PRA Regulatory Digest - July 2025

News and speeches

2025 Firm Feedback exercise

The PRA will again be seeking firms’ views on the effectiveness and quality of our supervisory framework and approach through the annual Firm Feedback Exercise. As the regulatory landscape evolves, we want to understand both what firms think works well and what we might do differently. Firms will be offered a chance to provide feedback on a number of topics, including:

• the PRA’s understanding of firms;
• firms’ understanding of the PRA’s regulatory objectives and expectations;
• the PRA’s level of challenge to firms;
• the effectiveness of the PRA’s relationship with firms;
• the PRA’s coordination with other regulators and data requests;
• the clarity and accessibility of prudential policy, rules, and requirements;
• the Secondary Competitiveness and Growth Objective;
• accessibility of the PRA Rulebook; and
• views on improvements the PRA could make to its publications to enhance their usefulness.

The format of the exercise will be similar to previous years and firms will be asked to complete a survey. Responses will be assessed by a team independent of day-to-day supervision, which will also hold follow up meetings with a cross-section of firms. The results of the exercise will be reported to the Prudential Regulation Committee and PRA senior management. A summary will also be published in the 2026 PRA Annual Report and on the PRA website. This year, for the first time, we aim to include all PRA-regulated firms in the exercise.

The survey will be sent out in the second half of August. We very much welcome and value your participation in the exercise.

Extension to consultation deadline for CP12/25

August 2025 update

On 22 May 2025,the PRA published CP12/25 Pillar 2A review – Phase 1. Responses were requested by 5 September 2025. The PRA also proposed that the implementation date for the changes to pension obligation risk (set out in Chapter 4) and market risk and counterparty credit risk (Chapter 5) would be Monday 2 March 2026.

The PRA has now extended the consultation period to 30 September 2025. This is in response to feedback that respondents might benefit from extra time to develop their responses to the CP, particularly given other on-going consultations that close in early September. Along with the extension of the consultation period to 30 September 2025, the PRA also proposes that the implementation date for the changes to pension obligation risk and market risk and counterparty credit risk would now be 1 July 2026, rather than 2 March 2026.

The implementation date for the remaining proposals in the CP concerning credit risk (set out in Chapter 2) and operational risk (Chapter 3) would continue to be aligned with the date of the PRA’s implementation of the Basel 3.1 standards (1 January 2027), as initially proposed.

Extension to consultation deadline for CP17/25

August 2025 update

On 15 July 2025, the PRA published CP17/25 – Basel 3.1: Adjustments to the market risk framework. Responses were requested by 5 September 2025. The PRA has now extended the consultation period to 12 September 2025. This is in response to feedback that respondents might benefit from extra time to develop their responses to the CP, while recognising the proposed implementation timelines for the full B3.1 package.

O-SII buffer rates for ring-fenced banks and large building societies

29 July 2025

The PRA has reissued the 2024 O-SII buffer rates for ring-fenced banks and large building societies to reflect the FPC’s updated O-SII buffer framework.

Speed of regulatory approvals

15 July 2025

The PRA takes seriously its responsibility to meet the deadlines set out in legislation for processing regulatory applications and in 2023 increased the frequency and granularity of reports on its performance.

Joint statement by the PRA and FCA on HM Treasury’s captive insurance consultation response

15 July 2025

The Financial Conduct Authority (FCA) and the PRA welcome HM Treasury’s (HMT) plans to support the growth of the UK’s captive insurance market. We are committed to playing our part by developing a proportionate authorisation and regulatory regime for captives reflecting the lower risk they pose.

PRA statement on prudential treatment of non-UK Covered Bonds

15 July 2025

Prudential treatment of non-UK Covered Bonds.

Thematic findings from the 2024 Cyber Stress Test

9 July 2025

Letter from the Bank and PRA to PRA-regulated firms and relevant FMIs outlining the thematic findings from the 2024 Cyber Stress Test

Solvency-triggered termination rights clauses in bulk purchase annuity transactions

4 July 2025

The PRA’s letter to Chief Risk Officer to share the PRA’s view of the potential risks arising from the use of solvency-triggered termination rights clauses (STTRs) in bulk purchase annuity (BPA) transactions and our assessment of how firms are mitigating the risks involved.

Cross cutting publications

Low impact amendments to PRA rules and policy material

22 July 2025

In PRA Regulatory Digest – June 2025, the PRA announced a more efficient approach to consulting on and making low impact amendments to rules and policy material, aimed at reducing burden on firms.

The new approach enables the PRA to make low impact amendments in a more efficient and proportionate way – either using a streamlined consultation process or, where appropriate, without further consultation.

The PRA is consulting on three low impact changes to rules and has also made the first set of changes using the new process.

In LIAC01/25 the PRA is consulting on:

1. An amendment to the definition of ‘parent undertaking’ in the Solvency II Firms Sector of the PRA Rulebook.
2. An amendment to the Internal Capital Adequacy Assessment (ICAA) Part of the PRA Rulebook.
3. The deletion of the Benchmarking of Internal Approaches Part of the PRA Rulebook.

The consultation closes on Tuesday 2 September 2025.

In LIAF01/25, the PRA made the following minor updates and corrections without further consultation:

1. Minor corrections following publication of final Solvency II rules.
2. Amendments to supervisory statement (SS) 16/16 –The minimum requirement for own funds and eligible liabilities (MREL) – buffers and Threshold Conditions.

Please contact LIAP@bankofengland.co.uk to respond to the consultation or with any questions about the new process.

CP18/25 – Review of the Senior Managers and Certification Regime (SM&CR)

15 July 2025

This consultation paper (CP) sets out initial proposed changes to the PRA’s SM&CR rules and expectations within the context of the current legislative framework.

Banking publications and updates

This discussion paper (DP) sets out the PRA's preliminary considerations, and seeks feedback and supporting evidence, on a range of possible policy changes to the treatment of residential mortgage exposures under the internal ratings based (IRB) approach to credit risk.

In this CP, the PRA sets out proposed PRA Rulebook Glossary definitions that would replace definitions in Articles 4, 4A, 4B, and 5 of the CRR for the purposes of the PRA Rulebook. The PRA proposes to expressly define certain terms in the PRA Rulebook Glossary that are currently implicitly defined in other provisions of the CRR. The PRA also proposes to make consequential amendments across the PRA Rulebook that are related to the transfer of CRR definitions into the PRA Rulebook Glossary.

The PRA is proposing to restate the vast majority of the CRR definitions in the PRA Rulebook without changes in substance. The PRA does, however, in a few areas propose targeted improvements to enhance the clarity of the definitions, with no material change to policy.

The minimum requirement for own funds and eligible liabilities (MREL) - buffers and Threshold Conditions

17 July 2025

This statement sets out the PRA’s expectations on the relationship between the minimum requirement for own funds and eligible liabilities (MREL) and both capital and leverage ratio buffers, as well as the implications that a breach of MREL would have for the PRA’s consideration of whether a firm is failing, or likely to fail, to satisfy the Threshold Conditions.

PS12/25 – Restatement of CRR and Solvency II requirements in PRA Rulebook – 2026 implementation

17 July 2025

This PRA policy statement (PS) provides feedback to responses to CP8/24 – Definition of Capital: restatement of CRR requirements in PRA Rulebook, and parts of Chapter 3 and 7 of CP13/24 – Remainder of CRR: Restatement of assimilated law concerning supervisory expectations related to securitisations and the mapping of external credit rating agency ratings to credit quality steps (ECAI mapping), and outlines the PRA’s final policy in respect of those proposals.

The PRA’s approach to waivers and permissions under Own Funds (CRR) Part

17 July 2025

This statement of policy (SoP) sets out the PRA’s approach to considering applications from PRA authorised persons not to apply rules, or to apply them with modifications, under section 138BA of the Financial Services and Markets Act 2000 (FSMA).

SS3/25 – Identification of groups of connected clients for large exposures purposes

17 July 2025

This supervisory statement (SS) sets out the PRA’s expectations in relation to the approach firms should take when grouping two or more clients into a ‘group of connected clients’. This statement should be read in conjunction with the requirements in the Large Exposures (CRR) Part of the PRA Rulebook and the high-level expectations outlined in the PRA’s approach to banking supervision.

PS14/25 – Amendments to the Large Exposures Framework – Part 1

17 July 2025

This PRA PS provides feedback to responses the PRA received to Chapter 5 of CP14/24 – Large Exposures Framework. This PS also provides feedback to responses received on groups of connected clients (GCC) in relation to Chapter 4 of CP23/23 – Identification and management of step-in risk, shadow banking entities and groups of connected clients.

PS13/25 – The PRA’s implementation of the Bank Resolution (Recapitalisation) Act

16 July 2025

This PRA PS provides feedback to responses the PRA received to the section of CP4/25 – Depositor protection relating to the PRA’s implementation of the Bank Resolution (Recapitalisation) Act 2025 (the Act). It also contains the PRA’s final amendments to the Depositor protection Part of the PRA Rulebook relating to the implementation of the Act.

CP15/25 – Resolution planning: Amendments to MREL reporting

15 July 2025

This CP sets out proposals by the PRA to make targeted changes to the reporting expected from relevant firms on their MREL, as part of a broader package of announcements on resolution-related policy by the Bank and the PRA.

CP16/25 – Disclosure: resolvability resources, capital distribution constraints and the basis for firm Pillar 3 disclosure

15 July 2025,

This CP sets out proposals to enhance Pillar 3 disclosures by firms in three areas: the resources supporting resolvability, capital distribution constraints and the overall basis on which their Pillar 3 disclosure is prepared.

CP14/25 – Amendments to Resolution Assessment threshold and Recovery Plans review frequency

15 July 2025

Firms must prepare for resolution so that they can be resolved with minimal disruption to the services that they provide to customers and the economy. The PRA keeps relevant requirements under review to ensure that they remain proportionate and fit-for-purpose, based on the PRA’s and the Bank’s experience of operating the framework and wider developments. The policy changes proposed in this CP reflect that experience and seek to ensure that the frameworks remain calibrated appropriately for the risks they address and that the burden on firms is proportionate.

CP17/25 – Basel 3.1: Adjustments to the market risk framework

15 July 2025

This CP sets out the proposed adjustments to the near-final market risk rules published in PS9/24 – Implementation of the Basel 3.1 standards near-final part 2 and the related supervisory statement published in PS17/23 – Implementation of the Basel 3.1 standards near-final part 1.

Prudential Regulation Authority announces review of the Loan to Income (LTI) flow limit rule and offers interim modification by consent

9 July 2025

Following the FPC’s recommendation, the PRA is reviewing the loan-to-income ratio requirements and is offering a modification by consent to disapply the relevant part of the PRA Rulebook while the review is ongoing.

PS11/25 – Amendments to PRA Rulebook and FCA Guidance on the de minimis threshold for the Loan to Income flow limit in mortgage lending

8 July 2025

This PS is issued jointly by the PRA and the FCA (collectively ‘the regulators’). It provides feedback to responses the regulators’ received to the joint CP6/25 – Proposed amendments to PRA Rulebook and FCA Guidance on the de minimis threshold for the Loan to Income flow limit in mortgage lending.

PS8/25 – Updates to the UK policy framework for capital buffers

3 July 2025

This PRA PS provides the PRA’s final policy in relation to amendments being made to the UK framework on capital buffers, including to streamline some policy materials to enhance usability and clarity, following CP10/24 – Updates to the UK policy framework for capital buffers.

The PRA’s approach to identifying Global Systemically Important Institutions (G-SIIs) and setting G-SII buffers

3 July 2025

This statement of policy sets out the PRA’s approach to identifying Global Systemically Important Institutions (G-SIIs) – the UK equivalent term for Global Systemically Important Banks (G-SIBs) – and set G-SII buffers.

The PRA holds Future Banking Data roundtable

1 July 2025

On 19 May, the PRA hosted a round table with Chief Financial Officers (CFO) of the largest, most systemic firms operating in the UK to discuss the Future Banking Data (FBD) project.

Insurance updates

PS9/25 – Changes to the UK ISPV regulatory framework solvency II

24 July 2025

This PRA PS provides feedback to responses the PRA received to CP15/24 – Proposed changes to the UK Insurance Special Purpose Vehicles (UK ISPV) regulatory framework.

SS2/25: Prudential considerations for insurance and reinsurance undertakings when transferring risk to Special Purpose Vehicles

24 July 2025

This SS sets out the PRA’s expectations in respect of the transfer of risk by firms to Special Purpose Vehicles (SPVs).

Update on the 2026 Dynamic General Insurance Stress Test (DyGIST) II

18 July 2025

The PRA confirms that the 2026 Dynamic General Insurance Stress Test (DyGIST) will commence in May 2026, with the objectives and format remaining as outlined in our original announcement.