On September 22, 2014, the Prudential Regulation Authority (“PRA”) published for consultation a draft supervisory statement on the European Banking Authority’s (“EBA”) Guidelines on Disclosure of Encumbered and Unencumbered Assets. The draft supervisory statement sets out the criteria for the PRA’s intended use of the waiver from the requirement to disclose collateral received that is kept off balance sheet (which would normally be disclosed by firms to the PRA using template B in the EBA Guidelines). The EBA Guidelines relate to the reporting requirements under the Capital Requirements Regulation. The Guidelines seek to address concerns that transparency regarding assets encumbered to central banks and liquidity assistance given by central banks may negatively impact financial stability. Under the EBA Guidelines, a national regulator may waive the requirement to disclose such collateral if such disclosure would allow the use or non-use of liquidity assistance to be detected. Under the PRA's proposals, a PRA-supervised firm subject to the Capital Requirements Regulation and the Capital Requirements Directive will be able to make use of the waiver provided it meets the PRA’s criteria. The consultation paper also includes the PRA’s proposed expectations on factors to be considered and frequency of disclosures in compliance with the EBA Guidelines. Reponses to the consultation are due by November 24, 2014.
The consultation paper is available at: http://www.bankofengland.co.uk/pra/Documents/publications/cp/2014/cp1814.pdf.