Prudential / Capital Requirements

What Changed

• - Counterparties whose average aggregate notional amount (AANA) of non-centrally cleared OTC derivatives falls below the EUR 8 billion threshold will no longer be required to exchange initial margin...
• The current framework, under which below-threshold counterparties are exempt from initial margin for new trades but must continue to exchange initial margin for pre-existing “legacy” contracts, will...
• Article 28(1) of Delegated Regulation (EU) 2016/2251 will be amended to explicitly extend the exemption from initial margin requirements to outstanding contracts where one of the two counterparties...
• The RTS introduce a clearer operational framework for entry into and exit from the initial margin regime based on the annual AANA calculation for March–May, including scenarios where one or both...
• Once a counterparty falls below the EUR 8 billion threshold under the revised rules, firms will be permitted to terminate related initial margin processes, including ceasing ongoing calculation,...

Suggested Considerations

• Map all EMIR in-scope entities within the group and identify those whose AANA of non-centrally cleared OTC derivatives is close to or below the EUR 8 billion threshold, to assess which relationships may benefit from the expanded exemption.
• Review current collateral and margin frameworks to identify legacy contracts where initial margin is still being exchanged solely because the regime requires continuation despite the counterparty having fallen below the EUR 8 billion threshold.
• Prepare an internal policy update so that, once the RTS enter into force, initial margin requirements are switched off for counterparties below the EUR 8 billion threshold on both new and existing uncleared OTC derivatives, subject to group risk appetite.
• Update EMIR margin procedures and AANA calculation processes to ensure accurate annual determination of whether each counterparty is above or below the EUR 8 billion threshold, including documentation of the March–May calculation methodology.
• Review and amend collateral agreements, credit support annexes (CSAs) and associated legal documentation to incorporate the revised treatment for below-threshold counterparties, including terms for stopping margin exchange and potentially releasing segregated collateral.

Key Dates

References

• [1] esma.europa.eu/press-news/esma-news/joint-rts-amendments-...
• [2] esma.europa.eu/sites/default/files/library/esas_2019_20_-...
• [3] esma.europa.eu/document/emir-rts-various-amendments-bilat...
• [4] esma.europa.eu/sites/default/files/2026-08/ESA_2026_07_Fi...
• [5] esma.europa.eu/press-news/consultations
• [6] ashurst.com/en/insights/financial-services-speedread-4-au...
• [7] esma.europa.eu/press-news/esma-news/esas-publish-joint-qa...
• [8] sip.lex.pl/komentarze-i-publikacje/poradniki/sprawozdanie...

What Changed

• - The EDMC now has a new Chair (Nicholas Segal) and Deputy Chair (Peter King), replacing Sir William Blair and Philip Marsden whose terms ended in July 2026.
• The appointments are the outcome of an external recruitment process commenced in October 2025, aligned with the EDMC’s governance framework and five‑year renewable term structure.
• The scope of the EDMC’s remit continues to cover contested enforcement decisions across the Bank’s statutory regimes: Prudential Regulation, Financial Market Infrastructures, Resolution,...
• The EDMC Procedures, published in January 2024, remain the operative framework for how contested enforcement cases are handled, including panel constitution, hearing processes, and decision‑making...
• The EDMC continues to operate with functional separation from investigation teams and the Bank’s executive, preserving independence in contested enforcement decisions.

Suggested Considerations

• Map all existing and potential enforcement exposures to the EDMC’s statutory remit, covering prudential regulation, FMI, resolution, securitisation, wholesale cash distribution, critical third parties and notes issuance.
• Review internal enforcement‑response playbooks to ensure they explicitly recognise the EDMC’s independent role and the January 2024 EDMC Procedures, including how contested cases will be heard and decided.
• Update board and senior management briefings on BoE/PRA enforcement to reflect the change in EDMC leadership and likely implications for contested case strategy and settlement versus contest decisions.
• Assess ongoing and anticipated enforcement matters for which the firm might contemplate contesting; incorporate the EDMC’s composition and procedures into litigation and regulatory strategy planning.
• Train Legal, Compliance and relevant business teams on the practical implications of the EDMC Procedures (panel size, hearing processes, written and oral representations, decision timelines) with scenario‑based exercises for contested cases.

Key Dates

References

• [1] bankofengland.co.uk/prudential-regulation/publication/202...
• [2] finreg.aoshearman.com/Bank-of-England-Establishes-Enforce...
• [3] 3vb.com/sir-william-blair-appointed-chair-of-bank-of-engl...
• [4] bankofengland.co.uk/about/people/court-of-directors/gover...
• [5] mondovisione.com/media-and-resources/news/bank-of-england...
• [6] elischolar.library.yale.edu/cgi/viewcontent.cgi?article=1...
• [7] talents.studysmarter.co.uk/companies/the-bank-of-england/...
• [8] treasury.govt.nz/sites/default/files/2018-04/rbnz-rev-ban...

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

References

• [1] bankofengland.co.uk/prudential-regulation/regulatory-repo...
• [2] skadden.com/insights/publications/2025/10/chapter-9-solve...
• [3] bankofengland.co.uk/prudential-regulation/key-initiatives...
• [4] bankofengland.co.uk/prudential-regulation/publication/202...
• [5] nortonrosefulbright.com/en/knowledge/publications/8dc8438...
• [6] bankofengland.co.uk/-/media/boe/files/prudential-regulati...
• [7] bankofengland.co.uk/prudential-regulation/publication/202...
• [8] bankofengland.co.uk/prudential-regulation/publication/202...

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

References

• [1] bankofengland.co.uk/prudential-regulation/publication/202...
• [2] bankofengland.co.uk/prudential-regulation/publication/202...
• [3] bankofengland.co.uk/prudential-regulation/low-impact-amen...
• [4] kpmg.com/xx/en/our-insights/regulatory-insights/uk-regula...
• [5] bankofengland.co.uk/prudential-regulation/regulatory-dige...
• [6] bankofengland.co.uk/prudential-regulation/publication/202...
• [7] finreg.aoshearman.com/UK-PRA-consults-and-makes-low-impac...
• [8] media.milliman.com/v1/media/edge/images/millimaninc5660-m...

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

References

• [1] bankofengland.co.uk/prudential-regulation/publication/202...
• [2] prarulebook.co.uk/guidance/statements-of-policy/the-pras-...
• [3] bankofengland.co.uk/-/media/boe/files/prudential-regulati...
• [4] milliman.com/en/insight/PRA-policy-statement-insurance-bu...
• [5] skadden.com/insights/publications/2026/04/pra-proposes-fu...
• [6] pwc.co.uk/financial-services/assets/pdf/pra-finalises-new...
• [7] regulationtomorrow.com/2026/05/pra-cp8-26-funded-reinsura...
• [8] cliffordchance.com/insights/resources/blogs/insurance-ins...

What Changed

• - The PRA has explicitly reinforced that FSCS Liabilities and FSCS Fee Tariff data are core prudential reporting metrics, and misreporting them may both impede risk assessment and cause underpayment...
• The enforcement action clarifies that failures to consult the PRA Rulebook and applicable guidance on FSCS coverage and fee tariff methodologies constitute a breach of Fundamental Rule 2 (due skill,...
• The PRA has signalled that the absence of effective written processes for calculating regulatory data, and lack of clear accountability, internal oversight, and challenge over those calculations,...
• The case demonstrates that remediation submissions are subject to the same accuracy and governance expectations as original returns, and that errors in purported remediation will be treated as...
• The PRA’s Early Account Scheme (EAS), formally incorporated into its enforcement policy in January 2024, is now clearly positioned as a mechanism that can materially reduce penalties where firms...

Suggested Considerations

• Review and map all FSCS Liabilities and FSCS Fee Tariff reporting obligations under the PRA Rulebook and applicable guidance, ensuring the firm’s methodology aligns with regulatory definitions of FSCS-covered liabilities.
• Conduct a detailed end-to-end review of regulatory reporting processes for FSCS data, including data sourcing, calculations, validations, and submission workflows, to identify and remediate control weaknesses.
• Develop and document formal, robust written procedures that govern the calculation and validation of FSCS Liabilities and FSCS Fee Tariff data, including change-control processes for methodologies.
• Assign clear ownership and accountability for FSCS-related reporting within the firm’s governance framework, ensuring named individuals or functions are responsible for accuracy, completeness, and timely submission.
• Strengthen internal oversight, challenge and review mechanisms over prudential and FSCS-related reporting, including regular independent checks by risk, compliance or internal audit.

Key Dates

References

• [1] lexology.com/library/detail.aspx?g=e13d06f0-5743-4ad2-bbe...

What Changed

• - Introduced a two‑step ICAAP/ILAAP submission model under the SREP: (1) annual submission of the main “ICAAP & ILAAP package” by 15 March and (2) continuous, year‑round submission of any new or...
• Shortened the standard annual deadline for ICAAP/ILAAP information from 31 March to 15 March, reducing the preparation and governance window by roughly two weeks versus prior practice.
• Confirmed that the clarifications apply from the SREP 2025 cycle onwards, with a general transition approach for 2025 and limited transitional flexibilities for banks whose internal processes cannot...
• Required inclusion of two distinct, concise documents within the annual packages: a “Capital Adequacy Statement” and a “Liquidity Adequacy Statement” reflecting the management body’s formal view on...
• Clarified governance expectations around capital and liquidity planning, including regular updates of governance frameworks to reflect external conditions and the submission of a complete risk...

Suggested Considerations

• Review existing ICAAP and ILAAP submission calendars and internal governance timelines and formally reset them to ensure core packages can be prepared, approved by the management body, and submitted by 15 March each year.
• Design and implement a documented two‑step submission process, including procedures for continuous, year‑round identification, approval and transmission to the ECB of any new or materially updated ICAAP/ILAAP‑relevant documents.
• Develop, approve and embed the new Capital Adequacy Statement and Liquidity Adequacy Statement, ensuring they reflect the management body’s signed‑off view on adequacy and are supported by clear references to ICAAP/ILAAP analyses and results.
• Update ICAAP and ILAAP governance frameworks to reflect ECB expectations, including explicit roles and responsibilities, escalation paths, periodic reviews triggered by external developments, and Board‑level oversight of capital and liquidity planning.
• Compile and maintain a comprehensive risk inventory covering both normative and economic perspectives, and ensure it is aligned with business models, risk appetite frameworks, recovery plans, stress testing programmes and SREP submissions.

Key Dates

References

• [1] bankingsupervision.europa.eu/ecb/pub/pdf/ssm.ICAAP_ILAAP_...
• [2] regulationtomorrow.com/2025/02/ecb-clarification-on-icaap...
• [3] blogs.pwc.de/en/risk/article/247557/ecb-clarification-on-...
• [4] pwcplus.de/de/article/247557/risk-blog-ecb-clarification-...
• [5] linkedin.com/pulse/ecb-clarification-icaaps-ilaaps-respec...
• [6] linkedin.com/posts/la-partners-sarl_ecb-clarification-on-...
• [7] linkedin.com/posts/deloitte_ecb-bankingrisklab-activity-7...
• [8] managementsolutions.com/en/publications-and-events/regula...

What Changed

• - Introduction of a tailored regulatory framework for single‑parent captive insurers in the UK, distinct from the regimes applicable to traditional insurers and reinsurers.
• Creation of a streamlined dual PRA/FCA authorisation process for captives, with an explicit target decision timeline of 4–6 weeks from application.
• Exclusion of captives from Solvency UK requirements, with a move to a separate, flexible capital resources framework rather than Solvency II‑style minimum capital requirements.
• Exclusion of captives from the FCA Consumer Duty, recognising that captives primarily insure intra‑group risks and have limited direct retail customer exposure.
• Introduction of proportionately lower capital requirements for captives, reflecting their lower risk profile and group‑risk‑financing purpose.

Suggested Considerations

• Assess whether existing or planned group risk‑financing strategies would benefit from establishing a UK single‑parent captive under the proposed regime and document the strategic rationale.
• Map current and planned intra‑group insurance and reinsurance arrangements, including any employee benefits‑related policies, to confirm which risks can be written directly and which must only be written on a reinsurance basis.
• Engage early with internal stakeholders (risk, treasury, legal, tax, and senior management) to determine preferred captive structures (standalone vs future PCC) and governance arrangements aligned with PRA expectations.
• Prepare to participate in the PRA and FCA consultations by drafting detailed, technical responses on authorisation processes, capital methodologies, reporting templates, and conduct requirements for captives.
• Review existing Solvency UK and Consumer Duty compliance frameworks and identify which elements would no longer apply to captives under the proposed regime, while ensuring that any remaining protections and safeguards are maintained where appropriate.

Key Dates

References

• [1] bankofengland.co.uk/prudential-regulation/publication/202...
• [2] assets.publishing.service.gov.uk/media/686fc3f910d550c668...
• [3] clydeco.com/en/insights/2025/07/government-plans-to-proce...
• [4] skadden.com/insights/publications/2025/07/uk-proposed-new...
• [5] tradingview.com/news/reuters.com,2025:newsml_S8N3Q9078:0-...
• [6] slaughterandmay.com/media/mzaiarh0/fr1356-18-june-2026.pdf
• [7] cms.law/en/gbr/publication/financial-services-horizon-sca...
• [8] bankofengland.co.uk/-/media/boe/files/prudential-regulati...

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

References

• [1] bankofengland.co.uk/prudential-regulation/publication/201...
• [2] bankofengland.co.uk/-/media/boe/files/prudential-regulati...
• [3] legislation.gov.uk/ukpga/2013/33/notes/division/4/data.xh...
• [4] freshfields.com/en/our-thinking/blogs/risk-and-compliance...
• [5] bankofengland.co.uk/-/media/boe/files/prudential-regulati...
• [6] regulationtomorrow.com/2015/05/the-implementation-of-ring...
• [7] bankofengland.co.uk/-/media/boe/files/prudential-regulati...

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

References

• [1] captive.com/news/pra-sets-uk-captive-insurance-regime-con...
• [2] assets.publishing.service.gov.uk/media/686fc3f910d550c668...
• [3] captiveinternational.com/pra-to-launch-captive-consultati...
• [4] linkedin.com/posts/regxplora_europe-prudential-regulation...
• [5] tradingview.com/news/reuters.com,2025:newsml_S8N3Q9078:0-...
• [6] cliffordchance.com/insights/resources/blogs/insurance-ins...
• [7] bankofengland.co.uk/prudential-regulation/publication/202...
• [8] skadden.com/insights/publications/2026/04/pra-proposes-fu...

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...
• Definitions of key exposure classes (such as “institution”, “credit institution”, “designated investment firm”, “central government”, “central bank”, “regional government”, “local authority”, “public...
• 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

References

• [1] bankofengland.co.uk/prudential-regulation/publication/202...
• [2] bankofengland.co.uk/prudential-regulation/publication/202...
• [3] finreg.aoshearman.com/uk-pra-consults-on-rule-changes-for...
• [4] assets.publishing.service.gov.uk/media/6994777dc0aa8279cb...
• [5] legislation.gov.uk/ukdsi/2026/9780348285178/pdfs/ukdsiem_...
• [6] ukfinance.org.uk/system/files/2026-04/UK%20Finance%20resp...

What Changed

• - CCPs must base admission criteria on a comprehensive risk assessment of the risks posed by clearing members and ensure the criteria reflect those risks.
• CCPs must consider whether clearing members have sufficient financial resources to meet obligations arising from participation in the CCP.
• CCPs must assess whether clearing members have access to reliable credit, liquidity, and foreign exchange facilities commensurate with the scale and nature of their clearing activity.
• CCPs must examine the clearing member’s operational capacity to meet CCP obligations, including readiness to support clearing operations and margin obligations.
• CCPs must take account of the client clearing activity of a clearing member, including the relative importance of that activity and the member’s ability to meet margin requirements if clients default.

Suggested Considerations

• CCPs should review their current admission criteria to ensure they are explicitly tied to a documented assessment of risks posed by each clearing member type.
• CCPs should update membership rulebooks and onboarding procedures to reflect the RTS requirement to consider financial resources, operational capacity, and liquidity support arrangements.
• CCPs should build or refine documented methodologies for assessing NFC clearing members’ ability to meet margin and default fund obligations.
• CCPs should ensure sponsored membership frameworks clearly define how the sponsor’s support, the sponsored member’s profile, and relevant risk controls are assessed for eligibility purposes.
• CCPs should prepare to publish clear admission criteria, application steps, timelines, required documentation, and explanations for any category-specific requirements.

Key Dates

References

• [1] esma.europa.eu/sites/default/files/2026-07/ESMA91-1505572...
• [2] esma.europa.eu/sites/default/files/2025-10/ESMA91-1505572...
• [3] eachccp.eu/wp-content/uploads/2026/01/EACH-Response-ESMA-...
• [4] isda.org/a/o4vgE/ISDA-Response-to-ESMA-on-CCP-Participati...
• [5] esma.europa.eu/press-news/esma-news/esma-consults-ccp-par...
• [6] asam.org/asam-criteria
• [7] deutsche-boerse.com/resource/blob/59972/5a6ef04dd55bcedf5...
• [8] drs-als.com/esma-publishes-guidelines-for-ccp-colleges/

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

References

• [1] bankofengland.co.uk/prudential-regulation/publication/202...
• [2] bankofengland.co.uk/prudential-regulation/publication/202...
• [3] ukgicompliance.com/fca-publishes-consultation-paper-cp26-...
• [4] linkedin.com/posts/the-law-chronicle_pra-cp726-regulated-...
• [5] fca.org.uk/publications/policy-statements/ps26-14-fca-reg...
• [6] finreg.aoshearman.com/uk-pra-consults-on-regulated-fees-a...

What Changed

• - MAS proposes introducing a Protected Cell Company (PCC) as a new corporate structure comprising a single legal entity with assets and liabilities statutorily segregated into distinct cells within...
• The PCC structure is intended to be available only to MAS-licensed entities engaged in captive insurance, insurance‑linked securities (ILS) and sovereign risk pooling activities, not generally to all...
• Each PCC will have a core and multiple cells, with ring‑fencing of assets and liabilities such that creditors of one cell should not have recourse to assets of other cells or the core, subject to...
• The framework is positioned to enable multiple risk issuances and programs within one vehicle, improving cost and operational efficiency compared with establishing multiple standalone insurers or...
• MAS signals that the PCC framework will complement existing special purpose reinsurance and alternative risk‑transfer structures, and is conceptually aligned with Singapore’s broader approach to...

Suggested Considerations

• Review the MAS Consultation Paper P013-2026 in detail and map proposed PCC requirements against your current and planned captive, reinsurance, ILS and sovereign risk pool structures.
• Conduct an internal impact assessment on how PCC introduction would affect corporate structuring, capital allocation, risk management, and policyholder/investor protections within your group.
• Identify potential use cases for PCCs (e.g. multi‑cell captives, collateralised reinsurance platforms, ILS issuance vehicles, sovereign risk pools) and assess legal, tax, accounting and regulatory implications for each use case.
• Engage legal, compliance, actuarial and treasury functions to develop a coordinated response to MAS addressing prudential treatment, segregation mechanics, governance expectations and disclosure considerations for PCCs.
• Prepare and submit detailed consultation feedback to MAS by 07 August 2026, including any requested clarifications, suggested safeguards, or recommended scope limitations or expansions for PCC usage.

Key Dates

References

• [1] captivereview.com/news/singapore-to-consult-on-pcc-legisl...
• [2] captiveinternational.com/singapore-targets-insurance-inno...
• [3] linkedin.com/posts/william-chan-strategist_the-monetary-a...
• [4] artemis.bm/news/singapore-to-introduce-protected-cells-fo...
• [5] sg.finance.yahoo.com/news/mas-consult-introducing-protect...
• [6] businesstimes.com.sg/companies-markets/singapore-introduc...
• [7] mas.gov.sg/news/media-releases/2000/singapore-positioning...
• [8] mas.gov.sg/regulation/guidelines/guidelines-on-shared-res...

What Changed

• - ESMA has published an Interim Report on the effectiveness of the Active Account Requirement, covering implementation and market impact during 2025 and early 2026, and explicitly framing this as the...
• ESMA confirms that roughly 500 entities have formally notified ESMA and national competent authorities that they are subject to the AAR, indicating that competent authorities now have a defined...
• Notified entities represent more than 90% of notional outstanding held by EU entities in relevant AAR‑scope derivatives, signalling supervisory focus on a concentrated set of high‑exposure...
• ESMA identifies early signs of increased clearing activity at EU CCPs, particularly among smaller entities, including some full relocation of positions from Tier 2 CCPs to EU CCPs for AAR‑relevant...
• ESMA notes a gradual but limited shift in market shares from systemically important Tier 2 CCPs to EU CCPs in certain AAR‑related products, indicating that supervisors will monitor market‑share...

Suggested Considerations

• Confirm whether your entity (and any funds or branches) is subject to the Active Account Requirement by assessing EMIR clearing obligation status and relevant notional clearing volumes against EMIR 3 thresholds for AAR‑scope derivatives.
• Implement and document annual stress‑testing of the active account arrangements, including at least one test per year, to evidence that positions and new trades can be shifted from Tier 2 CCPs to EU CCPs under stress scenarios.
• Map and quantify exposures to Tier 2 CCPs across AAR‑relevant derivatives, and establish an internal monitoring framework to track shifts in clearing volumes between Tier 2 CCPs and EU CCPs in line with AAR objectives.
• Align trade booking, clearing workflows, and client documentation so that the required minimum number of trades per relevant subcategory and contract class can be cleared through the EU active account on an annual average basis, taking into account representativeness requirements where applicable.
• Prepare to submit the first AAR report by 31 July 2026, ensuring that systems and controls can capture and report activity from 25 June 2025 to 30 June 2026 in accordance with ESMA’s reporting templates and instructions.

Key Dates

References

• [1] linkedin.com/pulse/emir-3-esma-moves-from-principle-imple...
• [2] ashurst.com/en/insights/eu-emir-esma-publishes-guidance-o...
• [3] esma.europa.eu/press-news/esma-news/esma-releases-reporti...
• [4] esma.europa.eu/press-news/esma-news/esma-publishes-final-...
• [5] simmons-simmons.com/en/publications/cm5wo3yoj06j8tr0ksgax...
• [6] linkedin.com/posts/eurex_emir-30-active-account-requireme...
• [7] esma.europa.eu/sites/default/files/2025-12/ESMA91-1505572...
• [8] eurex.com/ec-en/rules-regs/emir3-0

What Changed

• - CCIL is formally recognised as a Tier 1 third‑country central counterparty (TC‑CCP) under Regulation (EU) No 648/2012 (EMIR), allowing it to offer clearing services to EU clearing members and EU...
• The recognition is contingent on an equivalence decision adopted by the European Commission for the Indian regulatory framework applicable to CCPs under EMIR Article 25.
• ESMA has assessed and confirmed effective supervision and enforcement by the Reserve Bank of India (RBI) over CCIL as a prerequisite for recognition.
• ESMA and RBI have put in place cooperation arrangements, formalised through a Memorandum of Understanding, to support ongoing supervisory coordination over CCIL’s activities that affect EU...
• CCIL is now included in ESMA’s updated list of recognised third‑country CCPs, clarifying that EU firms may use CCIL’s clearing services while complying with EMIR’s clearing and risk‑management...

Suggested Considerations

• Confirm and document that CCIL now appears on ESMA’s official list of recognised third‑country CCPs and that its status is Tier 1 under EMIR, updating internal CCP eligibility lists and counterparty approval registers accordingly.
• Review and update internal clearing policies, procedures and governance documents to reflect that EU entities may again clear eligible products through CCIL, subject to EMIR and firm‑specific risk appetite.
• Reassess and formally approve CCIL within the firm’s CCP due‑diligence framework, including credit risk, operational risk, legal risk and jurisdictional risk assessments, taking account of the RMU with RBI and the Tier 1 classification.
• Update EMIR compliance mappings to ensure that trades cleared via CCIL are correctly treated for clearing obligation, risk‑management, reporting and collateral requirements, and that no activity is undertaken through non‑recognised CCPs in India.
• Coordinate with front‑office, clearing operations and collateral management teams to re‑open or adjust clearing access to CCIL (e.g. membership arrangements, client clearing channels, account structures, margin and collateral workflows).

Key Dates

References

• [1] ndtvprofit.com/markets/ccil-receives-esma-recognition-to-...
• [2] x.com/lakshmishaks/status/2072157632589418928
• [3] business-standard.com/amp/industry/news/ccil-secures-esma...
• [4] securitiesfinancetimes.com/securitieslendingnews/regulati...
• [5] esma.europa.eu/press-news/esma-news/esma-withdraw-recogni...
• [6] esma.europa.eu/sites/default/files/library/third-country_...
• [7] esma.europa.eu/central-counterparties/third-country-ccps
• [8] dirittobancario.it/wp-content/uploads/2022/03/Third-count...

What Changed

• - CSSF launches a new covered deposits data survey with reference date 30 June 2026, continuing the established quarterly reporting cycle used for FGDL funding and risk-based contribution...
• Credit institutions incorporated under Luxembourg law, POST Luxembourg (for postal financial services), and Luxembourg branches of credit institutions from third countries must report the stock of...
• The survey must be submitted via the CSSF reporting channels (CSSF eDesk platform or other specified electronic means), using the data templates and technical specifications communicated by the CPDI,...
• Institutions that are members of the FGDL must ensure alignment between the survey data and the definition of “covered deposits” under the Law of 18 December 2015 on the failure of credit...
• The circular reaffirms that data reported for the survey feed into the risk‑based ex‑ante contribution mechanism set out in CPDI circulars on FGDL contributions (e.g.

Suggested Considerations

• Apply the EUR 100,000 coverage cap per depositor for the survey and ensure that non‑eligible deposits (such as certain financial sector deposits or specific categories excluded under the 2015 Law) are correctly filtered out of the covered deposits figures.
• Reconcile the 30 June 2026 covered deposits data with internal finance, risk, and regulatory reporting systems to ensure consistency with other prudential data and FGDL contribution calculations.
• Arrange for the survey report to be reviewed and formally approved by the institution’s governing body or the designated senior manager responsible for deposit guarantee scheme reporting, documenting the approval and any key assumptions or methodological choices.
• Submit the completed 30 June 2026 covered deposits survey through the CSSF eDesk platform or other specified reporting channel within the deadline set by CSSF-CPDI 26/51 and any accompanying CPDI instructions.
• Retain detailed working papers, data extracts, and methodology documentation supporting the 30 June 2026 survey in order to evidence compliance to CSSF, facilitate internal audit review, and support future FGDL ex‑ante contribution calculations.

Key Dates

References

• [1] cssf.lu/wp-content/uploads/CSSF_CPDI_2650eng.pdf
• [2] fgdl.lu/wp-content/uploads/2023/05/CSSF_CPDI_2021_eng.pdf
• [3] cssf.lu/en/protection-of-depositors-and-investors/
• [4] mondaq.com/financial-services/1737014/circular-cssf-26906...
• [5] cliffordchance.com/content/dam/cliffordchance/PDFDocument...
• [6] cssf.lu/en/Document/circular-cssf-cpdi-16-01/
• [7] hsfkramer.com/insights/2026-03/cssf-circular-26-906-a-con...
• [8] stradalex.lu/en/slu_src_publ_leg_cssf/document/cssf-cpdi-...

What Changed

• - UK stablecoin issuance will be subject to a dual regulatory regime: non‑systemic stablecoins will be supervised solely by the FCA, while systemic stablecoins used for payments will be jointly...
• Issuing a qualifying sterling‑denominated stablecoin in the UK will become a regulated activity, requiring FCA authorisation for non‑bank issuers and bringing them within the FCA’s prudential,...
• HM Treasury will apply statutory systemic tests under the Banking Act (e.g. scale, interconnectedness, substitutability, impact on confidence in sterling) to decide whether a stablecoin payment...
• Once recognised as systemic, stablecoin issuers and systemic payment system providers will fall under the Bank of England’s remit under the Banking Act 2009, including powers to obtain information,...
• Systemic sterling‑denominated stablecoin issuers will be required to maintain backing reserves equal to all outstanding coins, with backing assets held on statutory trust in the UK and ring‑fenced...

Suggested Considerations

• Map all existing and planned sterling‑denominated stablecoin products against the UK’s systemic and non‑systemic regimes and assess whether their intended use in UK payments could trigger HM Treasury systemic recognition.
• Initiate or update FCA authorisation applications for stablecoin issuance and cryptoasset custody activities, ensuring business models, governance and safeguarding arrangements align with CP25/14 and the forthcoming stablecoin regime.
• Design and implement reserve‑management frameworks capable of maintaining backing assets equal to outstanding coins, in the proposed 70/30 mix between short‑term UK government debt and Bank of England deposits, with appropriate stress testing and liquidity risk oversight.
• Establish statutory trust and segregation structures for backing assets and liquid‑asset reserves, including appointing UK‑authorised third‑party custodians and aligning documentation with FCA client‑asset‑style protections and coinholder proprietary claims.
• Develop capital planning processes and ICAAP‑style assessments to meet the Bank of England’s requirements for capital against general business risk and dedicated reserves for financial risk and wind‑down costs.

Key Dates

References

• [1] fmlc.org/wp-content/uploads/2026/02/FMLC_Reponse-to-Syste...
• [2] paulhastings.com/insights/client-alerts/bank-of-england-c...
• [3] mayerbrown.com/en/insights/publications/2025/12/proposed-...
• [4] whitecase.com/insight-alert/bank-england-consults-regulat...
• [5] skadden.com/insights/publications/2025/11/bank-of-england...
• [6] bankofengland.co.uk/news/2026/june/boe-launches-policy-st...
• [7] theglobalcity.uk/PositiveWebsite/media/IRSG/240208_RESPON...
• [8] fca.org.uk/publications/consultation-papers/cp25-14-stabl...

What Changed

• - The Bank of England will update the Form PL definitions to improve consistency and alignment with the ONS UK National Accounts requirements, specifically for income and expenditure reporting.
• The definition and reporting guidance for tax (PL16 / PL.01.01.01 C0010 R1600) are being revised to clarify the treatment of items classified as taxes on production and related charges.
• The updated definitions will apply to all Form PL line items, with particular emphasis on ensuring more precise classification of tax-related items within profit and loss reporting.
• The Bank of England does not anticipate major changes in reported figures but expects improved clarity and consistency in how firms map internal accounting data to Form PL categories.
• The updated definitions will replace the current Form PL guidance and become the operative standard for all reporting institutions from the Q1 2027 reporting period.

Suggested Considerations

• Review the updated Form PL definitions in full once they are published on 31 July 2026 to understand all changes to income, expenditure and tax classification.
• Map the revised Form PL tax definition (PL16 / PL.01.01.01 C0010 R1600) to internal chart of accounts and tax reporting structures, ensuring correct identification of taxes on production and related charges.
• Update internal regulatory reporting systems, data transformation rules and validation checks to reflect the new Form PL definitions ahead of the Q1 2027 reporting period.
• Revise internal reporting policies, procedures and documentation for Form PL to incorporate the updated tax treatment and any other definitional changes.
• Train finance, regulatory reporting and data teams on the revised Form PL guidance, with particular focus on the redefined tax items and their distinction from other tax and fee categories.

Key Dates

References

• [1] bankofengland.co.uk/statistics/data-collection/statistica...
• [2] bankofengland.co.uk/-/media/boe/files/statistics/data-col...
• [3] linkedin.com/posts/swelfordsmith_regtech-regulatoryreport...
• [4] bankofengland.co.uk/-/media/boe/files/statistics/data-col...
• [5] bankofengland.co.uk/statistics/data-collection/statistica...
• [6] bankofengland.co.uk/statistics/data-collection/statistica...
• [7] bankofengland.co.uk/-/media/boe/files/statistics/data-col...
• [8] boe.access.preservica.com/download/file/IO_8d140db5-a092-...

What Changed

• - The ECB has reaffirmed that institutions using internal ratings-based (IRB) approaches must apply their approved internal models consistently for expected loss calculation on defaulted retail and...
• The ECB has underscored that the IRB shortfall (difference between expected loss and accounting provisions) must be correctly calculated and deducted from regulatory capital whenever expected loss...
• The ECB has classified intentional failure to apply approved internal models to expected loss calculations as a “severe” breach under its Guide to the method of setting administrative pecuniary...
• The enforcement action confirms the ECB’s readiness to use its sanctioning powers under Article 18 of Council Regulation (EU) No 1024/2013 against internal-model users that misreport capital due to...
• The case highlights that miscalculation of expected loss and IRB shortfall over multiple reporting periods, even without an explicit capital ratio breach of minima, can be sanctioned where capital...

Suggested Considerations

• Review and confirm that all regulatory capital calculations, including expected loss and IRB shortfall for defaulted exposures, consistently use the approved internal models as authorised by the ECB or national competent authority.
• Map and reconcile the internal-model implementation across risk systems, finance, and regulatory reporting to ensure that there are no manual overrides, alternative methods, or parallel calculations that deviate from the approved model specifications.
• Strengthen model risk governance by ensuring that any proposed changes to expected loss methodologies, including for defaulted retail and corporate portfolios, are formally approved by the competent authority before being used in regulatory capital reporting.
• Implement robust controls and periodic testing within Finance, Risk, and Regulatory Reporting functions to detect and prevent misapplication or non-application of approved internal models, with clear escalation procedures for identified discrepancies.
• Ensure that the calculation of IRB shortfall (difference between expected loss and accounting provisions) is independently validated and appropriately deducted from CET1 capital in accordance with CRR and ECB internal models guidance.

Key Dates

References

• [1] zandersgroup.com/en/insights/blog/ecbs-revised-guide-to-i...
• [2] corporatefinanceinstitute.com/resources/career-map/sell-s...
• [3] bankingsupervision.europa.eu/ecb/pub/pdf/ssm.supervisory_...
• [4] finanssivalvonta.fi/globalassets/fi/saantely/maarayskokoe...
• [5] bis.org/basel_framework/chapter/CRE/53.htm?inforce=202201...
• [6] managementsolutions.com/sites/default/files/publicaciones...
• [7] finalyse.com/blog/banking/ecb-revised-guide-to-internal-m...
• [8] bankingsupervision.europa.eu/framework/legal-framework/pu...

What Changed

• - The ECB is conducting a comprehensive review of around 130 supervisory publications (guides, reports, letters, methodologies) to assess their relevance, effectiveness and clarity and to align them...
• Approximately 40 supervisory documents have been classified as outdated, superseded or no longer relevant and have been formally discontinued, with the texts remaining accessible but clearly labelled...
• The ECB has updated its classification of supervisory guidance documents to emphasise explicitly that they are non‑binding, do not create new legal obligations and do not replace binding EU or...
• The Guide to the internal capital adequacy assessment process (ICAAP Guide) will be revised to clarify supervisory expectations on the management buffer, explicitly positioning it as the bank’s own...
• The ECB has removed all content on supervisory expectations for the credit conversion factor (CCF) from the Guide to internal models, in anticipation of forthcoming EBA guidelines on CCF, thereby...

Suggested Considerations

• Review the ECB press release and associated lists of discontinued publications to identify any ECB guides, reports, letters or methodologies currently referenced in your internal policies, risk frameworks or model documentation that are now labelled as discontinued.
• Update internal policy inventories, regulatory mapping and compliance registers to reflect the new classification of ECB supervisory guidance as non‑binding and to distinguish clearly between binding EU/national law and non‑binding ECB expectations.
• For banks using the ICAAP Guide, perform a gap analysis of capital planning and management buffer practices against the forthcoming clarified expectations, ensuring internal documentation clearly differentiates management buffers from Pillar 2 requirements and guidance.
• For institutions using internal models for credit risk, remove any reliance on the ECB’s former CCF expectations by re‑mapping modelling policies and documentation to forthcoming EBA guidelines on credit conversion factors and to CRR/CRD provisions, once those guidelines are finalised.
• For risk and finance functions, review the CVA treatment in internal capital and risk methodologies to verify alignment with CRR III and ensure that internal references to ECB guidance (assessment methodology, materiality assessment) are updated to reflect the removed CVA content.

Key Dates

References

• [1] forvismazars.com/group/en/insights/latest-insights/ecb-su...
• [2] managementsolutions.com/en/publications-and-events/regula...
• [3] bankingsupervision.europa.eu/framework/priorities/html/ss...
• [4] bankingsupervision.europa.eu/press/blog/2026/html/ssm.blo...
• [5] bancaditalia.it/media/bce-comunicati/documenti/2026/ecb-g...
• [6] banque-france.fr/system/files/2026-05/ecb.gc260504.en_.pdf
• [7] youtube.com/watch?v=babRYzEG3AY
• [8] linkedin.com/posts/regxplora_europe-european-central-bank...

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

References

• [1] bankofengland.co.uk/prudential-regulation/publication/202...
• [2] bankofengland.co.uk/prudential-regulation/publication/202...
• [3] jonesday.com/en/insights/2018/12/bank-of-england-establis...
• [4] assets.publishing.service.gov.uk/media/5a7ecd2c40f0b62305...
• [5] pallasllp.com/journal/regulatory-round-up-what-to-expect-...
• [6] fca.org.uk/publication/corporate/regulatory-initiatives-g...
• [7] ey.com/content/dam/ey-unified-site/ey-com/en-uk/insights/...
• [8] iif.com/LinkClick.aspx?fileticket=mK5vs8kmCK4%3D&portalid

What Changed

• - The PRA is now explicitly encouraging earlier engagement by investigation subjects, including proactive identification, acknowledgement, and remediation of breaches.
• The familiar enforcement pattern is changing from a late-stage admission model toward a front-loaded investigative model in which firms provide information earlier in the process.
• The PRA’s enforcement approach now places greater emphasis on written factual accounts and supporting materials during the initial investigative stage.
• Firms that participate early and make early admissions may obtain enhanced settlement discounts, while non-participants remain on a lower discount path.
• The Bank says this is not a new policy launch but an explanation of how the existing approach is operating in practice across live cases.

Suggested Considerations

• Review current investigation-response procedures to ensure the firm can produce a factually complete written account and supporting evidence at short notice.
• Build escalation protocols that trigger early internal fact-finding when a potential prudential breach is identified.
• Train relevant staff to distinguish between cooperation, factual admissions, and without-prejudice settlement positions so that engagement does not inadvertently prejudice legal strategy.
• Reassess whether current incident-management playbooks are aligned with the PRA’s expectation of early candour and remediation.
• Ensure legal, compliance, and business stakeholders can rapidly agree on breach acknowledgment, remediation steps, and document preservation.

Key Dates

References

• [1] bankofengland.co.uk/prudential-regulation/the-bank-of-eng...
• [2] globalfinregblog.com/2024/02/bank-of-england-unveils-chan...
• [3] youtube.com/watch?v=BfoH4Dl_mck
• [4] bankofengland.co.uk/prudential-regulation/publication/202...
• [5] addleshawgoddard.com/en/insights/insights-briefings/2026/...
• [6] slaughterandmay.com/insights/financial-regulation-weekly-...
• [7] finreg.aoshearman.com/Bank-of-England-Publishes-Updated-E...
• [8] financialregulation.linklaters.com/post/102mmh1/your-guid...

What Changed

• - The CSSF has formally applied the EBA Guidelines on ancillary services undertakings specified in EBA/GL/2026/01 for identifying activities under Article 4(1)(18) of Regulation (EU) No 575/2013.
• Firms must assess whether a non-bank activity or group entity qualifies as an ancillary services undertaking under the EBA criteria, rather than relying on internal labels or informal business...
• The regulatory perimeter analysis now needs to consider whether relevant activities are performed within a banking group in a way that affects prudential consolidation and supervisory treatment.
• Institutions should expect the CSSF to use the EBA framework as the benchmark for determining whether an activity is sufficiently connected to banking support functions to fall within the ancillary...
• Compliance evidence will need to show a documented, reproducible assessment of each potentially relevant activity against the EBA identification criteria.

Suggested Considerations

• Review all group entities and business lines to identify activities that may fall within the definition of an ancillary services undertaking under Article 4(1)(18) CRR.
• Document a formal assessment methodology for classifying activities against the EBA/GL/2026/01 criteria.
• Reconfirm the prudential consolidation perimeter and ensure all ancillary service entities are correctly included or excluded, with the reasoning retained for supervisory review.
• Update legal entity inventories, regulatory mapping, and governance documents so they align with the CSSF’s adopted EBA framework.
• Test whether existing internal reporting, risk management, and control frameworks capture any newly identified ancillary services undertakings.

Key Dates

References

• [1] cssf.lu/wp-content/uploads/cssf26_905_eng.pdf
• [2] grantthornton.lu/en/events/advancing-esg-risk-management-...
• [3] linkedin.com/posts/phong-nguyen-luxembourg-risk_esg-cssf-...
• [4] grantthornton.lu/en/insights/why-cssf-circular-26-905-mar...
• [5] linkedin.com/posts/kohlergotzev_circular-cssf-26905-activ...
• [6] youtube.com/watch?v=9X8bBauhwo0
• [7] linkedin.com/pulse/cssf-circular-26906-six-things-luxembo...

What Changed

• - The Bank of England has published a policy statement “Sterling‑denominated systemic stablecoins” (22 June 2026) and a draft Code of Practice that will constitute the primary rulebook for systemic...
• The regime applies only to systemic sterling‑denominated stablecoins used for UK payments, i.e. stablecoins recognised as systemic under Banking Act 2009 tests where disruption could threaten UK...
• The previous proposal that at least 40% of backing assets be unremunerated central bank deposits and up to 60% in short‑term UK government debt has been revised so that up to 70% of backing assets...
• Backing assets must remain highly liquid and low‑risk, with central bank deposits used explicitly to support prompt redemption in stress, while the expanded gilt component is intended to improve the...
• The BoE has dropped the earlier concept of temporary per‑holder limits (for example, £20,000 per individual and £10 million per business that were consulted on in 2025) and replaced them with a...

Suggested Considerations

• Conduct a regulatory perimeter and recognition analysis to determine whether any issued or planned sterling‑denominated stablecoin could meet the Banking Act 2009 systemic tests and therefore fall under the BoE systemic stablecoin regime.
• Review and update treasury and investment policies for stablecoin backing assets to ensure the portfolio structure can comply with the revised requirement of up to 70% short‑term UK government debt and the remainder in BoE deposits.
• Perform detailed liquidity and redemption stress‑testing to evidence that central bank deposits and gilt portfolios can support prompt redemption under extreme but plausible scenarios while remaining within the £40 billion issuance guardrail.
• Re‑calibrate business plans and revenue models for systemic stablecoin issuance to reflect the increased allowable share of interest‑bearing gilts, the absence of per‑holder limits, and continued constraints on paying interest to coinholders.
• Design and implement governance and risk‑management frameworks that meet BoE expectations for systemic payment systems, including Board‑level oversight, risk appetite for digital money, and clear accountability for prudential and operational risks.

Key Dates

References

• [1] skadden.com/insights/publications/2025/11/bank-of-england...
• [2] uk.finance.yahoo.com/news/bank-of-england-uk-stablecoin-t...
• [3] whitecase.com/insight-alert/bank-england-consults-regulat...
• [4] bankofengland.co.uk/paper/2025/cp/proposed-regulatory-reg...
• [5] mayerbrown.com/en/insights/publications/2025/12/proposed-...
• [6] reuters.com/business/finance/bank-england-faces-calls-uk-...
• [7] linkedin.com/posts/bank-of-england_today-we-have-publishe...
• [8] mofo.com/resources/insights/251203-uk-proposes-regulating...

What Changed

• - Supervisory expectations are raised for standardisation and reduction of fragmentation in CCP default-management procedures and communication conventions, with a strong push toward harmonised...
• Lead authorities explicitly promote greater use of portal-based solutions (rather than ad hoc email or bespoke channels) for communication, information sharing, and auction-related workflows between...
• Authorities call for more realistic testing of porting arrangements, including end-to-end operational tests that reflect real-life constraints (documentation, client consent, timing of transfers, and...
• The lead authorities propose considering a voluntary “market stress overlay” module in future CIDS exercises, creating a coherent cross-CCP macro stress scenario to test whether operational capacity...
• ESMA confirms that global CCP fire drills are now a core component of system-wide resilience expectations, effectively embedding regular multi-CCP default simulations into ongoing supervisory...

Suggested Considerations

• CCPs should review and update their default management procedures to align with emerging cross-CCP standards, including harmonised communication conventions, standardised information templates, and coordinated auction timelines.
• Clearing members should conduct a cross-CCP gap analysis of their default-management playbooks to ensure they can support simultaneous auctions and calls from multiple CCPs without creating operational bottlenecks.
• CCPs and clearing members should implement or upgrade portal-based communication and workflow tools for default events, replacing fragmented email- or spreadsheet-based processes where feasible.
• Clearing brokers and client-clearing firms should test and, where necessary, redesign their porting arrangements (including client consent, documentation, booking models, and operational capacity) to ensure they can port positions and collateral under stressed but realistic timelines.
• Risk and operations teams at CCPs and clearing members should incorporate findings from the 2023 and 2025 CIDS exercises into their internal default-management training, drills, and board reporting on operational resilience.

Key Dates

References

• [1] posttrade360.com/news/infrastructure/follow-up-report-esm...
• [2] bankofengland.co.uk/paper/2026/2025-ccp-global-internatio...
• [3] esma.europa.eu/sites/default/files/2024-04/ESMA91-1505572...
• [4] ccp-global.org/defaultsimulation
• [5] esma.europa.eu/press-news/esma-news/esma-and-eu-ccps-part...
• [6] securitiesfinancetimes.com/securitieslendingnews/industry...
• [7] eurex.com/ec-en/find/circulars/clearing-circular-4426338
• [8] linkedin.com/posts/post-trade-360_esma-and-eu-ccps-comple...

What Changed

• - The PRA confirms that the Basel 3.1 internal model approach for market risk (FRTB‑IMA) will be implemented in the UK on 01 January 2028, with no further delay to the already-announced date.
• The PRA proposes to extend the monitoring period for the profit and loss attribution (PLA) test from one year to three years before PLA outcomes are used to drive capital consequences for IMA trading...
• The PRA proposes a more targeted approach for positions with limited trading data, adjusting the identification of risks that cannot be modelled under IMA so that more positions can be treated as...
• The PRA proposes to modify the treatment of positions subject to a mix of IMA and standardised approaches, to avoid scenarios where capital requirements increase mechanically as firms gradually...
• The PRA proposes operational simplifications and amendments to the IMA rules to improve proportionality, including simplifications in how firms evidence modellability, run tests, and manage the...

Suggested Considerations

• Review the PRA consultation on the Basel 3.1 market risk internal model approach in detail and map each proposed change (PLA monitoring, modellability, mixed‑use treatment, operational simplifications) to current and planned IMA designs and policies.
• Update the Basel 3.1 implementation roadmap for market risk to reflect that all non‑IMA Basel 3.1 rules start in January 2027, while IMA goes live on 01 January 2028, ensuring dependencies between standardised and IMA implementations are clearly sequenced.
• Reassess the design, calibration, and governance of the profit and loss attribution framework to accommodate a three‑year monitoring period, including data retention, desk‑level analytics, exception management, and documentation of PRA engagement during the monitoring phase.
• Perform an inventory of trading book risk factors and positions with limited trading data and assess how the PRA’s more targeted approach to non‑modellable risks will change modellability classifications, capital impacts, and desk‑level model scope.
• Analyse current and planned use of mixed IMA and standardised approaches across desks to ensure that migration pathways do not inadvertently increase capital requirements and adjust transition plans, capital forecasts, and management information accordingly.

Key Dates

References

• [1] bankofengland.co.uk/prudential-regulation/publication/202...
• [2] finreg.aoshearman.com/Mansion-House-PRA-consults-on-adjus...
• [3] kpmg.com/xx/en/our-insights/regulatory-insights/pra-consu...
• [4] pwc.co.uk/financial-services/assets/pdf/basel-3.1-uk-cons...
• [5] bankofengland.co.uk/prudential-regulation/publication/202...
• [6] isda.org/a/2GpgE/ISDA-IIF-Response-to-PRA-CP-1725-on-Adju...
• [7] linkedin.com/posts/avantage-reply_cp1725-basel-31-adjustm...
• [8] bis.org/basel_framework/chapter/MAR/30.htm

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

References

• [1] bankofengland.co.uk/prudential-regulation/publication/202...
• [2] bankofengland.co.uk/prudential-regulation/publication/202...
• [3] isda.org/a/2GpgE/ISDA-IIF-Response-to-PRA-CP-1725-on-Adju...
• [4] regnology.net/en/resources/regulatory-topics/basel-31-uk-1/
• [5] linkedin.com/posts/monocle-solutions_on-20-january-2026-t...
• [6] afme.eu/media/s2el1hau/20250912-final-afme-response-cp172...
• [7] assets.kpmg.com/content/dam/kpmgsites/in/pdf/2025/07/fund...

What Changed

• - The FCA will introduce a new overarching rule requiring that all UK‑domiciled MMFs must hold sufficient liquidity for “adequate resilience”, explicitly linking fund liquidity to financial stability...
• The FCA will retain the current minimum WLA requirements from the existing UK Money Market Fund Regulation (UK MMFR) in its rules, instead of the previously consulted increases to 50% WLA for all...
• The FCA will issue guidance setting out strong supervisory expectations that stable NAV MMFs should hold 40% WLA and variable NAV MMFs should hold 20% WLA to meet the new resilience requirement,...
• The FCA makes clear that falling below the 40%/20% WLA supervisory expectations should only occur to meet redemption requests or due to factors beyond the manager’s control, and should be rare, with...
• The FCA will retain existing minimum daily liquid asset (DLA) requirements from UK MMFR in rules and does not plan to issue new guidance on DLA levels, but expects DLA and WLA together to be...

Suggested Considerations

• Conduct a comprehensive gap analysis comparing current MMF liquidity management frameworks (DLA, WLA, and stress‑testing assumptions) against the forthcoming FCA “adequate resilience” rule and the 40% (stable NAV) / 20% (variable NAV) WLA supervisory expectations.
• Update MMF liquidity policies, board‑approved risk appetites, and internal limits to reflect the new WLA expectations, including documentation of when and how funds may temporarily operate below 40%/20% WLA and the governance required to approve such deviations.
• Implement enhancements to liquidity monitoring and MI reporting so that portfolio managers, risk, and compliance have near‑real‑time visibility of DLA and WLA levels, breaches of internal and supervisory thresholds, and redemption‑driven use of liquidity buffers.
• Review and update fund prospectuses, KIIDs/KIDs, and investor disclosures to ensure that descriptions of MMF liquidity management, the availability of liquidity management tools, and the operation of stable NAV structures are accurate under the new FCA regime.
• Revise and strengthen investor KYC procedures for MMFs to capture concentration risks and potential correlated outflows, including segmentation of investor types, monitoring of large holders, and scenario analysis around key client redemption behaviour.

Key Dates

References

• [1] jdsupra.com/legalnews/uk-to-reform-money-market-fund-7624...
• [2] assets.publishing.service.gov.uk/media/6a059b2622977ebc82...
• [3] fca.org.uk/publication/consultation/cp23-28.pdf
• [4] theia.org/sites/default/files/2024-03/FCA_CP23_28_MMF_IAR...
• [5] gov.uk/government/publications/reforms-to-money-market-fu...
• [6] immfa.org/publications/consultations-and-responses.html

What Changed

• - The CSSF, in coordination with the European Commission, AMF (France) and Central Bank of Ireland, is consulting on national guidance that operationalises the Commission’s “market resilience” levels...
• The guidance will introduce non-binding but supervisory‑relevant WLA benchmarks designed to indicate when an MMF’s liquidity profile may warrant closer scrutiny and additional supervisory engagement.
• The consultation builds on the European Commission’s 11 May 2026 report, which identifies WLA benchmarks of 20% for VNAV MMFs and 40% for LVNAV and CNAV MMFs, compared with the MMFR regulatory minima...
• The guidance is intended to support more consistent and well‑calibrated supervision of MMFs across the EU, specifically on liquidity resilience under stress.
• MMFs that fall below the identified “market resilience” WLA levels, even while remaining compliant with the MMFR minimum percentages, can expect increased supervisory scrutiny, closer monitoring and...

Suggested Considerations

• Review the CSSF consultation paper “Guidance on Money Market Fund Weekly Liquid Asset Levels” in detail and map the proposed WLA resilience benchmarks against existing MMF liquidity policies, procedures and internal limits.
• Perform a quantitative impact analysis comparing each MMF’s historical and current WLA levels against both MMFR minimum requirements and the Commission’s market resilience benchmarks (20% for VNAV; 40% for LVNAV and CNAV) to identify potential shortfalls or pressure points.
• Assess and, where necessary, update MMF liquidity risk management frameworks to incorporate explicit internal WLA targets, triggers and escalation procedures linked to the new resilience benchmarks, including governance oversight and board reporting.
• Integrate the proposed WLA resilience levels into stress testing programmes under Article 28 MMFR, ensuring scenarios reflect the ability of funds to maintain or restore WLA around the benchmark levels under severe but plausible market stress.
• Revisit know‑your‑investor / liability profile analysis under Article 27 MMFR to ensure that internal WLA targets adequately reflect investor concentration, redemption behaviour, dealing frequency and distribution channels.

Key Dates

References

• [1] bny.com/assets/investments/im/archive/document/effectivel...
• [2] esma.europa.eu/sites/default/files/2024-04/ESMA50-4359979...
• [3] cssf.lu/en/2026/05/european-commission-report-on-the-adeq...
• [4] cssf.lu/wp-content/uploads/Macroprudential_policy_investm...
• [5] cssf.lu/en/money-market-funds/
• [6] ici.org/research/stats/mmf
• [7] cssf.lu/wp-content/uploads/cssf21_780eng.pdf
• [8] jdsupra.com/legalnews/cssf-circular-25-901-consolidation-...

What Changed

• Given the consultation nature and the absence of a published consultation text in the extract, the following points reflect what compliance teams should reasonably anticipate and prepare for, based...
• The CSSF is consulting on formal guidance that will specify how MMFs domiciled in Luxembourg should determine, monitor, and maintain weekly liquid asset levels under the EU Money Market Funds...
• The guidance is expected to operationalise the MMFR WLA requirements (for example, minimum weekly liquidity levels and interaction with redemption activity) by setting out supervisory expectations on...
• The consultation will likely address the interaction between WLA levels and the use of liquidity management tools (such as gates, fees, or suspensions), including expectations on when and how...
• The CSSF is expected to clarify how MMFs should incorporate WLA targets and thresholds into their internal risk management policies, including stress-testing assumptions, early warning indicators,...

Suggested Considerations

• Review the CSSF consultation paper in full as soon as it is available and identify all proposed expectations relating to weekly liquid asset levels, monitoring, and escalation.
• Map the proposed CSSF guidance against current MMF liquidity policies, prospectus disclosures, and internal procedures to identify gaps and potential areas needing enhancement.
• Assess whether existing MMF weekly liquidity monitoring tools, dashboards, and reporting are sufficient to meet anticipated CSSF expectations on frequency, granularity, and early warning indicators.
• Evaluate the current escalation framework for declining WLA levels, including board and senior management involvement, and update governance documentation to align with the likely CSSF approach to thresholds and decision‑making.
• Review MMF stress‑testing methodologies to ensure that scenarios adequately capture severe but plausible redemption and market stress in relation to WLA levels and that results are integrated into risk appetite and contingency planning.

Key Dates

References

• [1] cssf.lu/en/2020/07/transmission-instructions-for-reportin...
• [2] cssf.lu/en/authorisation-of-a-uci/
• [3] cssf.lu/en/anti-money-laundering-and-countering-the-finan...
• [4] cssf.lu/en/Document/circular-cssf-18-698/
• [5] cssf.lu/en/prospectus/
• [6] cssf.lu/en/file-transport-and-data-protection/
• [7] cssf.lu/en/
• [8] cssf.lu/en/money-market-funds/

What Changed

• - The Clearing Rules will be amended to designate two fixed calendar periods each year—1 March to 31 May and 1 September to 30 November—as calculation periods for determining mandatory clearing...
• The new standard calculation periods will apply from 1 March 2027 onwards, creating a permanent formulaic approach that generates future calculation periods without requiring further legislative...
• The existing approach of periodically updating the list of calculation periods in the Clearing Rules via legislative amendments will be replaced by this once‑and‑for‑all standardisation.
• The Prescribed Days associated with each calculation period will also be aligned with the new standard periods, providing greater clarity on when clearing obligations are triggered and when positions...
• The change is intended to increase certainty for derivative dealers in identifying future calculation periods and to facilitate more effective internal planning and compliance monitoring.

Suggested Considerations

• Map current OTC derivative portfolios and position‑monitoring systems to the new standard calculation periods (1 March–31 May and 1 September–30 November) and update internal calendars and compliance checklists accordingly.
• Review and amend internal policies, procedures, and control frameworks for mandatory clearing, including position‑sizing methodologies, threshold calculations, and record‑keeping requirements, to reflect the permanent calculation‑period structure.
• Coordinate with legal and compliance teams to track the progress of the legislative amendments and ensure that internal implementation timelines align with the expected effective date of 1 March 2027.
• Update trade capture, risk, and reporting systems to flag trades and positions that fall within the new calculation periods and to generate alerts when clearing thresholds are approached or breached.
• Train relevant front‑office, middle‑office, and compliance staff on the new calculation‑period regime, including the timing of Prescribed Days and the implications for trade execution, clearing decisions, and documentation.

Key Dates

References

• [1] hkma.gov.hk/eng/news-and-media/press-releases/2026/01/202...
• [2] hkma.gov.hk/eng/news-and-media/press-releases/2023/08/202...
• [3] hkma.gov.hk/media/eng/doc/key-information/press-release/2...
• [4] info.gov.hk/gia/general/202601/29/P2026012900244.htm
• [5] timothyloh.com/insights/guides/global-benchmark-reforms-h...
• [6] apps.sfc.hk/edistributionWeb/gateway/EN/consultation/doc
• [7] isda.org/2026/03/03/isda-response-to-hkma-sfc-consultatio...
• [8] brdr.hkma.gov.hk/eng/doc-ldg/docId/20260129-1-EN