Top news and publications
- PS19/24 – Strong and Simple Framework: The definition of an Interim Capital Regime (ICR) firm
- CP16/24 – Remuneration reform
- CP15/24 – Proposed changes to the UK Insurance Special Purpose Vehicles (UK ISPV) regulatory framework
- PS15/24 - Review of Solvency II: Restatement of assimilated law
- PS16/24 – Operational resilience: Critical third parties to the UK financial sector
- PS18/24 – Supervisory statement – Prudential assessment of acquisitions and increases in control
News and speeches
PRA Innovation Week 2024
As part of our 2024/2025 business plan, the PRA committed to running a ‘multi-day innovation-focused event for PRA colleagues to support learning and increase awareness about the impact of technological advances and initiatives across the financial sector’. This event, ‘PRA Innovation Week’ took place internally for colleagues in November.
The aim of the week was to inform PRA and Bank staff about the rapid innovations that are shaping growth and competitiveness in the financial services industry, helping them to understand the impact that these developments could have both on how they work and on the risks they supervise. The week covered technological advancements from AI to payments innovation, highlighting the rapid pace of change in the sector.
The event underscores the PRA’s commitment to understanding the innovations that are shaping growth and competitiveness in the UK, and to understanding both the risks and opportunities that those innovations present. The PRA will continue to engage with innovation in many forms across the industry, whether in the form of new entrants or new approaches to doing business in areas like digital money.
Approach to the oversight of critical third parties
12 November
The Regulators’ approach to the oversight of critical third parties (The Prudential Regulation Authority, the Bank of England and the Financial Conduct Authority).
This document acts as a standing reference, setting out how the regulators intend to use the oversight powers granted to us by legislation in respect of CTPs, in accordance with and in advancement of our respective statutory objectives.
Approach to the oversight of critical third parties | Bank of England
Cross cutting publications and updates
PS16/24 – Operational resilience: Critical third parties to the UK financial sector
12 November 2024
This policy statement (PS) is issued jointly by the Bank of England (Bank), Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) (collectively ‘the regulators’). It provides feedback to responses the regulators received to consultation paper (CP) 26/23 – Operational resilience: Critical third parties to the UK financial sector. It also contains the regulators’ final policy.
The overall objective of the final policy in this PS is to manage risks to the stability of, or confidence in, the UK financial system that may arise due to a failure in, or disruption to, the services (either individually or, where more than one service is provided, taken together) that a Critical Third Party (CTP) provides to one or more authorised persons, relevant service providers and/or financial market infrastructure entities (collectively ‘firms’).
This PS is primarily relevant to CTPs. The PS is also relevant to every ‘Person Connected with a CTP’, including but not limited to undertakings in a CTP’s group.
This PS is also relevant to firms. The CTP regime does not impose additional, explicit requirements or expectations on firms, but complements their existing requirements and expectations relating to operational resilience and third party risk management.
PS18/24 – Supervisory statement – Prudential assessment of acquisitions and increases in control
1 November
This joint PS by the PRA and FCA provides feedback to responses received to CP25/23 – Supervisory statement – Prudential assessment of acquisitions and increases in control. It also contains the final policy, as follows:
- PRA supervisory statement (SS) 10/24 – Prudential assessment of acquisitions and increases in control (Appendix 2).
- FCA non-Handbook Guidance (FCA guidance) – Prudential assessment of acquisitions and increases in control (Appendix 3).
- Updated PRA statement of policy (SoP) – Interpretation of EU Guidelines and Recommendations: Bank of England and PRA approach after the UK’s withdrawal from the EU (Appendix 4).
This PS is relevant to all PRA and FCA authorised firms and all persons to which Part XII ‘Control Over Authorised Persons’ of the Financial Services and Markets Act 2000 (FSMA) applies. It is also relevant to firms seeking to apply for UK authorisation in identifying who their controllers are.
SS7/24 – Reports by skilled persons: Critical third parties
12 November
This SS sets out the PRA and the Bank’s policy on and expectations for the use of the following powers as supervisory tools as applied by s312P(5) and (6) of FSMA:
- s166 (Reports by skilled persons); and
- s166A (Appointment of skilled person to collect and update information).
This SS is addressed to CTPs and Persons connected with a CTP as defined in section 312P(10) of FSMA.
SS7/24 – Reports by skilled persons: Critical third parties | Bank of England
SS6/24 – Critical third parties to the UK financial sector
12 November
This SS:
- is issued jointly by the PRA, the FCA, and the Bank (collectively ‘the regulators’); and
- sets out the regulators’ expectations of how a CTP should comply with the duties and obligations placed on it by or under the Financial Services and Markets Act 2000 (FSMA) as amended by the Financial Services and Markets Act 2023 (FSMA 2023), including the requirements in the regulators’ rules (collectively referred to as the ‘CTP duties’).
The Overall Objective of the oversight regime for CTPs is to manage risks to the stability of, or confidence in, the UK financial system that may arise due to a failure in, or disruption to, the services that a CTP provides to regulated firms and FMIs.
SS6/24 – Critical third parties to the UK financial sector | Bank of England
Banking publications and updates
PS19/24 – Strong and Simple Framework: The definition of an Interim Capital Regime (ICR) firm
29 November
This PRA PS provides the final PRA SoP – Operating the Interim Capital Regime and rules relating to the definition of an ICR firm and an ICR consolidation entity, which were published as near final in PS17/23 – Implementation of the Basel 3.1 standards near-final part 1 (December 2023) and PS9/24 – Implementation of the Basel 3.1 standards near-final part 2 ( September 2024).
This PS should be of interest to ICR-eligible firms and firms that are considering becoming an ICR firm, and entities that do business with ICR-eligible firms.
PS19/24 – Strong and Simple Framework: The definition of an Interim Capital Regime (ICR) firm
CP16/24 – Remuneration reform
26 November
This CP sets out the PRA’s and FCA (jointly, ‘the regulators’) proposed amendments to the Remuneration part of the PRA Rulebook, SS 2/17 – Remuneration, the FCA’s Handbook chapter: ‘SYSC 19D Dual-regulated firms Remuneration Code’, and the FCA’s associated non-Handbook Guidance relating to remuneration for dual-regulated firms (together the ‘remuneration regime’).
The changes proposed in this CP are intended to make the remuneration regime more effective, simple and proportionate while facilitating the regulator’s primary objectives. The aim is to ensure accountability for risk taking and appropriate outcomes for consumers and markets. The proposals also support the regulators’ secondary objectives; with a particular focus on facilitating the international competitiveness of the UK economy and its growth in the medium to long term. The changes also help to ensure appropriate outcomes for consumers and markets. The proposals complement previous remuneration regime changes enhancing proportionality for small firms, and removing the bonus cap.
CP16/24 – Remuneration reform | Bank of England
Advance notice of a change to the Q1 2025 submission due date for FRP001
Following a recent FCA software update and, the facility to align with the previously expected reporting date, the submission due date for the Q1 2025 FRP001 return will change from 16 May 2025 to 12 May 2025
Insurance publications and updates
CP15/24 – Proposed changes to the UK Insurance Special Purpose Vehicles (UK ISPV) regulatory framework
15 November
This CP sets out the PRA’s proposed reforms to the UK Insurance Special Purpose Vehicle (UK ISPV) regulatory framework, through a combination of changes to PRA rules, SSs and SoPs.
This CP is relevant to UK ISPVs and firms wishing to obtain authorisation to be a UK ISPV, UK Solvency II firms, the Society of Lloyd’s and its members and managing agents, (re)insurance groups, third country (re)insurance undertakings (including those that have a UK branch, a third country branch undertaking), and UK insurance holding companies. The CP may be of particular importance to:
- firms who wish to apply for, or have obtained authorisation as a UK ISPV; and
- firms seeking to use SPVs as risk mitigation.
PS15/24 – Review of Solvency II: Restatement of assimilated law
15 November
This PRA PS provides feedback to responses the PRA received to CP5/24 – Review of Solvency II: Restatement of assimilated law. This PS is the PRA’s final PS to implement the conclusions of the Solvency II Review as originally set out in CP12/23 – Review of Solvency II: Adapting to the UK insurance market.
In aggregate, this PS contains the PRA’s final Solvency II rules, supervisory statements and statements of policy, reporting and disclosure templates and instructions, Insurance Special Purpose Vehicle templates and instructions, Standard Formula (SF) annexes and s138BA permission application forms that will be effective on 31 December 2024. Across this PS, PS2/24, PS3/24 and PS10/24, the PRA has considered all elements of the onshored Commission Delegated Regulation (EU) 2015/35 (CDR)Opens in a new window, the Solvency 2 Regulations 2015, and related Technical Standards (TSs).
This PS is relevant to UK Solvency II firms, the Society of Lloyd’s, its members and managing agents, insurance and reinsurance groups, insurance and reinsurance undertakings that have a UK branch (third-country branch undertakings), and UK holding companies.
PS15/24 – Review of Solvency II: Restatement of assimilated law | Bank of England
SS8/24 – Solvency II: Calculation of technical provisions
15 November
This SS sets out the PRA’s expectations in respect of insurers applying simplifications to the best estimate and risk margin elements of the technical provisions, expanding on the rules set out in the PRA Rulebook.
This SS is relevant to all UK Solvency II firms, the Society of Lloyd’s, its members and managing agents. Part 2 of this SS is also relevant to third-country insurance undertakings that have a UK branch (third-country branch undertakings).
SS8/24 – Solvency II: Calculation of technical provisions | Bank of England
Solvency II: Volatility adjustment permissions
15 November
This SoP sets out the PRA’s approach to granting regulatory permissions in relation to the volatility adjustment VA, as well as variations to those permissions, and the circumstances in which the PRA may consider revoking a firm’s VA permission.
Solvency II: The PRA’s approach to Standard Formula adaptations | Bank of England
Solvency II: The PRA’s approach to insurance own funds permissions
15 November
This SoP sets out the PRA’s approach to granting the regulatory permissions contained in the Own Funds part of the PRA Rulebook (Own Funds permissions). Where relevant, this SoP also sets out the PRA’s approach to variations to those permissions, and the circumstances in which the PRA may take the decision to revoke an Own Funds permission. When granting, varying or revoking Own Funds permissions, the PRA would exercise its powers under section 138BA of the Financial Services and Markets Act 2000 (FSMA).
Solvency II: The PRA’s approach to insurance own funds permissions | Bank of England
Solvency II: The PRA’s approach to the permissible recovery period for insurers to restore full cover for their SCR
15 November
This SoP sets out the circumstances that could lead to the PRA declaring an exceptional adverse situation for the purpose of the Undertakings in Difficulty and Group Supervision Parts of the PRA Rulebook. The SoP also sets out the factors that the PRA will consider in determining whether an insurer should be permitted to have an extension of the permissible recovery period during which it should take the necessary measures to restore full cover for its Solvency Capital Requirement (SCR) including where an exceptional adverse situation has been declared.
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: