FCA and PRA finalized changes to the Mortgage Lenders and Administrators Return (MLAR) for regulated mortgage lenders and home finance administrators. Home finance lenders and administrators are currently required to submit aggregated data via MLAR, as well as individual product data via Product Sales Data to FCA. The data are shared with BoE and PRA. As part of PS22/19, PRA has also published updated versions of notes for the completion of MLAR and the supervisory statement (SS34/15) on guidelines to completing regulatory reports. The MLAR form and notes will take effect from October 01, 2020.
FCA and PRA published a joint policy statement (PS19/23 of FCA; PS22/19 of PRA) that summarizes the feedback received, along with the PRA and FCA response, to the consultation papers CP18/41 of FCA and CP30/18 of PRA. FCA and PRA received 19 consultation responses and the respondents generally supported the proposed changes. Firms and their trade bodies generally agreed the data should help meet objectives and carry out functions. Most respondents also agreed with the proposed methods for collecting the data. There were some exceptions to this, notably from 1 trade body and those responding from the credit union sector. Their concerns have been considered in the policy statement.
FCA and PRA are implementing proposals broadly as consulted on. However, they are making several changes of detail due to the feedback received:
- For the performance data report (PSD007), the authorities are introducing data items that will give a clearer understanding of how mortgage books are held (without unduly burdening firms).
- FCA and PRA are making changes to clarify and simplify the intended content. For the sales data report (PSD001), some of the data fields have been changed to clarify the intended content and the number of data fields which need to be completed for internal product transfers have been reduced.
- FCA and PRA have added an additional field about the rates used for affordability tests where firms have stepped rate products. This is in response to feedback from a firm and a large trade association.
- A minor consequential change has been made to the guidance notes and a data field label on MLAR, due to feedback about the PSD001 changes.
Firms need to ensure that they meet the requirements of the new rules so that reporting is in line with the changes set out in the policy statement. Firms will need to implement the changes within 12 months following publication of the policy statement to implement the PSD007 and MLAR changes and have 18 months to implement the PSD001 changes. New reporting requirements for PSD001 come into force on April 01, 2021 while the reporting requirements for PSD007 come into force on January 01, 2021. It is planned that the technical documents (Data Reference Guide) will be published in October 2019 and that firms will be given access to the FCA reporting system (GABRIEL) test environment from November 2019.
Effective Date: October 01, 2020 (MLAR Form and Notes); January 01, 2021 (PSD007); April 01, 2021 (PSD001)
Keywords: Europe, UK, Banking, Reporting, Mortgage Lending, MLAR, PRA, FCA
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.
The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.
The European Banking Authority (EBA) published a methodological guide to mystery shopping.
The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.
The European Securities and Markets Authority (ESMA) has responded to the IFRS consultation on targeted amendments to the IFRS Foundation constitution to accommodate an International Sustainability Standards Board (ISSB) to set IFRS Sustainability Standards.