PRA Proposes Simplified Obligations for Recovery Planning
PRA published the consultation paper CP10/20, with a proposal to allow certain firms to benefit from simplified obligations for recovery planning. This proposal is in light of the discretion PRA has under 4(1) of the Bank Recovery and Resolution Directive or BRRD (2014/59/EU) on whether to apply simplified obligations. The proposal involves changes to the supervisory statement SS9/17 on recovery planning and would reduce recovery planning expectations for certain firms. The comment period on CP10/20 closes on October 23, 2020. In the second half of 2020, PRA plans to publish the final policy statement and to notify the firms that are eligible for simplified obligations. Pending consideration of the responses to CP10/20, the amendments to SS9/17 would apply with immediate effect once the final policy statement is published.
The proposals in CP10/20 relate to how PRA would perform the eligibility assessment process to determine which firms are eligible for simplified obligations in respect of recovery planning. The proposals also address the recovery planning expectations for firms deemed eligible for simplified obligations. For firms that are eligible for simplified obligations, the proposals seek to reduce the minimum number of scenarios considered in recovery planning to two and clarify that these firms are not expected to submit the information recovery plan information template referred to in SS9/17. CP10/20 is relevant to PRA-authorized UK banks, building societies, designated UK investment firms, and their qualifying parent undertakings to which the Recovery Plans Part of the PRA Rulebook applies.
The proposals support the PRA approach to enhanced proportionality for smaller and non-systemic firms. PRA considers that the proposal introduces a more proportionate approach for recovery planning that would not cause firms to incur additional costs as a direct result of the proposals. The proposals set out in CP10/20 have been designed in the context of the 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 EU take effect. PRA has assessed that the proposals would not need to be amended under the EU (Withdrawal) Act 2018.
Related Links
Comment Due Date: October 23, 2020
Keywords: Europe, UK, Banking, Securities, Recovery Planning, Basel, BRRD, CP10/20, SS9/17, Resolution Framework, Proportionality, PRA
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
HKMA Issues Guidance on Implementing BCBS FAQs on Benchmark ReformsRelated Articles
EBA Launches Stress Tests for Banks, Issues Other Updates
The European Banking Authority (EBA) launched the 2023 European Union (EU)-wide stress test, published annual reports on minimum requirement for own funds and eligible liabilities (MREL) and high earners with data as of December 2021.
EBA Proposes Standards for IRRBB Reporting Under Basel Framework
The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.
FED Issues Further Details on Pilot Climate Scenario Analysis Exercise
The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.
US Agencies Issue Several Regulatory and Reporting Updates
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
ECB Issues Multiple Reports and Regulatory Updates for Banks
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
CBIRC Revises Measures on Corporate Governance Supervision
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
HKMA Publications Address Sustainability Issues in Financial Sector
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
EBA Updates Address Basel and NPL Requirements for Banks
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.