Draft Capital Requirements Regulation (Market Risk Transitional Provision) Regulations 2026

The draft Capital Requirements Regulation (Market Risk Transitional Provision) Regulations 2026 has published, together with a draft explanatory memorandum. The draft Regulations relate to changes to the UK implementation of Basel 3.1. They insert a new Article 465A into the UK Capital Requirements Regulation (UK CRR), introducing a transitional provision requiring credit institutions and designated investment firms not to apply the UK Prudential Regulation Authority's (PRA) market risk rules on updated internal model requirements between 1 January 2027 and 31 December 2027. This means that the UK implementation of the Basel 3.1 internal model requirements for market risk will now be delayed until 1 January 2028. Firms will be allowed to continue using their existing internal models under the current approach until then. The PRA previously consulted on adjustments to the market risk framework in July 2025. The Regulations will come into force on 30 December.

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