On 11 March 2022, the PRA published Policy Statement 2/22 ‘Operational Resilience and Operational Continuity in Resolution: CRR firms, Solvency II firms, and Financial Holding Companies’ (PS2/22).

In PS2/22 the PRA sets out its feedback to the responses to Consultation Paper 21/21 ‘Operational Resilience and Operational Continuity in Resolution: CRR firms, Solvency II firms, and Financial Holding Companies (for Operational Resilience)’ (CP21/21). In CP21/21, the PRA proposed that certain group obligations in the Operational Resilience Part of the PRA Rulebook, relevant to Capital Requirements Regulation (CRR) firms, should apply to CRR consolidation entities. In addition, the PRA also proposed to make other minor formatting and clarification amendments to the Operational Resilience Part applying to CRR firms, the Operational Resilience Part applying to Solvency II firms, the Group Supervision Part and the Operational Continuity Part.

In addition to setting out its feedback to the responses to CP21/21 the PRA sets out its final rules and policy in the form of:

  • Amendments to the Operational Resilience Part of the PRA Rulebook, the Insurance – Operational Resilience Part of the PRA Rulebook and the Group Supervision Part of the PRA Rulebook (Appendix 1).
  • Updated Supervisory Statement 1/21 ‘Operational resilience: Impact tolerances for important business services’ (SS1/21) (Appendix 2).
  • Amendments to the Operational Continuity Part of the PRA Rulebook (Appendix 3).

The PRA states that it has amended certain aspects of its proposed policy and these are summarised in paragraph 1.9 of PS2/22 and include:

  • A new rule has been introduced to Chapter 8 of the Operational Resilience Part requiring CRR consolidation entities to comply with the requirements in Chapter 8 within a reasonable time, and by no later than 30 June 2022.
  • New rules have been introduced to Chapter 8 of the Operational Resilience Part requiring CRR consolidation entities to assess the ability of group members to remain within impact tolerances for their important group business services, and to ensure the CRR consolidation entity’s board approves the CRR consolidation entity’s assessment.
  • Paragraph 9.4 of SS1/21 has been amended to remove the reference to the requirement relating to strategies, processes and systems, and to add an expectation that CRR consolidation entities should have a regular dialogue with other members of its group regarding the assessment required under Rule 8.8 of the Operational Resilience Part applicable to CRR firms.
  • Paragraph 9.5 of SS1/21 has been amended to clarify that firms are expected to work with other members of their group to take action, should it be likely that a relevant important group business service could not be delivered within its impact tolerance.

The implementation dates for the changes set out PS2/22 are:

  • 31 March 2022 for the Operational Resilience Parts and the Group Supervision Part.
  • 1 January 2023 for the Operational Continuity Part.