PRA consults on withdrawal of SS20/15: Supervising building societies' treasury and lending activities

The Prudential Regulatory Authority (PRA) has published a consultation paper (CP/11/25) proposing the deletion of supervisory statement (SS) 20/15, which outlines the supervision of building societies' treasury and lending activities. SS20/15 sets out the PRA's expectations for building societies to comply with the Building Societies Act 1986, the Financial Services and Markets Act 2000, the PRA Rulebook and SS24/15. The PRA conducted a review and concluded that SS20/15 is inconsistent with its broader policy approach and creates a level playing field issue by imposing prescriptive expectations on building societies that banks do not face. In addition, risk management in the building societies sector has advanced since SS20/15 with the PRA now having various tools to supervise firms. As a result, the PRA is proposing to withdraw SS20/15.

The proposals cover:

• Risk management approaches and indicative thresholds. The PRA found that firms often misinterpreted guidance on risk management approaches set out in SS20/15, treating it as requirements rather than guidance. The PRA considers that it is for each firm to determine its own financial risk management framework and therefore removing existing guidance will allow societies to tailor their financial risk management frameworks to their business model.
• Objectives analysis. The PRA considers withdrawing SS20/15 will not compromise safety and soundness due to its existing supervisory tools, but will enhance competitiveness, growth and competition by allowing societies to adapt their risk strategies and better compete with banks.
• Cost benefit analysis. The PRA considers withdrawing SS20/15 would offer business and economic benefits by allowing greater flexibility in managing treasury assets and funding, reducing costs for firms and the PRA.

The deadline for responses is 8 August. The proposed changes resulting from the consultation paper are due to be implemented on 1 January 2026.

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