Featured Product

    PRA Finalizes Changes to Consolidated Prudential Rules Under CRD5/CRR2

    September 15, 2021

    The Prudential Regulation Authority (PRA) issued the policy statement PS20/21, which contains final rules for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies that have been approved or designated in accordance with Part 12B of the Financial Services and Markets Act 2000 (FSMA) and the Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020). PS20/21 also contains a new Statement of Policy (SoP) on the supervisory measures and penalties in relation to financial holding companies and an updated SoP on the PRA approach to policy enforcement. The policy presented in PS20/21 will take effect on September 15, 2021.

    PRA had proposed, in June 2021, the rules finalized now via the consultation paper CP12/21, to which PRA has received no responses and has thus made no changes. One of the proposals in CP12/21 involved ancillary amendments to the Definition of Capital, Groups, and Notifications Parts of the PRA Rulebook to ensure that, where the application of a consolidated prudential requirement also carries a secondary obligation, that obligation would rest at the appropriate level of application. The amendment to the Groups Part is made as part of the Rules at Annex F of the Rules instrument and will come into force on January 01, 2022, along with the other PRA Rules which implement Basel III. In addition, a new SoP on supervisory measures and penalties in relation to financial holding companies has been published; this SoP sets out the PRA approach to exercising supervisory measures and imposing penalties on UK parent financial holding companies and UK parent mixed financial holding companies (holding companies) pursuant to Part 12B of the Financial Services and Markets Act 2000 (FSMA), covering measures related to the imposition of penalties and the amount of penalties. 

    The finalized policy is aimed to give effect to the changes in the Capital Requirements Directive V (CRD V), as transposed, and the Capital Requirements Regulation 2 (CRR2), as "onshored," which impose direct responsibility for compliance with the consolidated prudential requirements on approved or designated holding companies. PS20/21 is relevant to financial holding companies, mixed financial holding companies, PRA-authorized banks, and PRA-designated investment firms that are part of a UK consolidation group, controlled by a UK parent financial holding company, or UK parent mixed financial holding company.

     

    Related Links

    Effective Date: September 15, 2021

    Keywords: Europe, EU, UK, Banking, CRD5, CRR2, PRA Rulebook, PS20/21, CP12/21, FSMA, Regulatory Capital, Prudential Requirements, Financial Holdings, Statement on Policy, Investment Firms, PRA

    Featured Experts
    Related Articles
    News

    FINMA Approves Merger of Credit Suisse and UBS

    The Swiss Financial Market Supervisory Authority (FINMA) has approved the takeover of Credit Suisse by UBS.

    March 21, 2023 WebPage Regulatory News
    News

    BOE Sets Out Its Thinking on Regulatory Capital and Climate Risks

    The Bank of England (BOE) published a working paper that aims to understand the climate-related disclosures of UK financial institutions.

    March 13, 2023 WebPage Regulatory News
    News

    OSFI Finalizes on Climate Risk Guideline, Issues Other Updates

    The Office of the Superintendent of Financial Institutions (OSFI) is seeking comments, until May 31, 2023, on the draft guideline on culture and behavior risk, with final guideline expected by the end of 2023.

    March 12, 2023 WebPage Regulatory News
    News

    APRA Assesses Macro-Prudential Policy Settings, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) published an information paper that assesses its macro-prudential policy settings aimed at promoting stability at a systemic level.

    March 07, 2023 WebPage Regulatory News
    News

    BIS Paper Examines Impact of Greenhouse Gas Emissions on Lending

    BIS issued a paper that investigates the effect of the greenhouse gas, or GHG, emissions of firms on bank loans using bank–firm matched data of Japanese listed firms from 2006 to 2018.

    March 03, 2023 WebPage Regulatory News
    News

    HMT Mulls Alignment of Ring-Fencing and Resolution Regimes for Banks

    The HM Treasury (HMT) is seeking evidence, until May 07, 2023, on practicalities of aligning the ring-fencing and the banking resolution regimes for banks.

    March 02, 2023 WebPage Regulatory News
    News

    MFSA Sets Out Supervisory Priorities, Issues Reporting Updates

    The Malta Financial Services Authority (MFSA) outlined its supervisory priorities for 2023

    March 02, 2023 WebPage Regulatory News
    News

    German Regulators Issue Multiple Reporting Updates for Banks

    Deutsche Bundesbank published the nationally deactivated validation rules for the German Commercial Code (HGB) users on the taxonomy 3.2, which became valid from December 31, 2022

    March 02, 2023 WebPage Regulatory News
    News

    BCBS Report Examines Impact of Basel III Framework for Banks

    The Basel Committee on Banking Supervision (BCBS) published results of the Basel III monitoring exercise based on the June 30, 2022 data.

    February 28, 2023 WebPage Regulatory News
    News

    PRA Consults on Prudential Rules for "Simpler-Regime" Firms

    Among the recent regulatory updates from UK authorities, a key development is the first-phase consultation, from the Prudential Regulation Authority (PRA), on simplifications to the prudential framework that would apply to the simpler-regime firms.

    February 28, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8806