PRA Regulatory Digest - July 2021

• PS15/21 'Regulated fees and levies: Regulated fees and levies: Rates for 2021/22'
• DP2/21 'Diversity and inclusion in the financial sector - working together to drive change'
• PS17/21 'Implementation of Basel standards'
• CP11/21 'Review of Solvency II: Reporting (Phase 1)'

21 July 2021

Vicky Saporta reflects on the way in which the prudential rules we put in place after the 2008 financial crisis worked during the Covid pandemic.

She looks back at the main concerns at the start of the pandemic, and outlines how regulatory buffers behave to absorb the effects of economic stress.

Effective regulators look ahead to the next crisis. The Covid stress has given us a chance to investigate how buffers work in a real stress.

21 July 2021

The Bank of England and PRA are both Prescribed Persons as defined by Parliament under The Public Interest Disclosure (Prescribed Persons) Order 2014.

Since April 2017, all 'Prescribed Persons' are required to report in writing annually on workers (whistleblowing) disclosures they have received. This report covers the period 1 April 2020 to 31 March 2021.

7 July 2021

This Discussion Paper (DP) is issued by the PRA and the FCA as well as the Bank of England (the Bank) in its capacity of supervising financial market infrastructure firms (FMI).

The joint ambition is to ensure the financial system is better able to support the economy through well run firms and sound financial markets that can meet the diverse needs of their consumers. The PRA and FCA want a resilient financial services sector, which brings together and responds to different views and perspectives, so that concerns can be raised and decisions are challenged effectively.

The full DP is hosted on the FCA's website. Comments on this DP are to be submitted by Thursday 30 September 2021, to [e-mail].

6 July 2021

This PRA Policy Statement (PS) provides feedback to responses to Consultation Paper (CP) 8/21 'Regulated fees and levies: Rates proposals 2021/22'. It also contains the PRA's final policy.

This PS is relevant to all firms that currently pay PRA fees or are expecting to do so within the 2021/22 fee year.

30 July 2021

This public disclosure is designed to foster a uniform level of transparency and accountability between supervisory authorities. The material published will be of primary interest to PRA-authorised banks, building societies, investment firms, and credit unions.

26 July 2021

This PRA PS provides feedback to responses to CP2/21 'International banks: The PRA's approach to branch and subsidiary supervision'. It also contains the PRA's final Supervisory Statement (SS) 5/21 'International banks: The PRA's approach to branch and subsidiary supervision' which will replace SS1/18 'International banks: the Prudential Regulation Authority's approach to branch authorisation and supervision'.

This PS is relevant to all existing or prospective PRA-authorised banks and designated investment firms that are headquartered outside the UK or are part of a group based outside of the UK.

21 July 2021

This PS provides feedback to responses to CP9/21 'Remuneration: Correction to the definition of 'higher paid material risk taker''. It also contains the PRA's final policy.

This PS is relevant to PRA-authorised banks, building societies, and PRA-designated investment firms. This PS is not relevant to credit unions or PRA-authorised insurers.

13 July 2021

The PRA has reviewed its approach to shareholder distributions.

9 July 2021

This PS provides feedback to responses to CP5/21 'Implementation of Basel standards'. It also contains near-final rule instruments, Statement of Policy (SoP), SSs, and reporting templates and instructions.

This PS is relevant to UK banks, building societies, and PRA-designated investment firms, as well as UK financial holding companies and UK mixed financial holding companies of certain PRA-authorised firms.

The PRA has updated the relevant temporary transitional power (TTP) guidance documents to reflect changes to the Capital Requirements Regulations (CRR) and PRA rules taking effect on Saturday 1 January 2022 as part of this PS. Please see the TTP webpage for more information.

6 July 2021

This PRA PS provides feedback to responses to CP14/20, 'Internal Ratings Based UK mortgage risk weights: Managing deficiencies in model risk capture'. It also contains the PRA's final policy.

This PS is relevant to PRA-authorised UK banks, building societies, and ring-fenced banks (RFBs) holding IRB model permissions. It may be of interest to other firms, including those considering applying for IRB model permission, and other market participants.

5 July 2021

This CP sets out the PRA's proposals to make minor changes to its policy on designating investment firms. This includes a proposal to increase the base capital resources requirement for PRA-designated investment firms, thereby aligning it with changes to the same requirement for firms undertaking the same type of business that are only regulated by the Financial Conduct Authority (FCA) and not by the PRA - 'solo-regulated' firms.

The CP is relevant to all PRA-designated UK investment firms.

This consultation closes on Tuesday 5 October 2021.

28 July 2021

This CP sets out the PRA's proposed updates to its approach to insurance business transfers, to reflect legislative changes following the UK's withdrawal from the European Union and the completion of the transition period. It also provides additional guidance for independent experts and firms on the PRA's expectations.

The CP is relevant to all PRA-authorised insurers, including the Society of Lloyd's and its managing agents. It is also relevant to mutuals and friendly societies.

This consultation closes on Thursday 28 October 2021.

20 July 2021

This letter from Charlotte Gerken to the Chief Executive Officers of PRA-regulated Solvency II firms introduces the Solvency II Review Quantitative Impact Study and sets out the PRA's thinking on two key areas being assessed under it - the risk margin and the matching adjustment.

19 July 2021

This statement provides an update on the PRA's approach to the recalculation of the TMTP, relevant to PRA-regulated insurance firms.

8 July 2021

This CP sets out the PRA's proposed changes to the Solvency II reporting requirements and expectations. The PRA has developed these proposals in line with HM Treasury's review of Solvency II, on which HM Treasury sought evidence between Monday 19 October 2020 and Friday 19 February 2021.

The proposals in this CP would result in changes to; SS11/15, SS40/15, SS41/15, SS44/15, and Statement of Policy 'Interpretation of EU Guidelines and Recommendations: Bank of England and PRA approach after the UK's withdrawal from the EU'.

The CP is relevant to all UK Solvency II firms, the Society of Lloyd's and its managing agents, insurance and reinsurance undertakings that have a UK branch (third-country branch undertakings), and firms within the PRA's Temporary Permissions Regime for (re)insurers.

This consultation closes on Friday 8 October 2021.

Closing date: 9 August 2021 (extended from original date of 26 July 2021)

Closing date: 24 August 2021

Closing date: 25 August 2021

5 July 2021

1 July 2021

Bank Underground - a blog for Bank of England staff to share views that challenge - or support - prevailing policy orthodoxies. The views expressed here are those of the authors, and are not necessarily those of the Bank of England or its policy committees.

Bank Overground - the purpose of Bank Overground is to share our internal analysis. Each bite-sized post summarises a piece of analysis that supported a policy or operational decision. In July Bank Overground published 'How has Covid affected global trade?'.

KnowledgeBank - from interest rates and inflation through to bank failures and financial crises, KnowledgeBank uses everyday examples and engaging visuals to bring economics to life.

European and international developments - readers are also referred to the following websites:

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