The PRA published the latest in sequence of Dear CEO letters on the subject of regulatory reporting at the end of October. Consistent with earlier ones, this letter reiterates firms’ obligations to ensure regulatory returns are accurate, compliant with the rules and that the reporting framework is subject to an adequate degree of governance and oversight.
The current letter offers a few reminders of the actions that firms have consistently been told they should consider to ensure that their reporting meets the required standards, including:
- regular and comprehensive reviews of whether governance and control processes are effective; and
- deep dives into the accuracy of the returns themselves.
In addition, this Dear CEO emphasises the fact regulatory reporting is a prescribed responsibility. The letter itself was copied directly to Senior Managers with this responsibility with a reminder that their firm should be clear on how errors in regulatory returns are identified and resolved. The requirement for a clear record of the judgments and interpretations applied in the returns is also brought to the top of the agenda. Any firms who don’t have this type of policy statement in place, or who believe theirs may need to be revisited will need to address this as soon as possible.
It is difficult not to see these observations as a direct challenge to Senior Managers to rethink whether they really are in a position to demonstrate they’ve taken reasonable steps to ensure regulatory reporting is timely, accurate and of sufficiently high quality. The emphasis here is on the ability not only to deliver high-quality returns but also to ensure the framework the Senior Manager relies on to discharge their responsibility is robust and capable of identifying and resolving errors or inconsistencies before returns are finalised.
The letter closes with a reminder that Senior Managers should expect to justify how they’ve met these challenges during the potentially lengthy and detailed Skilled Persons reviews which are once again imminent. RSM can help in a number of ways to ensure your firm meets the standards required, including:
- pre-emptive reviews of governance as well as deep dives into specific returns either independently or in support of ongoing work undertaken by your firm’s second and third line activities;
- assistance in the process of preparing or reviewing and challenging regulatory reporting policy statements which capture key judgments and interpretations; and
- support and advice in interpreting and applying regulatory reporting rules.
If you’d like to discuss your firm’s response to the Dear CEO letter or learn more about how we’re helping firms deal with the challenge of delivering high-quality regulatory reporting, please contact James Roberts or Neil Pickles.