Prudential Regulation Authority Rulebook

1.1

This supervisory statement (SS) is relevant to non-EEA banks and PRA-designated investment firms in respect of their operations in the United Kingdom through branches known as ‘third country branches ‘(where singular ‘third country branch’). It sets out the PRA’s expectations for the internal governance of third country branches and how these firms should comply with the Internal Governance of Third Country Branches parts of the PRA Rulebook. The rules and supervisory statement cover the following areas:

• general organisational requirements;
• persons who effectively direct the business;
• responsibility of senior personnel;
• skills, knowledge and expertise;
• compliance and internal audit;
• risk control;
• outsourcing; and
• record keeping.

1.2

This statement replaces the guidance material previously included in chapters 4 – 9 and 21 of the Senior Management Arrangements, Systems and Controls (SYSC) section of the Handbook. It does not seek to introduce additional or new obligations nor change the PRA expectations of how non-EEA banks and PRA-designated investment firms organise their UK branches. Where relevant, the statement takes into account the requirements of the Senior Managers and Certification Regime (SM&CR) which apply to third country branches.^[1]

1.3

The statement should be read in conjunction with the PRA Fundamental Rules and with:

• Internal Governance of Third Country Branches parts of the PRA rulebook.
• The PRA’s approach to banking supervision (approach document)^[2]
• Supervisory Statement SS10/14: Supervising international banks: the Prudential Regulation Authority’s approach to branch supervision,^[3]
• Policy Statement 20/15: Strengthening individual accountability in banking: UK branches of non‐EEA banks;^[4] and
• Supervisory Statement SS28/15: Strengthening individual accountability in banking.^[5]
• Supervisory Statement 34/15: Guidelines for completing regulatory reports.^[6]

1.4

All PRA-authorised firms are required to meet the statutory PRA Threshold Conditions on a continuing basis. For branches in the United Kingdom, the PRA’s authorisation applies to the whole firm therefore Threshold Conditions apply to the whole firm; not just the branch in the United Kingdom.