PRA Regulatory Updates

Prudential / Capital Requirements Operational Resilience / Outsourcing Senior Managers / Governance

Topics:

BankAll Firms

🇬🇧 PRA Policy high

March 26th 2026

PS10/26 – Amendments to Resolution Assessment threshold and Recovery Plans review frequency

Policy statement 10/26

AI Analysis

PS10/26 finalizes PRA proposals to raise the Resolution Assessment threshold from £50 billion to £100 billion in retail deposits and reduce recovery plan review frequency for Small Domestic Deposit Takers (SDDTs) from annually to biennially, enhancing proportionality in resolution and recovery frameworks post-financial crisis. These changes reduce regulatory burden on smaller firms while maintaining safety and soundness, directly supporting PRA objectives of competitiveness and growth. Compliance teams must assess scope changes immediately to align reporting and planning cycles.

What Changed

Resolution Assessment Threshold: Increased from £50 billion to £100 billion in retail deposits, limiting reporting and disclosure requirements under the Resolution Assessment Part of the PRA Rulebook to only the largest firms posing systemic risks. Recovery Plans Review Frequency: For SDDTs and SDDT consolidation entities, reduced from at least annually to at least every two years, aiming for higher quality plans with less frequent reviews. Rulebook and Guidance Updates: Amendments to Resolution Assessment Part (Appendix 2), Recovery Plans Part (Appendix 3), and Supervisory Statement SS9/17 –...

What You Need To Do

Scope Assessment
Recovery Plans
Reporting/Disclosure

Key Dates

1 April 2026 - Effective date for PS10/26 changes, including new £100bn threshold and biennial recovery plan reviews for SDDTs .

2 October 2026 - Expected submission date for first Resolution Assessment reports for in-scope firms (as previously communicated by PRA) .

11 June 2027 - Expected publication date for first disclosures under amended threshold .

Compliance Impact

Urgency: High – Effective 1 April 2026 (imminent from March 2026), with first reports due 2 October 2026; firms between £50-100bn retail deposits gain immediate burden relief (exiting scope), while largest firms face no new burdens but must confirm ongoing compliance. Matters due to proportionality aligning with PRA growth objectives, reducing costs for mid-tier banks/building societies amid economic pressures, but requires swift deposit recalibration to avoid inadvertent non-compliance.

References

Sectors:

Prudential / Capital Requirements Reporting & Disclosure

Topics:

Bank

Banking & Credit Capital Markets & Trading Payments & E-Money

🇬🇧 PRA Policy high

March 26th 2026

PS11/26 – Disclosure: resolvability resources, capital distribution constraints and the basis for firm Pillar 3 disclosure

Policy statement 11/26

AI Analysis

PS11/26 finalizes PRA rules enhancing Pillar 3 disclosures on resolvability resources (MREL), capital distribution constraints (CDCs), and disclosure basis for UK banks and building societies. It matters because it standardizes information to boost market discipline, user comparability, and confidence in orderly resolution, directly impacting financial stability and compliance reporting. No substantive changes from CP16/25 consultation, with minor clarifications only.

What Changed

Standardized MREL disclosure templates: Replaces free-form disclosures with four new templates aligned to Basel BCBS TLAC formats (adapted for UK), expanding scope to more firms for consistency on MREL adequacy. Qualitative CDC narrative: Added to UK CC1 template for firms subject to CDCs, enabling market assessment of restriction impacts; removes obsolete Systemic Risk Buffer (SRB) disclosure post-O-SII buffer replacement. Disclosure basis statement: Firms must specify their Pillar 3 regime (e.g., resolution entity, O-SII, large institution), frequency, and details like reference date,...

What You Need To Do

Update Pillar 3 processes to use new MREL templates (Annex XXVII instructions), UK CC1 with CDC narrative, and basis statement (e
For CDC-subject firms
Ensure semi-annual disclosure of key metrics (Article 447 points a-g) where required
Integrate into consolidated reporting for UK parents; test templates/instructions from appendices
Review for alignment with broader CRR changes (e

Key Dates

17 March 2026 - PS11/26 and accompanying rule instruments (e.g., Disclosure (CRR) Instrument 2026) published.

1 January 2027 - Policy effective date; rules apply from this date.

H1 2027 - First disclosures under new policy published, covering period ending **31 December 2026** (annual/semi-annual as applicable).

Compliance Impact

Urgency: High – Effective 1 January 2027 requires immediate template/system updates for H1 2027 disclosures (year-end 2026 data), with standardized formats limiting flexibility and raising non-compliance risks to market discipline objectives. Impacts reporting teams, resolution planning, and investor relations; proportional design minimizes burden but demands proactive gap analysis given no transition grace beyond effective date.

References

Sectors:

Topics:

Prudential / Capital Requirements Reporting & Disclosure

BankBroker DealerAll Firms

🇬🇧 PRA Policy medium

March 26th 2026

PS9/26 – Resolution planning: Amendments to MREL reporting templates

Policy statement 9/26

AI Analysis

PS9/26 finalizes targeted amendments to MREL reporting templates, including changes to MRL001 and MRL003 data elements and the deletion of MRL002, reducing reporting burdens while maintaining resolution planning oversight. This matters for compliance teams as it streamlines processes under the PRA's Future Banking Data programme, with implementation from 1 January 2027, enabling firms to reallocate resources efficiently.

What Changed

Amendments to data elements in the MREL resources template (MRL001) and MREL debt template (MRL003), with full deletion of the MREL resources forecast template (MRL002). Consequential updates to reporting instructions (Appendix 2) and Supervisory Statement SS19/13 (Appendix 3), including relocation of instrument scope descriptions to reporting instructions for clarity. No changes to quarterly reporting frequency for MRL001/MRL003, despite industry requests for semi-annual alignment, to ensure monitoring of loss-absorbing capacity. PRA to publish updated reporting taxonomy shortly.

What You Need To Do

Review and update internal reporting systems to incorporate revised MRL001/MRL003 templates and deleted MRL002 by 1 January 2027
Implement updated reporting instructions and SS19/13 amendments, including clarified scope of instruments in MRL templates
Prepare for Q4 2026 data submission in February 2027 using new taxonomy (to be published shortly by PRA)
For firms with deleted COREP13 templates, cease submissions from April 2026 cycle
Conduct gap analysis against SS19/13 changes and test processes for quarterly MREL reporting continuity

Key Dates

1 January 2027 - Revised MRL001 and MRL003 templates effective; first submissions of 2026 Q4 data (ending 31 December 2026) due in **February 2027**. DEADLINE

1 April 2026 - Partial revocation of UKTS 2018/1624 (COREP13), deleting certain templates ahead of April 2026 cycle for period ending 31 December 2025.

1 April 2026 - PS10/26 effective (related: Resolution Assessment threshold amendments, reports due 2 October 2026). DEADLINE

1 January 2027 - PS11/26 effective (related: disclosures from 2027 H1 for period ending 31 December 2026).

Compliance Impact

Urgency: Medium – Changes reduce burden (net simplification, ~25% per industry feedback) but require system updates before 1 January 2027 submissions; non-compliance risks resolution planning scrutiny, though lead time mitigates immediate pressure. Matters for maintaining accurate MREL monitoring amid PRA's FBD efficiency drive.

References

Sectors:

Prudential / Capital Requirements Reporting & Disclosure

Topics:

Bank

Banking & Credit Insurance & Pensions Capital Markets & Trading

🇬🇧 PRA Policy high

March 18th 2026

PS7/26 – Operational resilience: Operational incident and third-party reporting

Policy statement 7/26

AI Analysis

PS7/26 finalizes PRA rules for standardized reporting of operational incidents and material third-party (MTP) arrangements, responding to CP17/24 consultation feedback by reducing firm burden through simplified templates and exclusions. This matters for compliance professionals as it enhances PRA oversight of operational resilience risks amid rising threats and third-party reliance, aligning with international standards like DORA and FSB FIRE while supporting identification of critical third parties (CTPs).

What Changed

MTP Reporting: Amended notification rule for clarity; scope excludes credit unions with <£50m assets and all third-country branches; separated register and notification templates with reduced data fields; single submission platform (FCA Connect). Operational Incident Reporting: Merged three-phased reports (initial, interim, final) into one simplified, aligned template across PRA/FCA/Bank; removed fields, made more optional; clarified thresholds (e.g., safety/soundness, financial stability, policyholder protection for PRA), timing, and factors like contagion/reputation via SS1/26. Guidance...

What You Need To Do

Identify and notify MTP arrangements via FCA Connect (excluding exemptions); maintain annual register with reduced fields
Monitor/assess operational incidents against clarified thresholds (e
Update policies per SS1/26 (thresholds) and SS2/21 (MTP identification)
Align reporting with PRA/FCA/Bank templates; use data for resilience prioritization
For insurers

Key Dates

December 2024 - CP17/24 consultation published.

H1 2026 - Final PRA/FCA rules on operational incident and third-party reporting effective (per industry analysis).

30 working days post-incident resolution - Submit final incident report update (extendable to 60 working days in complex cases).

Annual - MTP register reporting (exact date not specified; aligns with notifications).

March 2026 implies rules near/applicable now; implementation likely immediate or phased per PS.)

Compliance Impact

Urgency: High - Mandates new reporting infrastructure and processes amid rising operational threats; non-compliance risks supervisory action on resilience vulnerabilities. Reduced burden from CP mitigates costs, but timely implementation critical for PRA oversight and CTP identification; benefits (e.g., thematic analysis) outweigh costs per PRA.

References

Sectors:

Topics:

Operational Resilience / Outsourcing Reporting & Disclosure Technology & Cyber

BankInsuranceAll Firms

Banking & Credit Insurance & Pensions

🇬🇧 PRA Guidance high

March 18th 2026

SS1/26 – Operational resilience: Incident reporting

Supervisory statement 1/26

AI Analysis

SS1/26 outlines the PRA's expectations for firms to report operational incidents via a structured three-phase process (initial, intermediate, final) as mandated in the PRA Rulebook's Regulatory Reporting Part, Chapter 24, to enhance UK financial sector resilience by capturing incidents risking firm safety, policyholder protection, or stability. This matters because it standardizes reporting, enabling timely PRA oversight and reducing inconsistencies in incident data collection across regulated entities.

What Changed

Introduces clear reporting thresholds in Regulatory Reporting Rule 24.2: Firms must report if an incident poses risks to UK financial stability, firm safety/soundness, or (for insurers) policyholder protection; factors include operational/financial contagion, service disruptions, data loss to external users, or regulatory/media attention. Mandates a phased reporting approach (Rule 24.1-24.4): Initial report as soon as practicable (expected within 24 hours of threshold determination); intermediate updates for significant changes (e.g., impact escalation, BCP activation, resolution); final...

What You Need To Do

Assess incidents against PRA thresholds (e
Submit phased reports using specified fields
Maintain processes for prompt classification, data gathering, and submission while prioritizing resolution; continue ad-hoc supervisory notifications if needed
Review internal policies to align severity ratings with PRA thresholds; document assessments
For critical third-party (CTP) incidents, both firms and CTPs report uniquely

Key Dates

18 March 2026 - Publication date of SS1/26.

18 March 2027 - Effective date; firms must comply with reporting requirements. DEADLINE

Within 24 hours - Expected submission of initial phase report after determining threshold met (as soon as practicable).

Each significant change - Intermediate phase update(s), including at resolution.

Within 30 working days of resolution - Final phase report (extendable to 60 working days if impracticable).

Compliance Impact

Sectors:

Topics:

Prudential / Capital Requirements Reporting & Disclosure

BankInsurance

🇬🇧 PRA News medium

February 27th 2026

Prudential Regulation Authority statement on the life insurance stress test in 2028

This statement provides an early indication to industry of the Prudential Regulation Authority’s (PRA) intent to launch the next Life Insurance Stress Test (LIST) exercise in January 2028.

Sectors:

Topics:

Insurance

🇬🇧 PRA Consultation medium

February 25th 2026

CP4/26 – UK Solvency II Own Funds: Updates and fixes to rules and expectations

Consultation paper 4/26

AI Analysis

CP4/26 proposes targeted amendments to UK Solvency II own funds rules in the PRA Rulebook, addressing inconsistencies, clarifying requirements, and restating EU guidelines for better accessibility. These updates matter as they reduce regulatory burden, enhance clarity, and align rules with market practices, supporting PRA objectives of firm safety, policyholder protection, and competitiveness without introducing new risks.

What Changed

Amendments to prior permission requirements for repaying or redeeming Tier 1 and Tier 3 own funds instruments, clarifying application to items classified under own funds permissions. Clarification that Tier 2 basic own funds items can cover 20% of the Minimum Capital Requirement (MCR), while Tier 2 Ancillary Own Funds cannot. Requirement that both minimum maturity date and first contractual opportunity to redeem must be met for Tier 1 and Tier 2 basic own funds classification. Correction to reconciliation reserve calculation to avoid canceling eligible own funds increases from classification...

What You Need To Do

Review and respond to consultation by 24 April 2026 via email to CP4_26@bankofengland
Assess current own funds instruments against proposed clarifications (e
Evaluate reconciliation reserve calculations for potential adjustments post-permission grants
Engage PRA on concurrent transactions (e
Prepare for Rulebook updates by mapping impacts to Own Funds, Reporting, Group Supervision, Glossary, and SCR Standard Formula parts

Key Dates

24 April 2026 - Consultation response deadline. DEADLINE

2026 H2 - Publication of dedicated policy statement (PS) with effective date for remaining changes.

Compliance Impact

Urgency: Medium – Proposals are refinements and clarifications rather than new burdens, with modest impacts focused on error corrections and alignment with practices; however, they affect core own funds calculations critical for solvency, requiring review before H2 2026 implementation to avoid misclassifications or PRA engagement delays.

References

Sectors:

Topics:

Insurance

Banking & Credit Consumer Credit Mortgage & Lending

🇬🇧 PRA Policy high

February 20th 2026

PS5/26 – Credit Union Service Organisations

Policy statement 5/26

AI Analysis

PRA Policy Statement PS5/26 finalizes rules permitting UK credit unions to invest in Credit Union Service Organisations (CUSOs), expanding from the CP13/25 proposals to foster innovation, collaboration, and growth while managing prudential risks through safeguards like due diligence and investment caps. This matters as it enables credit unions—often smaller mutuals—to access shared services (e.g., HR, IT, compliance) via CUSOs, leveling the playing field against larger competitors and supporting the PRA's safety/soundness and competitiveness objectives.

What Changed

Investment permission and cap increase: Credit unions can now invest in CUSOs using own capital, with the cap raised from 5% to 7.5% of total capital across all CUSOs (clarifications added on practical application, e.g., aggregation). Expanded CUSO scope: CUSOs can now serve other UK-regulated mutuals (with Part 4A permission) beyond just credit unions; partnerships with non-credit unions permitted as owners, subject to safeguards. Supervisory expectations in SS2/23: New chapter requires due diligence, risk analysis, limited liability to investment amount, legal/operational separation,...

What You Need To Do

Review and update policies
Ensure structural safeguards
Governance alignment
Implementation planning
Reporting/oversight

Key Dates

24 October 2025 - Consultation response deadline for CP13/25. DEADLINE

20 February 2026 - Publication date of PS5/26 (final policy).

~20 August 2026 - Implementation deadline for SS2/23 CUSO expectations (six months from PS5/26 publication). DEADLINE

Compliance Impact

Urgency: High – Credit unions eyeing CUSOs for growth (e.g., shared services) must act promptly within the six-month window to avoid supervisory breaches, as this expands opportunities but introduces new prudential risks (e.g., ownership misalignment, capital exposure). Non-compliance risks heightened PRA scrutiny, especially post-PS26/25 mutual sector review; benefits justify costs only for opt-in firms, but proactive preparation ensures safety/soundness.

References

Sectors:

Topics:

Prudential / Capital Requirements Operational Resilience / Outsourcing Authorisation & Licensing

BankFintechAll Firms

Banking & Credit Capital Markets & Trading Investment Management

🇬🇧 PRA Consultation high

February 19th 2026

CP3/26 – PRA rule changes to accommodate HM Treasury’s Overseas Prudential Requirements Regime

Consultation paper 3/26

AI Analysis

The PRA's CP3/26 proposes rule amendments to align its Rulebook with HM Treasury's (HMT) Overseas Prudential Requirements Regime (OPRR), which restates and modifies existing CRR equivalence provisions for treating overseas entities' exposures as preferential "exposures to institutions." This matters for **PRA-authorised firms** as it clarifies capital treatment for cross-border exposures, reduces interpretive burdens, and ensures consistency post-Brexit, advancing the PRA's safety and soundness objective while facilitating HMT designations.

What Changed

Credit Risk Standardised Approach (SA): Exposures to overseas credit institutions, investment firms, or exchanges treated as "exposures to institutions" only if from UK or HMT-designated OPRR jurisdictions; deletes CRR Article 119(5) for investment firms under Part 9C rules. IRB Approach: Preserves CRR Article 107(3) effect by aligning exposure class allocation with SA's updated "exposures to institutions" concept. Large Exposures: Amends Rule 1.3 definition of "institution" to limit preferential treatment to UK or OPRR-designated overseas entities. General Scope: Applies changes across PRA...

What You Need To Do

Review and respond to consultation by 2 April 2026, indicating consent for name/organisation publication and any confidentiality claims
Assess current exposures to overseas institutions/exchanges against proposed OPRR criteria; model impacts on capital requirements under SA, IRB, and large exposures rules
Update internal policies on exposure classification once final rules published; monitor HMT OPRR designations for affected jurisdictions
Indicate response as individual or organisational; personal data handled per Bank of England privacy notice

Key Dates

Thursday 2 April 2026 - Consultation response deadline; submit to CP3_26@bankofengland.co.uk or PRA at 20 Moorgate, London EC2R 6DA. DEADLINE

Compliance Impact

Urgency: High – Firms must engage promptly on consultation (deadline ~10 weeks from publication) to influence outcomes; changes clarify but could increase capital for non-designated overseas exposures, impacting safety/soundness and competitiveness. Failure to adapt risks non-compliance with updated Rulebook and higher prudential burdens.

References

Sectors:

Topics:

Prudential / Capital Requirements Reporting & Disclosure

BankAll Firms

Banking & Credit Capital Markets & Trading Insurance & Pensions

🇬🇧 PRA Consultation high

February 17th 2026

CP2/26 – Reforms to securitisation requirements

Consultation paper 2/26

AI Analysis

CP2/26 is a PRA consultation paper proposing targeted reforms to UK securitisation rules to reduce prescriptiveness and burden while maintaining prudential soundness, building on recent CRR restatements. It matters for compliance professionals as it streamlines due diligence, risk retention, disclosures, and capital treatments, potentially lowering costs for PRA-authorised firms in the securitisation market amid Basel 3.1 implementation. These changes aim to enhance proportionality without compromising investor protection or oversight.

What Changed

The proposals amend PRA rules and supervisory guidance in the Securitisation Part of the PRA Rulebook, including: Due diligence: Remove prescriptive verification of credit-granting criteria (Chapter 2 Article 9), risk retention (Chapter 2 Article 6 and Chapter 4), STS criteria, specific information availability, ongoing monitoring lists, stress testing, internal reporting to management, and demonstration of understanding to PRA; replace with proportionate consideration of credit-granting standards. Risk retention: Introduce a new combined modality merging two existing ones. Market disclosure...

What You Need To Do

Review and respond
Gap analysis
Coordinate with FCA
Policy updates
Monitor legislation

Key Dates

18 May 2026 - Consultation response deadline. DEADLINE

1 January 2027 - Expected implementation aligning with Basel 3.1 and CRR restatement (PS3/26), with transitional arrangements to 2030.

Post-SI (TBD) - Changes to repository requirements effective upon HM Treasury Statutory Instrument amending UK Securitisation Regulation 2024.

1 January 2026 - Related CRR/Solvency II restatement (PS12/25) already effective, preserving core securitisation requirements.

Compliance Impact

Urgency: High – Proposals reduce burden (e.g., less prescriptive due diligence, streamlined disclosures) but require immediate review ahead of 18 May 2026 deadline and 1 January 2027 implementation, aligning with Basel 3.1. Non-response risks misaligned systems during CRR restatement transition; benefits include cost savings and proportionality, but firms must validate ongoing compliance with retained prudential standards.

References

Sectors:

Topics:

Prudential / Capital Requirements Reporting & Disclosure

BankInsuranceAll Firms

🇬🇧 PRA Consultation medium

February 4th 2026

DP1/26 – Future banking data

Discussion paper 1/26

AI Analysis

The PRA's DP1/26 outlines its Future Banking Data (FBD) programme, reviewing strategic regulatory reporting for banks to reduce costs, enhance data quality, timeliness, and relevance, while aligning with its secondary competitiveness and growth objective. This discussion paper seeks industry feedback on pragmatic, incremental reforms to reporting templates, processes, and principles, balancing supervisory needs with proportionality. It matters for compliance teams as it signals potential simplifications in data submissions, but requires proactive engagement to influence outcomes and prepare for evolving requirements.

Sectors:

Prudential / Capital Requirements Reporting & Disclosure

Topics:

Bank

Banking & Credit Insurance & Pensions

🇬🇧 PRA News high

February 2nd 2026

PRA Regulatory Digest - January 2026

The PRA Regulatory Digest is for people working in the UK financial services industry and highlights key regulatory news and publications delivered for the month.

Sectors:

Topics:

Prudential / Capital Requirements Reporting & Disclosure

BankInsurance

Banking & Credit Capital Markets & Trading Investment Management

🇬🇧 PRA Policy high

January 20th 2026

PS1/26 – Implementation of Basel 3.1: Final rules

Policy statement 1/26

AI Analysis

PS1/26 represents the UK Prudential Regulation Authority's final implementation framework for the Basel 3.1 international banking standards, effective 1 January 2027 (with market risk internal models delayed to 1 January 2028). This policy statement establishes mandatory capital, credit risk, operational risk, and market risk requirements for UK-regulated banks, building societies, and investment firms, addressing post-financial crisis shortcomings in risk-weighted asset (RWA) calculations and capital adequacy frameworks.

Action Required

The Prudential Regulation Authority (PRA) has published the final rules for the implementation of Basel 3.1 standards in the UK, with an effective date of January 1, 2027. The rules aim to enhance the resilience of banks and improve the stability of the financial system. Firms must review and update their policies and procedures to ensure compliance with the new requirements.

Sectors:

Topics:

Prudential / Capital Requirements Reporting & Disclosure Senior Managers / Governance

BankBroker DealerAsset Manager

🇬🇧 PRA Enforcement high

January 20th 2026

PS2/26 – Retiring the refined methodology to Pillar 2A – final

Policy Statement 2/26

AI Analysis

The PRA's PS2/26 finalizes the retirement of the "refined methodology" in Pillar 2A capital requirements, effective 1 January 2027, aligning with Basel 3.1 implementation to simplify the framework by eliminating an operationally burdensome adjustment originally designed to address conservatism in the standardized approach (SA) to credit risk. This matters for compliance professionals as it reduces complexity in ICAAP and SREP processes, with expected neutral aggregate capital impact, though firm-specific effects may vary and require supervisory engagement.

What Changed

Retirement of refined methodology: The refined methodology, introduced in 2018 (PS22/17) to mitigate perceived conservatism in CR SA relative to IRB for lower-risk assets, is fully retired from Pillar 2A as Basel 3.1 CR SA enhancements achieve similar risk sensitivity without it. No transitional period; immediate replacement by Basel 3.1 standards. Amendments to SS31/15: Updates to Supervisory Statement 31/15 on ICAAP and SREP (Appendix 1), including minor prior adjustment to paragraph 5.12A for SDDTs reflecting no need for Interim Capital Regime (ICR). No further changes from near-final:...

What You Need To Do

Review and update ICAAP/SREP processes
Recalculate Pillar 2A requirements
Align with related frameworks
Monitor firm-specific impacts
Governance and reporting

Key Dates

2024 CP9/24 consultation on streamlining Pillar 2A, including proposal to retire refined methodology.

28 October 2025 PS18/25 near-final policy published.

20 January 2026 PS2/26 final policy published.

1 January 2027 Effective date for retirement of refined methodology; aligns with Basel 3.1 implementation (PS1/26), CRR restatement (PS3/26), and SDDT simplified regime (PS4/26).

Compliance Impact

Urgency: High – With less than 11 months to 1 January 2027 effective date (as of January 2026 publication), firms face immediate need to remodel Pillar 2A under Basel 3.1, potentially affecting capital planning, stress testing, and regulatory reporting. Non-compliance risks supervisory scrutiny during SREP; benefits include workload simplification, but SA-only firms must validate no undue conservatism gaps versus IRB peers.

References

Action Required

The Prudential Regulation Authority (PRA) has finalized the policy to retire the refined methodology to Pillar 2A, which will take effect on January 1, 2027, aligning with the implementation of the Basel 3.1 standards. This change affects all PRA-regulated banks, building societies, and designated investment firms. The refined methodology will no longer apply to these firms, including Small Domestic Deposit Takers (SDDTs), as they will be subject to the Basel 3.1 standardized approach to credit risk.

Sectors:

Topics:

Bank

Banking & Credit Capital Markets & Trading Investment Management

🇬🇧 PRA Policy high

January 20th 2026

PS3/26 – Restatement of CRR requirements – 2027 implementation – final

Policy statement 3/26

AI Analysis

PS3/26 is the PRA's final policy statement restating the remaining provisions of the UK Capital Requirements Regulation (CRR) into the PRA Rulebook and related policy materials, effective 1 January 2027. This represents a critical step in the UK's transition away from assimilated EU law, consolidating fragmented regulatory requirements into a unified domestic framework while introducing targeted amendments to securitisation rules and External Credit Assessment Institution (ECAI) mapping.

Action Required

The Prudential Regulation Authority (PRA) has published a policy statement (PS3/26) that restates the remaining relevant provisions in the Capital Requirements Regulation (CRR) within the PRA Rulebook and other policy materials. This change aims to ensure that the PRA's rules and policies are consistent with the UK's withdrawal from the EU. The policy statement is relevant to PRA-authorised banks, building societies, and other financial institutions.

Sectors:

Topics:

Prudential / Capital Requirements Reporting & Disclosure Authorisation & Licensing

BankBroker DealerAsset Manager

🇬🇧 PRA Policy high

January 20th 2026

PS4/26 – The Strong and Simple Framework: The simplified capital regime for Small Domestic Deposit Takers (SDDTs) – final

Policy statement 4/26

AI Analysis

PS4/26 finalizes the **simplified capital regime for Small Domestic Deposit Takers (SDDTs)**, a tailored prudential framework designed to reduce regulatory burden while maintaining capital resilience for smaller, domestically-focused UK banks and building societies. This represents the completion of Phase 1 of the PRA's "Strong and Simple" initiative and introduces materially lighter capital, liquidity, and reporting requirements for qualifying firms, with implementation effective January 1, 2027.

What Changed

*Simplified Capital Framework The final policy introduces a dedicated capital regime** for SDDTs that descopes them from standard CRR Firms requirements. SDDTs are now subject to tailored Pillar 2 methodologies (SoP5/25) and simplified ICAAP/SREP processes (SS4/25) rather than the standard frameworks. *Liquidity Simplifications Qualifying SDDTs with 50% or more retail deposit funding** are exempted from the Net Stable Funding Ratio (NSFR) requirements, replacing this with a simpler Retail Deposit Ratio (RDR) measure.

What You Need To Do

*Immediate (by January 20, 2026)
*Assess SDDT eligibility – Determine whether your firm meets all seven qualification criteria, particularly the £20bn asset threshold and domestic asset location requirement
*Review consolidation group structure – If part of a group, confirm which entity will serve as the SDDT consolidation entity responsible for certification
*Implement SoP2/23 changes – Adopt updated operating procedures for the SDDT regime
*Update ICAAP/ILAAP processes – Implement new frequency requirements for capital and liquidity adequacy assessments

Key Dates

January 20, 2026 – PS4/26 published; changes to SoP2/23 and ICAAP/ILAAP frequency requirements take effect

January 20, 2026 – Revocation of ICR firm/consolidation entity definitions and deletion of SoP3/23 effective

January 1, 2027 – Simplified capital regime for SDDTs takes effect; SS4/25 brought into effect in full; SDDTs removed from SS31/15 scope

Compliance Impact

Urgency: HIGH

References

Action Required

The Prudential Regulation Authority (PRA) has introduced a simplified capital regime for Small Domestic Deposit Takers (SDDTs) to reduce regulatory complexity while maintaining adequate capital. The new regime will take effect on 2027-01-01. This change aims to simplify capital requirements for smaller banks and building societies.

Sectors:

Prudential / Capital Requirements Reporting & Disclosure Authorisation & Licensing

Topics:

Bank

🇬🇧 PRA News medium

January 15th 2026

Letter from Gareth Truran and Shoib Khan – Insurance Supervision: 2026 priorities

Letter to Chief Executive Officers of PRA-regulated Insurance firms

Sectors:

Prudential / Capital Requirements Operational Resilience / Outsourcing

Topics:

Insurance

Banking & Credit Investment Management Wealth & Private Banking

🇬🇧 PRA News medium

January 15th 2026

Letter from Rebecca Jackson and Alison Scott – International Banks Supervision: 2026 priorities

Letter to Chief Executive Officers of PRA regulated international banks active in the UK

Sectors:

Topics:

Prudential / Capital Requirements Operational Resilience / Outsourcing Senior Managers / Governance

BankWealth Manager

🇬🇧 PRA News medium

January 15th 2026

Letter from Charlotte Gerken and Laura Wallis – UK Deposit Takers Supervision: 2026 priorities

Letter to Chief Executive Officers of PRA regulated UK deposit takers

Sectors:

Prudential / Capital Requirements Operational Resilience / Outsourcing

Topics:

Bank

Banking & Credit Insurance & Pensions Investment Management

🇬🇧 PRA Consultation high

January 13th 2026

CP1/26 – Financial Services Compensation Scheme – Management Expenses Levy Limit (MELL) 2026/27

Consultation paper 1/26

AI Analysis

The PRA and FCA have jointly issued consultation paper CP1/26 proposing to set the **Management Expenses Levy Limit (MELL) for the Financial Services Compensation Scheme (FSCS) at £113 million for 2026/27**, comprising a £108 million management expenses budget and a £5 million unlevied reserve. This consultation determines the maximum amount the FSCS can levy on authorised financial services firms to fund its statutory compensation scheme operations, directly affecting compliance costs for all regulated entities.

Sectors:

Topics:

Prudential / Capital Requirements Authorisation & Licensing Consumer Protection / Conduct

BankInsuranceAsset Manager

Banking & Credit Investment Management Wealth & Private Banking

🇬🇧 PRA News

January 7th 2026

Future Banking Data: November CFO Roundtable: summary

On 12 November the PRA hosted a roundtable meeting with Chief Financial Officers (CFOs) of systemically important firms operating in the UK, to discuss Future Banking Data (FBD).

Sectors:

Topics:

Prudential / Capital Requirements Reporting & Disclosure Operational Resilience / Outsourcing

BankAsset ManagerWealth Manager

Banking & Credit Investment Management Wealth & Private Banking

🇬🇧 PRA News low

January 6th 2026

PRA Regulatory Digest - December 2025

The PRA Regulatory Digest is for people working in the UK financial services industry and highlights key regulatory news and publications delivered for the month.

Sectors:

Topics:

Prudential / Capital Requirements Operational Resilience / Outsourcing Reporting & Disclosure

BankAsset ManagerWealth Manager

🇬🇧 PRA News medium

January 2nd 2026

Berne Financial Services Agreement (BFSA) Operational Direction and Guidelines for UK Insurers’ Section IV Notifications

The Berne Financial Services Agreement (BFSA) is a mutual recognition agreement between the UK and Switzerland, effective from 1 January 2026. This agreement enhances cross-border market access for financial services between the two countries.

Effective Date: 1 January 2026

Sectors:

Prudential / Capital Requirements Authorisation & Licensing

Topics:

Insurance

🇬🇧 PRA Guidance high

December 19th 2025

SS2/25: Prudential considerations for insurance and reinsurance undertakings when transferring risk to Special Purpose Vehicles

Supervisory statement 2/25

AI Analysis

Supervisory Statement SS2/25 from the Prudential Regulation Authority (PRA) provides guidance on prudential considerations for UK insurance and reinsurance undertakings transferring risk to Special Purpose Vehicles (SPVs). It clarifies expectations for ensuring such transfers comply with Solvency II requirements, focusing on risk transfer validity, capital relief recognition, and supervisory approval processes. This matters because it aims to enhance transparency and risk management in reinsurance arrangements, reducing potential regulatory arbitrage while supporting efficient risk mitigation for insurers amid evolving market dynamics.

Sectors:

Topics:

Insurance

Banking & Credit Investment Management Wealth & Private Banking

🇬🇧 PRA News low

December 19th 2025

LIAF03/25 – Low Impact Amendments Finalisation December 2025

The PRA has published LIAF03/25, a collection of final low impact rule amendments.

Sectors:

Topics:

Prudential / Capital Requirements Operational Resilience / Outsourcing Reporting & Disclosure

BankAsset ManagerWealth Manager

Banking & Credit Investment Management Wealth & Private Banking

🇬🇧 PRA News low

December 10th 2025

PRA letter to the Prime Minister - December 2025

The Prudential Regulation Authority’s (PRA) update to the Prime Minister on work to support economic growth.

Sectors:

Topics:

Prudential / Capital Requirements Operational Resilience / Outsourcing Reporting & Disclosure

BankAsset ManagerWealth Manager

🇬🇧 PRA Policy medium

December 8th 2025

PS27/25 – Future banking data review: Deletion of banking reporting templates

Policy statement 27/25

AI Analysis

PS27/25 finalizes the PRA's policy to delete 37 redundant banking regulatory reporting templates (34 FINREP, 2 COREP, and PRA109) as the first phase of the Future Banking Data (FBD) programme, aiming to reduce reporting burdens while maintaining supervisory data quality. This matters for PRA-regulated banks as it delivers immediate cost savings and signals broader regulatory simplification, aligning with the PRA's secondary competitiveness and growth objective.

What Changed

Deletion of 37 whole reporting templates identified as duplicative, outdated, or low-value: 34 FINREP templates, 2 COREP templates (C05.01 and C05.02, now obsolete), and PRA109. Consolidation of remaining FINREP scoping provisions into a single section of the PRA Rulebook (new Chapters 5A–5F of the Reporting (CRR) Part), with clarifications to unclear or duplicative conditions. Alignment of FINREP remittance deadlines to 30 business days for reports under Article 430(3), Article 11(2), and new Chapters 5A–5F. Updates to Supervisory Statement SS34/15 – Guidelines for completing regulatory...

What You Need To Do

Review and update internal reporting systems, processes, and controls to cease submission of the 37 deleted templates for reference dates from 31 December 2025 onwards
Confirm applicability of consolidated FINREP scoping rules (Chapters 5A–5F) and adjust scoping for remaining templates, incorporating clarified conditions
Assess eligibility for individual FINREP waivers under the updated framework if part of a UK consolidation group; apply to PRA if criteria met (90-95% asset contribution)
Update compliance policies and training to reflect SS34/15 amendments and aligned remittance deadlines
Review Pillar 3 disclosure obligations for any ongoing requirements tied to deleted templates and prepare for potential future changes

Key Dates

8 December 2025 - Publication of PS27/25, finalizing policy and responses to CP21/25 consultation.

31 December 2025 - Effective date for revised rules, amended SS34/15, and deletions; applies to reporting reference dates falling on or after this date (avoids 2025 Q4 submissions where relevant).

11 November 2025 - Q3 2025 remittance deadline (precedes PS publication, so no concession for early non-reporting). DEADLINE

Compliance Impact

Urgency: Medium – Changes are simplificatory (deletions reduce burden), with immediate effect from 31 December 2025, but no new requirements or penalties for non-compliance with deleted items; firms must act promptly to decommission processes and avoid erroneous submissions. This matters as it lowers ongoing costs (especially for larger reporters) and sets precedent for FBD phases targeting further efficiencies, but smaller firms see limited benefit without broader reforms.

References

Sectors:

Reporting & Disclosure Prudential / Capital Requirements

Topics:

Bank

Banking & Credit Mortgage & Lending

🇬🇧 PRA Policy medium

December 5th 2025

PS26/25 – Discontinuing SS20/15: Supervising building societies’ treasury and lending activities

Policy statement 26/25

AI Analysis

The Prudential Regulation Authority (PRA) has issued PS26/25, finalizing the withdrawal of Supervisory Statement (SS) 20/15, which previously set prescriptive expectations for building societies' treasury and lending activities, effective immediately upon publication on 5 December 2025. This deregulatory move reduces administrative burdens, enhances proportionality across deposit takers, and promotes competition by aligning building societies more closely with banks, while relying on existing tools like the PRA Rulebook, SMCR, and routine supervision for risk management. It matters for compliance teams as it eliminates specific guidance often misinterpreted as binding requirements, freeing firms to tailor risk frameworks but requiring vigilance on broader prudential expectations.

Sectors:

Topics:

Prudential / Capital Requirements Senior Managers / Governance

Bank

Banking & Credit Investment Management Wealth & Private Banking

🇬🇧 PRA News low

December 5th 2025

Mutuals landscape report

This report has been informed by the PRA and FCA’s ongoing regulation and supervision of mutuals and by direct engagement with mutuals and their trade associations in sessions around the country throughout 2025.

Sectors:

Topics:

Prudential / Capital Requirements Operational Resilience / Outsourcing Authorisation & Licensing

BankAsset ManagerWealth Manager

🇬🇧 PRA Consultation high

December 4th 2025

CP22/25 – UK Solvency II reporting and disclosure: Post-implementation amendments

Consultation paper

AI Analysis

CP22/25 is a consultation paper on post-implementation amendments to UK Solvency II reporting and disclosure requirements, published by the PRA on 4 December 2025. The consultation addresses feedback and queries from insurance firms following the substantial reduction in reporting templates implemented at the end of 2024, clarifying expectations for compliance with the revised Reporting Part of the PRA Rulebook across multiple technical areas including accident/underwriting year reporting, annuity reporting by currency, and internal model governance disclosures.

Sectors:

Prudential / Capital Requirements Reporting & Disclosure Operational Resilience / Outsourcing

Topics:

Insurance

Banking & Credit Insurance & Pensions

🇬🇧 PRA Policy high

December 3rd 2025

PS25/25 – Enhancing banks’ and insurers’ approaches to managing climate-related risks – Update to SS3/19

Policy statement 25/25

AI Analysis

PS25/25 is the PRA's policy statement providing feedback on CP10/25 and issuing updated Supervisory Statement SS5/25, which replaces SS3/19 to enhance banks' and insurers' management of climate-related financial risks through strengthened governance, risk management, scenario analysis, data quality, and disclosures. It matters because it sets a higher regulatory bar for embedding climate risks proportionately into core processes like ICAAP, ILAAP, ORSA, and financial reporting, promoting resilience and strategic decision-making amid evolving climate threats.

What Changed

The main changes in SS5/25 from SS3/19 and CP10/25 responses include: Proportionate application clarification: New 'Overarching aims' section in Chapter 3 explains how firms should tailor expectations to their climate risk exposure, business size, and complexity via a two-step process (assess materiality, then respond). Governance strengthening: Boards and senior management must actively oversee climate risks, embedding them in strategy and ensuring accountability. Risk management enhancements: Integrate climate risks into existing frameworks/risk registers (supplementary sub-registers...

What You Need To Do

Conduct gap analysis against SS5/25 within 6 months and remediate (e
Integrate climate risks into board oversight, strategy, risk registers, ICAAP/ILAAP (banks), ORSA/stress testing (insurers), and financial reporting
Perform CSA exercises commensurate with exposures, using suitable scenarios to inform decisions; enhance data quality and disclosures
Document proportionate application (two-step process: materiality assessment, risk response); leverage existing structures where robust
Ensure senior accountability and alignment with standards like SS1/21

Key Dates

3 December 2025 - PS25/25 and SS5/25 published; SS5/25 effective immediately, replacing SS3/19.

Within 6 months (by ~June 2026) - Firms assess gaps against new expectations and develop remediation plans (industry guidance).

Ongoing - Forward-looking, strategic implementation proportionate to risks; PRA may request progress evidence.

Compliance Impact

Urgency: High – Effective immediately (3 Dec 2025), requiring significant uplift to existing approaches; non-compliance risks supervisory scrutiny, as PRA expects ambitious, ongoing progress and may request evidence. Matters for capital/liquidity planning, resilience, and strategic viability amid maturing climate risk landscape.

References

Sectors:

Topics:

Prudential / Capital Requirements ESG Senior Managers / Governance

BankInsurance

Banking & Credit Investment Management Wealth & Private Banking

🇬🇧 PRA Guidance high

December 3rd 2025

SS5/25 – Enhancing banks’ and insurers’ approaches to managing climate-related risks

Supervisory statement 5/25

AI Analysis

SS5/25 is the PRA's updated supervisory statement, published on 3 December 2025, replacing SS3/19 and setting enhanced expectations for banks and insurers to manage climate-related risks through governance, risk management, scenario analysis, data quality, and disclosures. It matters because it represents a step change from awareness-raising to embedding robust, proportionate practices that integrate climate risks into core prudential processes like ICAAP, ILAAP, ORSA, and capital planning, aligning with the PRA's objectives for firm safety and soundness amid evolving physical and transition risks.

What Changed

Replaces SS3/19 entirely: Introduces a more mature, consolidated framework reflecting international standards (e.g., BCBS), with detailed transmission channels for climate risks across credit, market, liquidity, insurance, and operational categories. Governance enhancements: Emphasizes board accountability, integration into business strategy, climate risk appetite statements, and linkage to Senior Managers & Certification Regime (SM&CR) without new Senior Management Functions (SMFs); promotes challenge culture and Management Information (MI). Risk management integration: Requires embedding...

What You Need To Do

Conduct materiality assessment of climate risks to scope proportionality (leverage TCFD/CSRD work)
Embed climate risks in governance
Integrate into risk frameworks
Perform climate scenario analysis
Enhance data

Key Dates

3 December 2025 Publication of PS25/25 and SS5/25; replaces SS3/19 effective immediately.

Within 6 months of 3 December 2025 (by ~3 June 2026) Firms assess gaps against new expectations and develop implementation plans.

April 2025 Consultation paper CP10/25 issued (feedback incorporated in final policy).

Compliance Impact

Urgency: High – Effective immediately with a 6-month window (~June 2026) for gap closure, this demands significant operational uplift (e.g., data, scenarios, integration) amid PRA's shift to enforcement; non-compliance risks supervisory action, given climate risks' materiality to prudential stability and alignment with global standards.

The table below shows the outcomes of the annual DLT assessment for PRA relevant currencies, which will be effective from 1 January 2026.

Effective Date: 1 January 2026

Sectors:

Topics:

Prudential / Capital Requirements Operational Resilience / Outsourcing Reporting & Disclosure

BankAsset ManagerWealth Manager

Banking & Credit Capital Markets & Trading Investment Management

🇬🇧 PRA Policy high

November 27th 2025

PS23/25 – Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251

Policy statement 23/25

AI Analysis

PS23/25 from the PRA and FCA finalizes amendments to Binding Technical Standards (BTS) 2016/2251 under UK EMIR, introducing an indefinite exemption for single-stock equity options and index options from bilateral margin requirements, removing IM obligations on legacy contracts for firms falling below thresholds, and allowing alignment with third-country jurisdictions' timelines for IM assessments. These changes reduce operational burdens and enhance competitiveness for UK firms trading non-centrally cleared derivatives, following feedback from CP5/25, while maintaining prudential standards.

What Changed

Indefinite exemption for equity options: Single-stock equity options and index options are permanently exempted from UK bilateral initial margin (IM) and variation margin (VM) requirements, replacing a temporary exemption ending 4 January 2026. This balances safety with international competitiveness, as capital can substitute for margin. Legacy contracts relief: Firms falling below the Average Aggregate Notional Amount (AANA) threshold no longer need to exchange IM on outstanding legacy non-centrally cleared derivatives contracts. Third-country alignment: UK firms can adopt another...

What You Need To Do

Assess cross-border transactions
Conduct gap analysis on margin calculations, collateral management, and reporting; train front-to-back office teams on changes
Retain records of AANA calculations and threshold monitoring to justify exemptions or relief
For firms with collected IM on now-exempt legacy positions, evaluate release options per updated FCA instrument language

Key Dates

11 August 2025 PRA submits final technical standards instrument to HM Treasury (HMT).

15 August 2025 FCA submits final technical standards instrument to HMT.

11 September 2025 HMT deems approval of PRA’s instrument.

24 September 2025 HMT deems approval of FCA’s instrument.

27 November 2025 Amendments to BTS 2016/2251 effective date.

Compliance Impact

Urgency: High – Effective immediately since 27 November 2025 (over a month ago as of current date), firms risk non-compliance if systems still enforce outdated IM/VM for exemptions; operational fixes are needed urgently to avoid breaches, fines, or disputes, especially with phase-out of temporary equity options relief approaching 4 January 2026. Impacts cost savings but requires swift policy recalibration for ongoing UK EMIR adherence.

References

Sectors:

Topics:

Prudential / Capital Requirements Reporting & Disclosure

BankBroker DealerAsset Manager

🇬🇧 PRA Guidance medium

November 24th 2025

The PRA holds model risk management roundtable on artificial intelligence and machine learning technologies

The PRA held roundtable meetings on artificial intelligence and machine learning (AI and ML) in the context of Supervisory Statement (SS)1/23 ‘Model risk management principles for banks’

AI Analysis

The Prudential Regulation Authority (PRA) held roundtable sessions on 20 and 22 October 2025 with 21 regulated firms to discuss AI and machine learning (AI/ML) adoption under Supervisory Statement SS1/23 on model risk management (MRM) principles for banks. This matters because it highlights PRA's strategic supervisory focus on AI/ML model risks, urging firms to enhance governance, risk appetite, monitoring, and validation to mitigate opacity, overfitting, and rapid performance degradation in these models. https://www.bankofengland.co.uk/prudential-regulation/publication/2025/november/pra-holds-model-risk-management-roundtable-on-ai | https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/publication/2025/november/ai-roundtable-oct-2025.pdf

What Changed

This is not a formal rule change but supervisory guidance via roundtable insights reinforcing SS1/23 principles (effective since 2023). Key emphases include: Risk appetite: Boards must articulate AI/ML-specific model risk appetite pre-deployment to avoid exceeding tolerances, given higher uncertainty from opacity. Model inventories and tiering: Address inaccurate/incomplete inventories and aggregate risks from deploying similar AI/ML across portfolios/jurisdictions; challenge tiering for complexity. Model development: Assess trade-offs in performance vs.

What You Need To Do

Review and strengthen board-level model risk appetite statements to explicitly cover AI/ML opacity and uncertainty; integrate into governance triggers like re-validation
Enhance model inventories for completeness, aggregate risk assessment, and cross-jurisdictional tiering challenges
Update model development policies to evaluate AI/ML trade-offs (e
Revise ongoing monitoring policies for more frequent, quantitative checks on AI/ML (e
Participate in PRA initiatives like MRM roundtables or AI Consortium for dialogue; align first/second-line defenses per SS1/23

Key Dates

20-22 October 2025 - PRA held CRO roundtable sessions with 21 firms on AI/ML MRM.

24 November 2025 - PRA published roundtable summary and slides. https://www.bankofengland.co.uk/prudential-regulation/publication/2025/november/pra-holds-model-risk-management-roundtable-on-ai

Compliance Impact

Urgency: Medium - Not critical as no new rules or deadlines, but high relevance for AI/ML users amid PRA's strategic MRM focus; non-compliance risks supervisory actions, given observations of gaps in monitoring and governance. Matters for banks scaling AI (rising adoption per industry views), as unaddressed risks like rapid degradation could amplify losses (e.g., historical model failures cost billions). https://www.articsledge.com/post/model-risk-management | https://www.finextra.com/blogposting/30372/the-pras-latest-view-on-ai-governance-implications-for-uk-banks

References

Sectors:

Prudential / Capital Requirements Technology & Cyber Senior Managers / Governance

Topics:

BankAll Firms

🇬🇧 PRA News medium

November 24th 2025

Life Insurance Stress Test 2025 results: Annex 4 – insurer-specific results

This is the first exercise conducted under the new Solvency UK regulatory regime implemented in 2024.

Sectors:

Topics:

Insurance

Banking & Credit Payments & E-Money Crypto & Digital Assets

🇬🇧 PRA Consultation high

November 21st 2025

CP23/25 – Regulatory fees and levies: policy proposals for 2026/27 – Joint PRA and FCA consultation

Consultation paper 23/25

AI Analysis

This joint PRA-FCA consultation (CP23/25 from PRA and Chapter 4 of FCA's CP25/33) proposes policy updates to regulatory fees, levies, and invoice processes for 2026/27, including new fee blocks for emerging activities like PISCES operators and targeted support, alongside adjustments to FOS/FSCS levies and payment timelines. It matters for compliance teams as it directly impacts budgeting, fee calculations, and cash flow management for fee-payers, with potential cost increases and procedural changes effective from April 2026.

What Changed

New fee structures: Introduction of a periodic fee block for PISCES operators based on regulated income (baseline £2,200 annual fee, variable above £500,000 threshold); extension of fee-block A.13 to include "targeted support" activities (Category 2 variation fee for existing firms, Category 4 for new entrants); registration fees for Deferred Payment Credit (DPC/buy-now-pay-later) activities aligned with Temporary Permissions Regime, added to FOS consumer credit fee-block but excluded from FSCS. Levy adjustments: Addition of targeted support to FSCS Class 2, Category 2.1 (life...

What You Need To Do

Review current fee/levy exposure and model impacts of new blocks (e
Assess invoice processes if paying £50,000+ in FCA/PRA fees; prepare for aligned due dates
Submit consultation responses by deadlines, focusing on targeted support by 9 January 2026
Budget for potential fee increases; monitor Spring 2026 fee-rates CP
For applicants

Key Dates

9 January 2026 - Deadline for comments on targeted support proposals (FCA CP25/33 paras 2.11-2.18, questions 3-7). DEADLINE

16 January 2026 - Consultation close for all other proposals, including PRA-FCA joint changes; responses to cp25-33@fca.org.uk.

February 2026 - FCA publishes feedback and rules on targeted support in Handbook Notice.

March 2026 - FCA publishes feedback and rules on all other proposals (including Chapter 4) in Handbook Notice; Spring fee-rates consultation.

April 2026 - PRA publishes feedback and rules on Chapter 4; changes effective for 2026/27 fee year (April-March).

Compliance Impact

Urgency: High – Firms must act imminently on consultation responses (deadlines passed as of today, but feedback analysis pending March/April 2026 rules) to influence outcomes; changes affect 2026/27 budgets starting April, with cash flow risks from invoice timing and new fees for emerging activities like PISCES/DPC. Non-engagement risks unbudgeted costs and procedural breaches (e.g., overdue invoices).

References

Sectors:

Topics:

Authorisation & Licensing Reporting & Disclosure Senior Managers / Governance

BankFintechPayment Provider

🇬🇧 PRA Policy high

November 18th 2025

PS24/25 – Depositor protection

Policy statement 24/25

AI Analysis

The PRA's PS24/25 finalizes rules increasing Financial Services Compensation Scheme (FSCS) depositor protection limits from £85,000 to £120,000 and temporary high balances (THB) from £1 million to £1.4 million for firm failures on or after 1 December 2025, responding to consultation feedback in CP4/25. This matters for PRA-authorized deposit-takers as it enhances consumer protection amid inflation but requires urgent system and disclosure updates to avoid FSCS payout delays or regulatory breaches. Firms must prioritize single customer view (SCV) readiness and phased disclosure revisions to comply efficiently.

What Changed

Increased Protection Limits: Standard FSCS deposit limit rises from £85,000 to £120,000; THB limit from £1 million to £1.4 million, applying to failures from 1 December 2025. SCV System Updates: Firms must update SCV systems (used by FSCS for rapid compensation) to reflect new limits from 1 December 2025, including accurate contact details. Disclosure Materials: - Update information sheets on FSCS cover to reflect new limits and improve clarity/accessibility; provide to depositors as soon as practicable post-1 December 2025, by 31 May 2026. - Revise compensation stickers/posters (for...

What You Need To Do

Immediate (pre-1 Dec 2025)
By 1 Dec 2025
Post-1 Dec 2025 to 31 May 2026
Document changes for audit trails; consider regtech for SCV automation

Key Dates

1 December 2025 - New deposit (£120,000) and THB (£1.4 million) limits apply to firm failures on/after this date; SCV systems must be updated; SS18/15 and SoP1/15 effective. DEADLINE

As soon as practicable after 1 December 2025 - Provide updated information sheets, stickers/posters, and exclusions lists to depositors (encouraged immediately to avoid confusion).

31 May 2026 - Firm deadline for all disclosure material updates and provision to depositors (six-month transition ends). DEADLINE

Compliance Impact

Urgency: High – SCV updates are mandatory by 1 December 2025 with no transition, risking delayed FSCS payouts and enforcement if unprepared; disclosure changes allow six months but PRA emphasizes early action to prevent depositor confusion. Impacts operational resilience and conduct risk; non-compliance could trigger supervisory action, especially for firms with outdated systems. Cost-benefit analysis shows minimal PRA impact but higher potential FSCS payouts in failures.

References

Sectors:

Consumer Protection / Conduct Prudential / Capital Requirements

Topics:

Bank

🇬🇧 PRA News medium

November 17th 2025

Life Insurance Stress Test: 2025 Results

This is the first exercise conducted under the new Solvency UK regulatory regime implemented in 2024. The PRA published sector-level results on 17 November 2025 followed by individual firm disclosure for the core scenario on 24 November 2025.

Sectors:

Topics:

Insurance

🇬🇧 PRA Consultation high

November 14th 2025

DP2/25 – Alternative Life Capital: Supporting innovation in the life insurance sector

Discussion paper 2/25

AI Analysis

The PRA's Discussion Paper 2/25 (published November 14, 2025) invites UK life insurers to provide feedback on potential regulatory reforms that would enable them to access **alternative forms of capital through risk transfer to capital markets**, outside traditional equity and debt issuance. This initiative aims to address capital constraints in the UK life insurance sector while maintaining policyholder protection and supporting long-term economic growth.

Sectors:

Prudential / Capital Requirements Authorisation & Licensing

Topics:

Insurance

🇬🇧 PRA Policy high

November 12th 2025

PS22/25 – Leverage Ratio: Changes to the retail deposits threshold for application of the requirement

Policy statement 22/25

AI Analysis

The PRA's PS22/25 finalizes an increase in the retail deposits threshold for the leverage ratio requirement from £50 billion to £75 billion, introducing a three-year averaging mechanism for calculations, effective 1 January 2026. This adjustment reflects nominal UK GDP growth since 2016 to maintain the Financial Policy Committee's original risk appetite while smoothing cliff-edge effects for firms like building societies. It matters for major UK banks and similar firms as it alters capital planning and leverage ratio applicability, potentially reducing immediate compliance burdens for those nearing the old threshold.

What Changed

Retail deposits threshold raised from £50 billion to £75 billion, adjusted upward from the CP2/25 proposal of £70 billion to account for further GDP growth to Q2 2025 (rounded to nearest £5 billion). Introduction of a three-year moving average for calculating retail deposits metric, replacing point-in-time values to mitigate volatility and aid capital planning, particularly for building societies. Non-UK assets threshold remains unchanged at £10 billion. Modifications by consent disapplying leverage ratio rules during review will cease on 30 June 2026. These changes are implemented via...

What You Need To Do

Review and update internal retail deposits calculations to incorporate three-year moving average methodology starting 1 January 2026
Assess current and projected retail deposits against £75 billion threshold (and £10 billion non-UK assets) to determine leverage ratio applicability and adjust capital planning accordingly
Prepare to meet 3
For firms with modifications by consent
Update governance, risk models, and board reporting to reflect changes; conduct gap analysis against PRA Rulebook appendices in PS22/25

Key Dates

5 March 2025 - PRA publishes Consultation Paper CP2/25 proposing £70 billion threshold.

5 June 2025 - Consultation response deadline. DEADLINE

12 November 2025 - PRA issues PS22/25 with final policy.

1 January 2026 - Final policy takes effect, applying new £75 billion threshold and three-year averaging.

30 June 2026 - Cessation of modifications by consent disapplying leverage ratio rules.

Compliance Impact

Urgency: High – With effectiveness just after today (1 January 2026), firms near £50-75 billion in retail deposits face immediate recalibration of leverage exposures and capital buffers to avoid breaches, amplified by the shift to averaging which requires historical data reconstruction. Non-compliance risks PRA enforcement, heightened scrutiny, or capital inadequacy findings, but the higher threshold and averaging provide planning relief versus the status quo.

Policy statement 19/25

AI Analysis

**PS19/25** is the PRA's near-final policy statement finalizing how remaining Capital Requirements Regulation (CRR) provisions will be restated into the PRA Rulebook, effective January 1, 2027. This represents a critical step in the UK's transition away from assimilated EU law, giving the PRA expanded rule-making authority over UK banks, building societies, and investment firms while introducing targeted policy changes to securitisation, credit risk treatment, and ECAI mapping.

Sectors:

Prudential / Capital Requirements Reporting & Disclosure

Topics:

BankBroker Dealer

🇬🇧 PRA Enforcement high

October 28th 2025

PS18/25 – Retiring the refined methodology to Pillar 2A – near–final

Policy statement 18/25

AI Analysis

PS18/25, published by the PRA on 28 October 2025, retires the "refined methodology" for Pillar 2A capital calculations, replacing it with reliance on the Basel 3.1 Credit Risk Standardised Approach (CR SA) for greater risk sensitivity, transparency, and proportionality. This near-final policy simplifies the Pillar 2A framework, reduces administrative burdens, and aligns with broader Basel 3.1 implementation and the Strong and Simple regime for Small Domestic Deposit Takers (SDDTs), promoting safety, soundness, and competition. It matters because it directly impacts credit risk capital add-ons for affected firms, requiring updates to ICAAP/SREP processes ahead of Basel 3.1 timelines.

What Changed

Retirement of Refined Methodology: Eliminates supervisory adjustments to Pillar 2A credit risk add-ons based on IRB benchmarking, as Basel 3.1 CR SA better captures risks and reduces gaps between standardised and IRB approaches. Policy Material Updates: - Near-final amendments to Statement of Policy (SoP) 5/15 – The PRA’s methodologies for setting Pillar 2 capital. - Final amendments to Supervisory Statement (SS) 31/15 – The Internal Capital Adequacy Assessment Process (ICAAP) and Supervisory Review and Evaluation Process (SREP). - Descope of SDDTs from SoP5/15 and SS31/15, with new...

What You Need To Do

Review and update internal Pillar 2A methodologies, ICAAP/SREP documentation to remove refined methodology reliance and align with Basel 3
Model/calculate potential capital impacts from CR SA changes vs
Prepare for IRRBB/pension risk clarifications in SS31/15 submissions from 1 July 2026; monitor CP12/25 review
Engage PRA supervisors on firm-specific transitions; update reporting (e
Firms may apply changes early in ICAAP from relevant dates (e

Key Dates

28 October 2025 - PS18/25 publication with near-final policy and PRA feedback to CP9/24/CP7/24 consultations.

1 July 2026 - Effective date for pension obligation risk amendments in SoP5/15 and SS31/15 clarifications (IRRBB changes partially deferred).

Q2 2026 - Expected finalisation of CP12/25 Phase 1 proposals (Pillar 2A review, including IRB benchmarking removal).

Basel 3.1 Implementation Date (TBD, aligned with CR SA go-live) - Retirement of refined methodology and related credit/operational risk changes.

January 2026 - PS2/26 published as final policy, minor adjustment to SS31/15 para 5.12A.

Compliance Impact

Urgency: High – Firms must act now to recalibrate Pillar 2A capital ahead of Basel 3.1 and 1 July 2026 effective dates, as retirement eliminates adjustments that reduced add-ons for low-risk CR SA firms, potentially increasing capital requirements despite Basel 3.1 offsets. Non-compliance risks supervisory scrutiny in SREP/ICAAP, higher Pillar 2A requirements, and misalignment with simplified regimes; benefits include reduced complexity/burden long-term.

References

Sectors:

Topics:

Bank

Banking & Credit Investment Management Wealth & Private Banking

🇬🇧 PRA News medium

October 28th 2025

SoP5/15 – The PRA's methodologies for setting Pillar 2 capital

Statement of Policy 5/15

Sectors:

Topics:

Prudential / Capital Requirements Reporting & Disclosure

BankAsset ManagerWealth Manager

🇬🇧 PRA Guidance high

October 28th 2025

SS31/15 - The Internal Capital Adequacy Assessment Process (ICAAP) and the Supervisory Review and Evaluation Process (SREP)

Supervisory statement 31/15

AI Analysis

SS31/15 is the PRA's foundational supervisory statement establishing expectations for how UK-regulated banks and large investment firms must conduct their Internal Capital Adequacy Assessment Process (ICAAP) and how the PRA will evaluate these assessments through its Supervisory Review and Evaluation Process (SREP). This guidance is critical because it directly determines the capital requirements firms must maintain and establishes the supervisory framework through which the PRA assesses whether firms hold sufficient capital to cover material risks.

Sectors:

Prudential / Capital Requirements Senior Managers / Governance Reporting & Disclosure

Topics:

BankBroker Dealer

Insurance & Pensions Capital Markets & Trading

🇬🇧 PRA Policy high

October 28th 2025

PS20/25 – The Strong and Simple Framework: The simplified capital regime for Small Domestic Deposit Takers (SDDTs) – near-final

Policy Statement 20/25

AI Analysis

**PS20/25** represents the second and final phase of the PRA's "Strong and Simple Framework," establishing a significantly simplified capital regime for Small Domestic Deposit Takers (SDDTs) while maintaining their resilience. This near-final policy statement, published on 28 October 2025, fundamentally restructures capital requirements, liquidity rules, and operational frameworks for SDDTs—a critical development for smaller deposit-taking institutions seeking regulatory relief from disproportionate compliance burdens.

What Changed

The simplified capital regime introduces structural changes across all three pillars of capital requirements: *Pillar 1 (Risk-Weighted Assets) SDDTs must apply Basel 3.1 standardised approaches for credit risk and operational risk, with specific simplifications. Due diligence requirements in the standardised approach to credit risk are disapplied for SDDTs. Counterparty credit risk (CCR) for derivatives and credit valuation adjustment (CVA) risk are disapplied (with minor exceptions). Market risk framework is simplified, with SDDTs applying the credit risk approach to trading book positions...

What You Need To Do

*For SDDTs Currently Operating or Considering Entry:
*Notification Decision – Determine whether to enter the SDDT regime and submit notification to the PRA by 31 March 2026 if seeking to benefit from simplified rules
*Policy Review – Conduct comprehensive review of PS20/25, related policy statements (PS18/25, PS19/25, PS8/25, PS14/25), and supporting methodologies (SoP5/25, SS4/25, amendments to SoP2/23)
*Capital Calculation Transition – Prepare systems and processes to transition from current capital calculation methodologies to Basel 3
Removal of CCR and CVA calculations for derivatives

Key Dates

31 March 2026 – Deadline for firms wishing to enter the SDDT regime to notify the PRA and benefit from the simplified framework at implementation. DEADLINE

1 January 2027 – Implementation date for the simplified capital regime for SDDTs; the Interim Capital Regime will no longer apply.

2026 (specific date TBD) – PRA to make final rules and policy covering the entire Basel 3.1 package once HM Treasury makes commencement regulations to revoke relevant CRR provisions.

2027 (specific date TBD) – PRA to implement restatement of CRR requirements (PS19/25).

Compliance Impact

Urgency Rating: HIGH

Policy statement 17/25

AI Analysis

PS17/25 establishes the **Matching Adjustment Investment Accelerator (MAIA) framework**, enabling PRA-regulated insurers to regularize and expand their use of matching adjustment (MA) in calculating capital requirements for certain long-duration insurance liabilities. This framework is significant because it provides a structured pathway for firms to optimize capital efficiency while maintaining prudential safeguards through exposure limits, eligibility assessments, and breach remediation mechanisms.

Sectors:

Topics:

Prudential / Capital Requirements Reporting & Disclosure Operational Resilience / Outsourcing

Insurance

Banking & Credit Payments & E-Money

🇬🇧 PRA News high

October 20th 2025

Effective practices: Cyber response and recovery capabilities

Publication from the Bank, PRA and FCA to firms and financial market infrastructures highlighting observed effective practices of cyber response and recovery capabilities.

Sectors:

Topics:

Operational Resilience / Outsourcing Technology & Cyber

BankFintechPayment Provider

Insurance & Pensions Banking & Credit

🇬🇧 PRA Consultation low

October 16th 2025

LIAC02/25 – Low Impact Amendments Consultation October 2025

The PRA has published LIAC02/25, a consultation on proposed low impact amendments to rules and policy.

AI Analysis

The PRA's LIAC02/25 consultation, published on 16 October 2025, proposes low-impact amendments to its Rulebook and policy materials, including technical fixes, conditional disapplications, and miscellaneous corrections to enhance accuracy and align with prior policies. These changes matter for PRA-regulated firms as they ensure regulatory consistency with minimal operational burden, with most taking effect in late 2025 or early 2026 following the consultation period.

What Changed

The main proposals include: Conditional disapplication of PRA General Provisions to implement deference arrangements under the UK-Swiss Berne Financial Services Agreement. Amendment to Transitional Measure on Technical Provisions (TMTP) Part, Rule 5.2, introducing a new formula for 'Wr' effective 31 December 2025, using existing 'Wq' values without retrospective recalculation. Amendment to Insurance Special Purpose Vehicle (ISPV) Part, Solvency Requirements Rule 2.2A(3), clarifying the 'no co-mingling' requirement, effective 23 December 2025, alongside updates to SS2/25. Miscellaneous...

What You Need To Do

Submit consultation responses by 13 November 2025 via the PRA's Low Impact Amendments Process page, focusing on proposed disapplications, TMTP formula, ISPV rules, and miscellaneous changes
Review and update internal policies for TMTP calculations to adopt the new 'Wr' formula from 31 December 2025 year-end, without restating priors
Confirm compliance with ISPV 'no co-mingling' clarifications and SS2/25 updates by 23 December 2025
Verify Rulebook references (e
For friendly societies/credit unions

Key Dates

13 November 2025 Consultation closes for LIAC02/25 responses.

21 October 2025 Effectiveness of Solvency II restatement amendments (from prior consultations).

23 December 2025 Effectiveness of ISPV Rule 2.2A(3), TMTP Rule 5.2A(3), minimum fees reduction, and related SS2/25 updates; also LIAF03/25 amendments per industry reports.

19 January 2026 Effectiveness of Securitisation Part Rule 2, Article 7 amendment aligning with FSMA revocations.

24 July 2025 Effectiveness of certain non-substantive Solvency II fixes (already passed).

Compliance Impact

Urgency: Low – These are explicitly "low impact" technical, typographical, and alignment amendments with no material capital, reporting, or operational shifts expected; many stem from prior consultations (e.g., CP8/25, CP12/23, PS10/25) and avoid retrospective changes. Firms should act promptly on response deadlines and upcoming effectives (e.g., December 2025) to prevent minor non-compliance, but resource allocation can be minimal given the non-substantive nature.

References

Sectors:

Topics:

Prudential / Capital Requirements Reporting & Disclosure

InsuranceBankAll Firms

Banking & Credit Investment Management Wealth & Private Banking

🇬🇧 PRA News low

October 16th 2025

LIAF02/25 – Low Impact Amendments Finalisation October 2025

The PRA has published LIAF02/25, a collection of final low impact rule amendments.

Sectors:

Topics:

Prudential / Capital Requirements Operational Resilience / Outsourcing Reporting & Disclosure

BankAsset ManagerWealth Manager

Banking & Credit Capital Markets & Trading Investment Management

🇬🇧 PRA Policy high

October 15th 2025

PS21/25 – Remuneration Reform

Policy statement 21/25

AI Analysis

PS21/25 implements reforms to PRA remuneration rules for banks, building societies, and PRA-designated investment firms, simplifying Material Risk Taker (MRT) identification, aligning deferral periods with international standards (4 years for non-SMF MRTs and 5 years for SMFs), and enhancing links to individual accountability under the Senior Managers Regime (SMR). These changes matter as they reduce regulatory burden, increase flexibility in bonus structures (e.g., marginal deferral rates and cash payments), and promote competitiveness while maintaining risk alignment, potentially reversing trends toward higher fixed pay.

What Changed

MRT Identification: Simplified quantitative threshold to the top 0.3% of earners (assessed against risk impact); qualitative criteria unchanged; raised proportionality threshold for disapplying rules from £44,000 variable pay to £660,000 total pay (with variable pay ≤33% of total); reintroduced exemption for MRTs serving <3 months. Deferral Periods: 4-year minimum for non-SMF MRTs (previously varied); reduced to 5 years for SMFs (from 7 years); aligns with FCA and international practice. Deferral Rates: Marginal system—40% deferral on first £660,000 of variable remuneration, 60% above;...

What You Need To Do

Review and update MRT identification processes, applying simplified top 0
Revise remuneration policies for deferral (4/5 years, marginal rates), upfront cash flexibility, and instrument expectations; update bonus award calculations
Embed SMR-linked adjustments
For dual-regulated firms
Optional early adoption for specified changes on 2025/unvested awards; document governance for RemCo approvals and board policies

Key Dates

15 October 2025 Publication date; some changes (e.g., deferral periods, pro-rata vesting) may apply to ongoing 2025 performance year and unvested prior awards at firm discretion.

16 October 2025 Final rules and updated SS2/17 take effect; apply to performance years starting after this date (e.g., mandatory from 1 January 2026 for calendar-year firms).

November 2024 Preceding joint consultation (CP16/24/PRA, CP24/23/FCA) closed prior to PS.

Compliance Impact

Urgency: High – Mandatory from performance years post-16 October 2025 (e.g., 2026 for most), with immediate opt-in possible; impacts 2026 bonus cycles, requiring swift policy rewrites amid year-end planning. Matters due to simplified but ownership-heavy MRT processes, SMR-pay linkages raising accountability risks, and flexibility needing robust justification to avoid supervisory challenge; non-compliance risks enforcement under PRA accountability regimes.

References

Sectors:

Topics:

Senior Managers / Governance Prudential / Capital Requirements Reporting & Disclosure

BankAsset ManagerAll Firms

Banking & Credit Capital Markets & Trading Investment Management

🇬🇧 PRA Policy high

October 9th 2025

PS16/25 – Markets in Financial Instruments Directive Organisational Regulation (MiFID Org Reg)

Policy statement 16/25

AI Analysis

PS16/25 is the PRA's policy statement restating firm-facing organisational requirements from the MiFID Org Reg (e.g., outsourcing, record-keeping, risk management, compliance, internal audit, and governance) into the PRA Rulebook, with no material changes, to align with HMT's revocation of the EU regulation under FSMA 2023. This matters because it ensures continuity of prudential oversight for PRA-authorised firms post-revocation, preventing enforcement gaps in systems and controls while adapting provisions (e.g., supervisory function) to UK governance structures.

What Changed

Restatement of requirements: Provisions from MiFID Org Reg Articles on outsourcing, record-keeping, control procedures, risk management, compliance, internal audit, and governance are transferred verbatim or with minor clarifications into PRA Rulebook parts (e.g., Risk Control). Supervisory function adjustment: Following consultation feedback, PRA retained Article 25 provisions but substituted "governing body" for "supervisory function" to fit UK firm structures, preserving board-level oversight without substantive change. Technical standards update: Minor amendment to algorithmic trading...

What You Need To Do

Review and map existing MiFID Org Reg compliance processes against restated PRA Rulebook provisions (e
Confirm governing body oversight aligns with adapted Article 25 requirements; document any adjustments for UK structures
Update internal references in algorithmic trading governance documents to new rule 2
Conduct gap analysis and training on minor clarifications; prepare for dual FCA/PRA alignment if applicable
Monitor HMT commencement order; if delayed, reassess implementation plans

Key Dates

9 October 2025 - PRA publishes PS16/25 with final rules and feedback to CP9/25 consultation.

23 October 2025 - New PRA rules and technical standards come into force, coinciding with HMT's anticipated revocation of MiFID Org Reg via commencement order (FCA rules align on same date).

Prior to 23 October 2025 - HMT expected to lay second Statutory Instrument revoking remaining MiFID Org Reg provisions; PRA may delay/revoke rules if not made.

Compliance Impact

Urgency: High – Firms must act promptly as rules take effect on 23 October 2025 (past deadline as of current date), with no transition period; non-compliance risks enforcement gaps in core systems/controls post-revocation. Impact is low for substance (restatement only) but requires documentation updates to avoid supervisory scrutiny, especially for governance and outsourcing.

References

Sectors:

Topics:

Operational Resilience / Outsourcing Senior Managers / Governance Reporting & Disclosure

BankBroker DealerAll Firms

🇬🇧 PRA News low

Letter to chief financial officers of selected PRA-regulated deposit-takers which provides thematic feedback from the PRA’s review of written auditor reports received in 2025 covering IFRS 9 expected credit loss accounting (ECL) and accounting for climate risk.

AI Analysis

The PRA's Dear CFO Letter, issued on 30 September 2025 by David Bailey, provides thematic feedback to selected PRA-regulated deposit-takers based on its 2025 review of auditor reports on IFRS 9 expected credit loss (ECL) accounting and climate risk integration. It matters because it highlights persistent supervisory concerns around timely credit risk recognition, model limitations, recovery assumptions, and climate impacts amid economic uncertainty, urging firms to strengthen ECL processes to ensure safety and soundness.

What Changed

This is not a formal rule change or new regulation but thematic feedback building on prior years, with "areas of focus" for improvement: Model risk: Elevated due to macroeconomic/geopolitical uncertainty; firms must enhance post-model adjustments (PMAs) for completeness (e.g., affordability risks, sector vulnerabilities), granular monitoring of borrower cohorts/ECL components, and model redevelopment governance. Recovery strategies: Ongoing risk of historical bias in Loss Given Default (LGD) estimates; challenge realism of recovery assumptions for vulnerable sectors/borrowers. Climate risks:...

What You Need To Do

Conduct self-assessments against annex "areas of focus" (model risk, recovery, climate) and share with auditors ahead of 2026 reporting
Enhance PMAs
Model improvements
Recovery processes
Climate integration

Key Dates

30 September 2025 - PRA issues Dear CFO Letter with thematic feedback.

2025 - Auditor reports reviewed by PRA (basis for this feedback).

2026 - Next round of written auditor reporting on firms' progress against areas of focus, including data aggregation and securitisation impacts; firms encouraged to self-assess now.

Compliance Impact

Urgency: High – Persistent issues from prior years (e.g., 2024 feedback) indicate elevated model risk in uncertain conditions could lead to PRA scrutiny, auditor findings, or enforcement if unaddressed; 2026 auditor reports will benchmark progress, risking heightened supervision. Matters for prudential stability as ECL underpins capital requirements.

References

Sectors:

Prudential / Capital Requirements ESG Reporting & Disclosure

Topics:

Bank

🇬🇧 PRA Consultation high

September 22nd 2025

CP21/25 – Future banking data review: Deletion of banking reporting templates

Consultation paper 21/25

AI Analysis

The PRA's CP21/25 proposes deletion of 37 banking regulatory reporting templates—primarily 34 FINREP templates representing approximately one-third of all FINREP collections—as the first phase of its Future Banking Data (FBD) programme. This initiative aims to reduce annual reporting burden by approximately £26 million while maintaining supervisory effectiveness by eliminating duplicative, outdated, or low-value data collections.

What Changed

The PRA proposes the following regulatory deletions: *FINREP Template Deletions:** Permanent deletion of 34 whole FINREP reporting templates (approximately one-third of all FINREP collections) Consolidation of remaining FINREP requirements within a single section of the PRA Rulebook Clarification of scoping conditions where current provisions are unclear, duplicative, or inconsistently applied Alignment of reporting remittance dates for FINREP reporting *Other Template Deletions:** Two COREP templates: C05.01 (Transitional Provisions) and C05.02 (Grandfathered Instruments) PRA109...

What You Need To Do

*Cease reporting on the 37 deleted templates effective 31 December 2025
*Update internal systems and processes to remove validation rules and submission workflows for deleted templates
*Revise compliance calendars to reflect aligned FINREP reporting remittance dates
*Review Pillar 3 disclosure obligations to identify any continued requirements based on deleted FINREP templates and assess whether disclosure obligations remain despite template deletion
*Implement rulebook changes reflecting consolidation of FINREP scoping provisions into the PRA Rulebook

Key Dates

September 2025 - CP21/25 consultation paper published

31 December 2025 - Proposed implementation date to avoid firms submitting 2025 Q4 data for deleted templates

8 December 2025 - PS27/25 (Policy Statement) published, confirming final policy

Compliance Impact

Urgency: HIGH

References

Sectors:

Reporting & Disclosure Prudential / Capital Requirements

Topics:

Bank

🇬🇧 PRA Consultation high

September 16th 2025

CP20/25 – Insurance third-country branches: policy implementation and other updates

Consultation paper 20/25

AI Analysis

CP20/25 is a PRA consultation paper published on 16 September 2025 that proposes targeted updates to the regulatory framework governing third-country insurance branches operating in the UK. The consultation addresses inconsistencies introduced during the Solvency II review, clarifies supervisory expectations, and increases the subsidiarisation threshold—matters that directly affect the operational and compliance costs of non-UK insurers seeking to maintain branch operations rather than establish subsidiaries in the UK market.

Sectors:

Prudential / Capital Requirements Authorisation & Licensing Reporting & Disclosure

Topics:

Insurance

Banking & Credit Wealth & Private Banking Mortgage & Lending

🇬🇧 PRA News low

September 11th 2025

Future Banking Data roundtable with members of UK Finance and the Building Societies Association

On 1 July, the PRA and the Bank of England held a roundtable meeting with representatives of non-systemic UK banks and building societies.

Sectors:

Topics:

Prudential / Capital Requirements Operational Resilience / Outsourcing Authorisation & Licensing

Bank