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    PRA Proposes Rulebook Changes; BoE Extends BEEDS Testing Window

    November 25, 2021

    The Prudential Regulation Authority (PRA) is proposing, via the consultation paper CP21/21, to apply group provisions in the Operational Resilience Part of the PRA Rulebook (relevant for the Capital Requirements Regulation or CRR firms) to holding companies. PRA is proposing other minor formatting and clarification amendments to the Operational Resilience (Appendix 1) and Operational Continuity Parts of the PRA Rulebook (Appendix 3), along with the consequential amendments to the supervisory statement SS1/21 on operational resilience (Appendix 2). This consultation closes on January 14, 2022, with PRA proposing to implement changes for the Operational Resilience Part from March 31, 2022 and for the Operational Continuity Part from January 01, 2023.

    In CP21/21, PRA is proposing to change Chapter 8 of the Operational Resilience Part, from imposing certain obligations on firms that are part of a group and/or consolidated group, to imposing these obligations onto the holding company; these obligations would not apply to insurance holding companies. Applying Chapter 8 (Group Arrangements) of the Operational Resilience Part to financial and mixed activity holding companies gives effect more directly to the initial policy intention, which stated that, where applicable, "a group-level view" of operational resilience is taken. This ensures that the risks of the whole group, including the parts that are not subject to individual requirements, are taken into account. Applying these obligations on the holding companies directly rather than on individual firms within their groups would be more proportionate and would align the Operational Resilience Part with the PRA approach to consolidated prudential requirements. The proposals on operational resilience are relevant for UK banks, building societies, and, PRA-designated investment firms, financial holding companies, mixed financial holding companies, and, UK Solvency II firms, and the Society of Lloyd’s and its managing agents. Meanwhile, the proposals on operational continuity in resolution are relevant for UK banks, building societies, and PRA-designated UK investment firms currently in scope of, or likely to come in scope of, the Operational Continuity Part of the PRA Rulebook.

    In addition to this PRA consultation, the Bank of England (BoE) published the Statistical Notice 2021/14, which announces that the User Acceptance Testing (UAT) window for Statistical Reporting on BEEDS is being extended until December 10, 2021 and the the Known Issues log has been updated. The Notice also informs that Online Statistical Collection Application (OSCA) has recently undergone system maintenance and, as part of this maintenance work, the minimum requirement for OSCA public website and web service is to now use TLS version 1.2. To allow reporting institutions some time to upgrade their systems, older versions TLS 1.0 and 1.1 will be supported until February 12, 2022, a date after which only TLS 1.2 will be supported.

     

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    Comment Due Date: January 14, 2022

    Effective Date: March 31, 2022 (Operational Resilience)/January 01, 2023 (Operational Continuity)

    Keywords: Europe, UK, Banking, CRR, Basel, Operational Resilience, Operational Continuity, Statistical Notice, BEEDS Testing, Statistical Reporting, TLS Version 1.2, PRA Rulebook, OSCA, PRA, BoE

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