Featured Product

    PRA Issues Proposals on Trading Activity Wind-Down in Resolution

    October 08, 2021

    The Prudential Regulation Authority (PRA) proposed, via CP20/21, expectations on firms’ engagement in trading activities that may affect the financial stability of United Kingdom. These proposals would result in a new Supervisory Statement on trading activity wind-down (TWD), a Statement of Policy (SoP), and amendments to SS9/17 titled "Recovery Planning." The proposed amendments to SS9/17 are in respect of the orderly wind-down of trading activities. The consultation period closes on January 21, 2022. PRA proposes that the implementation date for the changes resulting from CP20/21 would be January 01, 2025. Subject to the consultation responses, PRA intends to publish its final policy in the first half of 2022.

    CP20/21 proposes that firms engaged in trading activities be able to carry out a full or partial orderly wind-down of their trading activities in recovery and post-resolution restructuring. In CP20/21, the wind-down of trading activities, whether it be full or partial, or whether it would be carried out as a recovery or post-resolution restructuring option, is referred to as the TWD option. The proposed expectations are designed to to promote safety and soundness of firms, with this objective advanced primarily by minimizing the adverse effect of firm failure on the financial stability of United Kingdom. The proposals aim to enhance the ability of firms to recover from firm-specific and/or market-wide stress and should be read in conjunction with the Resolvability Assessment Framework of BoE. The draft SoP on trading activity wind-down aims to provide clarity on interaction between expectations outlined in the SS9/17,and the BoE approach to assessing resolvability, including the BoE SoP, which was published alongside the BoE Resolvability Assessment Framework policies. PRA consulted industry when developing the proposed expectations. The proposals in CP20/21 include expectations that firms to whom the policy applies:

    • include a baseline set of factors when designing the scenario or scenarios used to develop and test the TWD option/scenario
    • develop information provision and decision-making capabilities and refresh capabilities 
    • produce and maintain data of a breadth and granularity consistent with the non-mandatory templates set out in the appendices of the draft TWD supervisory statement

    CP20/21 is applicable to all PRA-authorized UK banks, their qualifying parent undertakings and PRA-designated investment firms that are engaged in trading activities, and relevant third country branches. The consultation is also relevant to policymakers and practitioners that would expect to be involved in a firm’s resolution. 


    Related Links

    Comment Due Date: January 21, 2022

    Effective Date (expected): January 01, 2025

    Keywords: Europe, UK, Banking, Securities, Trading Activity Wind Down, Resolution Framework, Investment Firms, Resolvability Assessment Framework, CP20/21, ss9/17, Recovery Planning, PRA

    Related Articles

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News

    FASB Proposes Improvements to 2023 GAAP Reporting Taxonomy

    The Financial Accounting Standards Board (FASB) is seeking comments, until November 03, 2022, on the proposed technical and other conforming improvements for the 2023 GAAP Financial Reporting Taxonomy.

    November 03, 2022 WebPage Regulatory News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8588