PS4/26 – The Strong and Simple Framework: The simplified capital regime for Small Domestic Deposit Takers (SDDTs) – final
AI Analysis
Executive Summary
The Prudential Regulation Authority (PRA) has introduced a simplified capital regime for Small Domestic Deposit Takers (SDDTs) to reduce regulatory complexity while maintaining adequate capital. The new regime will take effect on 2027-01-01. This change aims to simplify capital requirements for smaller banks and building societies.
What Changed
The PRA has introduced a new simplified capital regime for SDDTs, which includes changes to the PRA Rulebook, supervisory statements, and statements of policy. The regime also introduces new reporting templates and instructions.
Action Required
- Review and update capital adequacy assessments to ensure compliance with the new simplified capital regime
- Implement new reporting templates and instructions for SDDTs
- Update internal policies and procedures to reflect changes to the PRA Rulebook, supervisory statements, and statements of policy
Key Dates
20 Jan 2026 Publication of the final policy statement
20 Jan 2026 Early implementation of changes to ICAAP updates and reverse stress-testing
1 Jan 2027 The SDDT capital regime takes effect DEADLINE
Non-Compliance Risk
Enforcement action, fines, or license revocation for non-compliance with the new simplified capital regime
Who is Affected
Related Regulations
Summary
Policy statement 4/26