The world of prudential regulation can sometimes prove challenging to navigate, given the UK’s ‘twin peaks’ regulatory structure and the objectives of the two regulators. The PRA remains laser-focused on the safety and soundness of its firms and the FCA continues to articulate its expectations with regards to financial resilience and reduction of harms from firm failure We work with our clients in the banking, building society, wealth & investment management and credit / lending space to advise them on prudential matters, ranging from application of the UK Capital Requirements Regulations through to the prudential expectations under MIFIDPRU, the wider FCA Handbook and the FCA’s Finalised Guidance 20/1 on assessment of adequate financial resources. In particular, we are seeing the FCA becoming increasingly active in this space for firms that may not have previously considered themselves to be subject to intensive prudential regulation.
We support our clients in the prudential space in the following ways:
- Drafting and review of ICAAP, ILAAP, ICARA documentation
- Recovery and Resolution planning
- Solvent Exit planning
- Wind-down planning
- Prudential regulatory reporting
- Prudential consolidation
- Preparation for regulatory reviews visits and interviews, including SREP visits
- Board and ExCo training on prudential matters
- Preparation and submission of prudential regulatory submissions and waivers
- Preparation for regulatory change (e.g., Basel 3.1)
- Regulatory Due Diligence (regulatory financial forecasts, adequacy of financial resources, historical and forward-looking compliance)
- Working with distressed firms in contact with the regulator to effect recovery plans or orderly wind-downs, bringing to the fore the expertise of our FS Resolutions Practice
Given the direction of travel of the UK regulators, firms should take stock of their financial resources, the wider arrangements for ensuring compliance with prudential requirements and monitoring against this. We work with our clients to achieve this and can provide either a regulatory ‘health check’ or assurance, depending on client needs.
