BoE Taxonomy 1.3.0

The Bank of England’s new taxonomy 1.3.0 has been finalised according to its Statistical Notice 2022-20. This taxonomy introduces the collection of the Bank’s Issuing Paying Agent (IPA) form in XBRL format. The first report reference timing of collection in XBRL is November 2023. There are no other changes being introduced. Therefore, nearer to the first report reference date (understood to be 30 November 2023), the taxonomy will be added into WIRES. Clients using the WIRES product, need take no action at present.

Leverage Ratio Reporting

The PRA advised in its consultation paper 12-22 that four new leverage ratio templates will be introduced and be effective from report reference date 31 December 2023. The additional reporting will be applicable only to those firms that are subject to the UK Leverage Ratio Framework. Whistlebrook understands that these are institutions with retail deposit liabilities of at least £50bn or non-UK assets (averaged over 3 accounting years) of £10bn or more.

Reporting will have a semi-annual frequency. The aim of the additional reporting is to recognise the risk that in a stress, certain transactions (collateral swaps, repos, unsecured securities lending) may not be available or be subject to increased margin requirements. Leverage exposure would be impacted as a result.

Baseline Financial Resilience Regulatory Return

The FCA issued consultation paper 22-19 in which it is proposed that a regulatory form be introduced to replace data collected through a Financial Resilience Survey. This new template FIN073, will be applicable to FCA solo regulated firms. The new way of providing the data will be effective from the second half of 2023.

Energy Markets Financing Scheme

The PRA issued a statement on how firms should treat exposures under the above scheme. Whistlebrook understands that the scheme now in place, has the following key features:

• The UK government will provide a 100% guarantee to lenders that provide additional finance to energy suppliers, considered to play a significant part in that market.
• Additional finance is to cover liquidity requirements due to price volatility.
• Bank of England approval to include an exposure in the scheme, is required.
• The guarantee is available for twelve months, but will not cover fees and any defaulted interest.

Any firm that has an exposure which qualifies to take part in the scheme, will be able to treat the guarantee as unfunded credit protection. The exposure to the guarantor should be recognised as one to ‘central governments or central banks’.

Sustainability Disclosures and Labels

The FCA issued consultation paper 22-20 about a proposed sustainability regime. Whistlebrook understands that it is possible that over time, this regime (or similar) may get extended beyond its focus on UK based asset and fund management entities. It may be an area worthy of appreciation. The proposal covers:

• Labels: use of sustainability investment labels to guide consumers
• Disclosures: a requirement for disclosures linked to products
• Marketing: limit use of sustainability descriptions being linked to products. Here, the intention is to reduce unrealistic claims about products being ‘green’ (so called ‘greenwashing’).

WIRES Planned Releases

The planned timings of and reasons for WIRES releases as at the date of this newsletter, are shown below. These timings are subject to alteration and will be influenced by changes communicated by regulators.

Time	Reason
March 2023	Enhancements and any fixes
June 2023	Addition of FIN073 Enhancements and any fixes
October 2023	Addition of new Leverage Ratio templates for ‘LREQ’ firms. Bank of England taxonomy 1.3.0. Enhancements and any fixes

This regulatory update is Whistlebrook’s understanding of the position as at 26th October 2022.