UK Prudential Regulator Consults on Simplified Obligations for Bank Recovery Planning

The U.K. Prudential Regulation Authority has published a consultation on simplified obligations for PRA-authorized banks, buildings societies, PRA-designated investment firms and their qualifying parent undertakings that are subject to the Recovery Plans Part of the PRA Rulebook. The consultation is primarily aimed at smaller and non-systemic firms. The PRA's consultation closes on October 23, 2020, after which it plans to publish a final Policy Statement on its proposals in the second half of 2020 or 2021.

As the U.K.'s competent authority for the purposes of the EU Bank Recovery and Resolution Directive, the PRA (together with the Bank of England, the UK's resolution authority) is entitled under BRRD to apply simplified obligations to firms if their failure is not expected to have a significant negative effect on the economy, financial markets or other institutions. The PRA is proposing to introduce such simplified obligations in certain circumstances for firms that meet the eligibility requirements (which are currently mandated at EU level). The BRRD framework under which this regime operated has already been implemented into U.K. laws and will continue in force, with minor technical amendments, after Brexit. The consultation paper sets out how the PRA proposes to assess eligibility and the proposed simplified obligations, which include a reduced number of scenarios and a shorter template for recovery plan submission.

View details of the PRA's consultation on simplified obligations for recovery planning.

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