Featured Product

    PRA Reviews Capital Regime for Credit Unions in UK

    March 13, 2020

    PRA published the policy statement PS6/20, which contains the final policy on amendments to the Credit Union Part of the PRA Rulebook (Appendix 1) and the updated supervisory statement SS2/16 on the prudential regulation of credit unions (Appendix 2). PS6/20 also provides feedback to the responses received to consultation paper CP28/19 on the review of the capital regime for credit unions. PS6/20 is relevant to all credit unions and the changes in PS6/20 take effect from March 16, 2020.

    The updated supervisory statement SS2/16 sets out the PRA expectations of credit unions with regards to the Credit Union rules. It applies to all UK credit unions as defined in the Credit Union Rulebook Part. Areas covered include capital, liquidity, additional activities, maximum deposit levels, fixed-rate shares and deposits, lending, investments, and governance and organization. This statement is intended to be read together with the rules contained in the Credit Union Rulebook Part. The statement seeks to advance the statutory objective of PRA to promote the safety and soundness of the firms it regulates by setting out the expectations on how credit unions should comply with core elements of the regulatory framework contained in the Credit Union Rulebook Part. As per the regime, a credit union will be expected to maintain the relevant minimum requirement specified by Credit Union 8.5 at all times.

    SS2/16 was amended following the publication of PS6/20 on the review of capital regime for credit unions to update the capital requirements for credit unions. The changes include deletion of paragraphs 2.3-2.5, addition of new paragraph 2.6, amendment to paragraph 4.1, addition of the new paragraph 4.2A, amendments to paragraphs 4.3 and 4.4, and amendments to Tables 1 and 2. SS2/16 was also updated to simplify the formatting and language, where helpful, to aid readability and to update links in footnotes.

    The policy set out in PS6/20 has been designed in the context of the withdrawal of UK from EU and entry 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 (EUWA) at the end of the transition period.


    Related Links

    Effective Date: March 16, 2020

    Keywords: Europe, UK, Banking, PRA Rulebook, Credit Union, SS 12/16, Regulatory Capital, Proportionality, CP 28/19, PS 6/20, PRA

    Featured Experts
    Related Articles
    News

    PRA Consults on Implementation of Certain Provisions of CRD5

    PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).

    July 31, 2020 WebPage Regulatory News
    News

    EIOPA Report Identifies Key Financial Stability Risks for Insurers

    EIOPA published the financial stability report that provides detailed quantitative and qualitative assessment of the key risks identified for the insurance and occupational pensions sectors in the European Economic Area.

    July 30, 2020 WebPage Regulatory News
    News

    EBA Publishes Risk Dashboard for First Quarter of 2020

    EBA published its risk dashboard for the first quarter of 2020 together with the results of the risk assessment questionnaire.

    July 30, 2020 WebPage Regulatory News
    News

    EBA Issues Updates on Stress Test Exercise for Banks in EU

    EBA announced that the next stress testing exercise is expected to be launched at the end of January 2021 and its results are to be published at the end of July 2021.

    July 30, 2020 WebPage Regulatory News
    News

    PRA Proposes Guidance Related to Matching Adjustment under Solvency II

    PRA published the consultation paper CP11/20 that sets out its expectations and guidance related to auditors’ work on the matching adjustment under Solvency II.

    July 30, 2020 WebPage Regulatory News
    News

    MAS Issues Guidance on Dividend Distributions by Banks

    MAS published a statement guidance on dividend distribution by banks.

    July 30, 2020 WebPage Regulatory News
    News

    APRA Updates Guidance on Capital Management for Banks

    APRA updated its capital management guidance for banks, particularly easing restrictions around paying dividends as institutions continue to manage the disruption caused by COVID-19 pandemic.

    July 29, 2020 WebPage Regulatory News
    News

    FSB Report Reviews Macro-Prudential Framework and Tools in Germany

    FSB published a report that reviews the progress on data collection for macro-prudential analysis and the availability and use of macro-prudential tools in Germany.

    July 29, 2020 WebPage Regulatory News
    News

    EBA Urges Firms to Finalize Preparations for End of Brexit Transition

    EBA issued a statement reminding financial institutions that the transition period between EU and UK will expire on December 31, 2020; this will end the possibility for the UK-based financial institutions to offer financial services to EU customers on a cross-border basis via passporting.

    July 29, 2020 WebPage Regulatory News
    News

    SRB on Operational Continuity in Resolution and FMI Contingency Plans

    SRB published guidance on operational continuity in resolution and financial market infrastructure (FMI) contingency plans.

    July 29, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5604