PRA Proposes Reporting and Rulebook Changes Under CRDIV and SolvencyII
PRA published an occasional consultation paper (CP25/19) that proposes minor amendments to the PRA Rulebook Parts, supervisory statements, statements of policy (SoPs), and the relevant templates. The proposed changes fall under the Solvency II and Capital Requirements Directive (CRD IV). Among other changes, CP25/19 consults on minor updates and corrections to certain Capital+ and ring-fenced body reporting templates, which is covered under Chapter 4 of CP25/19. The consultation period for Chapter 4 of CP25/19 closes on November 18, 2019 while the consultation period for the remaining chapters closes on December 09, 2019.
The proposals in CP25/19 are included in the following five chapters:
- In chapter 2, PRA sets out proposals to update SS20/15 on supervising building societies’ treasury and lending activities (Appendix 1) and Statement of Policy on the methodologies for setting Pillar 2 capital (Appendix 2) to remove references to the London Inter-Bank Offered Rate (LIBOR).
- In chapter 3, PRA sets out proposals to update redundant references and make minor corrections to SS28/15 on strengthening individual accountability in banking (Appendix 3) and SS35/15 on strengthening individual accountability in insurance (Appendix 4).
- In chapter 4, PRA sets out proposals to amend the Regulatory Reporting Part of the PRA Rulebook (Appendix 5), Capital+ reporting templates (PRA101 and PRA102) (Appendix 6), and ring-fenced body reporting templates (RFB003, RFB004, and RFB008) (Appendix 6).
- In chapter 5, PRA sets out proposals in relation to retirement interest-only (RIO) mortgages as well as certain interest-only (IO) mortgages that are converted into RIO mortgages. The proposals would result in amendments to SS11/13 on the internal ratings based (IRB) approaches (Appendix 8) and SS10/13 on the standardized approach for credit risk (Appendix 9).
Subject to the PRA consideration of responses to CP25/19, the proposed implementation dates are the same date as publication of the final policy for Chapters 2 and 3 and the date as set out in Appendix 5 for Chapter 4. Furthermore, for Chapter 5, PRA proposes that firms should implement the proposed changes by December 31, 2020, to align with the proposed implementation date of the relevant EBA guidelines, as set out in CP21/19 on probability of default and loss given default estimation.
The proposals have been designed in the context of the current UK and EU regulatory framework. PRA will keep the policy under review to assess whether any changes would be required due to changes in the UK regulatory framework, including those arising once any new arrangements with EU take effect. Each chapter in CP25/19 sets out the PRA assessment of whether the proposals would need to be amended under the European Union (Withdrawal) Act 2018.
Related Links
- Notification
- CP25/19 (PDF)
- PRA101/PRA102 Draft Template (XLSX)
- RFB003 Draft Template (XLSX)
- RFB004 Draft Template (XLSX)
- RFB008 Draft Template (XLSX)
Comment Due Date: November 18, 2019 (Chapter 4); December 09, 2019 (Remaining Chapters)
Keywords: Europe, UK, Banking, Insurance, Reporting, PRA Rulebook, Solvency II, CRD IV, Capital+, IRB Approach, Pillar 2, CP25/19, Credit Risk, Ring Fencing, PRA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Previous Article
IMF Reports Assess Financial System Stability in ThailandRelated Articles
BoE Clarifies Approach to Treatment of Payment Holidays on Form PL
BoE published a statistical notice (Notice 2020/9) explaining the approach for treatment of payment holidays on the profit and loss return or Form PL.
BoE Provides Reporting Update on Form AS and Form FV
BoE updated the known issues document for the statistical reporting Forms AS and FV.
FED Announces Capital Requirements for Large Banks
FED announced individual capital requirements for 34 large banks and these requirements go into effect on October 01, 2020.
SRB Publishes Guidance on Implementation of Bail-In Tool
SRB published a set of documents to give operational guidance to banks on implementation of the bail-in tool.
BIS Publishes Update on G20 TechSprint Initiative
BIS published an update on the G20 TechSprint Initiative, which was launched in April 2020 and aims to highlight the potential for technologies to resolve regulatory compliance (regtech) and supervisory (suptech) challenges.
OSFI Provides Update on Implementation of IFRS 17 in Canada
OSFI published a letter that provides an update on the milestones for the implementation of the IFRS 17 standard on insurance contracts.
EBA Provides Clarity on Implementation of Guidance on COVID Reporting
EBA updated the report on the implementation of selected COVID-19 policies.
FSI Note Discusses Challenges Associated with COVID Relief Measures
The Financial Stability Institute (FSI) of BIS published a brief note that examines the supervisory challenges associated with certain temporary regulatory relief measures introduced by BCBS and prudential authorities in response to the COVID-19 pandemic.
BCBS Consults on Principles for Operational Risk and Resilience
BCBS is consulting on the principles for operational resilience and the revisions to the principles for sound management of operational risk for banks.
BoE Updates Template and Definitions for Form ER
BoE updated the reporting template for Form ER as well as the Form ER definitions, which contain guidance on the methodology to be used in calculating annualized interest rates.
