Disclosure rules updated for bank resolvability and capital
The Prudential Regulation Authority (PRA) has published an instrument amending disclosure rules for CRR firms, focusing on resolvability resources (MREL) and Pillar 3 requirements. These new rules come into force on January 1, 2027.
New clarity for MREL firms and disclosures
The Prudential Regulation Authority (PRA) has issued an instrument, PRA2026/10, effective January 1, 2027, which significantly amends the Disclosure (CRR) Part of its Rulebook.
Key changes include updated definitions for terms central to resolvability, such as 'eligible liabilities,' 'material subsidiary,' and 'MREL firm.'
An 'MREL firm' is now explicitly defined as an institution directed by the Bank of England to maintain own funds and eligible liabilities exceeding its standard requirements.
The instrument clarifies the application of disclosure requirements, specifying whether institutions must comply on an individual, sub-consolidated, or consolidated basis.
For instance, MREL firms identified as resolution entities, including G-SIIs and O-SIIs, must adhere to specific articles (437(3), 437a, and 447(h)) individually or on a resolution group consolidated basis.
These updates align regulatory expectations with the evolving framework for bank resolution, ensuring clarity on reporting obligations.
Expanding disclosure scope and frequency
The instrument details specific disclosure frequencies and content for various institution types.
Large institutions must disclose certain information semi-annually and quarterly, while non-listed large institutions follow an annual cycle.
MREL firms, including G-SIIs and O-SIIs, face semi-annual reporting for eligible liabilities and quarterly for key metrics.
The rules also clarify when non-material, proprietary, or confidential information can be omitted, with mandatory exceptions for own funds and eligible liabilities.
G-SIIs receive a four-month window for specific disclosures, allowing for separate publication.
These provisions aim to enhance transparency while balancing competitive and confidentiality considerations.
Raising the bar for transparency
These amendments significantly enhance the transparency requirements for banks, particularly those deemed systemically important.
The detailed rules for MREL and Pillar 3 disclosures are crucial for market discipline and effective resolution planning.
While increasing the compliance burden, this regulatory update strengthens the overall resilience and accountability of the financial sector.