PRA Consultations | Prudential Regulation Authority

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 2026 DEADLINE

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).

References

AI-generated analysis. May contain errors or omissions — verify with the original PRA source before acting. Full disclaimer.

Sectors:

Banking & Credit Insurance & Pensions

Topics:

Reporting & Disclosure Authorisation & Licensing

BankInsuranceAll Firms

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🇬🇧 PRA Consultation high

April 1st 2026

CP6/26 – High loan to income lending

Consultation paper 6/26

AI Analysis

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 2025 DEADLINE

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 2026 DEADLINE

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).

References

AI-generated analysis. May contain errors or omissions — verify with the original PRA source before acting. Full disclaimer.

Sectors:

Banking & Credit Mortgage & Lending

Topics:

Consumer Protection / Conduct Prudential / Capital Requirements

BankAll Firms

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🇬🇧 PRA Consultation high

March 17th 2026

CP5/26 – Modernising the liquidity policy framework

Consultation paper 5/26

AI Analysis

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).
Enhance governance: Strengthen ALM committees, risk appetite statements (covering frictions, survival horizons), LCP/funding plans integration.
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 2026 DEADLINE

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.

References

AI-generated analysis. May contain errors or omissions — verify with the original PRA source before acting. Full disclaimer.

Sectors:

Banking & Credit

Topics:

Prudential / Capital Requirements

Bank

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🇬🇧 PRA Consultation medium

February 25th 2026

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

Consultation paper 4/26

AI Analysis

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

What Changed

- Amendments to prior permission requirements for repaying or redeeming Tier 1 and Tier 3 own funds instruments, clarifying application to items classified under own funds permissions.
Clarification that Tier 2 basic own funds items can cover 20% of the Minimum Capital Requirement (MCR), while Tier 2 Ancillary Own Funds cannot.
Requirement that both minimum maturity date and first contractual opportunity to redeem must be met for Tier 1 and Tier 2 basic own funds classification.
Correction to reconciliation reserve calculation to avoid canceling eligible own funds increases from classification 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 2026 DEADLINE

- 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.

References

AI-generated analysis. May contain errors or omissions — verify with the original PRA source before acting. Full disclaimer.

Sectors:

Insurance & Pensions

Topics:

Prudential / Capital Requirements

Insurance

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🇬🇧 PRA Consultation high

February 19th 2026

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

Consultation paper 3/26

AI Analysis

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

What Changed

- Credit Risk Standardised Approach (SA): Exposures to overseas credit institutions, investment firms, or exchanges treated as "exposures to institutions" only if from UK or HMT-designated OPRR...
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 2026 DEADLINE

- 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.

References

AI-generated analysis. May contain errors or omissions — verify with the original PRA source before acting. Full disclaimer.

Sectors:

Banking & Credit Capital Markets & Trading Investment Management

Topics:

Prudential / Capital Requirements Reporting & Disclosure

BankAll Firms

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🇬🇧 PRA Consultation high

February 17th 2026

CP2/26 – Reforms to securitisation requirements

Consultation paper 2/26

AI Analysis

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

What Changed

The proposals amend PRA rules and supervisory guidance in the Securitisation Part of the PRA Rulebook, including:
Due diligence: Remove prescriptive verification of credit-granting criteria (Chapter 2 Article 9), risk retention (Chapter 2 Article 6 and Chapter 4), STS criteria, specific information availability,...
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...
Regulatory reporting: Disapply COREP C14.00/C14.01 for single-loan retail securitisations; introduce consistent non-performing exposure (NPE) definition.

Suggested Considerations

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 2026 DEADLINE

- 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.

References

AI-generated analysis. May contain errors or omissions — verify with the original PRA source before acting. Full disclaimer.

Sectors:

Banking & Credit Capital Markets & Trading Insurance & Pensions

Topics:

Prudential / Capital Requirements Reporting & Disclosure

BankInsuranceAll Firms

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🇬🇧 PRA Consultation medium

February 4th 2026

DP1/26 – Future banking data

Discussion paper 1/26

AI Analysis

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

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 2026 DEADLINE

- 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).

References

AI-generated analysis. May contain errors or omissions — verify with the original PRA source before acting. Full disclaimer.

Sectors:

Banking & Credit

Topics:

Prudential / Capital Requirements Reporting & Disclosure

Bank

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🇬🇧 PRA Consultation high

January 13th 2026

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

Consultation paper 1/26

AI Analysis

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

AI-generated analysis. May contain errors or omissions — verify with the original PRA source before acting. Full disclaimer.

Sectors:

Banking & Credit Insurance & Pensions Investment Management

Topics:

Prudential / Capital Requirements Authorisation & Licensing Consumer Protection / Conduct

BankInsuranceAsset Manager

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🇬🇧 PRA Consultation high

December 4th 2025

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

Consultation paper

AI Analysis

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

What Changed

The consultation introduces clarifications and amendments to Solvency II reporting requirements in several critical areas: Reporting Framework Modifications
Accident or underwriting year reporting: The PRA sets expectations for how firms should apply options within the Reporting Part of the PRA Rulebook regarding temporal classification of claims.
Annuity reporting by currency: Specific guidance on reporting annuities stemming from non-life obligations disaggregated by currency.
RBNS claims development: Clarification on reporting of reported but not settled (RBNS) claims and their development patterns. Internal Model Requirements
Firms using partial or full internal models for Solvency Capital Requirement (SCR) calculation must describe governance information including responsible roles, specific committees, their tasks,...

Suggested Considerations

*Immediate Actions (January-February 2026):
*Review consultation paper: Obtain and analyze CP22/25 in full to understand proposed amendments
*Assess applicability: Determine which reporting requirements apply to your firm (internal model status, portfolio types, reporting obligations)
*Identify gaps: Compare current reporting processes against PRA expectations outlined in the supervisory statement (SS4015)
*Engage supervisory contacts: Discuss any planned changes to reporting methodology (e.g., accident vs. underwriting year classification) with PRA supervisory contacts prior to implementation

Key Dates

4 December 2025

- PRA published CP22/25 consultation paper

31 December 2025

- Baseline date for commencement of new annual quantitative reporting template requirements (AoC.01) for firms with financial year-end on or after this date

31 December 2025

- Baseline date for commencement of quarterly QMC.01 reporting for internal model firms with financial year-end on or after this date

55 business days after quarter DEADLINE

end; - Deadline for quarterly QMC.01 submission (internal model firms)

100 business days after financial year DEADLINE

end; - Deadline for annual AoC.01 submission (internal model firms and groups)

Compliance Impact

Urgency Rating: HIGH

References

AI-generated analysis. May contain errors or omissions — verify with the original PRA source before acting. Full disclaimer.

Sectors:

Insurance & Pensions

Topics:

Prudential / Capital Requirements Reporting & Disclosure Operational Resilience / Outsourcing

Insurance

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🇬🇧 PRA Consultation high

November 21st 2025

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

Consultation paper 23/25

AI Analysis

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

What Changed

- New fee structures: Introduction of a periodic fee block for PISCES operators based on regulated income (baseline £2,200 annual fee, variable above £500,000 threshold); extension of fee-block A.13...
Levy adjustments: Addition of targeted support to FSCS Class 2, Category 2.1 (life distribution/investment intermediation) for both FOS and FSCS levies based on annual eligible income; withdrawal of...
PRA-FCA joint proposals (Chapter 4): Amended invoice due dates for firms paying £50,000+ in annual FCA/PRA fees ("payments on account") to prevent overdue labels from procedural mismatches.
Other updates: Removal of £3 agent registration fee for payment institutions, RAISPs, and EMIs; policy tweaks like expanding skilled person reviews for motor finance to more lenders, pro-rating for...

Suggested Considerations

Review current fee/levy exposure and model impacts of new blocks (e.g., PISCES, targeted support, DPC) and withdrawn FOS changes.
Assess invoice processes if paying £50,000+ in FCA/PRA fees; prepare for aligned due dates.
Submit consultation responses by deadlines, focusing on targeted support by 9 January 2026.
Budget for potential fee increases; monitor Spring 2026 fee-rates CP.
For applicants: Factor in new Category 4 fees for A.13 or crypto/DPC registrations.

Key Dates

9 January 2026 DEADLINE

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

16 January 2026

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

February 2026

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

March 2026

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

April 2026

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

Compliance Impact

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

References

AI-generated analysis. May contain errors or omissions — verify with the original PRA source before acting. Full disclaimer.

Sectors:

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

Topics:

Authorisation & Licensing Reporting & Disclosure Senior Managers / Governance

BankFintechPayment Provider

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🇬🇧 PRA Consultation high

November 14th 2025

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

Discussion paper 2/25

AI Analysis

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

AI-generated analysis. May contain errors or omissions — verify with the original PRA source before acting. Full disclaimer.

Sectors:

Insurance & Pensions

Topics:

Prudential / Capital Requirements Authorisation & Licensing

Insurance

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🇬🇧 PRA Consultation low

October 16th 2025

LIAC02/25 – Low Impact Amendments Consultation October 2025

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

AI Analysis

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

What Changed

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

Suggested Considerations

Submit consultation responses by 13 November 2025 via the PRA's Low Impact Amendments Process page, focusing on proposed disapplications, TMTP formula, ISPV rules, and miscellaneous changes.
Review and update internal policies for TMTP calculations to adopt the new 'Wr' formula from 31 December 2025 year-end, without restating priors.
Confirm compliance with ISPV 'no co-mingling' clarifications and SS2/25 updates by 23 December 2025.
Verify Rulebook references (e.g., Securitisation, parent undertakings) and adjust systems for effective dates like 19 January 2026.
For friendly societies/credit unions: Note zero minimum fees already reflected in 2025/26 invoices; no further action needed.

Compliance Impact

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

References

AI-generated analysis. May contain errors or omissions — verify with the original PRA source before acting. Full disclaimer.

Sectors:

Insurance & Pensions Banking & Credit

Topics:

Prudential / Capital Requirements Reporting & Disclosure

InsuranceBankAll Firms

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🇬🇧 PRA Consultation high

September 30th 2025

Letter from David Bailey ‘Thematic feedback on accounting for IFRS 9 expected credit losses (ECL)’

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

AI Analysis

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

What Changed

This is not a formal rule change or new regulation but thematic feedback building on prior years, with "areas of focus" for improvement:
Model risk: Elevated due to macroeconomic/geopolitical uncertainty; firms must enhance post-model adjustments (PMAs) for completeness (e.g., affordability risks, sector vulnerabilities), granular...
Recovery strategies: Ongoing risk of historical bias in Loss Given Default (LGD) estimates; challenge realism of recovery assumptions for vulnerable sectors/borrowers.
Climate risks: Greater emphasis on identifying/assessing/modelling climate drivers in ECL (e.g., via expert judgement, stress tests); align with PRA's SS1/23 on model risk and upcoming clarifications...

Suggested Considerations

Conduct self-assessments against annex "areas of focus" (model risk, recovery, climate) and share with auditors ahead of 2026 reporting.
Enhance PMAs: Challenge completeness for emerging risks (e.g., interest rates, sectors); link to emerging risk analysis.
Model improvements: Monitor redevelopment plans; ensure granular monitoring, comprehensive reviews, skilled independent assurance; define model boundaries.
Recovery processes: Strengthen challenges to LGD recovery assumptions for vulnerable exposures.
Climate integration: Improve risk identification, quantitative analysis, data/modelling, oversight; align governance with SS1/23.

Key Dates

2025

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

30 September 2025

- PRA issues Dear CFO Letter with thematic feedback

2026

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

Compliance Impact

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

References

AI-generated analysis. May contain errors or omissions — verify with the original PRA source before acting. Full disclaimer.

Sectors:

Banking & Credit

Topics:

Prudential / Capital Requirements ESG Reporting & Disclosure

Bank

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🇬🇧 PRA Consultation high

September 22nd 2025

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

Consultation paper 21/25

AI Analysis

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

AI-generated analysis. May contain errors or omissions — verify with the original PRA source before acting. Full disclaimer.

Sectors:

Banking & Credit Capital Markets & Trading

Topics:

Reporting & Disclosure Prudential / Capital Requirements

Bank

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🇬🇧 PRA Consultation high

September 16th 2025

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

Consultation paper 20/25

AI Analysis

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

What Changed

The consultation proposes four primary regulatory modifications: Subsidiarisation Threshold Increase The PRA proposes raising the FSCS liability threshold above which third-country branches must establish a UK subsidiary from £500 million to £600 million. The PRA attributes this increase to inflation rather than organic growth, aiming to prevent branches from artificially approaching the current threshold and incurring unnecessary subsidiarisation costs. ORSA Reporting Clarification Current guidance will be updated to clarify that third-country branches must submit an Own Risk and Self...

Suggested Considerations

*Threshold Assessment: Larger third-country branches must reassess whether their liabilities, forecast for the coming three years, mean they need to become subsidiaries given the proposed increased subsidiarisation threshold.
*Reporting Requirement Review: Branches should review updated guidance on ORSA submissions to ensure they provide the undertaking-level ORSA (rather than branch-specific ORSA) with required high-level summaries of solvency position, capital buffer rationale, and stress testing results.
*Quantitative Metrics Compliance: Given new quantitative metrics replacing previous PRA firm categorisation, branches should review what requirements will apply to them to ensure they do not inadvertently misreport.
*Three-Year Notification Obligation: Branches should establish processes to notify the PRA where it is projected that they may exceed the subsidiarisation threshold within the next three years.
*Asset Holding Verification: Confirm that branch assets are held in respect of branch provisions and that assets backing direct insurance liabilities are available, as required by the new rule.

Key Dates

16 September 2025

- CP20/25 published by the PRA

16 December 2025 DEADLINE

- Consultation response deadline

H1 2026

- Statement of Policy (SoP) expected to be published; subsidiarisation threshold update anticipated upon SoP publication

31 December 2026

- Planned implementation date for rulebook changes

Compliance Impact

Urgency Rating: HIGH

References

AI-generated analysis. May contain errors or omissions — verify with the original PRA source before acting. Full disclaimer.

Sectors:

Insurance & Pensions

Topics:

Prudential / Capital Requirements Authorisation & Licensing Reporting & Disclosure

Insurance

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