PRA Policy Updates | Prudential Regulation Authority | Reg Monitoring

🇬🇧 PRA Policy high

January 20th 2026

PS1/26 – Implementation of Basel 3.1: Final rules

Policy statement 1/26

AI Analysis

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

Action Required

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

Sectors:

Banking & Credit Capital Markets & Trading Investment Management

Topics:

Prudential / Capital Requirements Reporting & Disclosure Senior Managers / Governance

BankBroker DealerAsset Manager

🇬🇧 PRA Policy high

January 20th 2026

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

Policy statement 3/26

AI Analysis

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

Action Required

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

Sectors:

Banking & Credit Capital Markets & Trading Investment Management

Topics:

Prudential / Capital Requirements Reporting & Disclosure Authorisation & Licensing

BankBroker DealerAsset Manager

🇬🇧 PRA Policy high

January 20th 2026

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

Policy statement 4/26

AI Analysis

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

Action Required

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

Sectors:

Banking & Credit

Topics:

Prudential / Capital Requirements Reporting & Disclosure Authorisation & Licensing

Bank

🇬🇧 PRA Policy medium

December 8th 2025

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

Policy statement 27/25

AI Analysis

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

What Changed

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

What You Need To Do

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

Key Dates

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

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

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

Compliance Impact

Urgency: Medium – Changes are simplificatory (deletions reduce burden), with immediate effect from 31 December 2025, but no new requirements or penalties for non-compliance with deleted items; firms must act promptly to decommission processes and avoid erroneous submissions. This matters as it lower

References

Sectors:

Banking & Credit

Topics:

Reporting & Disclosure Prudential / Capital Requirements

Bank

🇬🇧 PRA Policy medium

December 5th 2025

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

Policy statement 26/25

AI Analysis

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

Sectors:

Banking & Credit Mortgage & Lending

Topics:

Prudential / Capital Requirements Senior Managers / Governance

Bank

🇬🇧 PRA Policy high

December 3rd 2025

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

Policy statement 25/25

AI Analysis

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

Sectors:

Banking & Credit Insurance & Pensions

Topics:

Prudential / Capital Requirements ESG Senior Managers / Governance

BankInsurance

🇬🇧 PRA Policy high

November 27th 2025

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

Policy statement 23/25

AI Analysis

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

Sectors:

Banking & Credit Capital Markets & Trading Investment Management

Topics:

Prudential / Capital Requirements Reporting & Disclosure

BankBroker DealerAsset Manager

🇬🇧 PRA Policy high

November 18th 2025

PS24/25 – Depositor protection

Policy statement 24/25

AI Analysis

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

Sectors:

Banking & Credit

Topics:

Consumer Protection / Conduct Prudential / Capital Requirements

Bank

🇬🇧 PRA Policy high

November 12th 2025

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

Policy statement 22/25

AI Analysis

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

What Changed

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

What You Need To Do

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

Key Dates

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

5 June 2025 - Consultation response deadline. DEADLINE

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

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

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

Compliance Impact

Urgency: High – With effectiveness just after today (1 January 2026), firms near £50-75 billion in retail deposits face immediate recalibration of leverage exposures and capital buffers to avoid breaches, amplified by the shift to averaging which requires historical data reconstruction. Non-complian

References

Sectors:

Banking & Credit Payments & E-Money Mortgage & Lending

Topics:

Prudential / Capital Requirements

BankPayment ProviderAll Firms

🇬🇧 PRA Policy high

October 28th 2025

PS19/25 – Restatement of CRR requirements – 2027 implementation – near-final

Policy statement 19/25

AI Analysis

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

Sectors:

Banking & Credit Capital Markets & Trading

Topics:

Prudential / Capital Requirements Reporting & Disclosure

BankBroker Dealer

🇬🇧 PRA Policy high

October 28th 2025

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

Policy Statement 20/25

AI Analysis

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

What Changed

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

What You Need To Do

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

Key Dates

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

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

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

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

Compliance Impact

Urgency Rating: HIGH

References

Sectors:

Banking & Credit Payments & E-Money

Topics:

Prudential / Capital Requirements Authorisation & Licensing Reporting & Disclosure

Bank

🇬🇧 PRA Policy high

October 23rd 2025

PS17/25 – Matching Adjustment Investment Accelerator

Policy statement 17/25

AI Analysis

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

Sectors:

Insurance & Pensions Capital Markets & Trading

Topics:

Prudential / Capital Requirements Reporting & Disclosure Operational Resilience / Outsourcing

Insurance

🇬🇧 PRA Policy high

October 15th 2025

PS21/25 – Remuneration Reform

Policy statement 21/25

AI Analysis

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

Sectors:

Banking & Credit Capital Markets & Trading Investment Management

Topics:

Senior Managers / Governance Prudential / Capital Requirements Reporting & Disclosure

BankAsset ManagerAll Firms

🇬🇧 PRA Policy high

October 9th 2025

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

Policy statement 16/25

AI Analysis

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

What Changed

Restatement of requirements: Provisions from MiFID Org Reg Articles on outsourcing, record-keeping, control procedures, risk management, compliance, internal audit, and governance are transferred verbatim or with minor clarifications into PRA Rulebook parts (e.g., Risk Control). Supervisory function adjustment: Following consultation feedback, PRA retained Article 25 provisions but substituted "governing body" for "supervisory function" to fit UK firm structures, preserving board-level oversight

What You Need To Do

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

Key Dates

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

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

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

Compliance Impact

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

References

Sectors:

Banking & Credit Capital Markets & Trading Investment Management

Topics:

Operational Resilience / Outsourcing Senior Managers / Governance Reporting & Disclosure

BankBroker DealerAll Firms

🇬🇧 PRA Policy high

September 30th 2025

PS15/25 – Closing liquidity reporting gaps and streamlining Standard Formula reporting

Policy statement 15/25

AI Analysis

PS15/25 introduces **new liquidity risk reporting requirements for major UK insurance firms**, closing data gaps identified during the March 2020 "dash for cash" and September 2022 LDI crisis. The policy mandates four new reporting templates for firms with significant derivatives or securities lending exposure, with implementation deferred to **30 September 2026** to allow adequate preparation time.

Sectors:

Insurance & Pensions

Topics:

Prudential / Capital Requirements Reporting & Disclosure Operational Resilience / Outsourcing

Insurance