PRA published the consultation paper CP12/19, which proposes to amend the prescribed responsibility for recovery plans and resolution packs and this prescribed responsibility forms part of the Senior Managers and Certification Regime (SM&CR) for strengthening individual accountability. The consultation also sets out consequential changes to the Supervisory Statement SS28/15 titled "Strengthening individual accountability in banking" and the form titled "Senior Managers Regime: Statement of Responsibilities" (also known as SoR form), together with other administrative changes to this form. The consultation period ends on August 07, 2019.
The proposed amendment to the prescribed responsibility is relevant to those UK banks and building societies with GBP 50 billion or more in retail deposits on an individual or consolidated basis at the date of their most recent annual accounts ("in scope" firms). It would result in the existing prescribed responsibility in respect of recovery plans and resolution packs being extended to include an equivalent responsibility for resolution assessments (conditional on the PRA introducing new rules in respect of such assessments). The proposed amendments to the SoR form are relevant to all PRA-regulated firms, including credit unions and small non-Directive insurers. However, for firms that are not subject to any future PRA rules in regard to resolution assessments, there will be no change to the PRA requirements and expectations of them.
The SM&CR sets out a number of Senior Management Functions. Individuals holding such functions (Senior Managers) are required to be approved by PRA and/or FCA. Each senior manager must have a SoR that clearly sets out the areas of the firm’s regulated activities for which they are responsible. In doing this, firms must allocate specific responsibilities set out in the PRA Rulebook, known as Prescribed Responsibilities, to its senior managers. All the proposed changes in CP12/19 relate to the prescribed responsibilities. The appendices to CP12/19 contain drafts of the rule-making instrument and amendments to SS28/15 and the SoR form. PRA intends to publish the final policy, rules, expectations, and SoR form in the fourth quarter of 2019. This proposed amendment and the consequential changes to SS28/15 and the SoR form are, however, dependent on the PRA introducing new rules in respect of resolution assessments.
Comment Due Date: August 07, 2019
Keywords: Europe, UK, Banking, Insurance, SM&CR, Operational Risk, CP12/19, Governance, Recovery and Resolution, PRA
Previous ArticleGAO Report Examines Regulatory Challenges Associated with Insurtech
FCA and PRA in the UK, FED in the US, and the authorities in Singapore have fined Goldman Sachs for risk management failures in connection with the 1Malaysia Development Berhad (1MDB).
BCBS announced that OSFI and the Bank of Canada hosted the 21st International Conference of Banking Supervisors (ICBS) virtually on October 19-22, 2020.
FCA proposed guidance on how firms should continue to seek to help customers who hold insurance and premium finance products and may be in financial difficulty because of COVID-19, after October 31, 2020.
EBA issued an opinion on prudential treatment of the legacy instruments as the grandfathering period nears an end on December 31, 2021.
ESRB published the fifth issue of the EU Non-bank Financial Intermediation Risk Monitor 2020 (NBFI Monitor).
HM Treasury announced that the new Financial Services Bill has been introduced in the Parliament.
APRA announced that it has increased the minimum liquidity requirement of Bendigo and Adelaide Bank for failing to comply with the prudential standard on liquidity.
PRA published the consultation paper CP17/20 to propose changes to certain rules, supervisory statements, and statements of policy to implement elements of the Capital Requirements Directive (CRD5).
US Agencies adopted a final rule that applies to advanced approaches banking organizations and aims to reduce interconnectedness in the financial system as well as to reduce contagion risks associated with the failure of a global systemically important bank (G-SIB).
US Agencies (FDIC, FED, and OCC) adopted a final rule that implements the net stable funding ratio (NSFR) for certain large banking organizations.