May 2024 Regulation Update - Whistlebrook

Posted on: May 23, 2024

Basel 3.1

As at 21st May 2024, the policy statement detailing the final regulation for credit risk, output floor, reporting and disclosures, has not been issued by the regulator. This publication and the related banking taxonomy (3.7.0) is expected by 30th June. In the meantime, Whistlebrook is working with some of its PLUS clients on probable data gaps and related changes. PLUS clients are encouraged to contact Whistlebrook, should they feel they will have gaps between their existing and required data.

For all WIRES clients affected by Basel 3.1, Whistlebrook will make a tested software release that provides users with reasonable time to perform their own testing , should they wish.

 

Small Domestic Deposit Takers Regime (SDDT)

Firms that are to be subject to SDDT will benefit from the reduced reporting requirements for COREP Net Stable Funding and Additional Liquidity Monitoring Metrics. The reduction is effective from report reference 30th June 2024. Please refer to Prudential Regulation Authority’s (PRA) policy statement 15-23, paragraph 2.131.

Net Stable Funding Requirement (NSFR)

Reporting will be necessary only where an institution’s Retail Deposit Ratio (RDR) is less than 50% (averaged over four consecutive rolling quarters). Therefore, where a firm’s average RDR is equal to or greater than 50%, no NSFR submission will be required. Further details are in paragraph 2.131 of the policy statement 15-23 and in consultation paper 4-23.

Additional Liquidity Monitoring Metrics (ALMM)

SDDT firms will need to complete only one of the ALMM templates i.e. C 68 (Concentration of Funding by Product Type). The 1% threshold that normally applies to this report, will not be relevant to SDDT reporters.

 

Consumer Credit Product Sales Data Collection

The Financial Conduct Authority (FCA) issued its policy statement 24-3 on 30th April 2024. Paragraph 2.7 introduces changes to the proposals for consumer credit reporting.

Thresholds to be used to determine if reporting is required have been increased and are now:

  • Outstanding consumer credit balance of at least £2million as at the previous annual reporting period and / or
  • New consumer credit advances in the reporting period, of at least £2million.

The policy statement also introduced an extension to the time in which the reporting is to be implemented. The effective dates are dependent on whether a firm is classed as “small” or “large”.

A “small” firm is one that as at 31 March 2024 has:

  • Outstanding consumer credit balance of at least £2million, but less than £20million and / or
  • New advances as reported in the CCR003 return, of at least £2million, but less than £20million.

A “large” firm will have outstanding balances and / or new advances of at least £20million.

 

First Reporting

Firm Category Sales Backbook Performance
Small
Report Reference 31st March 2026 31st March 2026 31st March 2026
Submission By 30th April 2026 15th May 2026 15th May 2026
Period Quarter One off submission and is for accounts still active at start of first reporting quarter. Quarter
Large
Report Reference 30th September 2025 30th September 2025 30th September 2025
Submission By 28th October 2025 11th November 2025 11th November 2025
Period Quarter Same as for “Small” firm. Quarter

 

Capital Requirements Directive VI – Non EU Firms

Whistlebrook understands that non-EU headquartered firms that are providing core banking services (including deposit taking and lending) within the EU, must have at a least a branch in the member state in which they are operating. The requirement will be effective from the Autumn of 2026.

 

Senior Managers and Certification Regime

Changes to be introduced to the regime, are expected to be published in June 2024.

 

Securitisation General Requirements

The PRA issued policy statement 7-24, which refers to retained EU law on securitisations, being repealed and replaced. According to the statement, most of the retained EU law will continue to apply in the form of PRA owned rules. It is likely that the requirements will be effective from 1st November 2024.

Changes being introduced, include an amendment to the risk retention calculation with securitised non-performing exposures. A reduced amount (most likely to be the market value), rather than the nominal of such exposures, will be permitted in the calculation. There is also to be a requirement that all documentation be available by 15 days after the securitisation has closed.

Further details are in the policy statement and in consultation paper 15-23.

 

WIRES Releases

Release Content Approximate Timing
6.9 Enhancements and minor fixes End August 2024
7.0 Changes for Basel 3.1 End December 2024 – the timing is subject to change as it is dependent on the Basel 3.1 publications being made in Q2 2024.

 

This regulatory update is Whistlebrook’s understanding of the position as at 21st May 2024.