Featured Product

    PRA Consults on Requirements to Identify Material Risk-Takers

    September 08, 2021

    The Prudential Regulatory Authority (PRA), via the consultation paper CP18/21, proposed changes to the applicable requirements on the identification of material risk-takers for the purposes of the remuneration regime. The proposals would result in changes to the Remuneration Part of the PRA Rulebook (Appendix 1), updates to the supervisory statement SS2/17 on remuneration (Appendix 2), and revocation of the EU Regulation 604/2014 (Appendix 3). PRA proposed that the implementation date for the changes resulting from this CP18/21 would be from the first performance year starting after the publication of final rules, which, subject to the extent and nature of feedback received, is planned for the fourth quarter of 2021. This consultation closes on November 08, 2021.

    Individuals identified as material risk-takers are subject to all PRA remuneration rules. Material risk-takers are subject to the application of PRA rules derived from the EU Capital Requirements Directive (CRD) IV. These requirements were previously based on the PRA rules and the EU Regulation 604/2014 supplementing CRD IV with regard to the regulatory technical standards for qualitative and appropriate quantitative criteria to identify categories of staff whose professional activities have a material impact on an institution's risk profile. The policy proposals included in CP18/21 are intended to:

    • revoke the application of the onshored version of Regulation (EU) No 604/2014 as regards to PRA-regulated firms
    • insert the provisions of the Material Risk Taker Regulation (as adopted by the European Commission on June 09, 2021) into the Remuneration Part of the PRA Rulebook, without substantive policy amendments.
    • make technical drafting fixes
    • update SS2/17 to reflect the rule changes and the amended process for excluding an employee identified solely based on the quantitative criteria.

    This consultation is relevant to banks, building societies, and PRA-designated investment firms, including third-country branches. CP18/21 is not relevant to credit unions or PRA-authorized insurers. The proposed amendments to the PRA Rulebook and the revocation of the onshored regulatory technical standards with regard to the PRA-regulated firms are aimed at rationalizing the material risk-taker identification regime, removing duplications, and promoting clarity by consolidating all legislative requirements within the PRA Rulebook. PRA does not expect that firms would incur additional costs as a direct result of the proposals. PRA would expect that removing duplicative and partially diverging requirements and consolidating the rules for identification of material risk-takers into PRA Rulebook would provide clarity to firms and reduce the cost of compliance.

     

    Related Links

    Comment Due Date: November 08, 2021

    Effective Date: Q4 2021 (Proposed)

    Keywords: Europe, UK, Banking, Investment Firms, CRD IV, Basel, Remuneration, Operational Risk, Material Risk-Takers, Governance, PRA Rulebook, ESG, PRA

    Related Articles
    News

    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.

    September 20, 2022 WebPage Regulatory News
    News

    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.

    September 15, 2022 WebPage Regulatory News
    News

    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).

    September 15, 2022 WebPage Regulatory News
    News

    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.

    September 15, 2022 WebPage Regulatory News
    News

    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.

    September 15, 2022 WebPage Regulatory News
    News

    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)

    September 15, 2022 WebPage Regulatory News
    News

    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.

    September 14, 2022 WebPage Regulatory News
    News

    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.

    September 14, 2022 WebPage Regulatory News
    News

    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)

    September 13, 2022 WebPage Regulatory News
    News

    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.

    September 12, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8514