Posted on: June 28, 2022
PRA Buffer Adjustment
Policy statement 15-20 explained that during the uncertainty resulting from the COVID 19 pandemic, Pillar 2A requirements could be reduced, but offset by additional buffer amounts. Whistlebrook understands that this arrangement provided some flexibility on minimum capital required, in the sense that the buffer could be drawn upon by firms. This arrangement is to be removed from 31st December 2022.
Mortgage Market Affordability Test
This test that was introduced back in 2014, brought in the requirement to check that a borrower could afford to make mortgage payments under a scenario rate. In a communication from the Bank of England, it has been decided that this assessment be withdrawn with effect from 1st August 2022.
EBA Pillar 3 Disclosure Mapping Tool
The Pillar 3 Disclosure templates that were issued as part of UK CRR2, have been included in Wires. The PRA did not provide a mapping between the regulatory reporting forms (e.g. COREP) and those for disclosures.
However, as the EU and UK Pillar 3 forms are very similar, when adding the details into Wires, some use was made of the EBA mapping tool. The EBA, recently issued some minor changes to its tool and therefore, where appropriate, these amendments have been included in the Pillar 3 disclosure reports within Wires.
Bank of England Taxonomy 1.2.3
The Bank issued an update to taxonomy 1.2 Statistical Reporting to BEEDS. This update made changes to validation rules on form CE (Country Exposure). The necessary amendments have been included in the WIRES reporting system.
Regulatory Initiatives Grid
The PRA published the latest version of the initiatives grid, showing the planned regulatory changes of the UK regulators. Of note are the following:
A publication is expected in Q4 of 2022 on the disclosure requirements to be provided by FCA solo regulated investment firms. These requirements are on environment, social and governance. Whistlebrook understands that the disclosures are in addition to those introduced under the Investment Firms Prudential Regime, in January 2022.
A UK Green taxonomy is to be developed and will identify economic activities deemed to be ‘environmentally stable’. Linked to this taxonomy is understood to be disclosure requirements. More information is expected at the end of 2022.
Amendments to COREP Net Stable Funding and Liquidity Coverage
A consultation paper is expected shortly and any changes to these COREP templates will be effective from the first half of 2023.
A consultation paper is expected in Q4 of 2022. The current effective date for the new regulation is 1st January 2025.
The initiatives grid can be found at https://www.fca.org.uk/publication/corporate/regulatory-intitiatives-grid-may-2022.pdf
This regulatory update is Whistlebrook’s understanding of the position as at 23rd June 2022.