Banking and finance regulatory news, December 2020

Holding company regulatory transaction fees: PRA CP21/20

The PRA has published a consultation paper, CP21/20[5], setting out a proposed rule on regulatory transaction fees for applications for approval or exemption as a holding company made under section 192Q of FSMA. The PRA explains that CRD V introduces new requirements for certain types of parent financial holding companies (FHCs) or mixed FHCs (MFHCs) that substantively control their group. They will be subject to supervisory approval and consolidated supervision.

The Financial Holding Companies (Approval etc) and Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020 (see above) extend powers to the PRA to supervise, monitor, exercise discretions, impose additional requirements, and enforce breaches of obligations in respect of approved FHCs and MFHCs.

The PRA proposes a regulatory transaction fee of £2,500 for an application for approval or exemption as a holding company. The proposed fee amount has been set to recover the approximate costs to the PRA of assessing each application, including related system changes and other linked regulatory transactions. The PRA will keep these costs under review and will consider consulting on changes to the fee in the event of material cost changes.

Comments can be made on the proposals until 8 January 2021. The PRA proposes to implement the new rule on 1 March 2021.

Operational resilience: PRA and ECB statements on supervisory cooperation

The PRA has published a statement[6] regarding supervisory cooperation on operational resilience in which it states that the PRA recognises the global and interconnected nature of banks and the importance of supervisory coordination. The PRA is committed to working closely with the European Central Bank (ECB) and the Federal Reserve to ensure that supervisory approaches on operational resilience are well coordinated. The ECB has published a similar statement[7] emphasising its commitment to work closely with the PRA and the Federal Reserve.

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