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    HMT Issues Instrument on IFPR Changes; BoE Issues Reporting Updates

    March 02, 2022

    The Her Majesty's Treasury (HMT) published the draft statutory instrument titled "Financial Services Act 2021 (Prudential Regulation of Credit Institutions and Investment Firms) (Consequential Amendments and Miscellaneous Provisions) Regulations 2022," which comes into force on August 17, 2022. This instrument includes certain amendments that follow the introduction of the Investment Firms Prudential Regime (IFPR) and Basel III standards on January 01, 2022. In addition, the Bank of England (BoE) announced that Data and Statistics Division is planning to move the collection of the Issuing and Paying Agents' Reporting Form (Form IPA) to the Bank of England Electronic Data Submission (BEEDS) portal.

    As part of this transition, BoE will move the reporting format of Form IPA from a macro-enabled Excel template to XBRL. Migration has an intended completion date in 2023. More details, including an expected timeline, will be released via another Statistical Notices in due course. In the coming months, BoE will consult with the Issuing and Paying Agents to discuss the transition and possible changes to the collection. Additionally, BoE published a statistical notice confirming that the next User Acceptance Testing (UAT) window will take place from February 28, 2022 until March 18, 2022. The UAT will be open to all statistical reporters and software houses, to enable testing of Version 1.2.2 of the Bank of England Statistics taxonomy, following the corrective release. With regard to work on the Excel-based solution (alternative reporting method to XBRL), BoE announced that it has made the decision to publish a utility that will enable firms to report their Statistical data within an Excel workbook and convert this into an XBRL file. This XBRL file can then be uploaded via BEEDS. The utility will only be supported for the current version of the taxonomy and will not be maintained for future taxonomy updates. This is to aid statistical reporters with the transition to reporting in XBRL and notice will be given when the XBRL utility will be withdrawn. Further information on this will be made available in due course. BoE also updated the frequently asked questions (FAQs) on OSCA to BEEDS migration.

    Coming back to the statutory instrument that followed the introduction of IFPR and Basel standards, which HMT published recently, this statutory instrument repeals the Banking Act 2009 (Exclusion of Investment Firms of a Specified Description) Order 2014 as it is redundant following the removal of FCA-regulated investment firms from the UK resolution regime. This instrument makes transitional provision in respect of risk retention requirements for certain securitizations, following the implementation of the IFPR. These requirements relate to the retention of a material net economic interest in a securitization by the originator, sponsor, or original lender to better align their interests with those of investors. This instrument makes amendments to ensure that short-term liabilities owed to both PRA- and FCA-regulated investment firms with permission to underwrite or deal on own account will continue to be exempt from bail-in. Bail-in involves shareholders of a failing institution being divested of their shares and creditors of the institution having their claims canceled or reduced to the extent necessary to restore the institution to financial viability. This instrument also addresses further deficiencies arising from withdrawal of the United Kingdom from the European Union.

     

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    Keywords: Europe, UK, Banking, Statistical Reporting, Statistical Notice, BEEDS, BEEDS Testing, Data Collection, XBRL, Form IPA, Investment Firms, CRR, IFPR, Basel, Regulatory Capital, Reporting, HM Treasury, BoE

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