CP22/23 – Occasional consultation paper – October 2023

The Prudential Regulation Authority, PRA, has launched an occasional consultation paper CP22/23 on miscellaneous, non-material changes to the PRA Rulebook. This time, the consultation paper includes two proposed changes: one relating to the Financial Services Compensation Scheme (FSCS) and one to forms to be filed under the Senior Managers and Certification Regime (SM&CR) as described below:
(1) The PRA is proposing to amend Depositor Protection rule DPP 9.2 relating to the payment of compensation to depositors when a bank fails. Currently, the FSCS must pay depositors within ten working days following the failure of an institution, but this time period will be reduced to seven days by the end of 2023. To accommodate this reduction and reduce the likelihood of payment disruptions for depositors, the FSCS plans to introduce an online portal to pay compensation electronically.
The proposed change in DPP 9.2 would alter the wording under the rule to require the FSCS to „make available the compensation“ rather than „pay compensation“ within ten, later seven working days to offer depositors the chance to draw the money quickly online. If a depositor can’t access the portal, the FSCS would still be responsible for paying compensation, but would need to make other arrangements, like sending a check to the depositor. Through changing the rule, the FSCS would not violate the time limit, if the depositor isn’t able to access the funds online and if any alternative arrangements would lead to a delay in payment (beyond the seven working days limit).
(2) The PRA is suggesting changes to two forms used in the Senior Managers and Certification Regime (SM&CR) to allow the forms to be used to notify the FCA of any violations of rules under the new Consumer Duty. Specifically, the modifications would involve the addition of a new row in SM&CR Forms C and D to report any such breaches.