Prudential Regulation Authority Rulebook

The following is a non-exhaustive list of contents that the PRA would expect a firm to set out in its solvent exit execution plan.⁵³

• Actions and timelines for the solvent exit, from the point of initiation to the removal of the firm’s Part 4A PRA permission. This includes actions that the firm will take to identify, and transfer or repay, deposits; sell assets; and transfer or repay other liabilities (if applicable).
• Identification and mitigation (or removal) of barriers and risks to the solvent exit. The firm should update the barriers and risks identified in its solvent exit analysis, prepared during BAU,⁵⁴ to reflect the circumstances which lead to the initiation of a solvent exit. The firm should also include how it will identify, monitor, and respond to emerging barriers and risks throughout the execution of the solvent exit.
• Communication plan for stakeholders impacted by the solvent exit. These include, but are not limited to: regulators, depositors, customers, creditors, shareholders, staff, outsourced service providers, and other market participants. This should include anticipated reactions from different stakeholders, how such reactions could affect the solvent exit, and how the firm will respond to stakeholder reactions. Examples of negative reactions include potential depositor runs, resignation of key staff, defaults by customers, demands for full and final settlement from creditors, withdrawal of services from outsourced service providers, and abrogation of contracts by contractual counterparties.
• Detailed action plan for the execution of the solvent exit, such as:
  • the identification, and transfer or repayment, of deposits
  • dealing with customer complaints
  • dealing with existing contractual commitments
  • the sale or transfer of all or part of the business, assets, and liabilities
  • the vacation of premises and disposal of fixed assets
  • communication with stakeholders
  • any actions and formalities to comply with applicable legal and regulatory requirements, such as directors’ duties and shareholders’ rights under company law, data protection law, employment law, insolvency procedures, and relevant FCA rules and guidance including consumer duty
• Assessment of resources needed to complete the execution of the solvent exit and how the firm will monitor and maintain access to these throughout the execution of the solvent exit, covering:
  • financial resources, including capital, funding, and liquidity,⁵⁵ to absorb the full costs of the solvent exit and meet all liabilities to depositors (and other creditors as applicable), with realistic exit valuations of assets and liabilities and appropriate analysis conducted (such as sensitivity analyses of factors that may impact the resources needed, and an analysis of any balance sheet items which may be difficult to transfer or sell after the main deposit and lending books have been disposed of)
  • non-financial resources, including access to external specialist services or advice; the firm’s key staff; operational and outsourcing arrangements; support from other group companies; premises; IT infrastructure; and certain data (eg SCV file)
• Governance arrangements, including roles and responsibilities in making the formal decision to initiate the solvent exit, as well as in managing and monitoring the execution of the solvent exit.
• Organisational structure, operating model, and internal processes.