The PRA has published Policy Statement 20/15: Strengthening individual accountability in banking: UK branches of non-EEA banks (PS20/15).
In PS20/15 the PRA provides feedback on its earlier consultation and includes final and near-final rules on the application of the senior managers’ regime, certification regime and conduct rules to UK branches of non-EEA banks and PRA designated investment firms.
In PS20/15 the PRA notes that respondents to its earlier consultation requested greater clarity on the circumstances in which individuals based overseas would require pre-approval as a Group Entity Senior Manager (SMF7). In PS20/15 the PRA summarises paragraphs 2.6 – 2.10 of Policy Statement 3/15 and 2.12 – 2.17 of Supervisory Statement 28/15 which clarify the PRA’s expectations of when an individual based in a parent or group entity, either in the UK or overseas, will require pre-approval as an SMF7.
The PRA also has made some modifications to its list of Prescribed Responsibilities for non-EEA branches. Table 1 on page 12 of PS20/15 sets out the PRA’s proposed and final Prescribed Responsibilities for non-EEA branches.
In response to industry feedback the PRA will no longer require all non-EEA branches to submit the SYSC attestation annually as a matter of course. The PRA will, however, continue to expect all non-EEA branches to notify it in a timely manner of known or suspected breaches of any applicable sections of the PRA Rulebook which replace SYSC. The PRA may also ask individual firms or senior managers or any other appropriate individual to attest compliance with specific regulatory requirements on an ad hoc basis if it considers that doing so will advance its objectives.
The PRA (and the FCA) have also decided to remove the branch whistleblowing responsibility from their respective rules until there is greater clarity regarding the extension of whistleblowing requirements to non-EEA branches.
In an earlier consultation the PRA proposed to mirror the approach for UK firms and base the scope of its certification regime for non-EEA branches on their UK population of material risk takers. Respondents supported this approach and the PRA is therefore not proposing any changes to it. Respondents also agreed to the PRA’s proposals to mirror the approach for UK firms to apply its conduct rules to senior managers and employees performing a PRA-specified certification function in branches. The PRA is therefore not making any changes to its proposals.