BoE on Application of Transitional Power to CRD5 and BRRD2 Legislation
BoE published a statement on the application of the temporary transitional power to CRD5 and BRRD2 derived legislation. The statement confirms that no additional exceptions from the application of the transitional power are expected to be required in relation to onshoring changes to new rules and legislation implementing the fifth Capital Requirements Directive (CRD5) and the revised Banking Resolution and Recovery Directive (BRRD2). BoE has added guidance documents that support the draft transitional directions published as part of the consultation paper CP13/20 on changes before the end of the transition period. The documents provide guidance on transitional direction in relation to the PRA Rulebook, the Capital Requirements Regulation, the Solvency II regime, the Securitization Regulation, and the BRRD.
BoE and PRA have not identified the necessity of any further exceptions to its transitional directions as a result of onshoring amendments to the CRD5 and BRRD2 derived legislation. This means that transitional relief will apply to a small number of “relevant obligations” that are changed by onshoring amendments made to the CRD5 and BRRD2 derived legislation at the end of the transition period. The temporary transitional power, however, cannot apply to changes being made to the primary or secondary legislation to implement a Directive in domestic law. These changes are not onshoring amendments made under section 8 of the Withdrawal Act to which the temporary transitional power can apply. Firms must, therefore, ensure that they are ready to comply with changes to domestic law and PRA rules, which are being made to implement the CRD5 and the BRRD2 to the extent that these are relevant to firms.
In relation to the BRRD2, HM Treasury is making changes to primary legislation that will affect the existing PRA regime for Contractual Recognition of Bail-in and Stay in Resolution rules. Most of the elements of the Statutory Instrument that are relevant to Contractual Recognition of Bail-in and Stay in Resolution rules will come into force on December 28, 2020 but will subsequently cease to have effect from the end of the transition period. As a result of this process, the temporary transitional power will be of limited relevance to BRRD2. PRA has previously communicated that it does not intend to grant transitional relief in respect of Contractual Recognition of Bail-in and Stay in Resolution rules, except in relation to phase two liabilities as referenced in relation to Contractual Recognition of Bail-in rules. PRA intends that this policy outcome will remain the same irrespective of any changes to PRA rules made due to BRRD2.
Related Links
Keywords: Europe, UK, Banking, Insurance, CRD5, BRRD2, Brexit Transition, Temporary Transitional Power, CRR, PRA Rulebook, Solvency II, Contractual Recognition, Bail-In, Resolution Framework, PRA, BoE
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Adam Koursaris
Asset and liability management expert; capable modeler; risk and capital specialist
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Related Articles
EBA Publishes Final Regulatory Standards on STS Securitizations
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.
ECB Further Reviews Costs and Benefits Associated with IReF
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
EBA Publishes Funding Plans Report, Receives EMAS Certification
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).
MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures
The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.
BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules
The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.
IOSCO Welcomes Work on Sustainability-Related Corporate Reporting
The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)
BoE Allows One-Day Delay in Statistical Data Submissions by Banks
The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.
ACPR Amends Reporting Module Timelines Under EBA Framework 3.2
The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.
ECB Paper Discusses Disclosure of Climate Risks by Credit Agencies
The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)
APRA to Modernize Prudential Architecture, Reduces Liquidity Facility
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.
