On 23 January 2014, the Prudential Regulatory Authority (“PRA”) published further details of its proposals for a new PRA Rulebook (CP2/14 – The PRA Rulebook). Currently the PRA “shares” with the Financial Conduct Authority the rules and guidance contained in the Handbook which they inherited from the Financial Services Authority in April 2013. The PRA is aiming to create its own set of rules which are as clear and concise as possible and also easier to navigate.
Structure of the new PRA Rulebook
In October 2013, the PRA published a consultation paper setting out its proposals for the structure of the new Rulebook (chapter 10 of CP8/13). The Rulebook will be divided into two sectors:
- deposit takers and investment firms (banking); and
- insurance.
The rules within these sectors will be divided into those applicable to directive firms and non-directive firms. Rules applicable to both banking and insurance will be replicated in both sections. The new Rulebook will be divided into “Parts” clearly named to describe its content. Rules and directions currently contained in the Handbook and which the PRA proposes to keep will move to the Rulebook; some may be redrafted to make them more concise and “purposive”. Some existing Handbook guidance may be moved into the Rulebook and turned into rules.
Guidance will not be contained in the Rulebook. Instead, guidance will be set out:
- in supervisory statements; or
- on the PRA’s main website (this applies to guidance on processes, for example, application processes).
In addition, the PRA may also publish statements of policy about the exercise of a particular power when required to do so by the Financial and Services Markets Act 2000.
Timing
The PRA will be issuing a series of consultation papers during the course of 2014. CP 2/14 includes proposals to replace the Principles for Businesses with Fundamental Rules and changes to various parts of the Supervision Manual. The deadline for responses is 21 March 2014. Final versions of the new rules will appear later in 2014 and will appear on the PRA Handbook website in PDF format. The PRA proposes that a new online website containing the final and full version of the PRA Rulebook will appear in mid 2015.