The Prudential Regulation Authority (PRA) published the final policy statement PS25/21, which was issued post a consultation (CP13/21) proposing minor amendments to the PRA Rulebook, supervisory statements, and reporting data items and instructions, including the Branch Return and the associated guidance and notes. The final policy entails changes to certain parts of the PRA Rulebook (Pillar 2 and Regulatory Reporting parts and Definition of Capital part) and to reporting forms and guidance for data items FSA071 to FSA082, FSA017, PRA111, Mortgage Lenders & Administrators Return (MLAR), and Branch Return. It is applicable to regulated entities such as banks (CRR firms), third-country branches, investment firms, and insurers and reinsurers (Solvency II firms).
In particular, the final policy covers the following key aspects:
- With respect to Pillar 2, PS25/21 provides final rules on amendments to the reporting Pillar 2 Part of the PRA Rulebook (Appendix 1), SS32/15 on Pillar 2 reporting (Appendix 2), FSA081 template (Appendix 3), and the associated FSA081 instructions (Appendix 4).
- With respect to reporting changes due to LIBOR discontinuation, PS25/21 provides an update to the regulatory reporting Part of the PRA Rulebook (Appendix 5), an update to SS34/15 on guidelines for completing regulatory reports (Appendix 6), amendments to the FSA017 instructions (Appendix 7), and amendments to the Notes for completion of MLAR (Appendix 8).
- With respect to the Definition of Capital, PS25/21 provides changes to the scope of the Definition of Capital Part of the PRA Rulebook (Appendix 9) and SS7/13 titled "Definition of capital (CRR firms)" (Appendix 10).
- With respect to the Branch Return, PS25/21 includes amendments to the Regulatory Reporting Part of the PRA Rulebook (Appendix 5), an update to SS34/15 on guidelines for completing regulatory reports (Appendix 11), an updated Branch Return template (Appendix 12), and reporting guidance to the Branch Return (Appendix 13).
- With respect to auditing, PS25/21 modifies Audit Committee Part of the PRA Rulebook (Appendix 14) and SS1/16 titled "Written reports by external auditors to the PRA" (Appendix 15).
With respect to the regulatory timelines, PRA announced that amendments to the method of submission, minor formatting corrections to the Branch Return, and clarifications to the accompanying reporting guidance will be implemented from May 31, 2022. The deletion of FSA042 will come into force on November 10, 2021. The changes to the FSA017 instructions and MLAR guidance notes will come in to force on January 01, 2022 to align the instructions with the timing of the discontinuation of LIBOR. SS34/15 will be updated on November 10, 2021, to delete the link to FSA042, and again on January 01, 2022, to include the updated links to the FSA017 and MLAR guidance notes; this amendment will also align with the Financial Conduct Authority’s effective date for changes to MLAR guidance note. Amendments to the scope of Chapter 4 of the Definition of Capital Part of the PRA Rulebook will be implemented from January 01, 2022. Correction and updating a reference in Rule 2.4(5) in the Audit Committee Part of the PRA Rulebook, and correction to an error in SS1/16 on written reports by external auditors to the PRA will also be implemented from January 01, 2022.
Keywords: Europe, UK, Banking, Insurance, Securities, PRA Rulebook, PS25/21, CP13/21, LIBOR, CRR, Reporting, Branch Return, Investment Firms, Pillar 2, Basel, Regulatory Capital, Benchmark Reforms, PRA
The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.
The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).
The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.
The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).
The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.
A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.
The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.
The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.
The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).
HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.