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.
PRA Policy Statement PS18/26 finalises a package of **post‑implementation amendments to Solvency UK reporting and disclosure** and **targeted fixes to the Own Funds framework**, aligned to apply via a single taxonomy update for year‑end 2026 reporting. This matters because insurance compliance teams must adjust regulatory reporting, disclosure processes, and Own Funds permission practices to the updated PRA Rulebook, templates and expectations, including new data requirements for third‑country branches and removal of certain permission requirements.
What Changed
- The PRA finalises amendments to the Reporting Part of the PRA Rulebook to implement post‑implementation clarifications, consistency improvements and data quality enhancements to Solvency UK...
Reporting and disclosure templates and instructions are amended (including XBRL taxonomy changes) to reflect the refined Solvency UK reporting framework and consequential changes from the Own Funds...
The PRA confirms transfer of the Matching Adjustment Asset and Liability Information Return (MALIR) templates from Excel to XBRL submission format, to be incorporated into the single insurance...
The PRA updates Supervisory Statement 7/18 – Solvency II: Matching adjustment, including changes to the Matching Adjustment supplementary information form under Insurance rule permissions and...
The PRA introduces a new collection of projected Financial Services Compensation Scheme (FSCS) liabilities data from third‑country branch undertakings to support enhanced branch supervision.
Suggested Considerations
Review and map existing Solvency UK reporting processes, systems and controls against the amended Reporting Part of the PRA Rulebook and updated templates and instructions to identify required changes for year‑end 2026.
Engage with finance, risk and actuarial functions to implement the new XBRL‑based MALIR submission process, including testing data extraction, validation and filing workflows aligned to the updated insurance taxonomy.
Update internal Own Funds policies, classification procedures and governance documentation to reflect removal of specified permission requirements and the amended Own Funds Part and Group Supervision Part of the PRA Rulebook.
Reconfigure regulatory reporting infrastructure and vendor solutions to adopt the single updated PRA insurance XBRL taxonomy, ensuring all Solvency UK quantitative reporting templates and narrative disclosures are correctly mapped and validated.
For third‑country branch undertakings, design and implement processes to calculate and report projected FSCS liabilities data in line with PRA expectations, including data sourcing, modelling assumptions and internal review controls.
Key Dates
31 December 2024
– Solvency UK reporting and disclosure reforms (phase 2) come into effect for reporting and disclosure reference dates on or after 31 December 2024, including the new Bank of England insurance XBRL taxonomy and removal of the Regular Supervisory Report requirement
Year‑end 2026 reporting (reference date 31 December 2026)
– Implementation of PS18/26 reporting and disclosure changes and Own Funds consequential reporting via a **single updated insurance taxonomy**, covering all amended templates, instructions, MALIR XBRL submissions and new FSCS projected liabilities data for third‑country branches
30 September 2026
– Liquidity reporting requirements for UK Solvency UK insurers with large derivatives and securities financing transaction exposures come into force, requiring firms above specified thresholds to commence new liquidity reporting
31 December 2026DEADLINE
– Revocation of certain Solvency UK Modifications by Consent (including the Reporting MbC) becomes effective; affected third‑country branches meeting premium or provisions thresholds must submit the full branch reporting suite
Compliance Impact
Non‑compliance with the updated reporting, disclosure and Own Funds requirements may result in supervisory findings, requests for remediation, potential use of PRA powers, and could affect the reliability of Solvency Capital Requirement, Own Funds and liquidity assessments. Given the alignment of multiple reforms into a single year‑end 2026 taxonomy update, control failures could have multi‑template, group‑wide impact on regulatory submissions.
The PRA’s LIAC02/26 consultation proposes targeted “low impact” changes to Solvency UK reporting for Lloyd’s syndicates and to PRA liquidity rules linked to Basel 3.1 and the forthcoming Overseas Prudential Requirements Regime. These changes will reduce reporting burdens for Lloyd’s syndicates and refine LCR eligibility/treatment of non‑UK covered bonds and related liquidity provisions, but they require systems, policy and reporting updates ahead of the 2026 year‑end and 2027 implementation.
What Changed
- Lloyd’s syndicates would be removed from the scope of Internal Model Output (IMO) reporting to the PRA via amendments to SS25/15 (Solvency II: Regulatory reporting, internal model outputs),...
SS26/15 (Solvency II: ORSA and the ultimate time horizon – non‑life firms) would be amended to clarify that the option to use IMO outputs in ORSA reporting applies only to firms still required to...
The IM.03 reporting instructions (section “General Comment”) would be amended to align the reporting template guidance with the removal of Lloyd’s syndicates from IMO reporting, avoiding inconsistent...
SS25/15 and SS26/15 would receive non‑substantive drafting updates to improve clarity and consistency, remove outdated EU references, and align terminology and framing with the PRA’s current Solvency...
For 2026 year‑end, Lloyd’s syndicates would no longer be required to submit IMOs to the PRA, with supervisory reliance instead on other Solvency UK reporting streams and data provided through the...
Suggested Considerations
Review existing IMO reporting processes and systems for Lloyd’s syndicates and prepare to decommission IMO submissions to the PRA for 2026 year‑end, ensuring all dependent internal reports and controls are updated.
Map all uses of IMOs in ORSA processes and supervisory reporting for non‑life firms, and update ORSA documentation and methodologies to reflect that the IMO‑based option applies only to firms that remain in scope of IMO reporting.
Update internal reporting manuals and instructions for IM.03 and related Solvency UK templates to reflect the revised PRA wording, removal of outdated EU references, and alignment with the PRA’s Solvency UK framework.
For Lloyd’s managing agents and syndicates, confirm alternative data channels and reporting obligations to the PRA (via Lloyd’s or Solvency UK templates) that will replace the supervisory reliance previously placed on IMO reporting.
Conduct an inventory of non‑UK covered bonds currently recognised as Level 2A HQLA in LCR calculations and assess how the proposed amendments to Article 11(1)(d)(ii) would change eligibility, haircuts, or caps from 1 January 2027.
Key Dates
11 September 2026
- Consultation end date for proposals to amend SS25/15, SS26/15, IM.03 instructions, and the PRA liquidity rules (Liquidity (CRR) Part and LCR (CRR) Part)
31 December 2026DEADLINE
- Proposed implementation date for the SS25/15 and SS26/15 changes and removal of Lloyd’s syndicates from IMO reporting, so syndicates are not required to report IMOs as part of their 2026 year‑end results
01 January 2027
- Proposed implementation date for amendments to the Liquidity (CRR) Part and Liquidity Coverage Ratio (CRR) Part, aligned with Basel 3.1 implementation, CRR restatement in the PRA Rulebook, and the expected entry into force of the Overseas Prudential Requirements Regime (Credit Institutions and Investment Firms) Regulations 2026
Compliance Impact
Non‑compliance would primarily manifest as defective regulatory reporting and mis‑stated LCR calculations, exposing firms to PRA supervisory challenge, potential remedial actions, and in serious cases liquidity add‑ons or restrictions on business activities. For Lloyd’s syndicates, failure to align with the new reporting model could also create data gaps in supervisory engagement and increase scrutiny under the PRA–Lloyd’s Cooperation Agreement.
The PRA’s CP12/26 proposes to codify and expand guidance on amalgamations and transfers of insurance friendly societies under Part VIII of the Friendly Societies Act 1992, aligning it more closely with its established approach to insurance business transfers. The consultation matters for compliance teams because it clarifies the PRA’s expectations, evidential standards, and discretionary powers (including member vote dispensations and independent actuarial reports), which will shape how friendly society restructurings must be planned, documented, and executed.
What Changed
- The PRA proposes a more detailed, codified description of the end‑to‑end Part VIII process for friendly society amalgamations and transfers, organised into stages such as planning and preparation,...
The PRA intends to update and integrate its Statement of Policy on insurance business transfers to explicitly cover friendly society amalgamations and transfers under the Friendly Societies Act 1992,...
For transfers, the PRA sets out circumstances in which it may exercise its statutory discretion to dispense with the requirement for the transferee friendly society to hold a member vote, subject to...
The PRA proposes to clarify when it may direct the transferor and/or transferee to appoint an independent actuary to report on the proposed transfer’s effects on members and policyholders, including...
Firms undertaking a Part VIII transfer will be expected to provide robust actuarial analysis and supporting evidence demonstrating that statutory preclusion grounds are not met and that the transfer...
Suggested Considerations
Map all current and planned amalgamations or transfers involving friendly societies against the proposed five‑part process (planning, analysis, member engagement and votes, application/notifications/representations, confirmation meetings) and identify procedural and evidential gaps.
Review internal policies, governance frameworks, and transaction playbooks for friendly society restructurings to ensure they reflect the PRA’s codified expectations under Part VIII of the Friendly Societies Act 1992, including early regulatory engagement and documentation standards.
Develop or enhance internal guidance for actuaries and finance teams on the required actuarial analysis for Part VIII transfers, ensuring the ability to evidence that preclusion grounds are not met and that the transaction is in the interests of members and policyholders.
Implement procedures to identify all classes of members and policyholders affected by proposed amalgamations or transfers, assess whether their existing terms and conditions are preserved or materially changed, and document the implications for benefit levels and distribution.
For partial transfers, establish a formal framework to assess and document how the interests of members remaining with the transferor society are considered, including any continuing obligations, capital support, and benefit expectations.
Key Dates
TBD (est. late 2026 / early 2027)
– Expected PRA policy statement and finalised amendments to the Statement of Policy on insurance business transfers, following consultation feedback (exact date not specified in the CP)
Early July 2026
– PRA publishes CP12/26 “Insurance friendly societies, amalgamations and transfers”, launching the consultation on proposed codified guidance and Statement of Policy amendments
Compliance Impact
Non‑compliance with the clarified PRA expectations and statutory requirements under Part VIII of the Friendly Societies Act 1992 can result in refusal or delay of transaction confirmation, increased supervisory scrutiny, and potential member or policyholder detriment, reputational damage, and enforcement risk. Given the PRA’s focus on safety, soundness, and policyholder protection, poorly evidenced or poorly governed transactions will face a materially higher risk of challenge and failure.
The PRA’s CP10/26 proposes to delete the Continuity of Provision of Services Chapter in the Ring‑fenced Bodies Part of the PRA Rulebook and make consequential amendments, effectively shifting continuity‑of‑services expectations for ring‑fenced bodies onto the broader operational continuity / resolution framework. For compliance teams, this is a material rationalisation of overlapping rule sets that will require careful mapping of existing ring‑fencing service‑continuity controls into the PRA’s operational continuity and resilience expectations, and engagement with the consultation by the response deadline.
What Changed
- The PRA proposes to delete in full the Continuity of Provision of Services Chapter in the Ring‑fenced Bodies Part of the PRA Rulebook, removing the specific ring‑fencing continuity‑of‑services...
The PRA will make consequential amendments to the Ring‑fenced Bodies Part to remove or adjust cross‑references, defined terms and obligations that are linked to the deleted Continuity of Provision of...
The proposal effectively retires the bespoke continuity‑of‑services construct that was introduced when ring‑fencing was implemented (including detailed constraints on termination, suspension or...
The consultation paper explains how the PRA intends to align ring‑fenced bodies’ continuity‑of‑services expectations with existing supervisory statements on operational continuity in resolution (for...
The PRA invites stakeholders to comment on whether deleting the Continuity of Provision of Services Chapter, and relying on the broader operational continuity regime, still adequately protects the...
Suggested Considerations
Assess the current use of the Continuity of Provision of Services Chapter in the Ring‑fenced Bodies Part within your firm’s ring‑fencing policies, procedures, contracts and governance, and identify all controls that explicitly rely on those rules.
Prepare and submit a considered response to CP10/26 by 14 October 2026, addressing the practical impact of deleting the Continuity of Provision of Services Chapter, any residual areas of concern, and suggestions for guidance or transitional arrangements.
Coordinate with group entities acting as permitted suppliers or critical service providers to ensure their OCIR documentation, service catalogues, TSAs and liquidity arrangements remain aligned with the ring‑fenced body’s continuity requirements in the absence of the deleted chapter.
Monitor for the subsequent PRA policy statement that will follow CP10/26, and be prepared to implement any final rule changes, transitional provisions or clarifications on how ring‑fencing continuity expectations intersect with OCIR and operational resilience regimes.
Key Dates
14 October 2026DEADLINE
- Deadline for submitting responses to PRA Consultation Paper CP10/26 on the deletion of the Continuity of Provision of Services Chapter and related changes to the Ring‑fenced Bodies Part
Compliance Impact
Non‑compliance would primarily manifest as weaknesses in the continuity of core services and intra‑group service arrangements rather than direct breaches of the deleted rules, potentially leading to PRA supervisory findings, remediation requirements and heightened capital or resolvability expectations. Failure to realign ring‑fencing continuity controls with the PRA’s operational continuity and resilience framework could also impact resolvability assessments and increase the risk of adverse supervisory interventions in stress or resolution.
The PRA has issued Consultation Paper CP11/26 proposing a **tailored prudential regime for UK captive insurance undertakings**, with responses due by 14 October 2026. This matters for compliance teams in insurance groups and large corporates because it will create a distinct authorisation and supervisory framework for captives under Solvency UK, potentially changing capital, governance, and reporting expectations and opening a new strategic option to domicile captives in the UK.
What Changed
- The PRA proposes to establish a dedicated UK regulatory regime for captive insurers, separate from the standard Solvency UK treatment for commercial (non‑captive) insurers.
Captive insurers would benefit from proportionate prudential requirements (for example simplified capital, reporting, and risk management expectations) reflecting their limited and group-focused risk...
The consultation seeks views on eligibility criteria for captives, likely including ownership (group‑owned), purpose (insuring or reinsuring parent/group risks), and restrictions on third‑party...
PRA proposes a UK authorisation and licensing pathway specifically tailored to captives, with adjusted expectations for business plans, risk appetites, and use of reinsurance and fronting structures.
The regime is intended to sit within Solvency UK rather than as a completely separate legislative framework, implying changes to the PRA Rulebook and supervisory statements rather than primary...
Suggested Considerations
Review CP11/26 in detail and perform an internal impact assessment on how the proposed captive regime would affect your group’s current or planned captive insurance structures, including domicile and regulatory capital profile.
Identify whether any existing insurance entities within the group may fall within the PRA’s proposed definition of a captive and assess whether reclassification would be beneficial or would trigger additional compliance work.
Prepare and submit a coordinated consultation response by 14 October 2026, addressing eligibility criteria, proportionality of capital and reporting requirements, and any operational or tax implications for your captive strategy.
Map existing governance, risk management, and internal control frameworks for captives against PRA’s proposed expectations and identify gaps that would need remediation ahead of the regime’s expected go‑live in mid‑2027.
Engage with group legal, tax, and treasury teams to evaluate whether onshoring an offshore captive to the UK, or establishing a new UK captive, becomes strategically attractive under the tailored regime, and model scenarios accordingly.
Key Dates
Summer 2026
– PRA (and FCA) indicated they would consult on a new UK captive insurance regime as part of their 2026 supervisory priorities and joint statements
14 October 2026DEADLINE
– Deadline for responses to CP11/26 “A tailored regime for captive insurance”
Mid 2027
– Target implementation date for the new UK captive insurance regime, as indicated in prior PRA policy communications and government consultation responses
Compliance Impact
Non‑compliance with the eventual captive regime (for example mis‑classification of entities, inadequate capital or governance relative to PRA expectations) could lead to authorisation issues, supervisory interventions, restrictions on business, or requirements to restructure existing captive arrangements. Given the regime will sit within Solvency UK, failures may also affect group capital positions and broader regulatory assessments of risk management adequacy.
PRA Policy Statement PS16/26 finalises rule changes across multiple CRR-related parts of the PRA Rulebook and Pillar 2 materials to align UK prudential rules with HM Treasury’s new Overseas Prudential Requirements Regime (OPRR), effective 1 January 2027. The changes are primarily technical and clarificatory but have direct implications for how UK banks and PRA-designated investment firms treat and report overseas exposures, including institutions, public sector entities, covered bonds, and large exposures, once CRR equivalence provisions are replaced by the OPRR.
What Changed
- The PRA Rulebook is amended across core CRR Parts (including Glossary, Credit Risk – General Provisions, Standardised Approach, IRB, Credit Risk Mitigation, Securitisation, Counterparty Credit...
Under the Standardised Approach to credit risk, the treatment of exposures to overseas credit institutions and designated investment firms is aligned to OPRR designations so that favourable...
The PRA restates and preserves the 100% risk-weight requirement for exposures to overseas public sector entities (PSEs) in non-designated (non‑equivalent) jurisdictions, maintaining alignment with...
Large Exposures rules are amended so that exposures to overseas credit institutions and investment firms qualify as “institution” exposures only where HM Treasury has determined the jurisdiction’s...
Suggested Considerations
Review and update internal capital models and Standardised Approach calculations for credit risk to ensure the classification and risk‑weighting of overseas exposures reflect the new OPRR‑linked definitions (e.g. treatment as “institutions” versus “corporates”) from 01 January 2027.
Update ICAAP methodologies, risk appetite statements, and SREP documentation (including for SDDTs) to reflect the continued 100% risk weight for overseas public sector entities in non‑designated jurisdictions and any changes to the treatment of overseas covered bonds, institutions, and exchanges.
Amend Pillar 2 reporting processes and templates, including FSA076 Pillar 2 Credit Risk Standardised Approach returns, to align data capture and reporting with the revised definitions, risk weights, and categorisation of overseas exposures under the PRA’s updated Rulebook and Statements of Policy.
Key Dates
Early July 2026
- PRA publishes PS16/26, confirming final rule changes to accommodate the OPRR and indicating that final rules have been made on the understanding that the OPRR statutory instrument will be made and in force prior to 1 January 2027
Q3 2026
- HM Treasury is expected to make the OPRR statutory instrument, with the PRA indicating it will amend or revoke its final rules if the instrument is amended prior to being made or is not made
02 July 2026
- HM Treasury lays before Parliament the Overseas Prudential Requirements Regime (Credit Institutions and Investment Firms) Regulations 2026, which will replace relevant UK CRR equivalence provisions as the statutory OPRR framework
01 January 2027
- The Overseas Prudential Requirements Regime (Credit Institutions and Investment Firms) Regulations 2026 come into force and the PRA’s new rules under PS16/26 take effect, coinciding with the PRA’s broader implementation of the Basel 3.1 standards; from this date, UK CRR equivalence provisions are revoked and replaced by the OPRR framework and associated PRA Rulebook changes
Compliance Impact
Non-compliance could result in mis-stated risk-weighted assets, incorrect large exposure reporting, and flawed ICAAP submissions, exposing firms to supervisory findings, remediation requirements, and potential capital add-ons. Given the changes apply at the core of credit risk, large exposures, and Pillar 2 frameworks, failure to implement them properly may materially affect firms’ regulatory capital ratios and their ability to demonstrate robust prudential management.
PS17/26 confirms the Bank of England’s and PRA’s final **fees and levies rates for 2026/27**, including a 3% overall increase in the Bank’s core levies (within CPI) but a small **reduction** in the PRA levy and a clarified mechanism for the “Cost of Transition” away from the legacy Cash Ratio Deposit (CRD) model.
For compliance and finance teams in PRA‑regulated firms, this directly affects **prudential fee budgets, cost allocation models, and forecasting**, and requires understanding of the new transition adjustment that can materially change the Bank of England Levy as interest rates move.
What Changed
- The Bank’s core levies (Bank of England Levy, PRA Levy, FMI Levy, and other core levies) are constrained to grow by no more than CPI in 2026/27, with the Bank’s operating costs and associated core...
Within this 3% cap, the Bank of England Levy (operational policy cost component) is budgeted to increase from £328 million (2025/26 budget) to £353 million in 2026/27, an 8% year‑on‑year rise driven...
The PRA Levy is set to decrease slightly from £350 million (2025/26) to £345 million in 2026/27, a 1% reduction reflecting the PRA’s lower overall Total Funding Requirement and a different investment...
The FMI Levy is budgeted to increase from £17 million (2025/26 budget) to £18 million in 2026/27, representing a 3% rise in costs for financial market infrastructure supervision.
Overall, the Bank’s core levies (Bank of England Levy, PRA Levy, FMI Levy) are forecast to move from £695 million (2025/26 budget) to £715 million in 2026/27, a £20 million (3%) increase within the...
Suggested Considerations
Review the PS17/26 final numbers and tables to identify your firm’s applicable PRA fee‑block(s), the applicable Bank of England Levy and FMI Levy components, and quantify the 2026/27 impact relative to 2025/26.
Update internal regulatory fee and levy forecasts, budgets, and accrual models to incorporate the 3% increase in core Bank levies, the 1% reduction in the PRA Levy, and any firm‑specific changes driven by business volumes or fee‑block allocations.
For treasury and finance teams, model the Cost of Transition by stress‑testing scenarios where Bank Rate is above or below the legacy CRD gilt return, to understand potential upward or downward adjustments to the Bank of England Levy and reflect this in multi‑year financial planning.
Ensure that board and relevant governance committees (e.g. Audit Committee, Risk Committee) are briefed on the 2026/27 levy changes, including the Cost of Transition mechanism, and that any material budget variances versus prior plans are explained and approved.
For firms previously affected by the CRD scheme, update internal regulatory funding documentation and policies to remove references to CRD funding and to describe the new levy‑based and Cost of Transition arrangements, ensuring consistency with PS17/26 and the 2024 Bank of England Levy Framework.
Key Dates
March 2024
– Legacy Cash Ratio Deposit (CRD) non‑interest‑bearing balances are converted into remunerated central bank reserves and the corresponding gilts portfolio is transferred to the Bank’s Banking Department, triggering the start of the Cost of Transition mechanism
17 April 2026
– PRA publishes CP7/26 “Regulated fees and levies: Rates proposals 2026/27”, consulting on draft fee rates, AFR and TFR for the 2026/27 fee year
15 May 2026DEADLINE
– Deadline for firms to submit consultation responses on CP7/26 to the PRA
Early July 2026
– PRA publishes PS17/26 setting the final regulated fees and levies, including final 2026/27 PRA Levy, FMI Levy, Bank of England Levy amounts, and the application of the Cost of Transition mechanism for the 2026/27 fee year
From July 2026
– FCA/PRA joint invoicing cycle for 2026/27 periodic fees and levies begins; firms start to receive invoices incorporating the PRA Levy, Bank of England Levy, FMI Levy, and related statutory levies for the 2026/27 fee year
Compliance Impact
Non‑compliance with PRA and Bank of England fee and levy obligations, including late or non‑payment, can result in surcharges, debt collection, restrictions on permissions, and potentially enforcement action, with reputational and prudential supervision consequences.
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.
The Cost Benefit Analysis (CBA) Panel is a statutory panel established to provide advice to the PRA and the Bank on the preparation of CBA. The Panel provides independent input to the PRA’s and the Bank’s CBAs, helping to support increased transparency and scrutiny of their policymaking. This report covers the period from 1 March 2025 to 28 February 2026.
The Bank of England and PRA are both Prescribed Persons as defined by Parliament under The Public Interest Disclosure (Prescribed Persons) Order 2014.
AI Analysis
The Bank of England and PRA, as Prescribed Persons under the Public Interest Disclosure (Prescribed Persons) Order 2014, have published their whistleblowing annual report for the period 1 April 2025 – 31 March 2026, in line with the Prescribed Persons (Reports on Disclosures of Information) Regulations 2017. The report confirms continued operationalisation of whistleblowing channels, the assessment of disclosures under PIDA, and the systematic sharing of all disclosures (protected and non‑protected) with supervisors, which materially elevates supervisory and enforcement risk for PRA‑regulated firms.
What Changed
- Prescribed Persons reporting obligations under the Prescribed Persons (Reports on Disclosures of Information) Regulations 2017 continue to apply, requiring the Bank and PRA to publish, within six...
For the 2025/26 period, the Bank and PRA report that 271 disclosures were received and assessed against the Public Interest Disclosure Act 1998 and their own statutory requirements to determine...
Of the 271 disclosures, 257 were reasonably believed to be protected disclosures within Part IVA of the Public Interest Disclosure Act 1998 and within the Bank’s and PRA’s remit as Prescribed...
Fourteen disclosures were assessed as not protected, including disclosures about firms not regulated by the Bank or PRA, issues outside the Bank’s or PRA’s regulatory remit, and individuals who do...
Regardless of statutory protection status, the Bank and PRA’s whistleblowing team provided supervisory colleagues with all disclosures (protected and non‑protected) for consideration or for...
Suggested Considerations
Establish clear internal processes for responding when the PRA or Bank contacts the firm following a whistleblowing disclosure, including immediate escalation to Compliance, Legal, and relevant Senior Managers, coordinated responses, and robust documentation of remedial actions.
Key Dates
01 April 2025
- Start of the reporting period for the Bank of England and PRA’s 2025/26 Prescribed Persons whistleblowing report
31 March 2026
- End of the reporting period for the 2025/26 whistleblowing disclosures referenced in the Bank and PRA report
By 30 September 2026 (within six months of 31 March 2026)DEADLINE
- Latest date by which the Bank and PRA are required under the Prescribed Persons (Reports on Disclosures of Information) Regulations 2017 to publish the written annual report on disclosures for the 2025/26 period
Compliance Impact
Non‑compliance with robust whistleblowing arrangements and failure to address issues raised by whistleblowers can significantly increase prudential and conduct risk, trigger intensified supervisory scrutiny, and lead to enforcement action, including fines, business restrictions, and personal consequences for senior management under SMCR. The fact that all whistleblowing disclosures, including non‑protected ones, are provided to PRA supervisors amplifies the likelihood that unresolved internal issues will surface in firm‑specific supervisory reviews and risk assessments.
This Enforcement Decision Making Committee (EDMC) annual report covers the period of 1 March 2025 to 28 February 2026.
AI Analysis
The PRA’s EDMC annual report confirms that contested enforcement decisions remain structurally separated from investigation teams and executive decision-makers, with the EDMC acting as the independent final administrative decision-maker before any Upper Tribunal referral. For compliance teams, the key message is not a new rule change, but a reminder that PRA enforcement cases are handled through a formal, disclosure-heavy process with written and oral representations and an independent review of settled cases.
What Changed
- The EDMC completed its annual reporting cycle for the period 1 March 2025 to 28 February 2026, confirming the continued operation of the PRA’s contested-case decision framework.
The report confirms that the EDMC continues to provide functional separation between investigation/enforcement staff and decision-makers in PRA contested enforcement cases.
The report confirms that the EDMC’s role covers enforcement cases under the Bank’s statutory regimes for prudential regulation, financial market infrastructure, resolution, securitisation, wholesale...
The EDMC confirms that contested enforcement decisions are made independently, with disclosure of relevant material and the opportunity for both written and oral representations.
The EDMC confirms that its decision is the final stage of administrative decision-making in contested PRA enforcement cases, after which the subject may refer the matter to the Upper Tribunal.
Suggested Considerations
Review your firm’s PRA enforcement response plan to ensure it supports rapid collection, review, and production of material that may be disclosed in a contested case.
Ensure legal and compliance teams are prepared to make both written and oral representations to the EDMC if the firm becomes subject to a contested enforcement matter.
Confirm that internal governance provides for independent escalation and board-level oversight when a PRA investigation enters the decision stage.
Maintain an updated settlement strategy for PRA matters, including documented positions on fairness, scope of admissions, and mitigation, because the EDMC may review settlement processes retrospectively.
Map exposure across all PRA enforcement regimes relevant to the business, including prudential regulation, FMI, resolution, securitisation, wholesale cash distribution, critical third parties, and S&NI banknote matters.
Key Dates
01 March 2025
- Start of the reporting period covered by the EDMC annual report
Summer 2026DEADLINE
- Remaining EDMC members, including the incoming Chair and Deputy Chair, are due to be appointed
28 February 2026
- End of the reporting period covered by the EDMC annual report
28 February 2026
- As of this date, the PRA enforcement team was overseeing five cases, including investigations into five firms and five individuals
June 2026
- The EDMC annual report for 2025/26 was published
Compliance Impact
The report reinforces that PRA enforcement remains procedurally rigorous and independent, so weaknesses in document preservation, internal escalation, or representation strategy can materially worsen outcomes in contested cases. While no new enforcement rule is introduced here, firms should treat the report as evidence that the PRA’s decision-making architecture is stable, formal, and capable of escalating to tribunal litigation if matters are not resolved early.
The Bank of England and the Prudential Regulation Authority (PRA) have published their annual reports. The PRA report includes information on our activities for the year ended 28 February 2026.
The PRA has issued CP9/26, a consultation on targeted adjustments to the **Basel 3.1 market risk Internal Model Approach (IMA)** that was finalized in PS1/26. The main compliance significance is that it refines how firms can use market risk models, including capital caps, collective investment undertaking treatment, reporting/disclosure, and other operational clarifications, while preserving the PRA’s objective of robust model standards and closer international consistency.
What Changed
- The PRA is consulting on a targeted set of adjustments to the market risk IMA rules and related policy materials that were finalized in PS1/26.
The proposals include replacing the existing partial caps on IMA capital with a permission-based cap on IMA capital at the full ASA level.
The PRA proposes to adjust the treatment of collective investment undertakings (CIUs) by introducing a 90% de minimis look-through threshold for IMA inclusion.
The PRA proposes to extend the ASA treatment of index-tracking funds to IMA.
The PRA proposes to update reporting and disclosure obligations so they align with the revised IMA framework.
Suggested Considerations
Review the proposed IMA amendments in CP9/26 against current Basel 3.1 implementation plans and identify where trading desk, model, and capital calculations would change.
Assess whether any current or planned IMA portfolios would be affected by the proposed permission-based cap at the full ASA level.
Recalculate the implications of the proposed 90% CIU de minimis look-through threshold for portfolio classification and capital treatment.
Check whether index-tracking fund positions should be re-mapped under the proposed extension of ASA treatment to IMA.
Update reporting and disclosure implementation workstreams to reflect the PRA’s proposed alignment changes.
Key Dates
20 January 2026
- PS1/26 finalized the PRA’s market risk IMA rules that this consultation seeks to adjust
19 June 2026
- CP9/26 is in force as an open consultation for industry response
18 September 2026DEADLINE
- Consultation responses are due to the PRA
Compliance Impact
The compliance impact is material but targeted: firms using, or planning to use, the IMA must update model governance, capital methodology, and reporting/disclosure processes to match the revised framework. Failure to adapt could lead to miscalculated market risk capital, supervisory challenge, delayed approvals, or remediation expectations if a firm relies on outdated IMA assumptions.
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.
PS15/26 sets out the PRA’s final Phase 1 reforms to **Pillar 2A capital methodologies and reporting**, aligned with the UK’s Basel 3.1 implementation and intended to modernise how risks beyond Pillar 1 are captured. It introduces revised approaches and expectations across credit, operational, pension obligation, market and counterparty credit risk, plus substantial updates to ICAAP/SREP guidance and Pillar 2 reporting for both mainstream firms and SDDTs.
What Changed
- The PRA finalises amendments to the Reporting Pillar 2 Part of the PRA Rulebook, including updated Pillar 2 data items (FSA072–FSA076 and FSA081) and an updated Pillar 2 reporting schedule, with...
The PRA issues an updated Statement of Policy (SoP) 5/15 – The PRA’s methodologies for setting Pillar 2 capital, providing revised methodologies across credit, operational, pension obligation, market...
The PRA issues an updated SoP 5/25 – The PRA’s methodologies for setting Pillar 2 capital for Small Domestic Deposit Takers (SDDTs), tailoring Pillar 2A approaches and expectations for SDDTs.
The PRA updates Supervisory Statement (SS) 31/15 – ICAAP and SREP, clarifying expectations on how firms should assess, document and justify Pillar 2A capital in ICAAPs, including how to reflect...
The PRA updates SS 4/25 – ICAAP and SREP for SDDTs, setting proportionate ICAAP expectations and aligning SDDT guidance with the revised Pillar 2A framework.
Suggested Considerations
Map your firm’s current Pillar 2A capital framework against the updated SoP 5/15 and, where applicable, SoP 5/25 to identify methodology changes across credit, operational, pension, market and counterparty credit risk.
Update ICAAP methodologies, models and documentation to reflect revised PRA expectations, including new or enhanced use of credit risk and operational risk scenarios and any updated calibration standards.
Review and, where necessary, redesign ICAAP governance (board oversight, senior management ownership, model risk and validation frameworks) to ensure that new scenario‑driven and systematic Pillar 2A methodologies are subject to appropriate challenge and approval.
For firms with material sovereign, central bank, regional government or unconditionally cancellable retail exposures, implement the new systematic Pillar 2A credit risk methodologies and assess the impact on capital requirements and risk‑weighted exposure allocation.
For firms with significant operational risk, enhance scenario analysis frameworks to capture low‑frequency, high‑severity loss events at the PRA’s expected soundness level, and embed these outputs into ICAAP capital quantification.
Key Dates
22 May 2025
– PRA published CP12/25 launching Phase 1 of the Pillar 2A review and consulting on revised methodologies and reporting
05 September 2025
– Consultation period for CP12/25 closed, with industry feedback informing PS15/26
02 March 2026
– Changes relating to pension obligation risk and market/counterparty credit risk methodologies and associated reporting expectations take effect
01 January 2027
– Basel 3.1 standards are implemented in the UK and the retirement of the refined Pillar 2A methodology takes effect; Phase 1 Pillar 2A changes for credit and operational risk are aligned to this Basel 3.1 implementation date
2027 (TBD)
– PRA plans to publish a further consultation paper (Phase 2) on an in‑depth review of individual Pillar 2A methodologies
Compliance Impact
The impact is high: the reforms change how Pillar 2A capital is calculated, justified and reported, with direct consequences for total capital requirements, ICAAP content and supervisory dialogue. Failure to implement the new methodologies and reporting expectations on time can lead to higher capital add‑ons, adverse SREP outcomes, supervisory remediation programmes and potential restrictions on distributions or business growth.
PRA Policy Statement PS14/26 finalises the restatement of CRR definitions into the PRA Rulebook Glossary, with consequential amendments across other Rulebook Parts and updates to SS15/13 on groups. For compliance teams, the key issue is transition planning: the remaining CRR definitions are being moved out of the CRR framework, and firms must ensure their policies, capital documentation, systems, and references align with the PRA Rulebook versions before the repeal of CRR Articles 4–5 takes effect on 1 January 2027.
What Changed
- The PRA has finalised new and restated PRA Rulebook Glossary definitions that replace the CRR definitions previously found in Articles 4, 4A, 4B and 5 for PRA Rulebook purposes.
The PRA has made consequential amendments across other Parts of the PRA Rulebook to align internal cross-references and terminology with the new glossary structure.
The PRA has updated Supervisory Statement SS15/13 – Groups to reflect the transfer of CRR definitions into the PRA Rulebook framework.
The PRA has stated that the vast majority of definitions are restated without substantive policy change, but some definitions were clarified for drafting consistency and readability.
HM Treasury has set the legislative timetable so that the relevant CRR Articles 4–5 will be revoked from 1 January 2027, while the statutory restatement of selected definitions was made in April 2026.
Suggested Considerations
Review all internal policies, manuals, and regulatory interpretation documents that currently cite CRR Articles 4, 4A, 4B, or 5 and replace those references with the corresponding PRA Rulebook Glossary definitions.
Update capital adequacy, prudential reporting, and risk management systems to use the new PRA Rulebook terminology where definitions have moved from the CRR text.
Reconcile group supervision materials, governance papers, and consolidation analyses against the revised SS15/13 wording to ensure group structures are assessed using the updated definitions.
Map every affected business line and legal entity to determine which Rulebook Parts and counterparties rely on the transferred CRR definitions.
Test template agreements, customer disclosures, and internal controls for terminology drift where contractual drafting depends on CRR-defined concepts.
Key Dates
July 2025
- HM Treasury published its Policy Update on applying the FSMA model of regulation to the UK CRR and proposed revoking the remaining CRR provisions while restating only necessary definitions
July 2025
- PRA published CP19/25 proposing the transfer of CRR definitions into the PRA Rulebook Glossary and consequential amendments across the Rulebook
January 2026
- PRA published earlier final policy work on CRR restatement and related implementation measures, indicating the wider restatement programme was already underway
February 2026
- HM Treasury published a policy update confirming it would proceed largely as consulted on, with a change to the statutory definition of “securitisation” for consistency with PRA Basel 3.1 rules
February 2026
- The commencement statutory instrument revoking CRR Articles 4–5 was made, with effect from 1 January 2027
Compliance Impact
The compliance impact is moderate to high because this is a definitional restatement rather than a wholesale policy rewrite, but it affects the legal basis of many prudential references and could create misstatement risk if firms continue to rely on revoked CRR text after 1 January 2027. Non-compliance may lead to inaccurate capital, governance, or perimeter analysis, and could trigger supervisory findings where firms have not updated systems, documentation, or controls to the new Rulebook structure.
The PRA’s Policy Statement PS13/26 finalises the CP20/25 proposals on UK branches of third‑country (re)insurers, including raising the subsidiarisation threshold, embedding existing reporting and investment waivers into the Rulebook, and updating supervisory expectations on ORSA and resolution. Compliance teams at third‑country branches must now recalibrate threshold monitoring, overhaul reporting processes, and update governance and documentation to align with the revised Third Country Branches and Reporting Parts of the PRA Rulebook, updated SSs, and new Statements of Policy.
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What Changed
- The PRA confirms an increase in the third‑country branch subsidiarisation threshold for liabilities covered by the Financial Services Compensation Scheme (FSCS) from £500 million to £600 million,...
Third‑country branch undertakings are now explicitly required to notify the PRA where projections show their FSCS‑covered liabilities may exceed the £600 million subsidiarisation threshold within a...
The PRA embeds in the Rulebook new quantitative thresholds for regulatory reporting, replacing the existing modification by consent (MbC) under Solvency II Reporting 2.2(1) for third‑country...
Under the new regime, only branches (excluding pure reinsurance branches) with at least £1 billion gross written premiums or £2 billion in branch provisions (based on the prior year’s annual...
The PRA discontinues quarterly reporting for certain non‑life claims templates and reinstates two annual reporting templates (IR.19.01.01 – non‑life insurance claims and IR.20.01.01 – development of...
Suggested Considerations
Assess current and projected FSCS‑covered UK branch liabilities against the new £600 million subsidiarisation threshold and implement or update a robust three‑year forecasting process to identify potential threshold breaches.
Update internal PRA notification procedures and early‑warning triggers so that the branch informs the PRA promptly if forecasts show FSCS‑covered liabilities could exceed the £600 million threshold within three years.
For branches approaching or exceeding the new threshold, initiate or refresh internal structural options analysis (branch vs subsidiary), including timeline, capital, governance, and operational impacts, and prepare for early engagement with the PRA on subsidiarisation expectations.
Map gross written premiums and branch provisions against the new £1 billion GWP and £2 billion provisions reporting thresholds and determine whether the branch will be subject to the full or reduced suite of third‑country branch regulatory reporting templates from 31 December 2026.
Redesign regulatory reporting processes, systems, and controls to align with the new reporting perimeter, including identifying which templates will be required, adjusting data capture, and ensuring capacity to produce reinstated templates IR.19.01.01 and IR.20.01.01 on an annual basis.
Key Dates
16 September 2025
– PRA publishes CP20/25, proposing changes to third‑country branch policy, including the higher subsidiarisation threshold and new reporting thresholds
16 December 2025
– Consultation period for CP20/25 closes; representations received from affected firms and stakeholders
Q1–Q2 2026
– PRA indicates that the increase in subsidiarisation threshold from £500 million to £600 million would take effect on publication of the relevant policy statement (PS13/26), with immediate relevance for threshold monitoring and branch vs subsidiary planning
31 December 2026
– Rulebook and policy changes (including amendments to the Third Country Branches and Reporting Parts, reinstatement of annual templates IR.19.01.01 and IR.20.01.01, embedded reporting thresholds, embedded pure reinsurance relief, updates to SS44/15, SS41/15, SS19/16, SoP6/24, SoP7/24, and SoP1/19, and disapplication/restatement of EIOPA Branch Guidelines) are scheduled to come into force
Compliance Impact
The impact is material for all UK branches of third‑country (re)insurers, particularly those near the new subsidiarisation and reporting thresholds, with consequences including potential forced subsidiarisation, expanded reporting burdens, or supervisory challenge if expectations on forecasting, ORSA, or resolution planning are not met. Non‑compliance could trigger PRA supervisory interventions, restrictions on business, and increased scrutiny during authorisation and ongoing supervision.
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.
The PRA's CP7/26 consultation proposes fee rates and amendments to the Fees Part of the PRA Rulebook for 2026/27 to meet a Total Funding Requirement (TFR) of £346.6 million, down 1% from 2025/26, primarily funding Ongoing Regulatory Activities (ORA) at £329.3 million. This matters for PRA-authorised firms as it involves adjusted periodic fees across blocks, increased allocations for initiatives like Future Banking Data, and other targeted fees, requiring budget planning and potential consultation responses.
What Changed
- Proposed fee rates to cover the 2026/27 Annual Funding Requirement (AFR) of £329.3 million (ORA only, down 2% from 2025/26).
Increased cost allocation for the Future Banking Data (FBD) programme, from £3.2 million to £6.8 million (111% rise), contributing to 'other fees to industry' rising 26% to £17.4 million.
Adjustments to specific fees: internal model application fees, model maintenance fee (£9.6 million, unchanged), Special Project Fee for restructuring, and new firm authorisation fees for Type 1...
Fee block variations, e.g., A1 (Modified Eligible Liabilities) fee rates down 7% despite 6% tariff data growth; A3 (Gross Written Premiums) down 4%, Best Estimate Liabilities down 2%; minimum fees...
Overall TFR down 1% to £346.6 million, with provisional figures subject to revision based on final costs.
Suggested Considerations
Review proposed fee impacts using tariff data (e.g., via PRA-provided tables) and budget for 2026/27 TFR, including potential increases in FBD/other fees.
Submit responses by 15 May 2026, indicating confidentiality preferences, consent to name publication, and whether responding individually or for an organisation; personal data will be handled per Bank privacy notice.
For new applicants or restructuring firms: Factor in updated authorisation and Special Project Fees during planning.
Monitor PRA Business Plan 2026/27 for funded activities context.
Key Dates
15 May 2026DEADLINE
Consultation response deadline; (responses via email to CP7_26@bankofengland.co.uk or post to PRA Fees Policy Team)
2026/27
Proposed effective period for new fee rates; (following policy statement; exact implementation tied to PRA Rulebook amendments, typically post-consultation)
June/July 2026 (expected)
Policy statement with final rules; (analogous to FCA timeline in CP26/11)
Compliance Impact
Urgency: Medium – Firms must incorporate provisional fee changes into 2026/27 financial planning, but overall TFR/ORA reductions mitigate immediate pressure; however, block-specific adjustments (e.g., FBD uplift) and consultation response could affect budgets, with non-response risking unaddressed cost impacts. Dual-regulated firms face compounded effects from FCA CP26/11 (1% fee uplifts).
The 2026/27 Business Plan sets out the workplan for each of our strategic priorities and our strategy to advance our primary and secondary objectives. This year’s business plan confirms the PRA’s continued focus on safety and soundness and policyholder protection, alongside a proportionate and efficient approach to regulation.
CP6/26 from the PRA consults on reforms to the **high loan-to-income (LTI)** lending rules for residential mortgages, building on prior adjustments to the flow limit that caps high-LTI loans (≥4.5x borrower income) at 15% of total new lending for larger lenders. This matters for mortgage providers as it aims to balance financial stability, support housing market growth, and adapt macroprudential measures to current economic conditions, potentially influencing lending capacity and risk management ahead of the June 2026 review deadline (https://www.bankofengland.co.uk/prudential-regulation/publication/2026/april/high-loan-to-income-lending-consultation-paper).
What Changed
- Review of LTI flow limit: PRA is reviewing the rule limiting new residential mortgages with LTI ≥4.5x to 15% of total new lending, following FPC recommendations; no final changes proposed yet, but...
Threshold increase (prior update): Flow limit now triggers only for firms issuing ≥£150M in residential mortgages annually (up from £100M), effective 11 July 2025, exempting ~80 smaller lenders (up...
Interim modification by consent: Firms can apply to disapply the 15% cap temporarily; requires submitting business plans, risk frameworks, and monthly reporting on high-LTI volumes.
Exclusions remain: No LTI limit for re-mortgages (no principal change), lifetime mortgages, or second/subsequent charge mortgages (per historical rules).
Group allocations: Firms in groups can share high-LTI allowances, with record-keeping required.
Suggested Considerations
Apply for modification (if seeking >15% high-LTI): Submit detailed business plan (incl. quarterly high-LTI projections), risk appetite, management frameworks; provide monthly notifications on approvals/completions.
Monitor thresholds: Track rolling 4-quarter mortgage volumes/contracts (≥£150M and ≥300 contracts in two periods triggers limit).
Record-keeping: Document high-LTI allowances, group allocations, exclusions.
Respond to consultation: Provide feedback on CP6/26 proposals via PRA channels (deadline not specified in summary; check full paper).
Engage regulators: FCA firms contact FCA for tailored guidance on high-LTI increases.
Key Dates
9 July 2025DEADLINE
PRA offers interim modification by consent applications; firms must submit business plan/risk info within 1 month, then monthly reports (first covering prior 3 months)
11 July 2025
£150M threshold increase effective
TBD 2026DEADLINE
PRA consultation on permanent LTI flow limit changes (due course post-review)
30 June 2026
Interim modifications expire (or earlier if rules amended)
Compliance Impact
Urgency: High – Firms near £150M threshold or planning high-LTI growth must act imminently on modifications (monthly reporting starts soon) to avoid breaches before June 2026 expiry; non-compliance risks enforcement, while opportunities for smaller lenders enhance competitiveness amid housing market pressures (https://www.bankofengland.co.uk/prudential-regulation/publication/2026/april/high-loan-to-income-lending-consultation-paper).
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.
The PRA has finalized the Financial Services Compensation Scheme (FSCS) Management Expenses Levy Limit (MELL) for 2026/27 at £113 million, effective April 1, 2026. This policy statement confirms the proposed budget following consultation, establishing the maximum amount that FSCS-levy-paying firms must fund for the compensation scheme's operating costs, with implications for all PRA and FCA-authorized firms across banking, insurance, and investment sectors.
What Changed
The final MELL for 2026/27 comprises:
Management expenses budget: £108 million (£4.4 million increase from 2025/26, broadly in line with inflation)
Unlevied reserve: £5 million (for unforeseen costs without requiring further consultation)
Total MELL: £113 million
Budget allocation details:
Investment budget: £5.5 million (10% increase from 2025/26) supporting the FSCS' new five-year strategy launching in 2026/27
Suggested Considerations
*Immediate compliance actions for affected firms:
*Budget planning: Incorporate the £113 million MELL into financial forecasting and levy allocation models for the 2026/27 financial year (April 1, 2026 onwards)
*Levy calculation: Ensure systems are updated to reflect the new budget allocation across PRA and FCA funding classes (detailed in Appendix 4 of CP1/26)
*Reserve provisioning: Account for the £5 million unlevied reserve in contingency planning, recognizing FSCS may levy additional funds at short notice for unforeseen costs
*RCF cost allocation: Confirm whether your firm is subject to the expanded RCF cost allocation (particularly relevant for credit unions, which raised concerns during consultation)
Key Dates
13 January 2026
- Consultation Paper CP1/26 published
10 February 2026DEADLINE
- Consultation deadline
31 March 2026
- Policy Statement PS8/26 issued
1 April 2026
- MELL 2026/27 effective date; FSCS financial year begins
**SS9/17 - Recovery Planning** is the PRA's supervisory statement establishing expectations for how UK banks, building societies, and designated investment firms must prepare and maintain recovery plans to ensure financial stability during periods of stress. This guidance supersedes the previous SS18/13 and represents a substantial tightening of recovery planning requirements, making credible, testable, and executable recovery plans a core component of prudential regulation rather than a compliance checkbox.
What Changed
SS9/17 introduced several material enhancements to recovery planning requirements:
Governance and Integration: Recovery planning must be embedded within firms' risk management frameworks, with board-level oversight and integration with stress testing and ICAAP processes. The PRA expects clear governance documentation showing how plans are produced, reviewed, signed off, and implemented.
Fire Drill Exercises: Firms must conduct regular fire drill exercises that simulate recovery scenarios in a live environment, testing governance arrangements, management information systems, and the...
Suggested Considerations
*Develop comprehensive recovery plans containing all minimum elements specified in the Recovery Planning Part of the PRA Rulebook and detailed in SS9/17
*Establish governance frameworks documenting how recovery plans are produced, reviewed, approved by the board, and how recovery options would be implemented
*Conduct fire drill exercises that simulate recovery scenarios, test governance arrangements, and validate management information capabilities
*Create implementation playbooks (for complex plans) that enable rapid execution by senior management during stress
*Perform detailed impact analysis for each recovery option, quantifying capital and liquidity impacts with realistic timelines
Key Dates
Second half of 2017
- Proposed implementation date for superseding SS18/13 (achieved with December 2017 publication)
21 September 2017DEADLINE
- PRA consultation deadline for CP9/17 (the consultation paper preceding this statement)
11 December 2017
- SS9/17 first published and became effective
OngoingDEADLINE
- Firms must maintain and test recovery plans continuously; the PRA notes this statement "may be revised as recovery planning becomes further embedded in firms' risk management practices"
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...
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 – Recovery planning (Appendix 4); no...
PRA Review Commitment: Threshold will be reviewed periodically (e.g., after reporting cycles or significant changes), but not indexed to GDP or on a fixed schedule as some respondents suggested.
Suggested Considerations
Scope Assessment: Immediately review retail deposits as of 1 April 2026; firms newly in-scope (≥£100bn) await PRA communication on first report/disclosure dates and prepare accordingly.
Recovery Plans: SDDTs/SDDT groups update review cycles to biennial starting 1 April 2026; ensure plans meet SS9/17 standards for quality.
Reporting/Disclosure: In-scope firms align internal processes with Rulebook amendments (Appendices 2-4); test systems for new threshold.
Governance: Document compliance with updated frameworks; monitor for PRA threshold reviews and related PS9/26/PS11/26 implementations.
Monitoring: Track retail deposits quarterly to anticipate scope changes; engage PRA if nearing threshold.
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.
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...
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...
Disclosure basis statement: Firms must specify their Pillar 3 regime (e.g., resolution entity, O-SII, large institution), frequency, and details like reference date, currency, LEI, accounting...
Minor amendments: Reflects HMT's revocation of CRR Article 92a; updates to Disclosure (CRR) and Reporting (CRR) Parts of PRA Rulebook, with semi-annual key metrics for certain firms.
No substantive policy changes post-consultation; costs/benefits assessment unchanged.
Suggested Considerations
Update Pillar 3 processes to use new MREL templates (Annex XXVII instructions), UK CC1 with CDC narrative, and basis statement (e.g., reference date, LEI, scope).
For CDC-subject firms: Prepare qualitative narrative on restriction impacts.
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.g., Article 92a revocation).
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.
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...
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.
Suggested Considerations
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 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 2026DEADLINE
- PS10/26 effective (related: Resolution Assessment threshold amendments, reports due 2 October 2026)
1 January 2027DEADLINE
- Revised MRL001 and MRL003 templates effective; first submissions of 2026 Q4 data (ending 31 December 2026) due in **February 2027**
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.
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...
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...
Guidance Enhancements: Updated SS2/21 with MTP identification examples; SS1/26 clarifies threshold interpretation, early-stage assessments, and systemic impact expectations.
Alignment: Full harmonization with FCA/Bank and international standards (DORA, FSB FIRE).
| Aspect | CP17/24 Proposal | PS7/26 Final Policy |
|--------|------------------|---------------------|
|...
Suggested Considerations
Identify and notify MTP arrangements via FCA Connect (excluding exemptions); maintain annual register with reduced fields.
Monitor/assess operational incidents against clarified thresholds (e.g., contagion, reputation); submit single report if met, within specified timelines.
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: Integrate with ongoing operational resilience post-SS1/21 milestone (31 March 2025).
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)
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.
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)...
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.,...
Excludes near-misses (potential events without disruption/data loss to external users); aligns with but does not replace Fundamental Rule 7 or Notification Part Chapter 2 obligations.
Specifies reporting via a "Reporting Fields Document"; firms balance reporting with incident resolution.
Suggested Considerations
Assess incidents against PRA thresholds (e.g., risk to stability/soundness/policyholders, considering contagion, disruptions > thresholds, data loss, media impact); report if met, even if internally high-priority.
Submit phased reports using specified fields: Initial (basic details promptly); Intermediate (updates on changes like impact, strategy shifts, resolution); Final (full details post-resolution).
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 2027DEADLINE
- Effective date; firms must comply with reporting requirements
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
Urgency: High – With effectiveness just over one year away (18 March 2027), firms must urgently map incident management frameworks to new thresholds/phases, update policies, train staff, and test reporting (e.g., via simulations), as non-compliance risks enforcement under PRA rules and heightened scrutiny on resilience amid rising cyber/operational threats. This elevates operational resilience from preparation (e.g., IMT testing by March 2025) to active reporting, demanding integrated tech/governance upgrades.
CP5/26 is a PRA consultation paper proposing updates to the liquidity policy framework to address modern risks from digital banking, payments, and technology that can amplify liquidity stresses. It matters because it strengthens firms' resilience by emphasizing liquidity resource composition, monetisation risk, and short-term stress scenarios, ensuring firms can meet outflows in acute crises.
What Changed
- Composition of liquidity resources: Revise the Overall Liquidity Adequacy Rule (OLAR) to explicitly require adequate composition (not just amount) of liquidity resources, balancing cash, non-cash...
Monetisation risk assessment: Replace 'marketable asset risk' with monetisation risk in ILAA rule 11.5, with detailed expectations in updated SS24/15 on market access, accounting treatment, repo/sale...
Stress scenario design: New requirement for a business model-specific stress scenario with sudden, severe outflows peaking in the first week (up to 7 days), integrated into ILAAP/ILAA.
Governance and ILAAP updates: Embed governance for ILAAP preparation, OLAR reviews, ALM committees; clarify risk appetite, Liquidity Contingency Plans (LCP), funding plans; streamline SS24/15...
Central bank facilities: Expectations to assess pre-positioned collateral, drawing capacity, operational readiness for publicly available facilities (excluding emergency assistance); monitor in ILAAP.
Suggested Considerations
Review and respond to consultation by 17 June 2026, indicating confidentiality and publication consent.
Update internal processes: Revise ILAAP/ILAA to include new stress scenario (sudden/severe outflows in first 7 days), monetisation risk assessments (with template), liquidity composition analysis, central bank facility readiness (pre-positioned collateral monitoring).
Stress testing: Design firm-specific acute stress with daily granularity, lowest cumulative net cashflows analysis over LCR/survival horizons.
Systems check: Assess impact on validation processes from PRA110 changes; ensure operational readiness for asset monetisation.
Key Dates
17 June 2026DEADLINE
Consultation responses due; (submit to CP5_26@bankofengland.co.uk or Liquidity Policy Team)
Compliance Impact
Urgency: High – Firms must engage now as the 17 June 2026 response deadline is ~3 months away (today: 17 March 2026), and changes target evolving digital risks that could amplify outflows. Non-engagement risks supervisory scrutiny on ILAAP adequacy, OLAR compliance, and resilience in stresses; proportionate but requires ILAAP revisions pre-final rules.
PS6/26 finalizes the PRA's policy on recognized exchanges (REs) under Article 4(1)(72)(c) of the UK CRR, shifting responsibility to firms for assessing exchange and asset liquidity conditions while restating main indices in the PRA Rulebook and revoking SS20/13. This matters for PRA-regulated firms as it enables more dynamic, risk-sensitive capital treatments for traded assets, potentially expanding eligible REs and supporting competitiveness without PRA pre-approval.
What Changed
- New Recognised Exchanges (CRR) Part in the PRA Rulebook: Specifies conditions for REs focusing on (i) exchange/market structure risk (e.g., operational robustness of clearing/settlement) and (ii)...
Restatement of main indices: List from Commission Implementing Regulation 2016/1646 moved to PRA Glossary without policy changes.
Amendment to 'higher risk equity exposure' definition: Aligns with Basel 3.1 near-final rules, excluding qualifying listed equities from higher risk weights under the standardized approach (ties to...
Revocation of SS20/13: Deletes the supervisory statement on third-country equivalence and REs; consequential amendments to Counterparty Credit Risk (CRR), Credit Risk Mitigation (CRR), and SDDT –...
Minor clarifications: Edits to scope and assessment of clearing/settlement mechanisms for overseas exchanges.
Suggested Considerations
Assess exchanges/assets: From 1 July 2026, evaluate overseas exchanges against new conditions (market structure, liquidity); document processes and update periodically; align with internal credit risk models.
Update policies/systems: Revise credit risk, counterparty credit risk, and CRM frameworks to incorporate firm-led RE assessments; remove references to revoked SS20/13.
Review exposures: Reassess equity exposures for Basel 3.1 alignment; test industry-shared assessments for accuracy and own-accountability.
Governance: Embed in risk management; prepare for PRA thematic reviews on implementation.
Reporting: No new forms, but ensure CRR disclosures reflect updated RE treatments.
Key Dates
18 June 2025DEADLINE
- Consultation deadline for CP3/25 (closed; feedback incorporated in PS6/26)
1 July 2026
- Implementation date for new RE rules, main indices restatement, SS20/13 revocation, and related Rulebook amendments
1 January 2027
- Proposed implementation for Basel 3.1 changes, including higher risk equity exposure amendments (alongside broader standards)
Compliance Impact
Urgency: High – Effective 1 July 2026 (approx. 4 months from now), requiring immediate gap analysis, policy updates, and assessor training to avoid capital miscalculations or supervisory findings. Impacts prudential calculations directly, with flexibility reducing PRA burden but increasing firm accountability and review risks.
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.
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.
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 permissions for balance sheet liabilities.
Updates to guidelines on capital instrument redemption, including early calls for unforeseen regulatory/tax changes and treatment of tender offers.
Suggested Considerations
Review and respond to consultation by 24 April 2026 via email to CP4_26@bankofengland.co.uk or post, indicating confidentiality and publication consent preferences.
Assess current own funds instruments against proposed clarifications (e.g., redemption permissions, MCR eligibility, maturity requirements) and update internal classifications or applications if needed.
Evaluate reconciliation reserve calculations for potential adjustments post-permission grants.
Engage PRA on concurrent transactions (e.g., redemptions) for streamlined processes under clarified expectations.
Prepare for Rulebook updates by mapping impacts to Own Funds, Reporting, Group Supervision, Glossary, and SCR Standard Formula parts.
Key Dates
24 April 2026DEADLINE
- Consultation response 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.
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...
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, conflict of interest policies, and...
Other updates: Chapter 17 of SS2/23 amended due to deletion of SS20/15; six-month implementation window for SS2/23 CUSO expectations.
Suggested Considerations
Review and update policies: Credit unions must conduct due diligence/risk assessments before any CUSO investment/use; implement conflict of interest policies, especially for non-credit union partnerships.
Ensure structural safeguards: Limit liability to investment amount; maintain legal/operational separation between credit union and CUSO; monitor aggregate investments ≤7.5% of capital.
Governance alignment: Decisions must prioritize member benefits per legislative objects; update internal investment rules to comply with amended PRA Rulebook (Credit Unions Part).
Implementation planning: Within six months, integrate SS2/23 expectations into operations; non-engaging credit unions need no action but should monitor for opportunities.
Reporting/oversight: Prepare for PRA supervision on CUSO risks; consider CBA updates if significantly impacting mutuals.
Key Dates
24 October 2025DEADLINE
- Consultation response deadline for CP13/25
20 February 2026
- Publication date of PS5/26 (final policy)
~20 August 2026DEADLINE
- Implementation deadline for SS2/23 CUSO expectations (six months from PS5/26 publication)
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.
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...
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 Rulebook for consistency; not relevant to credit unions or third-country branches.
Suggested Considerations
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 2026DEADLINE
- Consultation response deadline; submit to CP3_26@bankofengland.co.uk or PRA at 20 Moorgate, London EC2R 6DA
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.
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,...
Risk retention: Introduce a new combined modality merging two existing ones.
Market disclosure (transparency): Streamline for all securitisations; amend underlying documentation, delete PRA templates (use revised FCA Handbook templates), disapply templates for investor...
Review and respond: Analyse proposals against current operations; submit feedback by 18 May 2026 to CP2_26@bankofengland.co.uk, indicating confidentiality and publication consent.
Gap analysis: Assess due diligence processes, risk retention setups, disclosure templates, reporting (e.g., COREP), and capital models for resecuritisations/MGS loans; update for proportionality.
Coordinate with FCA: Align on shared templates/transparency (per FCA CP26/6); prepare for repository shift.
Policy updates: Revise internal policies, training, and systems for new risk retention modality, reduced verifications, and readability improvements post-final PS.
Monitor legislation: Track HM Treasury SI and PRA policy statement for final rules.
Key Dates
1 January 2026
- Related CRR/Solvency II restatement (PS12/25) already effective, preserving core securitisation requirements
18 May 2026DEADLINE
- Consultation response 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
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.
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.
What Changed
DP1/26 proposes no immediate binding changes, as it is a discussion paper seeking views rather than a consultation with firm rules. Key elements include:
Incremental reforms: Extending recent template deletions (e.g., from Strong and Simple initiative for liquidity returns in small banks) to wider collections, aiming for cost reductions estimated at...
Guiding principles: Four principles to shape FBD: (i) anchor data in PRA objectives; (ii) collect data 'once and well' (minimize volume, maximize use); (iii) ease firm supply processes; (iv) ensure...
Trade-offs: Balancing data standardization, comparability, international alignment, granularity vs. aggregation, and regular vs. ad-hoc requests.
Future roadmap: PRA will develop reforms based on responses, focusing on clearer instructions, coherent UK-wide processes, and addressing gaps for emerging risks.
No finalized requirements yet;...
Suggested Considerations
Submit responses: By 5 May 2026 via email to DP1_26@bankofengland.co.uk or post to PRA address; indicate confidentiality preferences, noting no guaranteed protection under FOIA/data regimes.
Review and assess impact: Evaluate current reporting against proposed principles/trade-offs; identify cost-saving opportunities and gaps in data processes.
Engage proactively: Provide feedback on reforms (e.g., template reviews, standardization) to shape roadmap; benchmark data capabilities (e.g., vs. BCBS 239).
Prepare internally: Anticipate clearer instructions, potential UK-wide coherence (with FCA), and shifts in regular/ad-hoc balance; no immediate submissions changed.
Key Dates
5 May 2026DEADLINE
- Deadline for responses to DP1/26
Compliance Impact
Urgency: Medium – Not critical, as no immediate rules or deadlines beyond response submission (3+ months away from 5 Feb 2026). Matters for strategic planning: signals cost reductions but requires input to avoid unfavorable changes; aligns with PRA's 2026 priorities on data accuracy/quality (e.g., for risk reporting, stress testing). Firms with high reporting burdens should prioritize to influence simplifications and mitigate risks from evolving data needs (e.g., emerging risks, AI).
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.
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.
What Changed
Credit Risk Framework
Implementation of restrictions on Internal Ratings-Based (IRB) approach scope, effective 1 January 2027, with firms required to reclassify certain exposures (e.g., slotting approach IPRE exposures)...
Minor clarifications and amendments to the Standardised Approach and credit risk mitigation techniques.
Operational Risk
Updated Business Indicator Component (BIC) calculation methodology requiring inclusion of the current financial year in the three-year average calculation (or an estimate if unavailable).
Clarifications on legal risk treatment and loss data set dates.
Market Risk (Fundamental Review of the Trading Book – FRTB)
Suggested Considerations
*Immediate (by mid-2026)
*Conduct impact assessment: Quantify RWA changes under Basel 3.1 across credit risk, operational risk, and market risk frameworks.
*Review IRB permissions: Identify exposures requiring reclassification (e.g., IPRE to HVCRE) and prepare permission amendment applications.
*Assess FRTB-IMA readiness: For firms with existing IMA permissions, evaluate transition strategy for out-of-scope positions moving to ASA/SSA during interim period (2027–2027).
*Arrange board-level assurance: Establish governance framework for board oversight of RWA calculation accuracy and Basel 3.1 implementation.
Key Dates
20 January 2026
– PRA publishes PS1/26 (final rules)
2026 ICAAP submission deadlineDEADLINE
– Must include Basel 3.1/SDDT impact assessment
1 January 2027
– Effective date for Basel 3.1 implementation (credit risk, operational risk, reporting/disclosure, IRB scope restrictions, SDDT regime)
1 January 2027
– Interim period begins for FRTB-IMA transition; existing IMA permissions retained; out-of-scope positions move to ASA/SSA
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.
What Changed
The PRA has introduced new rules for the calculation of risk-weighted assets, including changes to the credit risk standardised approach, market risk framework, and operational risk requirements. The rules also include amendments to the definitions of probability of default, loss given default, and conversion factor.
Suggested Considerations
Review and update credit risk policies and procedures to ensure compliance with the new standardised approach
Assess the impact of the new market risk framework on trading book positions and capital requirements
Update operational risk management frameworks to reflect changes to the Business Indicator and subcomponents
Key Dates
1 Jan 2027DEADLINE
Basel 3.1 rules take effect
1 Jan 2028DEADLINE
Internal model approach for market risk takes effect
Potential Consequences
Non-compliance with the new rules may result in enforcement action, fines, or other regulatory penalties
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...
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...
No further changes from near-final: Confirms PS18/25 near-final policy without alterations; defers certain IRRBB clarifications pending separate review.
Rationale: Reduces operational burden on firms and PRA; PRA analysis shows broadly neutral impact on total capital requirements (TCR), with ~50% of affected firms seeing reductions.
Suggested Considerations
Review and update ICAAP/SREP processes: Firms must integrate retirement into internal capital adequacy assessments, removing refined methodology calculations from Pillar 2A by 1 January 2027.
Recalculate Pillar 2A requirements: Model impacts using Basel 3.1 CR SA; engage PRA supervisors for firm-specific transitions if capital increases anticipated (PRA will apply judgement).
Align with related frameworks: Implement alongside Basel 3.1 (PS1/26), CRR restatement (PS3/26), and SDDT regime (PS4/26); update systems, policies, and disclosures accordingly.
Monitor firm-specific impacts: Conduct quantitative analysis per PRA's refreshed data; half of firms may see TCR reductions, but prepare for potential increases.
Governance and reporting: Board/Senior Managers to oversee transition; ensure 2027 SREP readiness without refined methodology proxy.
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.
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.
What Changed
The PRA has retired the refined methodology to Pillar 2A, which was previously used to determine capital requirements for firms. The new policy aligns with the Basel 3.1 standards and introduces a simplified capital regime for SDDTs.
Suggested Considerations
Update internal capital adequacy assessment processes (ICAAP) to reflect the changes to Pillar 2A
Review and implement the Basel 3.1 standardized approach to credit risk
Ensure compliance with the new simplified capital regime for SDDTs, if applicable
Key Dates
1 Jan 2027DEADLINE
The policy to retire the refined methodology to Pillar 2A takes effect, aligning with the implementation of the Basel 3.1 standards
Potential Consequences
Failure to comply with the new policy may result in enforcement action, fines, or other regulatory penalties
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.
What Changed
Restatement of CRR Provisions
The PRA is transferring remaining CRR requirements from the UK CRR into the PRA Rulebook without material changes to policy substance, except for targeted securitisation...
New: SS4/24 (Credit risk: Internal Ratings Based Approach), SS3/24 (Credit risk definition of default), SoP6/25 (Internal Model Method permissions), SoP7/25 (Securitisation waivers and permissions),...
Amended: SS15/13 (Groups), SS9/13 (Securitisation: Significant Risk Transfer), SS10/18 (Securitisation: General requirements), and SS10/13 (Credit risk: Standardised Approach)
ECAI Mapping...
Suggested Considerations
*Immediate (by Q2 2026):
*Review applicability: Determine whether your firm falls within the scope of PS3/26 (banks, building societies, designated investment firms, or financial holding companies)
*Assess impact: Analyse how the restatement affects your current compliance framework, particularly regarding credit risk (IRB and standardised approaches), securitisation, and ECAI mapping
*Identify policy changes: Review the new and amended supervisory statements (SS3/24, SS4/24, SoP6/25, SoP7/25, SoP8/25) to understand expectations for permissions, waivers, and model approvals
*Medium-term (by Q3 2026):
Key Dates
28 October 2025
- PS19/25 (near-final policy) published
20 January 2026
- PS3/26 final policy statement published
1 January 2027
- All policies take effect; HM Treasury commencement regulations revoke relevant CRR provisions and replace them with PRA Rulebook rules and policy materials
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.
What Changed
The PRA has restated the remaining relevant provisions in the CRR within the PRA Rulebook and other policy materials, including amendments to supervisory statements and the introduction of new statements of policy. The changes include updates to the securitisation requirements and the introduction of new rules on credit risk and internal ratings-based approaches.
Suggested Considerations
Review and update internal policies and procedures to ensure compliance with the restated CRR provisions
Ensure that risk management practices are aligned with the updated rules on credit risk and internal ratings-based approaches
Review and update securitisation policies and procedures to ensure compliance with the amended requirements
Key Dates
1 Jan 2027DEADLINE
The restated CRR provisions take effect
Potential Consequences
Failure to comply with the restated CRR provisions may result in enforcement action, fines, or other regulatory penalties
Related Regulations
Capital Requirements Regulation (CRR)Basel 3.1Solvency II
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.
Deletion of SoP3/23 (Interim Capital regime) effective January 20, 2026
Removal of SDDTs from scope of SS31/15 and SoP5/15 (standard ICAAP/SREP and Pillar 2 methodologies)
Modified consolidation group certification processes, with responsibility shifting to SDDT consolidation entities
Suggested Considerations
*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
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.
What Changed
The PRA has introduced a new simplified capital regime for SDDTs, which includes changes to the PRA Rulebook, supervisory statements, and statements of policy. The regime also introduces new reporting templates and instructions.
Suggested Considerations
Review and update capital adequacy assessments to ensure compliance with the new simplified capital regime
Implement new reporting templates and instructions for SDDTs
Update internal policies and procedures to reflect changes to the PRA Rulebook, supervisory statements, and statements of policy
Key Dates
20 Jan 2026
Publication of the final policy statement
20 Jan 2026
Early implementation of changes to ICAAP updates and reverse stress-testing
1 Jan 2027DEADLINE
The SDDT capital regime takes effect
Potential Consequences
Enforcement action, fines, or license revocation for non-compliance with the new simplified capital regime
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.
What Changed
The proposed MELL for 2026/27 introduces the following material changes:
Budget increase of £4.4 million from 2025/26 (from approximately £103.6 million to £108 million), broadly aligned with inflation
Nominal reduction of £6.6 million on a like-for-like basis when excluding the cost of enhancements to the FSCS's revolving credit facility (RCF)
Real terms reduction of £11 million when accounting for inflation adjustments
RCF enhancement to £3 billion to support the Bank of England's recapitalisation powers and enable faster depositor payouts
Suggested Considerations
*Review the consultation paper (CP1/26) in detail, particularly Appendices 3 and 4 detailing budget line items and PRA/FCA funding class allocations
*Assess levy impact on your firm's 2026/27 budget based on your regulated business volume and funding class allocation
*Prepare internal stakeholder communication regarding the £4.4 million aggregate increase and its implications for your firm's regulatory costs
*Monitor the FSCS January 2026 budget update for detailed cost breakdowns and compensation levy forecasts
*Submit consultation responses if your firm wishes to comment on the proposal by 10 February 2026
Key Dates
10 February 2026DEADLINE
– Consultation deadline for comments on CP1/26
1 April 2026
– Effective date: proposed MELL applies from start of FSCS financial year
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).
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.
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.