1
Phase 1
Phase 1 Part A: Corporate structure and significant legal entity information
1.1
The objective of this section is to provide the authorities with sufficient information to assess the preferred resolution strategy for the firm.
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1.2
All firms are expected to provide an overview of their business model, internal dependencies and external interconnectedness.
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1.3
Small firms should provide information relevant to their size and structure. Larger firms should provide information relating to their significant legal entities. Although firms are not expected to provide full details of entities that have no material bearing on how the firm operates, they are expected to provide details on entities with the ability to divert, shelter or freeze funds or which are material with regard to debt issuance (including off balance sheet entities). The purpose of these entities should also be explained and firms are expected to outline the criteria they have used to determine which legal entities are significant.[2]
Footnotes
- 2. As a guide, 90% of total balance sheet should be captured by the significant legal entities submitted by the firm.
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1.4
Information provided should include material global activities (both where these are material to the firm and where the firm is significant in overseas markets) and describe the global links and interactions.
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1.5
Where a firm’s parent organisation is a UK-incorporated entity, firms should provide information relating to all significant group entities (subsidiaries and branches).
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1.6
Where a firm’s parent organisation is incorporated outside the United Kingdom (eg foreign firms with UK subsidiaries) firms should provide information relating to:
- UK subsidiaries (and any associated overseas branches of these subsidiaries);
- UK branches of any overseas subsidiaries; and
- material interdependencies with non-UK legal entities in the group.
| Number | Heading | Required data/Detail required |
| 1 | Group structure and key information on legal entities | |
| 1.1 | Group structure | An overview diagram of the significant legal entities of the group and ownership structure. |
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Group structure charts showing: |
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| Group consolidated P&L and balance sheet, with the assets broken down between trading and non-trading book. | ||
| Note that some of the quantitative data requested may be similar to information collected by the PRA in other regulatory reporting submissions, including under Capital Requirements Regulation. |
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| Provide the following data and analysis for significant legal entities | ||
| 1.2 | Use of branches and subsidiaries | Commentary on approach to using branches and/or subsidiaries in different geographies |
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For each key geography that represents material revenues, profits or activity for the firm: |
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| 2 | Business model | |
| 2.1 | Core business lines | Give an overview of the firm’s business model. Identify the business lines which are core to the group’s operations and profitability and explain their activities. Highlight if a branch or subsidiary is significant in the local market or critical to the group. |
| For each core business line, the analysis should include: An explanation of the main operations with P&L and balance sheet for each business line. The geographies in which the business line operates and corresponding analysis eg geographic breakdown of revenue, total operating costs, loan loss provisions, impairments, profit before tax and assets, as well as the client base and jurisdictions by level of activity. Provide an overview of the branch network. Highlight material participation in specific markets eg banking services provided to UK local authorities or particular industries (which services provided, extent of service provision). Provide geographic concentrations of lending and deposits. Provide an indication of the franchise value of each business line eg where a business line provides networks, international linkages or access to markets which are critical for the overall franchise of the firm. An explanation of the governance structure and division of powers between group HQ and core business lines. An explanation of how the business line is organised within the group, including a high-level overview of interaction with other areas and service areas (provide metrics eg revenue, P&L where material cross-selling occurs). Is the business line standalone or highly interwoven with the rest of the group? |
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| 3 | Capital and funding | |
| 3.1 | Capital allocation and mobility | For each significant legal entity: Amount of capital required to support each significant legal entity The amount of capital currently allocated to each entity Explain method of capital provision to each entity Explain any maintenance and/or repatriation back to the ultimate parent entity (dividends, coupon, maturity cash flows etc.) |
| Details of at least the following should be supplied for significant legal entities: Minimum capital required by each legal entity to meet the thresholds set by regulators An analysis of capital by legal entity on a regulatory basis split into components (CET1, AT1 etc) An analysis of capital by legal entity on an accounting basis (permanent share capital, P&L reserves, other reserves, preference shares, subordinated debt and other intermediate capital etc). |
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| Explanation of the sources of capital raised for each legal entity including sources external to the group |
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| Quantification of capital which is surplus to regulatory requirements by each entity and in aggregate |
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| Information regarding any restriction on transfers of capital to other group entities (dividends, capital contributions, repayments etc) and in particular any factors that mean surplus capital held in any entity is not transferable. For each entity, details of material holdings in other financial institutions. |
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| Note that some of the quantitative data requested may be similar to information collected by the PRA in other regulatory reporting submissions, including under Capital Requirements Regulation. | ||
| 3.2 | Treasury function | An explanation of how the treasury function is organised |
| Indication of how quickly capital could be transferred to or from an entity if required and the procedures involved. | ||
| 3.3 | Funding | An overview of funding relationships in the group, including the main sources of funding for each significant entity and intra-group flows of funding. Break intra-group flows into secured/unsecured, short term/long term.[a] Highlight branches and subsidiaries which are significant in intra-group funding. |
| List of current material intra-group balances | ||
| Details of where there are current and potential impediments to the transfer of liquidity between entities or jurisdictions. |
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| A summary of other funding sources not captured elsewhere. Examples include: Off balance sheet funding Other sources including: covered bonds, RMBS, repos and other short-term secured financing. |
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| 3.4 | Intra-group guarantees | An overview of intra-group guarantees, including: How, why and when intra-group guarantees are used Types of guarantees extended (eg limited, unlimited guarantees) and the parties extending and receiving guarantees. Total exposures under intra-group guarantees, categorised into different types Overview of when guarantees can be enforced (including cross-defaults or events of default triggered by resolution) How intra-group guarantees are priced List of the most material intra-group guarantees List the entities that use, the entities sighted, and the underlying amounts of contracts that contain ‘Specified Entity’ or similar clauses. |
| 3.5 | Other financial dependencies |
An overview of all other material intra-group financial dependencies or exposures, including contingent exposures |
| 3.6 | Encumbrances | For each significant legal entity, an overview of which assets on the balance sheet are encumbered as at year-end. Highlight if they are intra-group or external encumbrances. |
| Information should also be provided on a group basis for UK-headquartered groups. For International banks headquartered outside the United Kingdom, operating via UK subsidiaries, information should be provided at the UK consolidated group level. |
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| Detail of what proportion of each asset class is encumbered and in what manner including: proportion of assets which are not subject to any encumbrance; proportion of assets encumbered through overcollateralisation; and an outline of the bank’s practise on overcollateralisation. Provide an analysis of assets subject to encumbrance by type of instrument including an approximate split by: securitisations, covered bonds, repo, collateral for OTC derivatives exposure, collateral placed at central banks and any other encumbrances (description of nature and magnitude of other encumbrances should be provided). The analysis should also include an assessment of the term split of encumbrances between short-term versus long-term encumbrances. |
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| 4 | Activities and operations | |
| 4.1 | Deposits analysis | Provide an overview of the deposit franchise eg maturity profile, geographic breakdown, depositor profile, deposit-taking channels (internet, branch etc), major competitors. Provide an overview of the quantum of offsetting balances in the deposit book. |
| An assessment of the timescale to produce the required Single Customer View (SCV) information by each UK entity and operational dependencies on other entities in the group or third parties to produce the information. Description of IT processes to produce SCV eg manual or automated, number of staff required. Confirm IT system capability to produce SCV within 72-hour period. | ||
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Last date of review of the Single Customer View file by the FSCS and outcome of verification process. Provide details of any problematic accounts that would prevent timely deposit payout eg missing depositor data. Confirm if firm has completed remediation actions required by the PRA and is not under any sanction that would prevent depositor payout. |
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| 4.2 | Access to Financial Market Infrastructure | A brief overview of the firm’s access to Financial Market Infrastructure (payment schemes, central counterparties etc.) including correspondent banking relationship and indirect access to key FMIs. Provide the legal entities that have this access and which entities within the group rely on this. |
| To what extent does the firm provide correspondent banking services/market access services/clearing services to third parties globally? Please provide the number of customers. To what extent, globally, does the firm rely on other firms for these services? What agreements govern these relationships and how will they be affected in a resolution? |
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| If relevant and not covered under 2.1, provide an overview of global payments, clearing and settlement business, including a high-level summary on key products/services provided, types of clients serviced, geographical location of business and FMI relied upon. |
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| 4.3 | Cash services | How is the cash services business integrated within the firm’s operations as a whole? Overview of role in cash industry: Note Circulation Scheme membership Cash supply Cash processing Commercial note issuance |
| 4.4 | Risk management practices | An overview of the firm’s booking practices by asset class. Does the group manage risk centrally from one entity (please provide main booking hubs by asset class)? To what extent is risk back-to-backed? Give an overview of the firm’s margining and collateral management for internal trades. Provide information on any remote booking practices. Provide information on the quantum of risk booked into each significant entity. |
| Give an overview of the use of unregulated affiliates globally for booking trades. |
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| 4.5 | Counterparty risk management | Give an estimate of trades which are booked via an exchange or central counterparty clearing (CCP) and trades booked with a bilateral third party, and the firm’s approach to counterparty risk management. This should include a broad overview on collateral management and the use of netting, including master netting agreements. |
| 4.6 | Critical shared services |
A summary of how operations are organised in the firm. Provide a high-level summary (including diagrams where appropriate) of how critical shared services[b] are provided across legal entities, business lines and jurisdictions. At a minimum, split critical services into Treasury, Risk Management, Finance and Operations (this list is not exhaustive). These are services that are crucial to the functioning of the core business lines of the firm. Please consider, at a minimum (including outsourced services and joint ventures), IT services, staff, premises, licenses and intellectual property. Briefly summarise whether there are contracts which govern the provision of services across business lines, entities and jurisdictions. Provide a brief overview of internal support functions such as accounting and tax, internal audit and compliance, HR. Provide an indication of scale and the location of these functions, including those located outside the United Kingdom. |
| Please provide a summary of the pension arrangements within the group, including in which legal entity pension liabilities and administration reside. How fully funded is the pension scheme? |
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Footnotes
- a. Short term refers to tenor of less than one year.
- b. The FSB defines critical shared services: For the purpose of this Guidance, a critical shared service has the following elements: (i) an activity, function or service is performed by either an internal line, a separate legal entity within the group or an external provider; (ii) that activity, function or service is performed for one or more business lines or legal entities of the group; (iii) the sudden and disorderly failure or malfunction would lead to the collapse of or present a serious impediment to the performance of critical functions.
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Phase 1 Part B: Economic functions
1.7
The objective of this section is to identify which of a firm’s economic functions may be critical to the financial system, either domestically or internationally. This will help the authorities to develop a resolution strategy that takes account of these functions.
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1.8
Information should be provided by legal entity. Market share information should be provided for both domestic market shares as well as local overseas market shares where such overseas activity may be material to the local market. Certain information is specifically requested from non-UK firms with activities in the United Kingdom. The following tables set out detailed information requirements.
| Economic function(s) |
Economic scale metrics (Value metrics should be in millions of GBP (£mn), unless otherwise stated, to standardise comparison. Where a different currency is used, please provide an exchange rate.) |
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| Deposit-taking & Savings | Deposit-taking | ||
| Retail Current Accounts |
Provide: B . For deposits held in branches of UK entities: |
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| SME[c] Current Accounts | As above for retail current accounts | ||
| Retail Savings Accounts/ Time Accounts |
As above for retail current accounts | ||
| SME Savings Accounts | As above for retail current accounts | ||
| Corporate Deposits |
Total liabilities (£mn) Total number of accounts Total number of customers Each metric to be shown on legal entity and jurisdiction basis. It should include deposits from cash management products where applicable. Market share-provide estimate of UK market share as well as overseas market shares where relevant. Identify any issues surrounding replacement of the firm’s services by other providers. |
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| Where the firm is a non-UK bank (UK is host authority), please provide Deposits from parent (£mn) |
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| Lending & Loan Servicing |
Lending | ||
| Retail Mortgages/Other Secured (Auto) |
Total assets (£mn) Total committed facilities (£mn) Total number accounts Total number customers RWAs (£mn) For each of the metrics above, please provide the legal entity and jurisdiction. Market share- provide estimate of UK market share as well as overseas market shares where relevant. Please identify any issues surrounding replacement of the firm’s services by other providers. |
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| Retail Unsecured Personal Lending | As above for retail mortgages |
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| Retail Credit Cards | Total outstanding (£mn) Total committed facilities (£mn) Total number accounts Total number cards in issue RWAs (£mn) Number customers with more than one card Number customers not paid within one month For each of the metrics above, please provide the legal entity and jurisdiction. Market share- provide estimate of UK market share as well as overseas market shares where relevant. Please identify any issues surrounding replacement of the firm’s services by other providers. |
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SME Lending (Secured) |
Total assets (£mn) Total committed facilities (£mn) Total number client accounts Total number customers RWAs Number accounts part of revolving credit facility Number customers not paid within one month For each of the metrics above, please provide the legal entity and jurisdiction. Market share- provide estimate of UK market share as well as overseas market shares where relevant. Please identify any issues surrounding replacement of the firm’s services by other providers. |
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| Corporate Lending | Total assets (£mn) Total committed facilities (£mn) Total number client accounts Total number customers RWAs (£mn) Number accounts part of revolving and standby credit facilities Number accounts part of syndicate (syndicated loans) For each of the metrics above, please provide the legal entity and jurisdiction. Market share- provide estimate of UK market share as well as overseas market shares where relevant. Please identify any issues surrounding replacement of the firm’s services by other providers. |
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| Where the firm is a non-UK bank (UK is host authority), please provide: Lending to and deposits in parent (£mn) |
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| Trade Finance | For each of the activities below: Documentary credit/documentary collection Guarantees Loans (import/export) Factoring/forfaiting and invoice financing Provide: Total number client accounts Annual amount lent (£mn) |
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| Infrastructure Lending |
Total number client accounts Annual amount lent (£mn) |
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| Loan Servicing |
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| Credit Card Merchant Services | Average daily activity (£mn) Average transaction value (£mn) Number of active merchant accounts |
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| Capital Markets & Investment | Trading | ||
| Derivatives (required report see Table A) |
Total notional outstanding (£mn) Note that some of the quantitative data requested may be similar to information collected by the PRA in other regulatory reporting submissions, including under Capital Requirements Regulation. |
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| Trading portfolio (required report see Table B) |
Balance sheet values by asset class (£mn) RWAs (£mn) |
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| Other | |||
| Asset management |
Assets under management (£mn) Total number client accounts For each of the metrics above, please provide the legal entity and jurisdiction of clients. Segregate between institutional, retail and wealth management clients. |
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| General insurance |
For each of the activities below: Policies eligible for FSCS protection Policies not eligible for FSCS protection Provide: Total policies by type (number) Total policyholders by type (number) For each of the metrics above, please provide the legal entity and jurisdiction. Market share – provide estimate of UK market share as well as overseas market shares where relevant. Please identify any issues surrounding replacement of the firm’s services by other providers. Average annual claims and benefits payout (latest three-year average, net of recoveries from reinsurers, £mn) |
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| Life insurance, pensions, investments and annuities |
For each of the activities below: Policies eligible for FSCS protection Policies not eligible for FSCS protection Provide: Funds under management, for investment products (£mn) Total policies by type (number) Total policyholders by type (number) For each of the metrics above, please provide the legal entity and jurisdiction. Market share- provide estimate of UK market share as well as overseas market shares where relevant. Please identify any issues surrounding replacement of the firm’s services by other providers. |
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| Wholesale Funding Markets |
Securities Financing (required report see Table C) |
Balance sheet values plus aggregate values for collateral accepted and given (£mn) Maturity profile Total number counterparties, including geographic distribution (number) |
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| Securities Lending |
For each: Direct Third party (non-custodian lending) Agent (custodian lending) Provide: Gross value of open loans (£mn) Total number clients |
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| Payments, clearing custody & settlement[d] |
Payment Services |
For all UK and material foreign payment systems[e] used, please provide: Legal entity which holds membership Transaction volumes (number, monthly/annual average, peak) Transaction values (number, monthly/annual average, peak) Flow volumes (£mn, monthly/annual average) Number of agents (flow volumes for these provided separately) Market share – provide estimate of UK market share as well as overseas market shares where relevant. Please identify any issues surrounding replacement of the firm’s services by other providers. |
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| If required, could the firm transition from an affiliate (intra-group) network to a third-party correspondent network for payments and clearing? What timeline is required? |
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| Settlement Services |
For all UK and material foreign settlement systems[f] used, please provide: Legal entity which holds membership Transaction volumes (number, monthly average/annual average) Transaction values (£mn, monthly average/annual average) Flow volumes (£mn, monthly average/annual average) Market share- provide estimate of UK market share as well as overseas market shares where relevant. Please identify any issues surrounding replacement of the firm’s services by other providers. SWIFT average volumes (number, monthly average/annual average) |
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| If required, could the firm transition from an affiliate network to a third-party correspondent network for settlement services? What timeline is required? |
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| Other related activities |
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| Cash Services (required report see Tables D and E) |
Please provide information for cash services in the United Kingdom only: Transaction inflows (value (£mn)/market share) Transaction outflows (value (£mn)/market share) Notes in Circulation- where own note issuance in Scotland and/or NI (value (£mn)/market share) Infrastructure -Cash centres (number/location/market share/coin centres) -ATMs (number/market share) -Branches (number/brand) For the ten largest inflow and ten largest outflow customers, provide a brief description of the relationship, along with the average monthly volumes and the proportion of the business they represent. Description of key industry relationships including but not limited to Bank of England, money printers, security providers, other banks and agents. Number of agency providers. |
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| Custody Services |
Safe custody assets held (£mn) Client money held (£mn) Description of ancillary services offered in custody eg securities lending, general prime brokerage services |
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| Third-Party Operational Services | For each (the list below is not exhaustive): Credit card systems Cheque processing Back office for retail banking Provide: Description of service Number of clients provided with service Number of other providers |
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Footnotes
- c. As defined in Article 2.1(f) of the EU Prospectus Directive, SME refers to companies, which, according to their last annual or consolidated accounts, meet at least two of the following three criteria: (i) an average number of employees during the financial year of less than 250, (ii) a total balance sheet not exceeding €43 million, (iii) an annual net turnover not exceeding €50 million.
- d. The payments, clearing and settlement function is limited to those provided by firms to their clients. The scope extends to non-bank entities of a bank, as some of these functions may be provided by a non-bank entity eg a broker-dealer. A bank may provide payments, clearing and settlement services as an intermediary between its own clients or as an intermediary between a client and relevant FMIs. In some cases, the bank may also be a provider of payment, clearing and settlement services to an FMI or may provide access to FMIs to other banks that are not clearing members (known often interchangeably as agency/indirect/correspondent services).
- e. This refers to FMIs in which the firm has direct access. Examples include, but not limited to BACS, CHAPS, Faster Payments, cheque clearing system, Fedwire and TARGET2.
- f. This refers to FMIs in which the firm has direct access. Examples include, but not limited to CLS, Crest and Euroclear.
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Table A Derivatives (complete for each legal entity if firm performs this function):
| Outstanding notional contract amounts (£mn) | ||||
| Exchange-traded derivatives | Other derivative cleared through CCPS[g] | OTC[h] derivatives settled bilaterally | Total | |
| Equities | ||||
| Sovereign Credit | ||||
| Non-sovereign Credit Products |
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| Rates |
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| Foreign Exchange |
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| Commodities |
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| Number of derivative counterparties |
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| Exchange-traded derivatives |
Other derivatives cleared through CCPs | OTC derivatives settled bilaterally |
Footnotes
- g. CCP = central clearing counterparty.
- h. OTC= over the counter.
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Table B Trading portfolio (complete for each legal entity if firm performs this function):
| Assets (£mn) | Liabilities (£mn) |
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| Equities | Balance sheet values | RWA | Balance sheet values |
| Treasury |
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| Sovereign Credit |
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| Non-sovereign Credit |
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| Rates |
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| Foreign Exchange |
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| Commodities |
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Table C Securities Financing (complete for each legal entity if firm performs this function):
| Reverse repurchase agreements and cash collateral on securities borrowed (£mn) | Repurchase agreements and cash collateral on securities lent (£mn) | Fair value of securities accepted as collateral under reverse repurchase agreements and securities borrowing transactions (£mn) | Fair value of securities given as collateral under repurchase agreements and securities lending transaction (£mn) |
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Table D Note flow statistics (cash services function):
| UK (annual) |
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| Value (£mn) | Market share (%) | |
| Inflows | ||
| From customers | ||
| From own business |
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| From other |
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| Outflows |
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| From customers |
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| From own business |
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| From other |
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Table E Infrastructure key statistics (complete the table and, where appropriate, split by legal entity):
| United Kingdom | England & Wales | Scotland | Northern Ireland | |||||
| Number | Market share (%) | Number | Market share (%) | Number | Market share (%) | Number | Market share (%) | |
| Cash centres | ||||||||
| ATMs | ||||||||
| ATM outflows (£mn/month) | ||||||||
| Branches | ||||||||
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Table on economic functions split by legal entities
1.9
The purpose of this table is to map the economic functions performed by firms to their legal entities, based on the analysis above.
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1.10
Where a firm’s parent organisation is a UK-incorporated entity, firms should complete this table for all significant legal entities and branches that form part of the group, both domestically and internationally. This will allow the UK authorities to understand the economic functions performed in each country and therefore to develop an appropriate resolution strategy and co-ordinate the group resolution plan taking into account these functions.
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1.11
Where a firm’s parent organisation is incorporated outside the United Kingdom, firms should only complete this table for:
- UK subsidiaries (and any associated overseas branches); and
- UK branches of any overseas subsidiaries.
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1.12
The overall purpose for the collection of information on economic activities and mapping them to legal entities is to inform the authorities’ selection of a preferred resolution strategy for a firm. These tables will also help inform the post-stabilisation restructuring analysis. In completing these tables, firms should include metrics that best show the importance of all material legal entities in relation to economic functions. Those metrics used in the economic function identification exercise in Chapter 2 B should provide a helpful source of metrics to quantify materiality on a legal-entity basis. Sample answers are provided in italics.
| Legal entity/branch 1 (£mn) (eg Bank A Ltd) |
Legal entity/branch 2 (£mn) (eg bank B Ltd) |
Legal entity/branch 3 (£mn) | Aggregate across legal entities/branches (£mn) |
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| Where UK is home supervisor, firms should provide information on all significant legal entities/branches, even if they do not perform any activity in the United Kingdom. | ||||
| Economic Function 1 (eg Retail Current Accounts) |
Total liabilities – 9 |
Total liabilities - 9 | Total liabilities -18 | |
| Economic Function 2 (eg Retail Mortgages) |
Total assets - 10 |
Total assets - 10 | Total assets - 20 |
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| Where UK is host supervisor, firms should provide information on legal entities/branches relevant to the United Kingdom as stated above. |
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| Economic Function 1 |
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| Economic Function 2 |
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