UK PRA consults on rule changes for overseas prudential requirements regime

The UK Prudential Regulation Authority (PRA) has published consultation paper CP3/26 setting out proposed amendments to the PRA Rulebook to accommodate HM Treasury's (HMT) planned overseas prudential requirements regime (OPRR), which will restate and modify certain existing Capital Requirements Regulation (CRR) equivalence provisions in UK legislation. HMT consulted on the creation of the regime in July 2025 and published its response on the same day, and in parallel to the PRA's consultation. The PRA's proposals are intended to ensure alignment between the PRA Rulebook and the OPRR framework, while largely preserving existing prudential outcomes and imposing no material additional costs on firms. Key changes include targeted amendments across multiple CRR-related parts of the Rulebook (including credit risk, market risk, securitisation and reporting) to clarify the treatment of exposures to overseas institutions and covered bonds following HMT designation decisions under the OPRR. The PRA also proposes minor consequential changes to Statement of Policy 5/15 on Pillar 2 capital. The deadline for responses is 2 April. The proposed changes are expected to take effect alongside other elements of the Basel 3.1 package on 1 January 2027.

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