LIAC01/26 – Low Impact Amendments Consultation April 2026

Low Impact Amendments Consultation April 2026

Published on
23 April 2026

LIAC01/26: April 2026 – Low Impact Amendments Consultation

Please provide any comments on the proposed amendments to LIAP@bankofengland.co.uk by the consultation end-date for each proposal.

When responding, please confirm if you are responding as an individual or on behalf of an organisation and whether you agree to the publication of your name, or your organisation’s name, in the PRA’s response to this consultation. See the disclaimer page for more information about how we will handle your personal data and your response to this consultation.

Please also indicate in your response if you consider any of the proposals in this consultation are likely to impact persons who share protected characteristics under the Equality Act 2010, and if so, please explain which groups and what the impact on such groups might be.

For information on how the PRA has addressed its statutory obligations, please refer to the to the Low Impact Amendments Process homepage and refer to the 'statutory duty to consult' drop down menu.

Amendments to the Groups Part of the PRA Rulebook

Consultation end date: 21 May 2026

Proposed implementation date: July 2026

The PRA proposes amending its rules to clarify that a firm must apply proportional consolidation when a participation arises as a result of its voting rights, not just its share of capital. The definition of an Article 18(5) relationship includes the definition of a participation, which includes the ownership, direct or indirect, of 20% or more of the voting rights or capital of an undertaking. The PRA therefore considers that it should remove this unintended inconsistency in its rules by referring to voting rights as well as share of capital. To clarify this, the PRA therefore proposes to add the term ‘voting rights’ to the relevant rules.

The PRA proposes to include the reference to voting rights to the Groups part of the PRA Rulebook, rule 2.3 of Methods of Prudential Consolidation. This change will apply to all CRR firms until 31 December 2026.

The PRA also proposes to include the reference to voting rights in Article 18(5) of the Groups Part of the PRA Rulebook as finalised in policy statement (PS) 3/26 – Restatement of CRR requirements – 2027 implementation – final. The amendments will remain once the CRR restatements apply on 1 January 2027.

• Appendix 1: Draft PRA Rulebook: CRR Firms: Groups Instrument 2026

Consequential amendments to a collection of PRA rules relating to the Capital Requirements Regulations 2013

Consultation end date: 21 May 2026

Proposed implementation date: 1 January 2027

The PRA proposes to remove references to additional own funds requirements under the Capital Requirements Regulations 2013 (SI 2013/3115) (the ‘Capital Requirements Regulations’) and replace them with references to ‘Pillar 2A requirement’ (to be defined in the Glossary) in the following parts of the PRA Rulebook:

• Disclosure (CRR) Part, Chapter 4 Disclosure (Part Eight CRR), Articles 438 and 447;
• Own Funds (CRR) Part, Chapter 3 Own Funds (Part Two CRR), Articles 84, 85 and 87; Chapter 4 rules supplementing the CRR with regards to own funds requirements (previously Regulation (EU) No 241/2014), Articles 10, 30, and 34A; and
• Credit Risk: Standardised Approach (CRR) Part, Chapter 4 Standardised Approach, Article 121.

These proposed amendments are consequential to the revocation of the relevant provisions in the Capital Requirements Regulations by HMT on 1 January 2027 through The Financial Services and Markets Act 2023 (Commencement No. 12 and Saving Provisions) Regulations 2026. These proposed amendments do not constitute a policy change and would ensure that the relevant PRA rules are still operable following the revocation of the Capital Requirements Regulations.

• Appendix 2: Draft PRA Rulebook: CRR Firms: Pillar 2 (Consequential Amendments) Instrument 2026

Amendments to the Countercyclical Capital Buffer Rates UK Technical Standard

Consultation end date: 21 May 2026

Proposed implementation date: 1 January 2027

The PRA proposes a number of miscellaneous low impact amendments to the UK Technical Standard on the identification of the geographical location of the relevant credit exposures for calculating institution-specific countercyclical capital buffer rates (the UKTS). These amendments would ensure that the UKTS still works for firms after the implementation of Basel 3.1 Credit Risk Rules on 1 January 2027.

Certain existing cross-references to provisions of the Capital Requirements Regulations (CRR) in the UKTS would be replaced with references to the PRA Rulebook to reflect

1. the implementation of Basel 3.1 standards in the PRA Rulebook as set out in PS1/26 – Implementation of Basel 3.1: Final rules; and
2. the restatement of certain provisions of the CRR in the PRA Rulebook as set out in PS3/26 – Restatement of CRR requirements – 2027 implementation – final.

These rule changes will become effective on 1 January 2027. To ensure that the UKTS continues to operate effectively as of that date, the PRA proposes that the amendments to the UKTS would also become effective on 1 January 2027.

• Appendix 3: Draft PRA Standards Instrument: The Technical Standards (geographical location of the relevant credit exposures for calculating institution-specific countercyclical capital buffers rates) instrument 2026

Amendment to the frequency of the O-SII designation exercise in SoP1/16 – The PRA’s approach to identifying other systemically important institutions (O-SIIs)

Consultation end date: 21 May 2026

Proposed implementation date: 1 November 2026

The PRA proposes to amend paragraph 5.1 of statement of policy (SoP) 1/16 – PRA’s approach to identifying other systemically important institutions (O-SIIs) to change the frequency of the other systemically important institutions (O-SII) designation exercise from an annual assessment to one that takes place at least once every two years. The PRA would retain the ability to review the list of firms identified as O-SIIs at any time outside of this biannual assessment should structural changes occur, ensuring that the assessment reflects the current state of the financial system.

The PRA is not proposing any policy changes to its approach to setting O-SII buffers. Firms’ O-SII buffers would continue to be set at least once every year, as is required under The Capital Buffers and Macro-prudential Measures Regulations 2025 (Capital Buffers Regulations).

This amendment is being made to streamline the policy process, allowing the PRA to run its operations more efficiently. The change would also align with the updated supervisory cycle for Periodic Summary Meetings, as set out in the PRA’s supervisory priorities for 2026.

The PRA proposes that the updated review cycle would come into effect on 1 November 2026. Therefore, the PRA would not publish an updated list of UK firms designated as O-SIIs in 2026, and intends to publish the next list in 2027.

• Appendix 4: Draft SoP1/16 – The PRA’s approach to identifying other systemically important institutions (O-SIIs)

Amendments to the definition of firms in scope of the O-SII buffer in SoP1/16 and SoP4/16

Consultation end date: 21 May 2026

Proposed implementation date: July 2026

On 31 July 2025, the Capital Buffers Regulations came into force. These restated the Capital Requirements (Capital Buffers and Macro-prudential) Regulations 2014 with some amendments, which included changes to the definition of the O-SII buffer scope. These changes to the O-SII buffer scope were consequential changes, resulting from amendments to the regulations for ring-fenced banks, to preserve the scope of the O-SII buffer framework in line with Financial Policy Committee’s (FPC’s) policy intent.

To ensure consistency with the Capital Buffers Regulations, the PRA proposes to amend SoP1/16 – The PRA’s approach to identifying other systemically important institutions (O-SIIs)and SoP4/16 – The PRA's approach to the implementation of the O-SII buffer to include an additional category of firms within the scope of the O-SII buffer. This category comprises UK deposit-takers (other than building societies) that have more than £35 billion in core deposits and do not have material trading activities, defined as trading assets of less than 10% of Tier 1 capital. This proposal would amend paragraph 4.8 of SoP1/16 and paragraphs 1.2, 2.2 and 2.3 of SoP4/16. The proposal would not change the population of firms currently subject to the O-SII buffer and would not change any firm’s current capital requirements.

The PRA also proposes to clarify by introducing a new paragraph in SoP1/16 that for UK deposit-takers (other than building societies) in scope of the O-SII buffer framework, the applicable basis of calculation for the setting of the O-SII buffer for firms that are members of a group will be on the consolidated situation of the parent financial holding company or parent institution and the individual basis for all others. The PRA also proposes similar amendments to paragraph 4.3 in SoP4/16 to clarify the level of application of the O-SII buffer for building societies. These amendments are not policy changes but are intended to provide firms with greater clarity regarding the PRA’s approach.

The PRA also proposes to amend the following hyperlinks in SoP1/16 and SoP4/16 to ensure they link to webpages that are accessible and to ensure consistency with the Bank of England’s website:

For SoP1/16, this includes amending:

• footnote 4: PRA’s approach to supervision of the banking and insurance sectors;
• footnote 5: The Financial Policy Committee’s framework for the systemic risk buffer (updated 29 July 2025); and
• footnote 7: SoP4/16 – The PRA's approach to the implementation of the O-SII buffer.

For SoP4/16, this includes amending:

• footnote 4: The Financial Policy Committee’s framework for the systemic risk buffer.

The PRA also proposes to remove footnotes 1 and 5 in SoP4/16 – The PRA's approach to the implementation of the O-SII buffer, as the underlying information is outdated or no longer relevant.

These proposals aim to ensure that the policy material remains accurate.

• Appendix 5: Draft SoP4/16 – The PRA’s approach to the implementation of the O-SII buffer

Amendments to SoP1/20 – The PRA’s approach to the publication of Solvency II technical information

Consultation end date: 21 May 2026

Proposed implementation date: July 2026

The PRA is proposing to make two changes to SoP1/20 – The PRA’s approach to the publication of Solvency II technical information. These are described below:

Proposal 1:

The PRA publishes a set of discount rates and other parameters, which are used by PRA authorised (re)insurers to calculate their best estimate liabilities (The ‘technical information’ or TI). The currencies for which the PRA provides TI are known as the 'PRA relevant currencies' and are confirmed each year on the PRA website.

The PRA determines the PRA relevant currencies by applying a materiality criterion and identifying which currencies UK insurers have Volatility Adjustment and/or Matching Adjustment (MA) permission for. Details of the PRA's approach is described in paragraphs 3.1 to 3.6 of SoP1/20.

The PRA proposes to reduce the frequency of the updates to the PRA relevant currencies to once every three years. However, if circumstances require an earlier update the PRA may provide an update sooner than this three-year cycle. Such update will reset the start of the subsequent three-year cycle. On this basis the next update is expected to take place no later than end 2028.

Proposal 2:

The PRA also assesses the depth, liquidity and transparency (DLT) of the market on interest rate swaps (or government bonds where the swap market is insufficiently active) for each of the PRA relevant currencies. This assessment informs the construction of the PRA's published basic risk-free interest rate term structures.

The DLT assessment involves analysis of swap trade data against volume and notional turnover indicators. Details of the PRA's approach are described in paragraphs 3.6C to 3.6G of SoP1/20.

The PRA proposes to also reduce the frequency of this publication to once every three years. The PRA may publish updates sooner than this three-year cycle where circumstances require, or should there be a material change in relevant market conditions. Such an update would reset the start of the subsequent three-year cycle. On this basis the next publication is expected to take place no later than end 2028.

The PRA considers these two proposals to be appropriate from a resource and efficiency perspective, because the outcomes of both the relevant currencies assessment and the DLT assessment have been relatively stable in recent years.

The PRA recognises the importance of having a fast, accurate, and proportionate approach to publishing TI, which makes efficient use of PRA resources and allows firms to calculate Technical Provisions in a timely manner. Accordingly, the PRA is continuing to explore further opportunities to streamline its processes relating to TI beyond the proposals in this consultation. SoP1/20 will continue to set out the PRA’s approach to the publication of TI; any further changes will be subject to separate consultation where necessary.

The PRA is also proposing to add a table of contents to SoP1/20.

• Appendix 6: Draft SoP1/20 – The PRA’s approach to the publication of Solvency II technical information

Appendices

• Appendix 1: Draft PRA Rulebook: CRR Firms: Groups Instrument 2026 Appendix 2: Draft PRA Rulebook: CRR Firms: Pillar 2 (Consequential Amendments) Instrument 2026

• Appendix 3: Draft PRA Standards Instrument: The Technical Standards (geographical location of the relevant credit exposures for calculating institution-specific countercyclical capital buffers rates) Instrument 2026

• Appendix 4: Draft SoP1/16 – The PRA’s approach to identifying other systemically important institutions (O-SIIs)

• Appendix 5: Draft SoP4/16 – The PRA’s approach to the implementation of the O-SII buffer

• Appendix 6: Draft SoP1/20 – The PRA’s approach to the publication of Solvency II technical information

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