PRA Dear CEO letter – Existing or planned exposure to crypto-assets

On 28 June 2018, the PRA published a letter reminding CEOs of banks, insurance companies and designated investment firms of their obligations under PRA rules, and to communicate the PRA’s expectations regarding firms’ exposure to crypto-assets.   The PRA reminds firms of their responsibilities under the PRA’s Fundamental Rules 3, 5 and 7 to: (i) act in a prudent manner; (ii) have effective risk strategies and risk management systems; and (iii) deal with regulators in an open and co-operative way, and disclose appropriately anything relating to their firm of which the PRA would reasonably expect notice. The risk strategies and risk management systems that the PRA considers most appropriate to crypto-assets include: recognition by firms that crypto-assets represent a new, evolving asset class with risks which should be considered fully by the board and highest levels of executive management; firms’ remuneration policies and practices should ensure…

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