On 23 May 2024, the Bank of England (BoE) published a Policy Statement (PS) on its approach to statutory notice decisions for use of its requirements powers. The PS provides feedback to responses to the BoE’s consultation paper (CP) on the topic, which was published in December 2023, and also sets out the BoE’s final statement of policy (SoP).

The SoP relates to the BoE’s new power, as part of its role as the UK’s regulator for central counterparties (CCPs) and central securities depositories (CSDs), to issue requirements to recognised UK CSDs, recognised UK CCPs and systemic third-country CCPs. This power is given to it by the Financial Services and Markets Act 2000 (FSMA) as amended by the Financial Services and Markets Act 2023.

The final SoP clarifies the BoE’s policy regarding the allocation of decision-making regarding statutory notices, its approach to supervisory statutory notice decision-making, and its approach to publication of supervisory statutory notice decisions.

Overview

The chapters in the PS are as follows:

  • General comments.
  • FMI representations.
  • Criteria for the BoE’s decision making.
  • Non-statutory notices.
  • Restricting or prohibiting recognised UK CCP discretionary payments.
  • Decision notices for voluntary requirement approvals.
  • Financial market infrastructure (FMI) fees.

Summary of responses

The BoE received two responses, both from FMI entities. The respondents were generally supportive of the proposals, but requested additional clarification, particularly around making representations following issuance of a statutory notice, the criteria of the BoE’s decision making when exercising the requirements and the scope of the powers.  

Summary of changes to the final policy text

The BoE notes that it made a minor change to the SoP which does not relate to any of the consultation responses received. This change is described in detail in a later section of the PS and is a clarification of the type of information that the BoE is required to publish relating to details in a Supervisory Notice, Decision Notice and Final Notice, in accordance with section 391 of FSMA.

Next steps

The final SoP will enter into effect from 23 May 2024.