Key Points

  • New Liquidity Reporting requirements, to be reported in XBRL
  • Draft taxonomy is published and feedback requested by 30 April
  • Contact Olive Octagon for a demo of our Liquidity Reporting solution

What is it with politics messing up markets? There’s been a lot of policy-driven volatility over recent weeks, and it wasn’t so long ago, in September 2022, that a mini-budget sent markets into turmoil with investors scrabbling for enough liquidity to meet margin calls on derivative positions. Anyone working anywhere close to LDI during that time probably still has PTSD.

During the events September 2022, the Prudential Regulation Authority (PRA) found itself somewhat in the dark, with the data it had available on companies’ liquidity positions being quite far out of date, largely due to the infrequency and high latency of data collection from the entities it regulates.

Enter a new reporting requirement (now available in draft)

In response, in December 2024 the PRA published Consultation Paper CP19/24 – “Closing liquidity reporting gaps and streamlining Standard Formula reporting” which put forward proposals to introduce liquidity reporting requirements for major life insurers.

The data to be reported is granular and required monthly within 10 working days of month-end, and the consultation also includes a “short-form” data template that could be required as frequently as daily-and-next-day (T+1) in the event of a firm specific liquidity stress or a general market liquidity stress event.

The templates published in CP19/24 looked to us XBRL people to be very, well, XBRLy. So, on 31 March 2025 when the “Bank of England Insurance liquidity taxonomy PWD” (PWD stands for Public Working Draft) was published, it came as little surprise that the data required by CP19/24 would be collected via XBRL. This is also completely consistent with the direction being taken in the UK, with similar XBRL taxonomies being published for UK Solvency reporting and Statistics reporting. The key difference with the Liquidity Reporting submissions is that T+1 data collection via XBRL is unprecedented.

Key considerations for reporters

What does this mean for those companies subject to the requirements of CP19/24? The two most obvious requirements from a reporting point of view are firstly that companies in scope need to be able to produce a lot of granular data very quickly, and secondly that this data needs to be converted to XBRL. This second requirement means companies need to look at finding a supplier of XBRL conversion software, unless they’re planning to develop this in-house. With XBRL being a rather niche area, most companies will probably buy in this part of their Liquidity Reporting workflow.

But there’s one other subtle requirement that needs to be considered. Whatever XBRL conversion system companies use, it must be efficient, robust and will need to slot in neatly with the data being produced. In a T+1 reporting scenario there will be no time for laggy software or inefficient data manipulation or mapping.

In terms of implementation, with the first reporting date being 31 December 2025, many firms may opt for a Minimum Viable Product (MVP) initially just to get the job done. But as this reporting will become more business as usual over time, then companies will likely benefit from a solution that fits in with this transition, starting with the MVP (for example an Excel-first approach) but also allowing for automation and integration in the future.

Feedback window open until 30 April

The Bank of England is requesting feedback on the draft taxonomy by 30 April 2025. This deadline is fast approaching, and we expect that the majority of feedback will come from software vendors given the tight timescales. There’ll almost certainly be a user acceptance testing (UAT) window later this year giving companies an additional opportunity for feedback.

Follow the Olive Octagon company page to keep up to date with developments.

Get your reporting solution here!

At Olive Octagon we have implemented the PWD taxonomy for any companies wishing to test the XBRL conversion part of their Liquidity Reporting workflow. If this is of interest to you, please take a look at our PRA Liquidity Reporting tool or get in touch with us to discuss or arrange a demonstration of our solution. Equally, if you’d just like to have a call to learn more about the Liquidity Reporting requirements then we’d be happy to do this (and indeed have already done so for some).

Further reading

CP19/24 – Closing liquidity reporting gaps and streamlining Standard Formula reporting: https://www.bankofengland.co.uk/prudential-regulation/publication/2024/december/closing-liquidity-reporting-gaps-consultation-paper

Bank of England Insurance liquidity taxonomy PWD: https://www.bankofengland.co.uk/prudential-regulation/regulatory-reporting/regulatory-reporting-insurance-sector#technical_artefacts