On 8 October 2021, the PRA published Consultation Paper 20/21: Trading activity wind-down (CP20/21).
The proposals in CP20/21 are relevant, although may not apply directly, to all PRA authorised UK banks, their qualifying parent undertakings and PRA-designated investment firms that are engaged in trading activities, and relevant third country branches.
In CP20/21 the PRA sets out proposed expectations in respect of firms’ engagement in trading activities that may affect the financial stability of the UK. The PRA also proposes that firms engaged in trading activities be able to carry out a full or partial orderly wind-down of their trading activities in recovery and post-resolution restructuring. In CP20/21 the wind-down of trading activities, whether it be full or partial, or whether it would be carried out as a recovery or post-resolution restricting option, is referred to as ‘the TWD option’.
When the proposals in CP20/21 are finalised the PRA will issue a new Supervisory Statement (SS) on trading activity wind-down, a Statement of Policy and an updated version of SS9/17 ‘Recovery Planning’. Links to drafts of these are set out in the appendices to CP20/21.
The deadline for comments on CP20/21 is 21 January 2022. Subject to consultation responses, the PRA intends to publish its final policy, in H1 2022