PRA has written a Dear CEO letter to banks on the reliability of regulatory returns. The letter highlights the recommendations of the review into the Co-Op bank – specifically that PRA should consider introducing more formal third-party reviews of key prudential information firms provide to it. PRA is now warning firms that it expects prompt responses to any questions it asks firms to help it understand how their governance and controls can deliver appropriate reporting, and to provide information on any errors it identifies in regulatory reporting and action it has taken to remedy them.
It expects that firms do whatever is necessary to ensure the integrity of returns and suggests that this may include regular reviews of the effectiveness of the governance, controls and other processes around regulatory returns, and carrying out deep dives looking at the accuracy of the returns themselves.
PRA now plans to commission s166 reports which may involve an opinion giving “reasonable assurance” on whether returns have been properly prepared, looking at the governance and controls processes and gathering information on how the firm has interpreted key provisions.