On 2 December 2024, the Bank of England (BoE) published a consultation paper setting out its proposal to revoke the retained EU law Technical Standard 2019/348 on Simplified Obligations (SO UKTS).

Background

Following its withdrawal from the EU, the UK retained the EU framework for determining the level of information required within recovery and resolution plans. This includes the process prescribed in the SO UKTS to determine whether ‘Simplified Obligations’ (SO) can be imposed in relation to those plans.

The BoE has found that the assessment set out in the SO UKTS identifies the same firms as the process that results in the setting of a preferred resolution strategy of modified insolvency. In light of this, the BoE explains that it can achieve the same outcomes using this more efficient, existing process instead of the duplicative SO UKTS process.

The proposal

The consultation paper sets out the BoE’s plans to revoke the SO UKTS, with the aim of reducing the resource burden of this prescriptive process upon the BoE, while preserving the application of SO and retaining the proportionality benefits for firms and authorities afforded by SO.

The BoE flags that it is only proposing to simplify the process by which a firm is designated as eligible for SO; the ability to apply SO and any consequential benefits to firms from SO would not be affected.

Next steps

The consultation closes on 2 February 2025, and the BoE proposes to bring into force the changes resulting from its proposals on 30 April 2025.