The Capital Buffers and Macro-prudential Measures Regulations 2025

The Capital Buffers and Macro-prudential Measures Regulations 2025 (SI 2025/653) have been laid before the UK parliament and published, together with an explanatory memorandum. The regulations restate relevant provisions of the Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014, which are set to be revoked by the Financial Services and Markets Act 2023 with effect from 31st July. This forms part of the UK's process of replacing a large body of detailed and technical financial services regulation which remains in legislation as assimilated law, following the UK's withdrawal from the European Union.

The regulations remove two capital buffers from legislation (the Capital Conservation Buffer (CCoB) and Globally Systemically Important Institutions (G-SII) buffer) and responsibility for setting these buffers is transferred to the Prudential Regulation Authority (PRA). Other regulations restated include those relating to capital buffers that are set by the Bank of England's Financial Policy Committee (FPC) (the Countercyclical Capital Buffer (CCyB) and the Other Systemically Important Institutions (O-SII) buffer). This is because the FPC does not have broad rulemaking powers like the PRA, and the regulations that underpin the use of its tools must be set out in legislation. The restatement includes technical modifications intended to improve the effectiveness of the overall capital buffer framework. These include: (i) changing the review frequency of the CCyB so that it is set "at least on a quarterly basis" rather than "on a quarterly basis", to enable the FPC to set the CCyB off-cycle, if needed; (ii) removing the requirement for the FPC to publish a quarterly 'buffer guide' for the CCyB based on credit-to-GDP ratio; (iii) updating the threshold at which firms are subject to the O-SII buffer to match the Smarter Ring-Fencing Regime deposit threshold; (iv) removing "edge case" provisions that cap the maximum combined buffer for firms that are subject to both an O-SII and G-SII buffer for simplification; (v) changing the mandated review frequency of the O-SII buffer from every two years to every three years; and (vi) not restating the regulations relating to the Systemic Risk Buffer (SRB), thereby removing it as policy tool. The revocation and restatement take effect on 31 July.

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