Policy and guidance
The FCA's updated Statement of Policy outlines its approach to statutory investigations into possible regulatory failures under Part 5 of the Financial Services Act 2012, including criteria for triggering investigations and producing reports for HM Treasury. It matters because it clarifies when the FCA must self-scrutinize serious lapses in regulation, helping firms anticipate rare but high-profile probes into systemic issues affecting consumer protection, market integrity, or competition. The primary update adjusts inflation-linked monetary thresholds for assessing "significant" consumer detriment, ensuring the policy remains relevant.
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What Changed
Inflation-adjusted monetary thresholds for consumer detriment: Detriment exceeding £210 million is more likely deemed "significant," while below £45 million is unlikely to meet the threshold unless qualitative factors (e.g., consumer vulnerability, widespread impact) apply. These replace 2013 levels and will be reviewed periodically.
No other substantive changes from the 2013 policy; refinements emphasize internal "lessons learned" reviews for non-statutory cases to avoid resource duplication in
What You Need To Do
- Monitor for triggering events
- Enhance internal reviews
- No direct firm obligations
- Document qualitative factors (e
Key Dates
14 November 2025 - Publication date of updated Statement of Policy.
Compliance Impact
Urgency: Medium. This update signals FCA's commitment to accountability without imposing new firm-level rules, but it heightens focus on significant failures (£45m+ detriment), potentially leading to public reports exposing industry-wide gaps. Firms with high consumer exposure (e.g., retail-facing)
Asset ManagerBankInsurance Policy statements
The FCA's PS25/23 finalizes guidance on tackling **non-financial misconduct (NFM)** in financial services, amending the COCON sourcebook to clarify how serious NFM breaches conduct rules and integrating it into FIT assessments for fitness and propriety. This matters because it aligns rules across banks and non-banks, enhances accountability, deters harmful workplace cultures, and supports FCA objectives like consumer protection and market integrity by ensuring consistent handling of issues like bullying or harassment.
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What Changed
COCON amendments: Expands scope to non-banks for work-related serious NFM involving financial services personnel; provides flowcharts, examples, and factors (e.g., seriousness, pattern, dishonesty, violence) to assess breaches consistently; clarifies only "serious" NFM qualifies, aligned with Equality Act concepts, and excludes trivial/private matters.
FIT sourcebook updates: Integrates NFM into fit and proper tests for employees/senior personnel; firms assess case-by-case without investigating
What You Need To Do
- Review and update policies/handbooks to incorporate COCON/FIT guidance on NFM assessment, including flowcharts and factors for breaches/fitness
- Train HR, compliance, and managers on applying rules consistently, emphasizing seriousness thresholds, case-by-case judgement, and alignment with employment law/privacy
- Enhance regulatory reference processes to disclose past NFM; ensure reporting of serious breaches to FCA
- Assess current NFM handling for gaps (e
- Firms not to investigate trivial/improbable allegations or overstep privacy laws
Key Dates
2023 Consultation on D&I in financial sector opened
2023 Consultation on D&I in financial sector closed
2025 Policy Statement and Consultation on non-financial misconduct guidance (CP25/18) published
2025 Consultation on non-financial misconduct guidance closed
2025 Policy Statement on non-financial misconduct (PS25/23) published
Compliance Impact
Urgency: High – With rules effective 1 September 2026 (9+ months from today), firms have preparation time, but PS25/23 closes FCA's NFM policy work, shifting to supervision/enforcement focus; non-compliance risks enforcement, FIT failures, and reputational damage amid trust-building priorities in FC
Asset ManagerBankInsurance Policy statement 1/26
PS1/26 represents the UK Prudential Regulation Authority's final implementation framework for the Basel 3.1 international banking standards, effective 1 January 2027 (with market risk internal models delayed to 1 January 2028). This policy statement establishes mandatory capital, credit risk, operational risk, and market risk requirements for UK-regulated banks, building societies, and investment firms, addressing post-financial crisis shortcomings in risk-weighted asset (RWA) calculations and capital adequacy frameworks.
What Changed
*Credit Risk Framework**
Implementation of restrictions on Internal Ratings-Based (IRB) approach scope, effective 1 January 2027, with firms required to reclassify certain exposures (e.g., slotting approach IPRE exposures) as High-Volatility Commercial Real Estate (HVCRE) where applicable.
Minor clarifications and amendments to the Standardised Approach and credit risk mitigation techniques.
*Operational Risk**
Updated Business Indicator Component (BIC) calculation methodology requiring inclusi
What You Need To Do
- *Immediate (by mid-2026)
- *Conduct impact assessment
- *Review IRB permissions
- *Assess FRTB-IMA readiness
- *Arrange board-level assurance
Key Dates
20 January 2026 – PRA publishes PS1/26 (final rules)
1 January 2027 – Effective date for Basel 3.1 implementation (credit risk, operational risk, reporting/disclosure, IRB scope restrictions, SDDT regime)
1 January 2027 – Interim period begins for FRTB-IMA transition; existing IMA permissions retained; out-of-scope positions move to ASA/SSA
1 January 2028 – FRTB-IMA implementation effective date
2026 ICAAP submission deadline – Must include Basel 3.1/SDDT impact assessment DEADLINE
Compliance Impact
Urgency: HIGH
The Prudential Regulation Authority (PRA) has published the final rules for the implementation of Basel 3.1 standards in the UK, with an effective date of January 1, 2027. The rules aim to enhance the resilience of banks and improve the stability of the financial system. Firms must review and update their policies and procedures to ensure compliance with the new requirements.
What Changed
The PRA has introduced new rules for the calculation of risk-weighted assets, including changes to the credit risk standardised approach, market risk framework, and operational risk requirements. The rules also include amendments to the definitions of probability of default, loss given default, and conversion factor.
What You Need To Do
- Review and update credit risk policies and procedures to ensure compliance with the new standardised approach
- Assess the impact of the new market risk framework on trading book positions and capital requirements
- Update operational risk management frameworks to reflect changes to the Business Indicator and subcomponents
Key Dates
1 Jan 2027 Basel 3.1 rules take effect DEADLINE
1 Jan 2028 Internal model approach for market risk takes effect DEADLINE
Non-Compliance Risk
Non-compliance with the new rules may result in enforcement action, fines, or other regulatory penalties
Related Regulations
Basel 3.1Capital Requirements Regulation (CRR)Financial Services and Markets Act (FSMA) 2023
Confidence: high
BankBroker DealerAsset Manager
The FCA's decision to ban Darren Antony Reynolds from working in financial services and fine him £2,037,892 has been upheld by the Upper Tribunal. The FCA's decision to ban Darren Antony Reynolds from working in financial services and fine him £2,037,892 has been upheld by the Upper Tribunal.Mr Reynolds was dishonest when he gave pension transfer advice and investment recommendations to his customers, causing them significant harm.Mr Reynolds showed a clear disregard for his customers’ intere...
Wealth ManagerAll Firms
Letter to Chief Executive Officers of PRA regulated international banks active in the UK
BankWealth Manager
Given at King’s College London
BankWealth ManagerAll Firms
We stand in full solidarity with the Federal Reserve System and its Chair Jerome H. Powell.
BankAsset ManagerWealth Manager
This page contains information about fines published during 2026. The total amount of fines so far is £371,700. Firm or individual finedDateAmountReasonRichard Adam07/01/2026£232,800The Final Notice refers to knowing concern in breaches of Article 15 of the Market Abuse Regulations, Listing Rule 1.3.3R, Listing Principle 1 and Premium Listing Principle 2.Zafar Khan07/01/2026£138,900The Final Notice refers to knowing concern in breaches of Article 15 of the Market Abuse Regulations, Listing Ru...
BankBroker DealerAsset Manager
The FCA has fined 2 former finance directors for their part in misleading statements being issued by Carillion plc. Richard Adam and Zafar Khan were both aware of serious financial troubles in Carillion’s UK construction business but failed to reflect this in company announcements or alert the Board and audit committee, leading to poor oversight.Mr Adam and Mr Khan have been fined £232,800 and £138,900, respectively. The fines were imposed after Mr Adam and Mr Khan withdrew their challenges t...
BankWealth ManagerAll Firms
The Bank's Court of Directors acts as a unitary board, setting the organisation's strategy and budget and taking key decisions on resourcing and appointments. Required to meet a minimum seven times per year, it has five executive members from the Bank and up to nine non-executive members.
BankAsset ManagerWealth Manager
Earlier this year, we undertook a refresh of our Sustainable Finance Advisory Committee. In line with good governance, we planned to refresh the membership on a staggered basis, allowing us to bring in new expertise whilst benefiting from some continuity. Following this process, we are pleased to announce the appointment of two new members to the Committee:Elly Dowding, Director of ESG AccordFarnam Bidgoli, Independent AdviserThese appointments reflect our commitment to drawing on diverse exp...
Asset ManagerWealth ManagerAll Firms
With over 20 years’ experience and responsibility for supervising 5,000 firms, I know that when an issue arises, the first question is often: 'What action will you take?'That’s a fair question – enforcement is one of the most visible ways we act. It often grabs headlines with big fines and publicity.But our role as supervisors is to exercise judgement - selecting the right tool to achieve the best and fastest outcomes for consumers and markets.While enforcement is a vital part of the kit, it’...
This FCA blog post outlines the regulator's supervisory "toolkit" for addressing consumer harm, emphasizing proactive supervision over enforcement to achieve faster outcomes like redress and market-wide improvements. It matters because it signals FCA's preference for swift, non-enforcement interventions (e.g., skilled person reviews, voluntary requirements), urging firms to respond promptly to supervisory feedback to avoid escalation. Compliance teams should view this as a reminder to prioritize Consumer Duty compliance, as supervision tools are increasingly tied to it for rapid harm prevention.
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What Changed
No new rules or requirements are introduced; this is a supervisory strategy update highlighting FCA's full range of tools beyond enforcement. Key emphases include:
Prioritizing supervision for quick fixes, such as multi-firm reviews, good/poor practice guidance, and skilled person reviews (s.166) under FSMA.
Integration of Consumer Duty (Principle 12) as a core principle for assessing and remedying poor outcomes, e.g., unclear policy renewals or inadequate support.
Examples from insurance (e.g.,
What You Need To Do
- Embed proactive monitoring
- Respond swiftly to FCA contact
- Improve practices market-wide
- Evidence compliance
- Facilitate redress
Key Dates
October 2022 Boards to scrutinise and agree implementation plans.
July 2023 ) - Implement for new/existing products.
July 2024 ) - Extend to closed-book products.
Compliance Impact
Urgency: Medium – This reinforces existing obligations under Consumer Duty and Principles, but underscores risk of supervisory escalation if firms ignore early warnings. It matters because FCA prioritizes speed (supervision over enforcement), enabling quick harm fixes but exposing non-responsive fir
InsuranceAll Firms
We're providing guidance to support firms to tackle bullying, harassment and violence in financial services, after they asked for additional support. In July, we changed our rules – setting clearer standards for how financial services firms should address non-financial misconduct.This more closely aligned the rules for banks and non-banks. We wanted to give firms the confidence to act against serious misconduct, drive consistency and make it clearer when non-financial misconduct is a breach o...
BankWealth ManagerAll Firms
David Roberts has been reappointed as Chair of the Court of the Bank of England by His Majesty the King
BankWealth Manager
Policy statement 26/25
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.
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What Changed
Full deletion of SS20/15: Removes all expectations on treasury and lending activities, including the "Treasury Approaches" framework, without replacement.
Consequential amendments: Updates SS31/15 (Internal Capital Adequacy Assessment Process and Supervisory Review and Evaluation Process) to excise references to SS20/15.
Alignment with broader policy: Addresses inconsistencies with PRA's approach for banks, improved sector risk management maturity, and proportionality for smaller firms; supports
What You Need To Do
- Review and update policies
- Assess risk management
- Update governance documents
- Engage supervisors
- Monitor related reforms
Compliance Impact
Urgency: Medium – Effective immediately (5 December 2025), but deregulatory nature reduces burdens rather than imposing new obligations; critical for year-end 2025/early 2026 planning to avoid legacy SS20/15 misapplication. Matters as it shifts from prescriptive "hard limits" (often treated as rules
Bank
Policy statement 25/25
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.
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What Changed
The main changes in SS5/25 from SS3/19 and CP10/25 responses include:
Proportionate application clarification: New 'Overarching aims' section in Chapter 3 explains how firms should tailor expectations to their climate risk exposure, business size, and complexity via a two-step process (assess materiality, then respond).
Governance strengthening: Boards and senior management must actively oversee climate risks, embedding them in strategy and ensuring accountability.
Risk management enhancements:
What You Need To Do
- Conduct gap analysis against SS5/25 within 6 months and remediate (e
- Integrate climate risks into board oversight, strategy, risk registers, ICAAP/ILAAP (banks), ORSA/stress testing (insurers), and financial reporting
- Perform CSA exercises commensurate with exposures, using suitable scenarios to inform decisions; enhance data quality and disclosures
- Document proportionate application (two-step process: materiality assessment, risk response); leverage existing structures where robust
- Ensure senior accountability and alignment with standards like SS1/21
Key Dates
3 December 2025 - PS25/25 and SS5/25 published; SS5/25 effective immediately, replacing SS3/19.
Within 6 months (by ~June 2026) - Firms assess gaps against new expectations and develop remediation plans (industry guidance).
Ongoing - Forward-looking, strategic implementation proportionate to risks; PRA may request progress evidence.
Compliance Impact
Urgency: High – Effective immediately (3 Dec 2025), requiring significant uplift to existing approaches; non-compliance risks supervisory scrutiny, as PRA expects ambitious, ongoing progress and may request evidence. Matters for capital/liquidity planning, resilience, and strategic viability amid ma
BankInsurance
Supervisory statement 5/25
SS5/25 is the PRA's updated supervisory statement, published on 3 December 2025, replacing SS3/19 and setting enhanced expectations for banks and insurers to manage climate-related risks through governance, risk management, scenario analysis, data quality, and disclosures. It matters because it represents a step change from awareness-raising to embedding robust, proportionate practices that integrate climate risks into core prudential processes like ICAAP, ILAAP, ORSA, and capital planning, aligning with the PRA's objectives for firm safety and soundness amid evolving physical and transition risks.
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What Changed
Replaces SS3/19 entirely: Introduces a more mature, consolidated framework reflecting international standards (e.g., BCBS), with detailed transmission channels for climate risks across credit, market, liquidity, insurance, and operational categories.
Governance enhancements: Emphasizes board accountability, integration into business strategy, climate risk appetite statements, and linkage to Senior Managers & Certification Regime (SM&CR) without new Senior Management Functions (SMFs); promotes ch
What You Need To Do
- Conduct materiality assessment of climate risks to scope proportionality (leverage TCFD/CSRD work)
- Embed climate risks in governance
- Integrate into risk frameworks
- Perform climate scenario analysis
- Enhance data
Key Dates
3 December 2025 Publication of PS25/25 and SS5/25; replaces SS3/19 effective immediately.
Within 6 months of 3 December 2025 (by ~3 June 2026) Firms assess gaps against new expectations and develop implementation plans.
April 2025 Consultation paper CP10/25 issued (feedback incorporated in final policy).
Compliance Impact
Urgency: High – Effective immediately with a 6-month window (~June 2026) for gap closure, this demands significant operational uplift (e.g., data, scenarios, integration) amid PRA's shift to enforcement; non-compliance risks supervisory action, given climate risks' materiality to prudential stabilit
BankInsurance
Letter from the Chancellor to the Governor
BankWealth ManagerAsset Manager
The PRA held roundtable meetings on artificial intelligence and machine learning (AI and ML) in the context of Supervisory Statement (SS)1/23 ‘Model risk management principles for banks’
The Prudential Regulation Authority (PRA) held roundtable sessions on 20 and 22 October 2025 with 21 regulated firms to discuss AI and machine learning (AI/ML) adoption under Supervisory Statement SS1/23 on model risk management (MRM) principles for banks. This matters because it highlights PRA's strategic supervisory focus on AI/ML model risks, urging firms to enhance governance, risk appetite, monitoring, and validation to mitigate opacity, overfitting, and rapid performance degradation in these models. https://www.bankofengland.co.uk/prudential-regulation/publication/2025/november/pra-holds-model-risk-management-roundtable-on-ai | https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/publication/2025/november/ai-roundtable-oct-2025.pdf
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What Changed
This is not a formal rule change but supervisory guidance via roundtable insights reinforcing SS1/23 principles (effective since 2023). Key emphases include:
Risk appetite: Boards must articulate AI/ML-specific model risk appetite pre-deployment to avoid exceeding tolerances, given higher uncertainty from opacity.
Model inventories and tiering: Address inaccurate/incomplete inventories and aggregate risks from deploying similar AI/ML across portfolios/jurisdictions; challenge tiering for complex
What You Need To Do
- Review and strengthen board-level model risk appetite statements to explicitly cover AI/ML opacity and uncertainty; integrate into governance triggers like re-validation
- Enhance model inventories for completeness, aggregate risk assessment, and cross-jurisdictional tiering challenges
- Update model development policies to evaluate AI/ML trade-offs (e
- Revise ongoing monitoring policies for more frequent, quantitative checks on AI/ML (e
- Participate in PRA initiatives like MRM roundtables or AI Consortium for dialogue; align first/second-line defenses per SS1/23
Key Dates
20-22 October 2025 - PRA held CRO roundtable sessions with 21 firms on AI/ML MRM.
24 November 2025 - PRA published roundtable summary and slides. https://www.bankofengland.co.uk/prudential-regulation/publication/2025/november/pra-holds-model-risk-management-roundtable-on-ai
Compliance Impact
Urgency: Medium - Not critical as no new rules or deadlines, but high relevance for AI/ML users amid PRA's strategic MRM focus; non-compliance risks supervisory actions, given observations of gaps in monitoring and governance. Matters for banks scaling AI (rising adoption per industry views), as una
BankAll Firms
Consultation paper 23/25
This joint PRA-FCA consultation (CP23/25 from PRA and Chapter 4 of FCA's CP25/33) proposes policy updates to regulatory fees, levies, and invoice processes for 2026/27, including new fee blocks for emerging activities like PISCES operators and targeted support, alongside adjustments to FOS/FSCS levies and payment timelines. It matters for compliance teams as it directly impacts budgeting, fee calculations, and cash flow management for fee-payers, with potential cost increases and procedural changes effective from April 2026.
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What Changed
New fee structures: Introduction of a periodic fee block for PISCES operators based on regulated income (baseline £2,200 annual fee, variable above £500,000 threshold); extension of fee-block A.13 to include "targeted support" activities (Category 2 variation fee for existing firms, Category 4 for new entrants); registration fees for Deferred Payment Credit (DPC/buy-now-pay-later) activities aligned with Temporary Permissions Regime, added to FOS consumer credit fee-block but excluded from FSCS.
What You Need To Do
- Review current fee/levy exposure and model impacts of new blocks (e
- Assess invoice processes if paying £50,000+ in FCA/PRA fees; prepare for aligned due dates
- Submit consultation responses by deadlines, focusing on targeted support by 9 January 2026
- Budget for potential fee increases; monitor Spring 2026 fee-rates CP
- For applicants
Key Dates
9 January 2026 - Deadline for comments on targeted support proposals (FCA CP25/33 paras 2.11-2.18, questions 3-7). DEADLINE
16 January 2026 - Consultation close for all other proposals, including PRA-FCA joint changes; responses to cp25-33@fca.org.uk.
February 2026 - FCA publishes feedback and rules on targeted support in Handbook Notice.
March 2026 - FCA publishes feedback and rules on all other proposals (including Chapter 4) in Handbook Notice; Spring fee-rates consultation.
April 2026 - PRA publishes feedback and rules on Chapter 4; changes effective for 2026/27 fee year (April-March).
Compliance Impact
Urgency: High – Firms must act imminently on consultation responses (deadlines passed as of today, but feedback analysis pending March/April 2026 rules) to influence outcomes; changes affect 2026/27 budgets starting April, with cash flow risks from invoice timing and new fees for emerging activities
BankFintechPayment Provider Statement from the Bank of England
BankWealth ManagerAsset Manager
Megan Greene has been reappointed as an external member of the Monetary Policy Committee by the Chancellor of the Exchequer, Rachel Reeves
BankAsset ManagerWealth Manager
The Bank's Court of Directors acts as a unitary board, setting the organisation's strategy and budget and taking key decisions on resourcing and appointments. Required to meet a minimum seven times per year, it has five executive members from the Bank and up to nine non-executive members.
BankAsset ManagerWealth Manager
Supervisory statement 31/15
SS31/15 is the PRA's foundational supervisory statement establishing expectations for how UK-regulated banks and large investment firms must conduct their Internal Capital Adequacy Assessment Process (ICAAP) and how the PRA will evaluate these assessments through its Supervisory Review and Evaluation Process (SREP). This guidance is critical because it directly determines the capital requirements firms must maintain and establishes the supervisory framework through which the PRA assesses whether firms hold sufficient capital to cover material risks.
What Changed
The supervisory statement establishes several core regulatory expectations:
*ICAAP Requirements**
Firms must assess on an ongoing basis whether they hold sufficient capital to cover all material risks, including interest rate risk in the banking book (IRRBB), market risk, operational risk, concentration risk, group risk, pension obligation risk, and foreign currency lending to unhedged retail and SME borrowers
Firms must implement stress testing and scenario analysis as integral components of c
What You Need To Do
- *Immediate Compliance Actions
- *Establish ICAAP Framework
- *Risk Identification and Assessment
- *Stress Testing and Scenario Analysis
- Results of stress tests carried out in accordance with CRR requirements for firms using IRB approaches or internal models
Key Dates
29 July 2015 - SS31/15 first published, replacing PRA SS5/13 and PRA SS6/13
1 July 2026 - Effective date for updates to SS31/15 (as referenced in recent amendments)
Ongoing - Firms must carry out ICAAP on a continuous basis in accordance with PRA ICAA rules DEADLINE
Compliance Impact
Urgency Rating: HIGH
BankBroker Dealer
The PRA and FCA have today confirmed plans to increase flexibility around senior banker pay, alongside changes to create better links between bonus awards and responsible risk-taking.
BankWealth Manager
Policy statement 21/25
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.
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What Changed
MRT Identification: Simplified quantitative threshold to the top 0.3% of earners (assessed against risk impact); qualitative criteria unchanged; raised proportionality threshold for disapplying rules from £44,000 variable pay to £660,000 total pay (with variable pay ≤33% of total); reintroduced exemption for MRTs serving <3 months.
Deferral Periods: 4-year minimum for non-SMF MRTs (previously varied); reduced to 5 years for SMFs (from 7 years); aligns with FCA and international practice.
Deferra
What You Need To Do
- Review and update MRT identification processes, applying simplified top 0
- Revise remuneration policies for deferral (4/5 years, marginal rates), upfront cash flexibility, and instrument expectations; update bonus award calculations
- Embed SMR-linked adjustments
- For dual-regulated firms
- Optional early adoption for specified changes on 2025/unvested awards; document governance for RemCo approvals and board policies
Key Dates
15 October 2025 Publication date; some changes (e.g., deferral periods, pro-rata vesting) may apply to ongoing 2025 performance year and unvested prior awards at firm discretion.
16 October 2025 Final rules and updated SS2/17 take effect; apply to performance years starting after this date (e.g., mandatory from 1 January 2026 for calendar-year firms).
November 2024 Preceding joint consultation (CP16/24/PRA, CP24/23/FCA) closed prior to PS.
Compliance Impact
Urgency: High – Mandatory from performance years post-16 October 2025 (e.g., 2026 for most), with immediate opt-in possible; impacts 2026 bonus cycles, requiring swift policy rewrites amid year-end planning. Matters due to simplified but ownership-heavy MRT processes, SMR-pay linkages raising accoun
BankAsset ManagerAll Firms
Policy statement 16/25
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.
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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
BankBroker DealerAll Firms
Given at the London School of Economics and Political Science
BankWealth ManagerAsset Manager
Given at Britain’s Return to the Gold Standard in 1925 Revisited, Bank of England
BankWealth ManagerAll Firms