Spot the Difference III: Regulating the Standards March 2019

Sue Harvey, Partner at Campbell Tickell, identifies the key changes to the updated Regulating the Standards document.

Earlier this week the Regulator of Social Housing published an updated version of Regulating the Standards, the key document that sets out its operational approach to assessing registered providers’ compliance with the regulatory standards. To support our clients in quickly identifying where they may need to update their own processes and assurances we have produced a mark-up, highlighting the substantive changes.

Regulating the Standards is an important document that describes how the regulatory teams will use In-Depth Assessments (IDAs), annual stability checks, reviews of quarterly surveys and planned and reactive Engagement to inform their regulatory judgements, as well detailing the expectations of data returns and notifications. The March 2019 version replaced that published in April 2018 and outlines some major changes as well as some shifts in emphasis.

Click here to read our marked-up version

In summary, the major changes are:

  1. Engagement with the largest and / or most complex providers

  • In-Depth Assessments (IDAs) to be every two years.
  • Structured, annual engagement meetings in the intervening years to discuss developing strategies, emerging risks and relevant sector issues.
  1. Additional emphasis on expectations of Stress Testing

  • A specific requirement for Boards to have considered long-term, cyclical factors, internal business risks and one-off shocks in both their general planning and in stress testing.
  • The need to be able to demonstrate Board ownership of stress testing.
  • A requirement that stress tests should be sufficiently severe.
  • Assurance that mitigation strategies are credible, effective at resolving the financial position, and have well understood trigger points.
  1. Interim regulatory judgements

  • Signalling that interim regulatory judgements may be issued following significant constitutional changes and group restructures, as well as mergers.
  • A new table setting out the broad approach to the different scenarios in which interim judgements may be issued.
  1. In-Depth Assessments

  • An update on the focus of each of the five themes.
  • More detail on the kinds of assurance the regulator will be looking for during an IDA under each theme.
  • As above, large and /or complex providers can expect an IDA every two years, rather than every three or four years.

Minor changes include:

  • An expectation that Boards can demonstrate how they identify risks.
  • Additional emphasis on the need for appropriate of the control arrangements to ensure the submission of accurate regulatory returns
  • Allowing for a speedier recognition as rapidly growing organisations reach 1,000 units, and therefore becoming subject to greater regulatory scrutiny.
  • A reminder that providers need to keep RSH up-to-date on organisational and contact details.
  • Re-emphasis that a G3 grading indicates that the regulator will be engaging with the provider.

Campbell Tickell has extensive experience in assisting our clients with all regulation and governance matters, including providing critical friend advice on:

  • Preparation for an In-Depth Assessment;
  • Risk management, controls assurance and audit committee effectiveness;
  • Governance structures, processes and effectiveness;
  • Regulatory returns: process reviews and quality control;
  • Strategic, business and financial planning and Brixx modelling;
  • Stress testing and asset and liability registers;
  • Value for money;
  • Restructures, disposals, stock swaps and mergers;
  • Registration and de-registration.

To discuss how we could support you as you take on board these new expectations call Sue Harvey or Radojka Miljevic on +44 (0)20 8830 6777

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