PS7/22 | CP3/22- Responses to Occasional Consultation Paper – March 2022

Publish on 08 August 2022

PS7/22 - Responses to Occasional Consultation Paper – March 2022

Overview

This Prudential Regulation Authority (PRA) Policy Statement (PS) provides the final policy following Consultation Paper (CP) 3/22 ‘Occasional Consultation Paper’. In the form of:

• final rules; 
• amended UK Technical Standards (UKTS);
• updated Supervisory Statements (SS);
• updated Statement of Policy (SoP); 
• updated template and instruction file; and
• deletion of Legacy Supervisory Statements (LSS) and SS3/13, SS4/15, and SS29/15.  

This PS is relevant to different firms, in accordance with the CP chapters, as follows:

• Chapter 2 – all UK Solvency II firms, including the Society of Lloyd’s and its managing agents, hereafter referred to as ‘UK insurers’.
• Chapter 3 – Capital Requirements Regulation (CRR) firms and CRR consolidation entities on an individual, consolidated, and where relevant, sub-consolidated basis (CRR consolidation entities). For the purposes of the application of the requirements on a consolidated basis, references to ‘firms’ include CRR consolidation entities. 
• Chapter 4 (a) – banks, building societies, and PRA-designated investment firms.
• Chapter 4 (b) – Capital Requirements Regulation (CRR) firms and CRR consolidation entities. For the purposes of the application of the requirements on a consolidated basis, references to ‘firms’ include CRR consolidation entities. 
• Chapter 4 (c) – banks, building societies, and PRA-designated investment firms.
• Chapter 5 – Capital Requirements Regulation (CRR) firms, CRR consolidation entities, and UK insurers.
• Chapter 6 – banks, building societies, and PRA-designated investment firms.
• Chapter 7 – banks, building societies, and PRA-designated investment firms.
• Chapter 8 - Capital Requirements Regulation (CRR) firms and CRR consolidation entities. For the purposes of the application of the requirements on a consolidated basis, references to ‘firms’ include CRR consolidation entities.

The appendices to this PS provide links to the final policy material as set out in the table below.

Summary of responses

The PRA received no responses to proposals relating to any of the chapters in CP3/22.

Implementation

The implementation date for the policy changes set out in chapters 2, 3, 4, 5, 7, and 8 of this PS is Thursday 1 September 2022. 

The implementation date for the policy changes set out in Chapter 6 is Friday 12 August 2022.

References related to the UK’s membership of the European Union (EU) in the rules and any other material covered by the policy in this PS have been updated as part of this PS to reflect the UK’s withdrawal from the EU. Unless otherwise stated, any remaining references to EU or EU-derived legislation refer to the version of that legislation which forms part of retained EU law.

Policy Statement 7/22

Appendix

• Amendments to Statement of Policy ‘The PRA’s approach to the publication of Solvency II technical information’
• Amendments to SS45/15 ‘The UK leverage ratio framework’
• PRA Rulebook: CRR Firms: (CRR 2 and Other Consequentials) Modification Instrument 2022
• The Technical Standards (CRR2 and Other Consequentials) Modifications Instrument 2022
• SS3/13 ‘Capital and leverage ratios for major UK banks and building societies’
• SS4/13 ‘Solvency II: applying EIOPA’s preparatory guidelines to PRA authorised firms’
• SS29/15 ‘CRD IV: Interim LCR reporting’
• Legacy SS4/13 ‘Liquidity and capital regime for UK banks and building societies: adjustments in relation to FPC statement’
• Legacy SS6/13 ‘Pension obligation risk: treatment in the Internal Capital Adequacy Assessment Process (ICAAP) for banks and building societies’
• Amendments to Statement of Policy ‘Interpretation of EU Guidelines and Recommendations: Bank of England and PRA approach after the UK’s withdrawal from the EU’
• PRA Rulebook: Investment Firms Prudential Regime Amendment Instrument 2022
• PRA Standards Instrument: The Technical Standards (Investment Firms Prudential Regime Consequential Amendments) Instrument
• Amendments to Template UK LIQ2: Net Stable Funding Ratio
• Instructions on Template UK LIQ2 on disclosure of Net Stable Funding Ratio (NSFR)
• PRA Rulebook: CRR Firms Administration Instrument 2022

• ---

Published on 15 March 2022

CP3/22 – Occasional Consultation Paper – March 2022

Overview

This Consultation Paper (CP) sets out the Prudential Regulation Authority’s (PRA) proposals to make minor amendments to UK Technical Standards (UKTS), PRA rules, supervisory statements (SS), Legacy Supervisory Statements (LSS), and a Statement of Policy (SoP). 

The chapters in this CP are relevant to different types of firms, as follows:

• Chapter 2 – all UK Solvency II firms, including the Society of Lloyd’s and its managing agents, hereafter referred to as ‘UK insurers’.
• Chapter 3 – Capital Requirements Regulation (CRR) firms and CRR consolidation entities on an individual, consolidated, and where relevant, sub-consolidated basis (CRR Consolidation Entities). For the purposes of the application of the requirements on a consolidated basis, references to ‘firms’ include CRR consolidation entities.
• Chapter 4 (a) – banks, building societies, and PRA-designated investment firms.
• Chapter 4 (b) – Capital Requirements Regulation (CRR) firms and CRR Consolidation Entities. For the purposes of the application of the requirements on a consolidated basis, references to ‘firms’ include CRR consolidation entities. 
• Chapter 4 (c) – banks, building societies, and PRA-designated investment firms.
• Chapter 5 – Capital Requirements Regulation (CRR) firms, CRR Consolidation Entities, and UK insurers.
• Chapter 6 – banks, building societies, and PRA-designated investment firms.
• Chapter 7 – banks, building societies, and PRA-designated investment firms.
• Chapter 8 - Capital Requirements Regulation (CRR) firms and CRR Consolidation Entities. For the purposes of the application of the requirements on a consolidated basis, references to ‘firms’ include CRR consolidation entities.

The chapters contained in this CP, the policy material they propose to change, and the appendices containing the draft amended policy, are listed in the table below.

Implementation

Pending consideration of the responses to this consultation, the proposed implementation date for the changes resulting from this CP is Thursday 28 July 2022.

Responses and next steps

This consultation closes on Tuesday 10 May 2022. The PRA invites responses on the proposals set out in this consultation. Please address any comments or enquiries to OCP.Responses@bankofengland.co.uk. Please indicate in your response if you believe any of the proposals in this consultation paper are likely to impact persons who share protected characteristics under the Equality Act 2010, and if so, please explain which groups and what the impact on such groups might be.

Consultation Paper 3/22

Appendix

Appendix 3: Amendments consequential on CRR Rules

• Annex B and C of draft PRA RULEBOOK: (CRR 2 AND OTHER CONSEQUENTIALS) MODIFICATION INSTRUMENT 2022 (pdf)
• [DRAFT] PRA Standards Instrument: The Technical Standards (Consequential Amendments) Instrument 2022 (pdf)