PRA reports on approach to identifying other systemically important institutions

The Prudential Regulation Authority (PRA) has published PS6/16: The PRA’s approach to identifying other systemically important institutions (O-SIIs).

This Prudential Regulation Authority (PRA) policy statement (PS) provides feedback to responses to Consultation Paper (CP) 39/15, ’The PRA’s approach to identifying other systemically important institutions (O-SIIs)’.The PS also contains a statement of policy on the PRA’s approach to identifying O-SIIs and the PRA’s 2015 list of UK firms designated as O-SIIs.

In CP39/15 the PRA set out the criteria and scoring methodology it proposed to use to identify O-SIIs. These criteria and methodology are derived from Article 131(3) of the Capital Requirements Directive (2013/36/EU) (CRD IV) – which requires O-SIIs to be identified – and follow the European Banking Authority (EBA) Guidelines on the criteria to determine the conditions of application of Article 131(3) CRD IV in relation to the assessment of O-SIIs.

The consultation set out the PRA’s proposed approach to identifying and designating as O-SIIs those firms whose distress or failure would have a systemic impact on the UK or the EU economy or financial system due to size, importance (including substitutability or financial system infrastructure), complexity, cross-border activity, and interconnectedness.

This policy statement is relevant to all credit institutions, investment firms, EEA parent institutions, EEA parent financial holding companies and EEA parent mixed financial holding companies within the domestic financial sector at their highest level of consolidation in the United Kingdom.

The content of this policy statement does not apply to EEA and third-country branches operating in the UK.

Lavanya Rathnam

Lavanya Rathnam is an experienced technology, finance, and compliance writer. She combines her keen understanding of regulatory frameworks and industry best practices with exemplary writing skills to communicate complex concepts of Governance, Risk, and Compliance (GRC) in clear and accessible language. Lavanya specializes in creating informative and engaging content that educates and empowers readers to make informed decisions. She also works with different companies in the Web 3.0, blockchain, fintech, and EV industries to assess their products’ compliance with evolving regulations and standards.

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