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Art. 55 BRRD – No-Action Letter Brit-style

The PRA has today issued a short-term waiver in respect of phase 2 liabilities under its transposition of Article 55 BRRD. Its rules require firms to amend contracts with 3rd country counterparties, to include a term that subordinates liabilities to the Bank’s resolution authority, a contractual recognition of bail-in. The requirement was imposed via a […]

Taking the Shine off the Silver Bullet – PRA Provides Gentle Warning Against Over-Reliance on ISDA Resolution Stay Protocol

On 13 November the PRA published its policy statement and supervisory statement containing final rules requiring contractual stays in financial contracts governed by third country law (see this blog post for more detail).  The policy statement requires firms to amend “financial arrangements” entered into, or materially amended, after the relevant effective dates.[1] Whilst the PRA […]

PRA finalises 3rd country stay

On 13 November 2015 the PRA published a Policy Statement containing the final rules for contractual stays in financial contracts governed by third-country law. The rules are the offspring of Consultation paper CP 19/15; their intention is to suspend the 3rd country termination and close-out rights of counterparties to a UK entity that has entered […]

US Prudential Regulators finalise non-cleared margin rules

Two of the US prudential regulators[1], the FDIC and the OCC, have voted to jointly adopt final rules regarding the exchange of initial and variation margin for uncleared swaps. The rules will apply to entities that are i) under the supervision of a prudential regulator ii) have registered with the CFTC or SEC as a […]

PRA Consults on O-SII Identification

On 19 October 2015, the Prudential Regulation Authority (PRA) published a consultation paper detailing the criteria and scoring methodology it proposes to use to identify “other systemically important institutions” (O-SIIs)[1] – firms whose distress or failure would have a systemic impact on the UK or the EU economy or financial system.  The consultation period remains […]

ISDA 2014 Resolution Stay Protocol stayed

On 26 August 2015, ISDA announced that the 2014 Stay Protocol is to undergo revisions. Although it remains open, it is not expected that any market participant would adhere at this time. On the same day, in its comment to the PRA Consultation Paper on contractual stays in financial contracts governed by third-country law, ISDA […]

Bye-Bye Bonus

The PRA and the FCA have today issued a joint statement outlining far-reaching changes to remuneration policy. PS 15/16: Strengthening the Alignment of Risk and Reward: New Remuneration Rules aims to improve risk-reward alignment, deter the irresponsible and short-term appetite for risk, and to encourage effective risk-management. The rules will apply to FCA-regulated banks and […]

PRA Hold Buy-Side in Headlock Over Early Termination

Introduction On 26 May 2015, the Prudential Regulation Authority (PRA) published Consultation Paper CP 19/15, “Contractual stays in financial contracts governed by third-country law”.  The consultation period closes on 26 August 2015 and seeks comment on two aspects of current regulation which impact on portfolios of trading documentation – contractual stays and data mining. Contractual […]

LEI is nigh

The PRA has published a “final warning” regarding the imminent  LEI deadline: The PRA’s LEI “recommendation” requires a firm/group to obtain an LEI code/codes by 31 December 2014 at the latest The PRA requests that any inability to comply by the year end should be notified to them by Friday 5 December 2014. Notification may be […]

PRA cranks up the printing press

The PRA has published four papers, three consultations and one discussion, as part of the PRA’s wider “resolution and resilience agenda”. The implementation of ring-fencing: consultation on legal structure, governance and the continuity services and facilities- CP19\14 sets out the PRA’s proposed ring-fencing policy in three areas: the legal structure of banking groups, governance, and […]

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