Replacement of OSCA

The Bank of England advised the following in relation to the withdrawal of OSCA for Statistical reporting.

• On-boarding of firms to report via BEEDS is extended to quarter four of 2022. It had previously been expected that all firms would have transitioned by the end of quarter two of this year.
• The OSCA withdrawal is being delayed by a couple of months until November 2022.
• An interface to BEEDS has no definite date for availability. Whistlebrook understands that this point is particularly important because it means, without an interface, direct transmissions to BEEDS are not possible.
• The permanent BEEDS test environment has no specified delivery date.
• Cross form (i.e. between statistical returns) validation rules are under development by the Bank of England.

Strong and Simple Framework

The PRA issued its consultation paper 5-22, in which it proposed a definition (of a ‘simpler regime firm’) to be used in the simplest layer of the new framework. For a firm to qualify as a ‘simpler regime’ one, it would need to satisfy specified criteria, including:

• Asset size of no greater than £15bn
• Non-use of internal ratings based approach for credit risk
• UK focussed business – i.e. at least 85% of borrowers in particular exposure classes, must be located in the UK
• No commodities positions
• Limited (to 2% of the firm’s own funds as reported in COREP CA 01.00) position of foreign exchange

Options for Institutions

It is proposed that the following choices will be available for ‘simpler regime firms’:

• Opt out of being this type
• Rather than change to Basel 3.1 from 1^st January 2025, a firm could remain on the UK CRR (as at the aforementioned date) and then move to the new framework thereafter
• Move to Basel 3.1

The date by which responses to the consultation need to made is 22 July 2022.

Further details are in PRA consultation paper CP 5-22.

Cryptoassets

Whistlebrook understands that firms will be asked to report on their cryptoasset exposures and related investment plans. No date appears to have been specified in relation to such reporting. Development of regulation of cryptoassets is ongoing, including at an international level.

Branch Return

Clients that submit the branch return are reminded that from report reference date 30^th June 2022, submissions must be made by an XML file upload to BEEDS. E-mail will no longer be an option. WIRES has been updated to accommodate the requirement.

This regulatory update is Whistlebrook’s understanding of the position as at 24th May 2022.