PRA published the policy statement PS11/21 setting out updated supervisory statement SS28/15 on strengthening individual accountability in banking, SS35/15 on strengthening individual accountability in insurance, and Form D on changes to personal information/application details and conduct breaches/disciplinary action related to conduct. PS11/21 also provides feedback to responses to Chapter 2 of the FCA consultation paper CP20/23 and the consequential amendments to the PRA Rulebook. Chapter 2 of CP20/23 jointly proposed PRA and FCA expectations regarding temporary, long-term absences for Senior Management Functions. The changes outlined in PS11/21 will take effect from June 02, 2021 and PS11/21 is relevant to all PRA-authorized firms.
In the FCA CP20/23, PRA and FCA had proposed to clarify their expectations for firms notifying the competent authorities of when a Senior Manager takes temporary leave for longer than 12 weeks (long-term leave)—for example in cases of parental leave and where the length of absence is not known. The proposals were:
- In cases where an individual who performs a Senior Management Function is temporarily absent from their role and the firm intends to keep the role open for that individual to return to in the future, the firm would not need to notify PRA (and where applicable FCA) that the individual’s approval should be removed.
- Firms would be expected to ensure that where the individual taking long-term leave is carrying out a PRA (or FCA) required function, another individual is appointed to perform that required function during the interim period.
- A minor amendment to "Form D - Changes to personal information/application details and conduct breaches/disciplinary action related to conduct," to enable firms to notify PRA or FCA that the relevant individual is taking leave or returning from that leave.
Respondents generally welcomed the PRA proposals, with some respondents also requesting clarifications (set out in Chapter 2). Post consultation, the amendments have been made to the following parts of the PRA Rulebook:
- Senior Managers Regime – Applications and Notifications Part
- Insurance - Senior Managers Regime – Applications and Notifications Part
- Large Non-Solvency II Firms - Senior Managers Regime – Applications and Notifications Part
- Non-Solvency II Firms - Senior Managers Regime – Applications and Notifications Part
PRA also identified that the extract of Form D that was used in the CP20/23 was not the current version of the Form D. The text under PRA and FCA banners had already been removed following PS20/20. Form D will appear without this text and this minor change to what appeared in the consultation does not result in any material change for firms. The only changes to Form D that firms should note are those set out in FCA CP20/23. PRA also made several language and typographical changes to the supervisory statement to provide clarity and improve readability. The proposals set out in PS11/21 have been designed in the context of the end of Brexit transition. Any references to EU or EU-derived legislation refer to the version of legislation that forms part of the retained EU law. PRA will keep the policy under review to assess whether any changes would be required due to changes in the UK regulatory framework.
- PS11/21 (PDF)
- PRA Rulebook (PDF)
- SS28/15 (PDF)
- SS35/15 (PDF)
- Form D (PDF)
- CP20/23 (PDF)
Effective Date: June 02, 2021
Keywords: Europe, UK, Banking, Insurance, Senior Managers, PRA Rulebook, Form D, PS11/21, CP20/23, SS28/15, SS35/15, SM&CR, CRR, Solvency II, PRA, FCA
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