The Prudential Regulation Authority (PRA) has issued the following publications:
PRA Rulebook: Fees Part and response to CP40/15 – PS7/16
Internal governance of third country branches and response to CP3/16 – PS8/16
Fees: PRA approach and application – SS3/16
Internal governance of third country branches – SS4/16
Guidelines for completing regulatory reports – SS34/15 UPDATE
Details on the publication can be found below or on the PRA’s website:
1) PRA Rulebook: Fees Part and response to CP40/15 – PS7/16
Overview
This Prudential Regulation Authority (the PRA) policy statement (PS) provides feedback on responses to Consultation Paper 40/15 and is relevant to all PRA-regulated firms.
Included in this PS are the supervisory statement (SS) and final rules following CP40/15. The final SS3/16 ‘Fees: PRA Approach and Application’ in Appendix 1 and the final rules in Appendix 2. Handbook and Rulebook consequential instruments can be found in Appendices 3 and 4 respectively.
In CP40/15 the PRA set out proposals to redraft the FEES module of the Handbook to conform to the PRA Rulebook (the Rulebook) style. The CP was part of a planned series of consultations aimed at replacing PRA Handbook material inherited from the Financial Services Authority (FSA) with a standalone Rulebook and reflected the commitment made in the PRA’s supervisory approach documents to create a set of rules specific to the needs of PRA-authorised firms.
Fee rates shown in the final rules instrument are those in force at the date of the PS (i.e. for the 2015/16 fee year). Fee rates for 2016/17 will be subject to consultation in spring 2016.
Summary of content
CP40/15 outlined the PRA’s general approach when replacing the rules and guidance in the FEES module of the Handbook with a new Fees Part of the Rulebook. In summary, the former Handbook material has been divided into five topic based chapters as follows:
- Chapter 1 Application and Definitions (formerly FEES 1);
- Chapter 2 Obligation to pay fees (formerly FEES 2);
- Chapter 3 Periodic Fees, with Periodic Fees Schedule (formerly Fees 4);
- Chapter 4 Regulatory Transaction Fees (formerly FEES 3 other than Annex 9); and
- Chapter 5 Special Project Fee for restructuring (formerly FEES 3 Annex 9).
This has not changed following consultation.
2) Internal governance of third country branches and response to CP3/16 – PS8/16
This Prudential Regulatory Authority (PRA) policy statement (PS) issues the final rules and a supervisory statement relating to the internal governance arrangements of UK branches of non-EEA banks and PRA designated investment firms, known as ‘third country branches’. The PRA consulted on draft rules and a supervisory statement in Consultation Paper (CP) 17/15: ‘The PRA Rulebook: Part 3’. This PS also publishes the final rules and a supervisory statement in response to CP3/16 ’Occasional Consultation Paper’.
Chapter 2 of this PS is relevant to all third country branches. Chapter 3 is relevant to all PRA-authorised firms. All the rules and supervisory statements set out in the appendices apply from 7 March 2016. This publication forms part of the project to redraft the Handbook inherited from the FSA to create the PRA Rulebook containing only PRA rules.
The material on the internal governance of third country branches has been finalised separately from the main response to CP17/15 which was published in PS19/15 on 3 August 2015. Finalisation of the rules and the supervisory statement was delayed to ensure amendments are included to reflect aspects of the Senior Managers and Certification regimes (SM&CR) relating to third country branches, that would have superseded or otherwise affected these proposals.
3) Fees: PRA approach and application – SS3/16
This supervisory statement is addressed to all Prudential Regulation Authority (PRA) authorised firms and anyone seeking to become PRA-authorised. It should be read alongside the Fees Part of the PRA Rulebook (the ‘Fees Part’ or ‘Fees’).
The PRA consults annually on fee rates with the publication of a consultation paper (CP). Feedback on the proposals in the CP is then published in a policy statement (PS), together with the final rule-making instrument and any agreed policy.
The PRA’s fee year is twelve months from 1 March to the end of February in the following year. New fee rates are consulted on in March to take effect from 1 March in each year.
4) Internal governance of third country branches – SS4/16
This supervisory statement is relevant to non-EEA banks and PRA-designated investment firms in respect of their operations in the United Kingdom through branches known as ‘third country branches ‘. It sets out the PRA’s expectations for the internal governance of third country branches and how these firms should comply with the ‘Internal Governance of Third Country Branches’ parts of the PRA Rulebook. The rules and supervisory statement cover the following areas:
- general organisational requirements;
- persons who effectively direct the business;
- responsibility of senior personnel;
- skills, knowledge and expertise;
- compliance and internal audit;
- risk control;
- outsourcing; and
- record keeping.
This statement replaces the guidance material previously included in chapters 4 – 9 and 21 of the Senior Management Arrangements, Systems and Controls (SYSC) section of the Handbook. It does not seek to introduce additional or new obligations nor change the PRA expectations of how non-EEA banks and PRA-designated investment firms organise their UK branches. Where relevant, the statement takes into account the requirements of the Senior Managers and Certification Regime (SM&CR) which apply to third country branches
5) Guidelines for completing regulatory reports – SS34/15 UPDATE
Update 26 February 2016: SS34/15 was updated following Occasional Consultation Paper – CP3/16 to include guidelines for completing supervisory reports relating to the Close Links and Change in Control Parts of the PRA Rulebook. This update supplements the PRA’s expectations set out in the original statement, published on 3 August. This supervisory statement is addressed to all firms regulated by the Prudential Regulation Authority (PRA) who are required to submit supervisory reports under the Regulatory Reporting, Close Links and Change in Control Parts of the PRA Rulebook. Its purpose is to set out the PRA’s expectations for how firms should complete the data items and returns required by those Parts.
Links to the guidance on completing data items and the data items are set out in appendices to this supervisory statement.