Featured Product

    PRA Proposes to Extend Temporary High Balances Coverage Amid COVID-19

    July 09, 2020

    PRA issued a proposal, via the consultation paper CP6/20, to extend coverage under the Financial Services Compensation Scheme (FSCS) for Temporary High Balances, from six months to twelve months from the date of deposit or from the first date the Temporary High Balance becomes legally transferable to the depositor. The proposed extension of coverage would be until, and including, January 31, 2021. This extension is being proposed in response to the impact of COVID-19 on residential property and investment markets and on access to banking services for some depositors. Temporary High Balance coverage would revert to six months from February 01, 2021. The comment period for this consultation ends on July 23, 2020.

    The Temporary High Balance rules of PRA extend FSCS coverage from GBP 85,000 to GBP 1 million for six months from the point of deposit for certain qualifying life events, including the purchase and proceeds from residential properties. Depositor Protection Part of the PRA Rulebook sets out the list of categories of eligible deposits that may benefit from Temporary High Balance protection. The extension in Temporary High Balance coverage would be accompanied by consequential changes to the Depositor Protection Part of the PRA Rulebook (Appendix 1) and to paragraphs 30, 47a, and 47b of the Deposit Guarantee Scheme Statement of Policy. PRA would not require firms to update the information sheet in Annex 1 of Depositor Protection Part of the PRA Rulebook to reflect the extension to a twelve-month Temporary High Balance coverage. If firms do decide to amend their information sheets, then PRA would expect firms to ensure that the information sheet is changed back before February 01, 2021.

    CP6/20 is relevant to retail financial consumers that are, or may become, Temporary High Balance depositors before February 01, 2021. CP6/20 is also relevant to the FSCS and to all PRA-authorized deposit-takers. The proposal has been designed in the context of withdrawal of UK from EU and entry into the transition period, during which time UK remains subject to the 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 proposal would not need to be amended under the EU (Withdrawal) Act 2018.

     

    Related Links

    Comment Due Date: July 23, 2020

    Keywords: Europe, UK, Banking, COVID-19, FSCS, PRA Rulebook, Deposit Guarantee Scheme, Residential Property, Credit Risk, CP6/20, Temporary High Balance Coverage, PRA

    Featured Experts
    Related Articles
    News

    BCBS Proposes to Amend Rules on Minimum Haircut Floors for SFTs

    BCBS is consulting on two technical amendments to the rules on minimum haircut floors for securities financing transactions, or SFTs.

    January 26, 2021 WebPage Regulatory News
    News

    EC Consults on Crisis Management and Deposit Insurance Framework

    EC launched a targeted consultation on the review of crisis management and deposit insurance framework in EU.

    January 26, 2021 WebPage Regulatory News
    News

    EIOPA Sets Out Principles for Liquidity Stress Test for Insurers

    EIOPA published a paper that sets out the methodological principles of insurance stress testing with a focus on the liquidity component.

    January 26, 2021 WebPage Regulatory News
    News

    BIS Launches Euro Green Bond Fund for Central Banks

    BIS launched a EUR-denominated, open-ended fund for green bond investments by central banks and official institutions, following the launch of the first BIS green bond fund denominated in USD in September 2019.

    January 25, 2021 WebPage Regulatory News
    News

    EBA Announces Stress Test Timeline; ECB Sets Up Climate Change Center

    EBA announced that it will launch the 2021 EU-wide stress test exercise, with the publication of the macroeconomic scenarios on January 29, 2021.

    January 25, 2021 WebPage Regulatory News
    News

    BoE Discontinues Form CX on Capital Expenditure and Finance Leasing

    BoE announced that the reporting entities are no longer required to report Form CX after the fourth quarter of 2020 reference period, with the last collection on January 29, 2021.

    January 25, 2021 WebPage Regulatory News
    News

    PRA Updates Q&A on Branch Return, Announces End Date of COVID Facility

    PRA published Version 3 of the questions and answers (Q&A) on the Branch Return form, with this version superseding the version published in October 2020.

    January 25, 2021 WebPage Regulatory News
    News

    IAIS Consults on Application Paper on Supervision of Control Functions

    IAIS is consulting on a draft application paper on the supervision of control functions.

    January 25, 2021 WebPage Regulatory News
    News

    ECB President Answers Queries on Application of EU Taxonomy

    ECB published a letter in which the President Christine Lagarde answered questions, from a Member of the European Parliament, on the application of the EU taxonomy on sustainable finance.

    January 22, 2021 WebPage Regulatory News
    News

    PRA Issues Direction on Capital Buffers, Finalizes PS1/21 on SM&CR

    PRA published a direction for modification by consent of 5.1 to 5.3 and 5.5 of the Capital Buffers Part of the PRA Rulebook.

    January 22, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 6499