BoE and PRA Publish Regulatory Updates for Financial Sector Entities
The Prudential Regulatory Authority (PRA) proposed expectations, via CP8/22, in respect of changes to the instruments or claims that comprise unvested deferred sums awarded to material risk-takers as part of their variable pay. Additionally, the Bank of England (BoE) published a statistical notice to clarify reporting of the Economic Crime Levy on Form PL while BoE and PRA jointly published an Index of Prudential and Resolution Policies.
CP8/22. The proposals in CP8/22 would result in changes to supervisory statement (SS2/17) on remuneration (Appendix 1). PRA proposes that the implementation date for the changes resulting from CP8/22 would be December 12, 2022. PRA is requesting responses by September 19, 2022. CCP8/22 proposes that a new section is added to chapter 4 of SS2/17 setting out the PRA’s expectations that:
- in general, unvested, deferred claims that comprise the variable pay of material risk takers should not be converted from an equity claim into a claim on other instruments (or vice versa) after an award has been made
- this expectation should apply to all unvested, deferred sums, and not exclude amounts above the regulatory minima
- in exceptional circumstances, such as where there are potential conflicts of interest arising from a (proposed) public-sector appointment that cannot otherwise be sufficiently mitigated, it may be appropriate for a conversion to occur subject to the prior non-objection of PRA, and on the basis that the relevant retention requirements remain unchanged
Index of Prudential and Resolution Policies. Due to the onshoring process following EU Exit, prudential and resolution policies are now hosted across a wide range of sources and websites. As part of BoE and PRA's commitment to make policies more accessible, this Index brings them together in one place and divides them by sectors and topic areas, so that users can easily find them. The Index is easy to navigate and is intended to help firms identify which policies are relevant for their particular areas of business. For each topic area, the Index provides a dedicated page listing links to related policies from the following sources:
- PRA rules (including waivers and modifications)
- UK legislation and technical standards
- PRA Supervisory Statements, Statements of Policy, and approach documents
- Publications issued by BoE as Resolution Authority
- Other relevant material (including Guidelines issued by the European Supervisory Agencies)
Statistical notice. The introduction of the Economic Crime Levy, established as part of the Finance Act 2022 and effective from April 01, 2022, has prompted a need to clarify the reporting of the Levy on the Form PL. Any levy payments made should be reported directly under Tax (PL16), but not within any of the further box breakdowns (16A or 16B). Where possible, data should be reported on an accruals basis. Form PL is used to collect data on the reporting institution’s income and expenditure. It should be submitted via OSCA. This treatment should be implemented with effect from the second quarter of 2022 reporting.
Keywords: Europe, UK, Banking, Basel, Remuneration, Material Risk Takers, Form PL, Statistical Notice, Reporting, CP8 22, BoE, PRA
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Skilled life insurance actuary; subject matter expert on IFRS 17 and source of earnings
Previous ArticleUK Government Issues Statutory Instrument on IFPR Changes
Next ArticleNBB Publishes Regulatory Updates in July 2022
FINMA Approves Merger of Credit Suisse and UBS
The Swiss Financial Market Supervisory Authority (FINMA) has approved the takeover of Credit Suisse by UBS.
BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks
The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.
OSFI Finalizes on Climate Risk Guideline, Issues Other Updates
The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.
APRA Assesses Macro-Prudential Policy Settings, Issues Other Updates
The Australian Prudential Regulation Authority (APRA) published an information paper that assesses its macro-prudential policy settings aimed at promoting stability at a systemic level.
BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending
BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.
HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks
The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.
MFSA Sets Out Supervisory Priorities, Issues Reporting Updates
The Malta Financial Services Authority (MFSA) outlined its supervisory priorities for 2023
German Regulators Issue Multiple Reporting Updates for Banks
Deutsche Bundesbank published the nationally deactivated validation rules for the German Commercial Code (HGB) users on the taxonomy 3.2, which became valid from December 31, 2022
BCBS Report Examines Impact of Basel III Framework for Banks
The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.
PRA Consults on Prudential Rules for "Simpler-Regime" Firms
Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.