On 13 September 2019, the PRA published a waiver by consent of the Continuity of Access (CoA) rules in the Depositor Protection Part of the PRA Rulebook (DPP). The PRA introduced rues in the DPP requiring firms to put in place systems to ensure eligible depositors have continued access to Financial Services Compensation Scheme (FSCS) covered deposits in resolution or insolvency by facilitating a transfer of such deposits. The unmodified rules required all firms subject to the CoA rules in the DPP to meet these requirements by 1 December 2016. In advance of the rules coming into force, the PRA offered a waiver by consent which expires on 1 December 2019.
The PRA states that, over the past few years, it has been publically committed to reviewing the calibration of minimum requirement for own funds and eligible liabilities (MREL) before the end of 2020. In doing so, the PRA will anticipate any intervening changes in the EU regulatory framework due to the revision of the Bank Recovery and Resolution Directive (BRRD) and the Capital Requirements Regulation (CRR) as well as firms’ experience in issuing liabilities to meet their interim MRELs. The review may lead the PRA to consider adjustments to the scope, functionality and necessity of the rules on CoA.
Pending the outcome of the review, the PRA is providing a new waiver by consent for the CoA rules with an expiry of 1 December 2022. The waiver is available for firms if they meet the criteria in one of the three updated cases set out by the PRA. The waiver exempts a firm from the CoA rules (DPP 13.4 to 13.8 inclusive) and from the related CoA reporting requirements (DPP 15.2 to 15.4 inclusive and 15.7).
The PRA has set out the changes to the rules in a waiver direction.