In this Consultation Paper (CP), the Prudential Regulation Authority (PRA) sets out its proposals to revise its operational continuity in resolution (OCIR) policy. The purpose of the proposals is to improve firms’ resolvability and support the Bank of England’s approach to resolution as set out in the Statement of Policy ‘The Bank of England’s approach to assessing resolvability’. The proposals would make amendments to the Operational Continuity Part of the PRA Rulebook (Rules) (see Appendix 1) and PRA OCIR expectations, and would result in a new Supervisory Statement (SS) on OCIR (Appendix 2). The new SS would supersede SS9/16 ‘Ensuring operational continuity in resolution’.
This CP is relevant to PRA-authorised UK banks, building societies, and PRA-designated UK investment firms currently in scope of, or likely to come into scope of, the Rules. For a firm to be in scope of the Rules, it must receive critical services, and must meet one of the three thresholds set out in Operational Continuity 1.1.
The PRA proposes that the changes resulting from this CP would take effect from Saturday 1 January 2022.
The PRA intends to publish its final policy relating to OCIR in H1 2021. Many firms' existing OCIR arrangements may already be consistent with some of these proposals. The PRA would therefore expect that firms would be able to leverage their existing OCIR arrangements when considering the extent to which further work may be necessary ahead of Saturday 1 January 2022.
Responses and next steps
This consultation closes on Sunday 31 January 2021. The PRA invites feedback on the proposals set out in this consultation. Responses to this CP, CP19/20 and the Bank’s CP ‘Updates to the Bank of England’s approach to assessing resolvability’ may be included in a single response to RAF_OCIR_consultations_2020@bankofengland.co.uk.