BoE Publishes Final and Near-Final Policies Before Brexit Transition
In the jointly published policy statement PS27/20, BoE and PRA have set out the final and near-final policies before the end of the Brexit transition period. PS27/20 includes the final BoE and PRA Technical Standards (EU Exit) Instruments, the "Nationalizing the Acquis (NtA) non-binding materials," and the BoE transitional direction and related guidance documents. The PRA transitional direction, PRA Rulebook (EU Exit) Instrument, and related guidance documents have been published as "near-final" in PS27/20. PRA will finalize these documents before the end of the transition period, once the PRA rules implementing the fifth Capital Requirements Directive (CRD5) have been made. PS27/20 also provides feedback to responses to the consultation papers CP13/20 and CP18/19, which proposed changes resulting from Brexit.
PRA has received five responses to CP13/20 and three responses to CP18/19. Additionally, two responses addressed changes to the Depositor Protection Part of the PRA Rulebook. Section A of PS27/20 relates to the BoE and PRA transitional directions and guidance. Chapter 2 sets out further changes and clarifications to the near-final PRA transitional direction (Appendix A.1), the final BoE transitional direction (Appendix A.7), the final BoE and near-final PRA general guidance notes on transitional directions (Appendices A.2 and A.8), and the final BoE and near-final PRA-specific guidance notes on transitional directions (Appendices A.3-A.10). Section B contains EU Exit Instruments making changes to existing PRA rules and on-shored Binding Technical Standards. Section B also includes updated BoE and PRA supervisory statements and statement of policy. This package of supervisory statements and statement of policy is referred to collectively as "NtA non-binding materials." Section B includes the following chapters:
- Chapter 3 is relevant to all regulated firms and financial market infrastructure (FMIs) entities; it sets out updates to the final BoE and PRA statement of policy on interpretation of EU guidelines and recommendations (Appendix B.1)
- Chapter 4 is relevant to all regulated firms and sets out updates to the final SS1/19 on approach of PRA after withdrawal of UK from EU (Appendix B.2), the final SS2/19 on approach to interpreting reporting and disclosure requirements and regulatory transactions forms after Brexit (Appendix B.3), the final updates to SS18/15 on depositor and dormant account protection (Appendix B.4), the near-final PRA Rulebook (EU Exit) Instrument (Appendix B.5), and the final Technical Standards (EU Exit) Instruments in the PRA remit (Appendices B.6 – B.9).
- Chapter 5 is relevant to firms in scope of the UK resolution regime and FMIs; it sets out amendments to the final Technical Standard (EU Exit) Instrument in the BoE remit as the resolution authority and the FMI competent authority (Appendix B.10).
- Chapter 6 is relevant to firms in scope of the UK resolution regime and sets out amendments to the final Technical Standards (EU Exit) Instruments in the BoE remit as the resolution authority (Appendix B.11).
- Chapter 7 is relevant to FMIs; it sets out amendments to the final BoE supervisory statement on non-binding BoE materials related to Financial Market Infrastructure Supervision (Appendix B.12) and the final Technical Standards (EU Exit) Instruments in the BoE remit as FMI competent authority (Appendices B.13 – B.14).
- Chapter 8 sets out the obligations of BoE and PRA under the European Union (Withdrawal) Act 2018.
- Chapter 9 sets out the obligations of PRA under the Financial Services and Markets Act 2000 (FSMA).
PRA does not intend to make changes to the near-final materials published as part of PS27/20. However, PRA has consulted, in CP22/20, on designation of firms within certain consolidation groups on its proposed rules to a new Part of the PRA Rulebook (the Designation Part). Some of the proposed rules require amending to ensure that they remain operable after the end of the transition period; therefor, CP22/20 included a companion PRA Rulebook (EU Exit) Instrument. These onshoring changes have been included in the "near-final" PRA Rulebook (EU Exit) Instrument (published as part of this PS27/20) but remain subject to change, following responses received to CP22/20. The transitional directions and Technical Standards (EU Exit) Instruments will all commence on IP completion day (11 pm on December 31, 2020). Most provisions of the updated PRA Rulebook (EU Exit) Instrument will commence on IP completion day, although a small number of provisions will take effect at different times, as explained in the commencement provision. All NtA non-binding materials will become applicable on the IP completion day.
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Keywords: Europe, UK, Banking, Insurance, Brexit, Exit Instruments, CRD5, Binding Technical Standards, PRA Rulebook, Reporting, Transitional Direction, PS27/20, BoE, PRA
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