Featured Product

    PRA Proposes to Extend Temporary High Balances Coverage Amid COVID-19

    July 09, 2020

    PRA issued a proposal, via the consultation paper CP6/20, to extend coverage under the Financial Services Compensation Scheme (FSCS) for Temporary High Balances, from six months to twelve months from the date of deposit or from the first date the Temporary High Balance becomes legally transferable to the depositor. The proposed extension of coverage would be until, and including, January 31, 2021. This extension is being proposed in response to the impact of COVID-19 on residential property and investment markets and on access to banking services for some depositors. Temporary High Balance coverage would revert to six months from February 01, 2021. The comment period for this consultation ends on July 23, 2020.

    The Temporary High Balance rules of PRA extend FSCS coverage from GBP 85,000 to GBP 1 million for six months from the point of deposit for certain qualifying life events, including the purchase and proceeds from residential properties. Depositor Protection Part of the PRA Rulebook sets out the list of categories of eligible deposits that may benefit from Temporary High Balance protection. The extension in Temporary High Balance coverage would be accompanied by consequential changes to the Depositor Protection Part of the PRA Rulebook (Appendix 1) and to paragraphs 30, 47a, and 47b of the Deposit Guarantee Scheme Statement of Policy. PRA would not require firms to update the information sheet in Annex 1 of Depositor Protection Part of the PRA Rulebook to reflect the extension to a twelve-month Temporary High Balance coverage. If firms do decide to amend their information sheets, then PRA would expect firms to ensure that the information sheet is changed back before February 01, 2021.

    CP6/20 is relevant to retail financial consumers that are, or may become, Temporary High Balance depositors before February 01, 2021. CP6/20 is also relevant to the FSCS and to all PRA-authorized deposit-takers. The proposal has been designed in the context of withdrawal of UK from EU and entry into the transition period, during which time UK remains subject to the 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 proposal would not need to be amended under the EU (Withdrawal) Act 2018.

     

    Related Links

    Comment Due Date: July 23, 2020

    Keywords: Europe, UK, Banking, COVID-19, FSCS, PRA Rulebook, Deposit Guarantee Scheme, Residential Property, Credit Risk, CP6/20, Temporary High Balance Coverage, PRA

    Featured Experts
    Related Articles
    News

    EBA Sets Out Work Priorities and Deliverables for 2021

    EBA published its annual work program for 2021. The work program describes the activities and deliverables for the coming year in the context of the six key strategic areas of work.

    September 30, 2020 WebPage Regulatory News
    News

    PRA Proposes to Amend SS11/13 on Internal Ratings-Based Approaches

    PRA is proposing, via the consultation paper CP14/20, to introduce two complementary expectations on the level of mortgage risk-weights in UK for banks applying the internal ratings-based approaches.

    September 30, 2020 WebPage Regulatory News
    News

    ECB Confirms Compliance of €STR with Financial Benchmark Principles

    ECB published its statement of compliance with the IOSCO principles for financial benchmarks developed by IOSCO.

    September 30, 2020 WebPage Regulatory News
    News

    OSFI Updates Timelines for Implementation of IFRS 17

    OSFI updated the timelines for implementation of IFRS 17 on insurance contracts.

    September 30, 2020 WebPage Regulatory News
    News

    IFRS Consults on Global Approach to Sustainability Reporting

    IFRS launched a consultation to assess the demand for global sustainability standards.

    September 30, 2020 WebPage Regulatory News
    News

    EIOPA Sets Out Work Priorities for 2021-2023

    EIOPA has set out the work priorities for 2021-2023, taking into account the current market situation in light of the COVID-19 pandemic.

    September 30, 2020 WebPage Regulatory News
    News

    US Agencies Finalize Three Interim Final Rules Issued Amid Pandemic

    US Agencies (FDIC, FED, and OCC) finalized three interim final rules that were published in March and April this year to ease the impact of disruptions caused by the COVID-19 pandemic.

    September 30, 2020 WebPage Regulatory News
    News

    US Agencies Finalize Interim Final Rules Issued Amid Pandemic

    US Agencies (FDIC, FED, and OCC) finalized two rules, which are either identical or substantially similar to the interim final rules in effect and issued earlier this year.

    September 29, 2020 WebPage Regulatory News
    News

    APRA Proposes to Increase Transparency of Banking Data

    APRA announced that it is resuming consultation on the confidentiality of data submitted to APRA by the authorized deposit-taking institutions.

    September 29, 2020 WebPage Regulatory News
    News

    EIOPA Consults on Use of Risk Mitigation Techniques Under Solvency II

    EIOPA is consulting on a supervisory statement on the use of risk mitigation techniques by insurance and reinsurance undertakings.

    September 29, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5873