On 11 January 2021, the Prudential Regulation Authority (PRA) published a consultation on its proposed approach to supervising the UK activities of PRA-authorised banks and designated investment firms that are headquartered outside the UK, or are part of a group based outside the UK. The PRA also proposes expectations for receiving information concerning risks in the wider group, and for co-operation from regulated entities and their supervisors, in order that it can be satisfied that firms are meeting threshold conditions. The PRA has published the draft supervisory statement ‘International banks: The PRA’s approach to branch and subsidiary supervision’ (in the Appendix), which will supersede SS1/18.
The PRA explains that overall, its approach to the supervision of international banks remains stable and consistent following the UK’s withdrawal from the EU. The PRA consider that those firms which have operated in the UK for some time as either branches or subsidiaries should find the proposals to be in line with their experience of the PRA’s supervision. The proposed expectations on subsidiaries and systemic wholesale branches in the proposed Supervisory Statement are consistent with the PRA’s existing supervisory approach, and are intended to provide clarity to firms on what they need to do to meet the PRA threshold conditions.
The consultation closes on 11 April 2021 and the PRA proposes the implementation date for the final policy would be in Q2 2021.
