Regulatory Reporting of a UK Branch, EU Bank

FOCUS ON: Case studies, Banking,

SUMMARY

The customer was the UK branch of an EU bank who was expanding its UK activities in deposit-taking and commercial mortgages. The goal of the project was to assist the client with its regulatory reporting and compliance in the UK. Avantage Reply reviewed the reporting requirements for the branch and developed a comprehensive suite of all reports that branches in the UK need to review and assess – approximately 120 reports. Our team also reviewed all reporting requirements and assessed the client’s individual applicability based on regulatory permissions, business model and financial projections across key regulators including BoE, PRA, FCA and PSR as well as considered the overarching regulatory requirements applicable to branches of third country/EEA groups in the UK. Lastly, Avantage Reply helped the client understand the requirements and applicability surrounding annual fees to UK regulators.

CUSTOMER GOALS

The principal objective of the client was to understand the regulatory reporting requirements for its future deposit-taking and commercial mortgage activities in its UK branch. This was performed through a comprehensive analysis of regulatory reports applicable to third country branches with a particular focus on reports specific to the client’s approved regulated activities.

CHALLENGES

The client was in the process of opening its UK branch for deposit-taking activities and commercial mortgages. As the client had previously not undertaken any activities in its UK branch, the team primarily relied on business projections for the estimated FSCS and other annual regulatory fees.

APPROACH AND SOLUTION

An initial working session was used to identify the areas of focus in regulatory reporting for the client as well as previous regulatory reports filed for the UK branch. A detailed spreadsheet of applicable regulatory reports was provided followed by a working session to discuss the requirements of each report with the client. A detailed spreadsheet of estimated annual regulatory fees was provided for the client with a comprehensive breakdown of the assumptions and data used for the calculations.

Our review provided senior management with the desired comfort to proceed with the expansion of their UK branch activities.
We reviewed over 125 regulatory reports that could be applicable based on the business model, projected business volumes and regulatory discretion. With careful analysis, we reviewed each report and determined its applicability (current and future) and key data points required to be filled for applicable reports. Our final review suggested specific regulatory reports necessary for the client to file in the future including: 5 PRA reports, 1 FCA report and 1 BoE report.
For the in-scope reports, we assisted the client with an understanding of each relevant cell and data field and its regulatory interpretation.
The project helped the client understand its regulatory obligations in the UK and also developed the initial set of reports for submission, including their schedule and frequency.
The branch was able to make robust decisions in relation to its deposit-raising activities in the UK.

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