidance to regulated firms on implementation of the EBA guidelines on reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis.
EBA updated the 2019 list of closely correlated currencies that was originally published in December 2013.
FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).
APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.
BCBS and FSB published a report on supervisory issues associated with benchmark transition.
IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.
ESMA updated the reporting manual on the European Single Electronic Format (ESEF).