The PRA has published Policy Statement 12/17: Strengthening individual accountability in banking and insurance: amendments and optimization (PS12/17). In PS12/17 the PRA provides feedback to responses to Consultation Paper 34/16: Strengthening individual accountability in banking and insurance: amendments and optimisations (CP34/16).
PS12/17 also provides:
- the final rules amending the Senior Managers and Certification Regime (SM&CR) (Appendix 1) and Senior Insurance Managers Regime (SIMR) (Appendix 2);
- updates Supervisory Statement 28/15: ‘Strengthening individual accountability in banking (SS8/15) (Appendix 3) and Supervisory Statement 35/15:‘Strengthening individual accountability in insurance (Appendix 4); and
- the PRA Statement of Policy: Conditions, time limits and variations of approval (Appendix 5).
The final rules also insert the links to Forms B, C and D into Large Non-Solvency II Firms – SIMR – Applications and Notifications 7, and Non-Solvency II Firms – SIMR – Applications and Notifications 7. The links were omitted in error when those parts where published in Policy Statement 26/15: The prudential regime, and implementation of the SIMR for non-Solvency II firms.
The changes to Supervisory Statement 28/15: Strengthening individual accountability in banking (SS28/15) include updates to references to MiFID II as set out in Policy Statement 9/17: Implementation of MiFID II: Part 2.
Among other things the PRA has made modifications to the final rules relating to the optimisations to the SM&CR proposed in CP34/16. For example:
- the draft definition of the new Chief Operations Senior Management Function (SMF) has been simplified and renumbered (SMF24);
- the new prescribed responsibility accompanying the Chief Operations SMF has also been narrowed to cover ‘the firm’s performance of its obligations under the Outsourcing part of the PRA Rulebook’;
- the draft definition of the Head of Key Business Area functions (SMF6) has also been revised so that: (i) the existing qualitative criterion relating to the contribution of the business area to the group’s ‘gross revenue’ has been deleted; and (ii) only the qualitative criterion proposed in CP34/16 has been added namely whether the relevant business area or division of the firm performs a critical function.
The PRA has also amended SS28/15 and Supervisory Statement 35/15: Strengthening individual accountability in insurance to clarify its expectations on areas such as:
- the PRA’s expectations of the contents on Statements of Responsibilities and Management Responsibilities Maps;
- the duty of responsibility;
- the new Chief Operations SMF; and
- the application of the Conduct Rules to Notified non-executive directors.
The PRA will shortly be publishing a consultation paper which, among other proposals, will consult on a new:
- Head of Key Business Area SIMF for insurers; and
- Chief Operations SIMF, and a corresponding new prescribed responsibility in relation to outsourced operational functions and activities.
View PRA publishes policy statement on the accountability regimes, 12 May 2017
