FCA and PRA Amend Reporting Requirements for Mortgage Lenders
FCA and PRA finalized changes to the Mortgage Lenders and Administrators Return (MLAR) for regulated mortgage lenders and home finance administrators. Home finance lenders and administrators are currently required to submit aggregated data via MLAR, as well as individual product data via Product Sales Data to FCA. The data are shared with BoE and PRA. As part of PS22/19, PRA has also published updated versions of notes for the completion of MLAR and the supervisory statement (SS34/15) on guidelines to completing regulatory reports. The MLAR form and notes will take effect from October 01, 2020.
FCA and PRA published a joint policy statement (PS19/23 of FCA; PS22/19 of PRA) that summarizes the feedback received, along with the PRA and FCA response, to the consultation papers CP18/41 of FCA and CP30/18 of PRA. FCA and PRA received 19 consultation responses and the respondents generally supported the proposed changes. Firms and their trade bodies generally agreed the data should help meet objectives and carry out functions. Most respondents also agreed with the proposed methods for collecting the data. There were some exceptions to this, notably from 1 trade body and those responding from the credit union sector. Their concerns have been considered in the policy statement.
FCA and PRA are implementing proposals broadly as consulted on. However, they are making several changes of detail due to the feedback received:
- For the performance data report (PSD007), the authorities are introducing data items that will give a clearer understanding of how mortgage books are held (without unduly burdening firms).
- FCA and PRA are making changes to clarify and simplify the intended content. For the sales data report (PSD001), some of the data fields have been changed to clarify the intended content and the number of data fields which need to be completed for internal product transfers have been reduced.
- FCA and PRA have added an additional field about the rates used for affordability tests where firms have stepped rate products. This is in response to feedback from a firm and a large trade association.
- A minor consequential change has been made to the guidance notes and a data field label on MLAR, due to feedback about the PSD001 changes.
Firms need to ensure that they meet the requirements of the new rules so that reporting is in line with the changes set out in the policy statement. Firms will need to implement the changes within 12 months following publication of the policy statement to implement the PSD007 and MLAR changes and have 18 months to implement the PSD001 changes. New reporting requirements for PSD001 come into force on April 01, 2021 while the reporting requirements for PSD007 come into force on January 01, 2021. It is planned that the technical documents (Data Reference Guide) will be published in October 2019 and that firms will be given access to the FCA reporting system (GABRIEL) test environment from November 2019.
Related Links
Effective Date: October 01, 2020 (MLAR Form and Notes); January 01, 2021 (PSD007); April 01, 2021 (PSD001)
Keywords: Europe, UK, Banking, Reporting, Mortgage Lending, MLAR, PRA, FCA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
David Fihrer
Skilled life insurance actuary; subject matter expert on IFRS 17 and source of earnings
Related Articles
APRA Sets LAC for D-SIBs, Proposes to Enhance Crisis Preparedness
APRA issued a letter on the loss-absorbing capacity (LAC) requirements for domestic systemically important banks (D-SIBs) and published a discussion paper, along with the proposed the prudential standards on financial contingency planning (CPS 190) and resolution planning (CPS 900).
EC to Review Macro-Prudential Rules while ESRB Assesses Policy Stance
The European Commission (EC) launched a call for evidence, until March 18, 2022, as part of a comprehensive review of the macro-prudential rules for the banking sector under the Capital Requirements Regulation (CRR) and Directive (CRD IV).
FSB Sets Out Good Practices for Crisis Management Groups
The Financial Stability Board (FSB) published a report that sets out good practices for crisis management groups.
APRA Penalizes Heritage Bank for Incorrect Reporting of Capital
The Australian Prudential Regulation Authority (APRA) found that Heritage Bank Limited had incorrectly reported capital because of weaknesses in operational risk and compliance frameworks, although the bank did not breach minimum prudential capital ratios at any point and remains well-capitalized.
OSFI Releases Annual Report 2021-2022
The Office of the Superintendent of Financial Institutions (OSFI) released the annual report for 2020-2021.
OSFI Updates Timeline for Implementation of Certain Basel Rules
Through a letter addressed to the banking sector entities, the Office of the Superintendent of Financial Institutions (OSFI) announced deferral of the domestic implementation of the final Basel III reforms from the first to the second quarter of 2023.
EC Defers Adoption of Regulatory Standards for Disclosures Under SFDR
EIOPA recently published a letter in which EC is informing the European Parliament and Council that it could not adopt the set of draft regulatory technical standards for disclosures under the Sustainable Finance Disclosure Regulation (SFDR) within the stipulated three-month period, given their length and technical detail.
FCA Releases MIFIDPRU Application Forms and Third Set of Rules on IFPR
The Financial Conduct Authority (FCA) published the third in a series of policy statements that set out rules to introduce the UK Investment Firm Prudential Regime (IFPR), which will take effect on January 01, 2022.
APRA Finalizes Capital Adequacy Standards for Banks
The Australian Prudential Regulation Authority (APRA) published, along with a summary of its response to the consultation feedback, an information paper that summarizes the finalized capital framework that is in line with the internationally agreed Basel III requirements for banks.
CPMI-IOSCO Seek Comments on Access to Central Clearing and Portability
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) issued a consultative report focusing on access to central counterparty (CCP) clearing and client-position portability.
