PRA published a policy statement (PS3/20) that provides updates to certain supervisory statements (SS20/15, SS28/15, and SS35/15) and statements of policy (SoP). The proposals on these updates were covered in Chapters 2 and 3 of an occasional consultation paper CP25/19. The proposals in chapter 2 were to update SS20/15 on supervising building societies’ treasury and lending activities (Appendix 1) and Statement of Policy on the methodologies for setting Pillar 2 capital (Appendix 2) to remove references to the London Inter-Bank Offered Rate (LIBOR). In chapter 3, PRA proposed to update certain redundant references and make minor corrections to SS28/15 on strengthening individual accountability in banking (Appendix 3) and to SS35/15 on strengthening individual accountability in insurance (Appendix 4). PRA received no responses to these chapters of CP25/19 and has, therefore, made no changes to the draft policy.
PS3/20 will take effect from its date of publication. The policy set out in PS3/20 has been designed in context of the Brexit and the entry of UK into the transition period, during which time the UK remains subject to European law. PRA will keep the policy under review to assess whether any changes would be required due to changes in the UK regulatory framework at the end of the transition period, including those arising once any new arrangements with the EU take effect. PRA has assessed that the proposals would not need to be amended under the EU (Withdrawal) Act 2018 at the end of the transition period.
PRA plans to publish feedback and final policy for chapter 5 of the CP25/19, alongside the final policy for CP21/19 on probability of default and loss given default estimation under credit risk at a later date, as both consultations proposed changes to SS11/13 on the internal ratings-based approaches.
Effective Date: February 24, 2020
Keywords: Europe, UK, Banking, Insurance, Securities, PS 3/20, CP 25/19, Pillar 2, IRB Approach, Credit Risk, LIBOR, PRA
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The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).
The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
The Australian Prudential Regulation Authority (APRA) published the prudential practice guide CPG 511 to assist banks, insurers, and superannuation licensees in meeting requirements of CPS 511, the new prudential standard on remuneration.
The Office of the Comptroller of the Currency (OCC) published a bulletin that provides an updated self-assessment tool for banks to evaluate their preparedness for cessation of the London Interbank Offered Rate (LIBOR).
The Financial Stability Board (FSB) published a report that examines the progress made toward disclosures aligned with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
The Basel Committee on Banking Supervision (BCBS) published the progress report on adoption of the Basel III regulatory framework in member jurisdictions.
The French Prudential Supervisory Authority (ACPR) has implemented, in its information system, updates linked to the Data Point Model (DPM) version 3.1.
The European Banking Authority (EBA) published a thematic note that aims to identify and raise awareness of the transition risks of benchmark rates, as the London Interbank Offered Rate (LIBOR) and the Euro Overnight Index Average (EONIA) are close to being phased out.
In a letter to the federally regulated financial institutions and pension plans, the Office of the Superintendent of Financial Institutions (OSFI) published a summary of the feedback received to the January 2021 discussion paper on ways to address climate risks.