PRA Regulatory Digest - March 2024

News and speeches

New PRA Rulebook website

19 March 2024

The new PRA Rulebook website will be launched on Wednesday 10 April 2024, and will be available at www.prarulebook.co.uk. This web address is the same as that used for the current website, and all existing links will continue to operate, including the existing Rulebook links on the Bank and PRA website, as well on the Financial Conduct Authority's (FCA) Handbook website.

The new PRA Rulebook website has been designed to be more engaging and informative for users taking into account the feedback received following PRA discussion paper (DP)3/21 - The PRA Rulebook website: Planned updates.

New PRA Rulebook website

The proposed UK regime for critical third parties - speech by Gareth Truran

8 March 2024

The objective of the UK's regime for critical third parties (CTPs) is to help manage risks to the stability of, or confidence in, the UK financial system. Gareth summarises the regulators' current proposals and highlights that CTPs, firms and regulators will need to work together during implementation to enhance the operational resilience of the UK financial sector.

The proposed UK regime for critical third parties - speech by Gareth Truran

Cross cutting publications and updates

PS6/24 - Financial Services Compensation Scheme - Management Expenses Levy Limit 2024/25

28 March 2024

This Prudential Regulation Authority (PRA) policy statement (PS) provides feedback to responses to consultation paper (CP) 1/24 - Financial Services Compensation Scheme - Management Expenses Levy Limit 2024/25. It also contains the PRA's final PRA rules for the Financial Services Compensation Scheme (FSCS) Management Expenses Levy Limit (MELL) for 2024/25 (Appendix 2).

This PS is relevant to all FSCS levy-paying Financial Conduct Authority (FCA) and PRA-authorised firms. It contains no material of direct relevance to retail financial services consumers or consumer groups upon which they might need to act.

PS6/24 - Financial Services Compensation Scheme - Management Expenses Levy Limit 2024/25

Insurance publications and updates

Latest Solvency II updates

4 March 2024

The PRA are looking to engage with industry on developing liquidity reporting requirements through a roundtable with insurers and relevant stakeholders on Tuesday 19 March 2024, between 11am and 12pm.

The roundtable will cover:

• the PRA's views on sources of liquidity risk within insurers
• the existing liquidity risk management framework, as set out in SS5/19
• the PRA's planned engagement during 2024 to develop liquidity reporting requirements

Further background to this work can be found on the Review of Solvency II: Reporting phase 3: liquidity reporting page.

Solvency II

Banking publications and updates

Pillar 2 (FSA071 - 082) and Interim Intraday Liquidity (IDY001 - 003) data items

From Monday 1 April 2024, the PRA has changed the way firms submit Pillar 2 Capital - Operational Risk (FSA072-075) and Pillar 2 Capital - Market Risk (FSA080) data items. The submission format will change to XML and these data items will now be collected via The Bank of England Electronic Data Submission (BEEDS) portal.

For Pillar 2A - Firm Information and Summary (FSA071), Pillar 2 - Credit Risk (FSA076, FSA077 and FSA082), Concentration Risk (FSA078 and FSA079) and Pension Risk (FSA081) as well as the Interim Intraday Liquidity templates (IDY001 - 003), these data items will now be collected via The Bank of England Electronic Data Submission (BEEDS) portal.

Please note that this is a technical change only, there are no changes to the submitted data.

For more information, please see Notes on submitting the Pillar 2 data items via BEEDS and Notes on submitting the Interim Intraday Liquidity data items via BEEDS.

SS2/24 - Solvent exit planning for non-systemic banks and building societies

12 March 2024

This supervisory statement (SS) sets out the PRA's expectations for non-systemic banks and building societies in the UK to prepare, as part of their business-as-usual (BAU) activities, for an orderly 'solvent exit'; and if needed, to be able to execute one.

This SS is relevant to a firm which is subject to Chapter 7 of the Recovery Plans Part of the PRA Rulebook, which is defined as a UK bank or building society that is:

(a) not subject to the Operational Continuity Part of the PRA Rulebook, or
(b) not itself, or part of a group that is, a global systemically important institution (G-SII) or an other systemically important institution (O-SII).

The SS has three chapters:

• Chapter 1: introduction to the nature and purpose of solvent exit planning and how it furthers the PRA's objectives. There are also references to other relevant policies which complement, and should be read in conjunction, with the SS.
• Chapter 2: expectations for how a firm should prepare for an orderly solvent exit as part of its BAU activities. A firm should produce a 'solvent exit analysis' to meet the expectations in this chapter.
• Chapter 3: expectations for a firm to produce a 'solvent exit execution plan' when solvent exit becomes a reasonable prospect for a firm. It also sets out the PRA's expectations for how a firm should manage and monitor the execution of a solvent exit.

SS2/24 - Solvent exit planning for non-systemic banks and building societies

PS5/24 - Solvent exit planning for no-systemic banks and building societies

12 March 2024

This PRA PS provides feedback to responses to CP 10/23 - Solvent exit planning for non-systemic banks and building societies. It also contains the PRA's final policy, as follows:

• Chapter 7 of the Recovery Plans Part of the PRA Rulebook (Appendix 1);
• SS 2/24 - Solvent exit planning for non-systemic banks and building societies (Appendix 2); and
• updated SS3/21 - Non-systemic UK banks: The Prudential Regulation Authority's approach to new and growing banks (Appendix 3).

This PS is relevant to UK banks and building societies to which Recovery Plans Chapter 7 applies (henceforth 'firms'). Specifically, this means every UK bank or building society that is not:

This PS is not relevant to credit unions or branches of third-country groups.

PS5/24 - Solvent exit planning for non-systemic banks and building societies

More information

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-size post summarises a piece of analysis that support a policy or operational decision.

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

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