The update directly addresses prudential capital and credit risk regulation for PRA-authorised UK banks, building societies, and investment firms, which are core Retail Banking supervisory concerns.
The consultation also affects PRA-designated investment firms and their prudential treatment under the OPRR framework, introducing a secondary investment services dimension to the regulatory scope.
Specialism
The PRA's proposed rule changes directly address prudential requirements for UK banks and investment firms, including capital treatment of exposures and large exposure limits, which are core prudential standards for payment and credit institutions.
Low confidence — requires human review. The consultation involves regulatory reporting template updates and disclosure amendments, but the primary focus is prudential capital and exposure rules rather than reporting obligations.
2026-02-19 11:07:50·csoo@vixio.com
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TITLE: United Kingdom's Prudential Regulation Authority Proposes Rule Changes to Accommodate Overseas Prudential Requirements Regime
BODY:
On 19 February 2026, the Prudential Regulation Authority (PRA) published Consultation Paper 3/26, setting out proposed amendments to its Rulebook to align with HM Treasury's (HMT) implementation of the Overseas Prudential Requirements Regime (OPRR). The OPRR restates existing Credit Risk Regulation (CRR) equivalence provisions with modifications, replacing HMT's current approach to recognising other jurisdictions' regulatory frameworks.
The PRA's proposals aim to ensure coherence between its Rulebook and HMT's reforms across multiple credit risk areas. Key proposed changes include amendments to the treatment of exposures to institutions, eligible covered bonds, central governments and central banks, regional governments and local authorities, public sector entities, and Gibraltarian entities. The proposals also address large exposure limits and clarify interactions between PRA rules and OPRR designations.
The PRA emphasises that the expected impact on firms is minimal, with no material costs anticipated. The proposals maintain existing requirements and PRA approaches while enhancing clarity and operationalisation. Changes would apply to PRA-authorised UK banks, building societies, PRA-designated UK investment firms, and their qualifying parent undertakings. The PRA notes that reporting and disclosure templates may require updates to reflect amended cross-references, with timing to be determined.
The consultation closes on Thursday 2 April 2026. The PRA invites feedback on its proposed approach and requests identification of any other consequential changes required. Responses should be submitted to CP3_26@bankofengland.co.uk. The PRA proposes that changes resulting from this consultation become effective alongside the Basel 3.1 package on Friday 1 January 2027.