April 2021 Regulation Update

OSCA Replacement

A virtual meeting was held in April, by the Bank of England (BoE), to share progress with the OSCA replacement project.  The main conclusions taken from the meeting were as follows.

Timelines

  • There is no specific reference date for first reporting under the new BoE taxonomy
  • A timeline is expected to be published soon
  • Gradual on-boarding to BEEDS will take place such that some firms will no longer report to OSCA in Q1 2022. It is anticipated that in Q2 2022, all firms will be reporting to BEEDS.

BEEDS

  • The BoE is looking to make more UAT windows available than in recent times
  • Whilst the Bank is actively working on an API interface to BEEDS, the latter will not be available at go live. Therefore it is understood that no direct (to BEEDS) system to system transmission will be possible in the short term, once a firm moves from OSCA to BEEDS.

UK Investment Firms Prudential Regime (IFPR) Second Consultation – FCA CP 21-7

The Financial Conduct Authority issued a second consultation paper on UK IFPR. This paper provided proposed requirements on several areas. A questionnaire template (MIF007) is to be included with a firm’s ICARA (Internal Capital and Risk Assessment). A remuneration template MIF008 will also be introduced.

Details of the basic liquidity requirement and the instrument types of which it can be formed, were specified. Finally, calculations of some K Factor capital requirements that had not been in the previous consultation, were made available.

The timings of expected communication from the FCA in respect of UK IFPR are as follows.

Quarter Publication
   
Q2 Policy statement (result of first consultation 20-24)
   
Q3 Policy statement (outcome of second consultation 21-7)
   
Q3 / 4 Third Consultation and policy statement thereafter

 

The new regime will be effective from 1 January 2022.

Remuneration Reporting

According to a statement by the PRA, there are IT problems associated with the EBA remuneration templates (modules COR014 and COR015). The regulator has advised that firms should submit REP004 (where appropriate) and REP005, as a temporary measure. Further details are in the following link.

https://www.bankofengland.co.uk/prudential-regulation/publication/2021/april/pra-statement-on-remuneration-reporting-templates

Wires is unaffected by the change.

Firms that are FCA solo regulated and not part of a group that is subject to dual regulation, are not affected.

HM Treasury Backed 95% LTV Residential Mortgages

Some firms may be providing these new residential mortgage products that will include a UK government guarantee. Whistlebrook understands that the government will guarantee 20% of the difference between the outstanding loan balance and the secured property’s realisable value. Firms may wish to consider changes appropriate for reporting credit risk exposures.

Extension of Financial Crime Reporting (REPCRIM)

The Financial Conduct Authority issued policy statement 21-4 that provided details of the financial crime reporting that is to be applied more widely. Crypto asset businesses and firms providing the following services will be required to submit the return.

  • Arranging / dealing investment activity and holding client money or safe custody assets
  • Managing an investment portfolio
  • Collective investment schemes

The REPCRIM template is available in Wires. Firms brought into the reporting requirement will submit within 60 business days of their financial year end occurring after 30 March 2022.

Product Sales Data Reporting

Firms are reminded that new versions of PSD001 and PSD007 will be required to be used for report reference date 30 June 2021 and beyond.

 

This regulatory update is Whistlebrook’s understanding of the position as at 26th April 2021.