pc
nid 91095
Mar 05, 2026
csoo@vixio.com
United Kingdom
Bank of England
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2051 charsUnited Kingdom's Prudential Regulation Authority Finalises Recognised Exchanges Policy and Main Indices Transfer
On 5 March 2026, the Prudential Regulation Authority (PRA) published Policy Statement 6/26, providing final rules on recognised exchanges (REs) policy and the transfer of main indices to the PRA Rulebook.
The PRA received three responses to its consultation paper 3/25, with respondents generally welcoming the proposals and the flexibility for banks to recognise exchanges independently. The final policy establishes conditions under Article 4(1)(72)(c) of the Capital Requirements Regulation (CRR) for identifying REs or assets traded on such exchanges. Firms must undertake a two-stage assessment: an exchange and market structure condition, and an asset liquidity condition specific to each asset. The PRA clarified that an exchange qualifies as an RE only in respect of particular assets meeting the liquidity condition, not necessarily all securities traded on that exchange. The PRA maintains its position that firms should conduct these assessments themselves rather than relying on a centrally maintained list, with post-implementation thematic reviews to evaluate approaches.
The final rules also restate the main indices definition currently in Commission Implementing Regulation 2016/1646 into the PRA Glossary. The PRA made minor amendments to reflect market changes, including replacing the discontinued S&P NZX 15 Index with the S&P NZX 10, and removing the MSCI Russia Index and Russian Traded Index due to significantly reduced liquidity following geopolitical events. The PRA amended the definition of "higher risk equity exposure" to align with Basel 3.1 implementation.
The rules specifying RE conditions and revoking Supervisory Statement 20/13 take effect on 1 July 2026. The rules on higher risk equity exposure, main indices restating, and consequential amendments to the Counterparty Credit Risk and Credit Risk Mitigation Parts take effect on 1 January 2027. The policy applies to PRA-authorised UK banks, building societies, Small Domestic Deposit Takers, PRA-designated investment firms, and financial holding companies.
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1273 charsUK’s Prudential Regulation Authority Publishes Policy Statement on Recognised Exchanges Policy and Transfer of Main Indices
On March 5, 2026, the Prudential Regulation Authority (PRA) published a policy statement (PS6/26) on recognised exchanges (RE) policy and transfer of main indices.
The policy statement confirms the following:
Permission for an overseas investment exchange to qualify an RE based on a two-stage assessment.
Clarification that the policy does not require firms to apply to the PRA for recognition of exchanges or assets;firms may treat an asset as listed or traded on an RE if they are satisfied that the market structure and asset liquidity conditions are met.
Amendment to the definition of ‘higher risk equity exposure’ that will be implemented alongside Basel 3.1 standards on January 1, 2027.
Transfer of main indices list to the PRA Rulebook, which is currently situated in Commission Implementing Regulation 2016/1646 (Technical Standard-TS).
Amendments to the Counterparty Credit Risk part and the Credit Risk Mitigation part of the PRA Rulebook, alongside the revocation of supervisory statement 20/13 .
This PS is relevant to PRA-authorised UK banks, building societies, Small Domestic Deposit Takers (SDDTs), SDDT consolidation entities, PRA-designated UK investment firms, and PRA-approved or PRA-designated financial or mixed financial holding companies.