Liquidity Reporting

Net Stable Funding

Clients are reminded that changes to liquidity reporting will be effective from report reference date 30^th June 2024. The Simplified version of the Net Stable Funding reporting will no longer be available. Therefore, COREP templates C 82 and C 83 will not be accessible. Firms will be required to submit their data on forms C 80 and C 81. Please refer to the Prudential Regulation Authority’s policy statement 15-23 which refers to the removal of the templates.

In addition to the change described above, firms that are to be subject to the ‘Small Domestic Deposit Takers Regime’, will be required to submit Net Stable Funding data only if their Retail Deposit Ratio (RDR) is less than 50% (averaged over four consecutive rolling quarters). Therefore, where an institution’s average RDR is equal to or greater than 50%, no NSFR submission will be necessary. Further details are in paragraph 2.131 of policy statement 15-23 and in consultation paper 4-23. The implementation report reference date of this rule is 30^th June 2024.

Additional Liquidity Monitoring Metrics

Institutions that are to be subject to the ‘Small Domestic Deposit Takers Regime’ will be required to complete only one of the Additional Liquidity Monitoring Metrics templates. This template is C 68 (Concentration of Funding by Product Type). This change is effective from report reference date 30^th June 2024.

 

Exit Planning

The Prudential Regulation Authority published its policy statement 5-24, in which the requirements for a solvent exit from the market are described. The regulation is applicable from 1^st October 2025 and will apply to non-systemic UK incorporated banks and building societies that are not part of a systemic group.

Affected firms will be required to prepare a ‘Solvent Exit Analysis’ document and update it at least every three years. This deliverable is required as a business as usual activity, even if a solvent exit is not deemed appropriate. The PRA will have access to the document.

It is understood that the purpose of the analysis is to identify and address potential barriers that may arise were an exit needed. Other expected content of the analysis includes:

• Approach to disposal of assets and repayment of creditors as well as any depositors.
• Metrics (with data being collected) that may indicate the appropriateness of an exit e.g. frequency of operational loss events such as IT failures and their impacts; trends in profitability and market share; perception of reputation, etc.
• Communication of an exit.
• The way in which an exit would be managed internally.

 

Growth Guarantee Scheme for Small and Medium Sized Enterprises (SMEs)

The UK Government announced in the recent budget statement, that the Recovery Loan Scheme (introduced to assist business recovery from the effects of COVID 19) will be extended and renamed ‘Growth Guarantee Scheme’. A Loan up to £2million made to an SME in Britain, will have a 70% guarantee from the UK Government. The qualifying loan amount will be capped at £1million, for SMEs based in Northern Ireland. The extension to this scheme will end in March 2026.

Further details are in the following link https://www.british-business-bank.co.uk/press-release/british-business-bank-spring-budget-response/

 

WIRES Releases

Next Expected Release	Content
By 5 April 2024	·        Amendment (relevant to Small Domestic Deposit Takers) to Additional Liquidity Monitoring Metric template C 68 and removal of the Simplified version of Net Stable Funding forms. ·        Bug fixes

 

This regulatory update is Whistlebrook’s understanding of the position as at 19th March 2024.