BEEDS Testing Window – Bank of England Statistical Taxonomy 1.3.0

The Bank of England announced in its Statistical Notice 2023-06, that there will be windows available for firms to test submissions of form IPA (Issuing Paying Agents). When this form is added into WIRES, Whistlebrook will perform testing, but clients reporting IPA, may wish to do their own.

 

The BEEDS testing windows are:

31/08/2023 to and including 15/09/2023

30/10/2023 to and including 13/11/2023

 

Securitisations

The Financial Conduct Authority and the Prudential Regulation Authority issued consultation papers (23-17 and 15-23 respectively) on proposals to repeal and replace the retained EU law on securitisations. Whistlebrook understands that the new regulation (applicable to UK established firms) will not be materially different from that currently in place. Of note:

• The amount of risk retention in a securitisation of non-performing exposures, was based on the face value. Instead of using the face value, the market valuation (likely to be lower) will be the basis for the amount that a firm needs to retain in a securitisation of its non-performing exposures.
• It is understood that existing regulation does not allow a firm to select the weakest assets for a securitisation. The regulation requires assets that have higher losses over their lives (up to a maximum of four years) relative to comparable ones, cannot be selected for securitisation. The consultation paper provides some clarity on “comparable”. The clarification states that similar methods, variables and models (if appropriate) must be used to measure expected performance of exposures to be securitised and those not. That expected performance must not be that different when the two groups are compared.
• Changes to reporting and disclosure requirements for securitisation will be consulted upon at a future time.

 

Critical Third Party Regime

The Financial Services and Markets Act 2023 has established a critical third party regime. This regime will allow the regulators to develop and implement rules applicable to organisations that provide critical services to the financial sector.

 

WIRES Planned Releases

Whistlebrook is planning to make the following releases of its WIRES software.

 

Planned Time of Release	Content
Mid-October 2023	·        Financial Resilience FIN073 template (still awaiting its publication) ·        Issuing Paying Agent form IPA, under Bank of England Statistical taxonomy 1.3.0 ·        Contingent leverage ratio templates, under Bank of England Banking taxonomy 3.6.0. Note that as at 16th August 2023, this taxonomy has not been finalised and so the timing suggested may alter.
End of Feb 2024	Bank of England Banking taxonomy 3.7.0 (for Basel 3.1). Given that as at 16 August, the taxonomy has still not been confirmed as final, “End of Feb 2024” may be revised.

 

This regulatory update is Whistlebrook’s understanding of the position as at 16th August 2023.