On 28 May 2021, the Bank of England (BoE) published updated versions of:

  • Statement of Policy: The BoE’s Approach to Assessing Resolvability (RAF SoP).
  • The BoE’s Statement of Policy (SoP) on Restructuring Planning.
  • The BoE’s SoP on Management, Governance and Communication.

In October the BoE and the PRA consulted in parallel on proposals relating to operational continuity in resolution (OCIR) to alleviate operational burdens on firms in response to COVID-19. The BoE consulted on proposed amendments to the RAF SoP which sets out how the BoE as resolution authority intends to assess individual firms’ resolvability, and the resolvability outcomes it deems necessary to support resolution. In particular, the proposals covered changes to the OCIR section of the RAF SoP and the sections of the RAF SoP where firms’ submissions and disclosures under the Resolution Assessment Part of the PRA Rulebook in 2020/21 were mentioned.

In light of the PRA now publishing its final OCIR policy in Policy Statement 9/21: Operational continuity in resolution: Updates to the policy , the BoE has made the following amendments:

  • Removing references to the term ‘essential services’ from the RAF SoP and the Management, Governance and Communication SoP. This is to reflect the PRA’s decision in its final policy not to introduce the term ‘essential services’, but instead to amend the definition of critical services in the Operational Continuity Part of the PRA Rulebook to refer to both critical functions and core business lines.
  • Clarifying in the RAF SoP the BoE’s approach to assessing OCIR in 2021 and 2022 in light of the effective date for the PRA’s revised OCIR policy. In particular, the BoE’s assessment of firms’ resolvability during 2021 and 2022 will focus on the PRA OCIR policy that came into force on 1 January 2019, taking into account the 1 January 2023 effective date for the PRA’s revised OCIR policy. This will also be reflected in the BoE’s public statements regarding the resolvability of the major UK firms during this time.

As noted above, the BoE’s assessment of firms’ resolvability during 2021 and 2022 will focus on the PRA OCIR policy that came into force on 1 January 2019, taking into account the 1 January 2023 effective date for the PRA’s revised OCIR policy. This will also be reflected in the BoE’s public statements regarding the resolvability of the major UK firms during this time. This will have the following implications for firms’ assessments and submission of reports during the first RAF cycle:

  • Firms’ assessments of their preparations conducted prior to 1 January 2022 should focus on capabilities developed to comply with the PRA OCIR policy that came into force on 1 January 2019.
  • The PRA anticipates that firms’ reports in October 2021 will focus on the OCIR policy that came into force on 1 January 2019.
  • Firms should submit to the PRA their plan for implementing the PRA’s revised OCIR policy by 18 February 2022, and are encouraged to submit this plan alongside other updates they may have to their reports in light of the January 2022 compliance deadline for other outstanding resolvability policies.

The changes set out above are effective immediately.