Last month’s Dear CEO letter on recovery planning for non-systemic firms shouldn’t give rise for too many concerns. The drafting changes to SS9/17 (effective March 2025) are not specified, but they address inter alia the points raised in the letter –
- some scenarios used are insufficiently severe
- in some cases recovery capacity was not adjusted to reflect individual scenarios – the parameters of which scenarios will impact on capacity via one or both – liquidity and capital
Equally there are few UK firms which have not already built something to reflect the requirements for solvent exit planning (SS2/24, effective October 2025). Typically planning and ring-fencing sufficient resources for an orderly wind-down of the business is dealt with as a specific stress scenario in your ILAAP.
What might give rise to a little more work, is responding in appropriate detail to the seven categories named at 2.2 in the SS, in particular the requirement for indicators, provide sufficient warning for a solvent exit execution plan to be drawn up and executed. To risk stating the obvious, waiting until you’ve reached your PONV (point of non-viability) isn’t going to work.
Let me know if we should informally discuss these or related matters.
KnowCo is a specialist UK financial institution support resource. We help with the heavy lifting of implementing new regulatory requirements, as well as maintaining old ones such as ICAAP ILAAP, RRP etc.
From the primary drafting of policies and processes, through laying down MI feedback loops for assurance, our subject matter experts have all the necessary tools and skills to support and guide you through implementation and remain abreast of regulatory requirements.
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Paul Ashton
paul.ashton@knowco.co.uk
Dr Lise Land
lise.land@knowco.co.uk
07799 113535