Banking and Finance

Issue 1134 / 4 November 2021

UK Finance

Outsourcing and third party risk management - UK Finance publishes paper on implementation of Supervisory Statement - 3 November 2021

UK Finance has published a paper, co-authored with Ernst & Young LLP, on the industry’s implementation of the PRA's supervisory statement on outsourcing and third-party risk management (TPRM) (SS2/21), as previously reported in this Bulletin. Firms are expected to comply with the PRA's expectations, as set out in SS2/21, by 31 March 2022. 

The paper summarises the key aspects of SS2/21, highlighting four particular implementation challenges. These include identifying synergies between operational resilience and TPRM; contractual remediation; improving the understanding of complex supply chains across the sector; and a lack of availability of resources and required knowledge and skills to undertake assurance exercises.

UK Finance paper on Supervisory Statement (SS2/21)

Webpage

Payment Systems Regulator

Market review of card acquiring services - PSR publishes final report - 3 November 2021

The Payment Systems Regulator (PSR) has published its final report following a market review (MR18/1.8) into of card acquiring services. In short, the PSR finds that the supply of card-acquiring services does not work well for small and medium-sized merchants and large merchants with annual card turnover of up to £50 million. 

The PSR launched the market review because of concerns that card-acquiring services may not offer merchants value for money. Some of the concerns raised included that acquirers might not have passed on savings they made from the interchange fee caps introduced by the Interchange Fee Regulation (IFR). There were also concerns about a lack of transparency around the fees merchants pay to accept card payments and the difficulty merchants have comparing and switching providers. 

The PSR is consulting on proposed remedies to increase merchant engagement. It will publish a remedies consultation in early 2022, with a provisional decision on remedies (and potentially a draft remedies notice) to be published for consultation later that year.

Annexes to the report, a glossary, stakeholder responses and merchant survey results have also been published and are available via the webpage.

PSR: Final report on the market review into card-acquiring services

Webpage

Consultation responses

Merchant survey results

Technical report

Institute of International Finance

TCFD-aligned climate-related disclosures - IIF publishes template - 2 November 2021

The Institute of International Finance (IIF), supported by Ernst & Young LLP, has developed a template to assist financial institutions, and in particular banks, in aligning their climate-related disclosures with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), as most recently revised in October 2021. The template provides a set of indicative structures across the four TCFD pillars – governance, strategy, risk management, and metrics and targets – which can be drawn upon when designing and implementing climate disclosures. It draws on industry practices and is designed to complement, and not replace, existing resources.

The template is intended to be a "living document", and the IIF expects future work to focus on assessing alignment of the template with jurisdictional frameworks.

TCFD Guidance Template: A Voluntary, Open-Source Toolkit Drawing on Observed Industry Practices

Overview document

Webpage

Press release

See also the Securities and Markets section below for an item on the publication by the Network for Greening the Financial System of its Glasgow Declaration.