BoE cyber simulation exercise

The Bank of England (BoE) has published the high level findings of the financial sector cyber simulation exercise that took place on 9 November 2018 (SIMEX 18). The exercise explored the sector's resilience to a major cyber incident impacting the UK and involved UK financial authorities along with 29 of the most systemically important firms and financial market infrastructures.

The BoE states that the exercise demonstrated that recommendations from the last sector exercise have been implemented, but it also identified further opportunities for improvement.

The exercise found:

  • opportunities to improve the way firms coordinate at an operational level during incidents that impact the sector;
  • that disparity in risk tolerance for suspending services could impact the functioning of the financial sector;
  • the recovery of services is impacted by differences in the way data is stored across the financial sector; and
  • effective and consistent communications are key to maintaining customer and market confidence.

Specific recommendations linked to the 2018 exercise key themes will be taken forward by the participants and authorities.

PRA PS21/19: Responses to CP13/19 Occasional Consultation Paper

The Prudential Regulation Authority (PRA) has published a policy statement, PS21/19, giving feedback to responses to consultation paper (CP) 13/19 "Occasional Consultation Paper". It also includes the final rules, updated supervisory statements (SS), and relevant templates and LOG files. PS21/19 is relevant to a variety of PRA-regulated firms.

In CP13/19, the PRA proposed to:

a) update SS3/15 "Solvency II: The quality of capital instruments" to reflect changes in the Solvency II Regulations which came into effect on 10 July 2019;

b) delete extraneous and historical material from SS8/14 and SS2/15 to align them with the current format and bring them up to date;

c) discontinue the FSA006 return, deleting this from the Regulatory Reporting part of the PRA rulebook and deleting any references to this from SS34/15 "Guidelines for completing regulatory reports"; and

d) make minor updates, corrections and clarifications to NSTs, NST LOG files, internal model output templates and LOG files, and a related SS25/15 "Solvency II: Regulatory reporting internal model outputs".

The revisions in PS21/19 that relate to paragraphs a), b) and c) come into force on 30 September 2019. The revisions relating to paragraph d) come into force on 30 November 2019.

The PRA webpage for the policy statement provides links (in the appendices to PS21/19) to the final rules amending the relevant parts of the PRA Rulebook, final SSs, final templates and LOG files. Changes are made to:

  • SS3/15 "Solvency II: The quality of capital instruments"
  • SS8/14 "Subordinated guarantees and the quality of capital for insurers"
  • SS2/15 "Solvency II: Own funds"
  • Reporting Part of the PRA Rulebook
  • SS34/15 "Guidelines for completing regulatory reports"
  • National Specific Templates (NSTs), internal model output templates and associated LOG files:
    • Reporting Part of the PRA Rulebook
    • SS25/15 "Solvency II: Regulatory reporting internal model outputs"
    • National Specific (NS.07) template
    • National Specific (NS.08) template
    • National Specific Templates LOG files
    • Internal model output (IM.00) template
    • Internal model output (IM.00) LOG file
    • Internal model output (IM.03) template
    • Internal model output (IM.03) LOG file

SMCR: PRA PS20/19 on resolution assessments and reporting

The PRA has published a policy statement, PS20/19, on "Strengthening individual accountability: Resolution assessments and reporting amendments".

In PS20/19, the PRA sets out feedback to its June 2019 consultation paper (CP12/19) on changes to the prescribed responsibility (PR) for recovery and resolution under the senior managers and certification regime (SMCR). The PRA consulted on amendments to the Allocation of Responsibilities Part of its Rulebook so that the senior manager who is assigned the PR for recovery plans and resolution packs would have an additional equivalent responsibility for resolution assessments. This amendment would be applicable only to firms with £50 billion or more in retail deposits on an individual or consolidated basis.

The PRA intends to proceed with the proposals set out in CP12/19, with minor amendments.

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