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In PS6/23 and SS1/23 – ‘Model risk management principles for banks’, the PRA outlines five Principles designed to support effective model risk management (MRM), the first of which relates to ‘model identification and model risk classification’.
The European Banking Authority (EBA) has published amendments outlining requirements for calculating Prudent Valuation Adjustments (PVA) on fair-valued financial instruments held by institutions.
Is the perceived reduction in risk among European banks an early sign of sector-wide optimism? In 2023, we faced a global economic slowdown, persistent geopolitical tensions, and rapid technological advancements. Analysing the year-end results of Europe’s 26 largest banks, what insights can we gain about expected credit losses and the strategies these institutions implement to manage ongoing uncertainties...
In line with the PRA’s new requirements, our prudential risk experts discussed how non-systemic banks and building societies can prepare for an orderly solvent exit.
On 17 April 2024, the Bank of England (BoE) published an article with useful insights for financial institutions on using scenario analysis to measure climate-related financial risks.
The US unveiled its take on the BCBS Basel reforms on July 27th, 2023, calling it the “Basel III Endgame” (referred to as Basel 3.1 in the UK). This article outlines the key disparities between the US and UK approaches to implementing these reforms.
The Prudential Regulation Authority (PRA) continues to emphasise the importance of the reliability and accuracy of regulatory data for banks and building societies. Data risk is named a main priority within the 2024 Dear CEO Letter and through the Transforming Data Collection initiative between the Bank of England and the Financial Conduct Authority.
Banks are expected to have robust governance and controls processes for the production of their regulatory returns. In particular, the PRA outlined its expectation that banks should perform independent testing and validation of their regulatory returns to ensure they are reliable and accurate. With the PRA’s increasing focus on regulatory reporting demonstrated through SREP reviews and S166s reviews,...
The Prudential Regulatory Authority (PRA) has outlined its expectations for the preparation of regulatory returns in The Dear CEO Letter (DCEO), which focuses on the “Thematic findings on the reliability of regulatory reporting”. Dated the 10th of September 2021, the letter highlights the PRA’s expectations for banks to submit reliable and accurate regulatory returns, and for the regulatory reporting...
With the introduction of the Strong & Simple (S&S) regime, UK banks will be predominantly categorised as under either the S&S regime or the Capital Requirement Regulation (CRR). For firms considering whether to apply to the S&S regime a thorough evaluation of the respective regulatory implications of either approach is required.
On November 27th, the Financial Conduct Authority (FCA) published a second and final report with further observations on how firms are implementing requirements on the Internal Capital Adequacy and Risk Assessment (ICARA) process and reporting under the Investment Firms Prudential Regime (IFPR).
In this article, we highlight regulatory developments in Q2 2024 for insurance covering Appointed Representative (AR) oversight, Guaranteed Asset Protection (GAP) sales, motor total loss claims, Consumer Duty updates, a post-implementation review of travel insurance signposting rules and Solvency II Matching Adjustment (MA) reforms.
The FCA recently published a multi-firm review of outcomes monitoring under the Consumer Duty. While the review was carried out across 20 firms in the insurance sector, the findings are relevant across all sectors.
The FCA introduced the anti-greenwashing rule (AGR), which comes into effect on 31 May 2024, as part of its supervisory kit to create a common understanding of the sustainability characteristics of products and services.
The agreement to pause sales of Guaranteed Asset Protection (GAP) insurance for 80% of the market was a big headline in February. It may have come as a shock to some but the FCA’s concerns with GAP insurance are nothing new, dating back to its 2014 Market Study. The FCA pointed to its 2022 value measures data and had given GAP firms a stark warning in September 2023 over fair value.
The Financial Conduct Authority (FCA) published its 2024/25 Business Plan on 19 March, setting out how it will deliver the final year of its three-year strategy. To fulfil the FCA’s objectives [1], the strategy seeks to reduce and prevent serious harm, set and test higher standards and promote competition and positive change.
The Financial Conduct Authority (FCA) conducted a review of claims-handling processes for valuing vehicles which have been stolen or written off (‘total-loss’ claims).
Employees, who work remotely in a different country to where their employer is based, can give rise to a multitude of regulatory compliance obligations that employers need to understand and have a policy and process to manage.
The FCA/PRA deadline for firms to ensure alignment of their operational resilience frameworks with regulatory requirements is fast approaching, in particular demonstrating Important Business Services (IBS) can operate within the defined Impact Tolerances.
It is commonplace for many financial services firms to engage office holders through an off payroll working arrangement, especially where duties are occasional. Here, we explore the potential pitfalls of such arrangements and how businesses can avoid significant liabilities arising on the fees they are paid.
Robust succession plans can enable a Board to ensure their organisation remains in good hands for years to come, address any potential skills gaps, and reap the benefits of increased diversity.
On 17 April 2024, the Bank of England (BoE) published an article with useful insights for financial institutions on using scenario analysis to measure climate-related financial risks.
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Read our latest news and analysis on the changing markets and economic environment.
Following a record-breaking vote, the Labour Party has been elected to lead the UK government.
In this instalment of the FS regulatory affairs newsletter, our experts have summarised the significant updates firms should be aware of in the first quarter of 2024.
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