The BoE and PRA have launched a consultation on proposed updates to international banking branch and subsidiary supervision to reflect changes since introducing the PRA’s SS5/21.
The proposed changes include:
- Introducing additional indicative criteria for consideration by the PRA when determining the appropriateness of an internal bank operating in the UK as a branch rather than subsidiary.
- The PRA is proposing to update its expectations in SS5/21 to include an additional indicative threshold of £300 million of total retail and small company demand deposits (ie including non FSCS-covered deposits).
- Clarifying expectations around booking arrangements and extending their application to a subset of UK banks.
- In proposed changes to booking arrangements, firms will need to consider various factors including potential fragmentation; split desk impacts; and economic rationale.
- Amending the PRA branch return, aiming to improve whole-firm liquidity data collection.
- Changes to reporting requirements for third-country branches.
- Making non-substantive amendments to SS5/21 to clarify existing expectations and processes of the PRA.
The proposed changes to branch reporting is scheduled to be implemented on 31 December 2025. and changes to SS5/21 are proposed to come into force during 2025 Q2.
The consultation closes on 30 October 2024.