UK PRA final rule changes for overseas prudential requirements regime

The UK Prudential Regulation Authority (PRA) has published policy statement PS16/26, setting out its final rules to accommodate HM Treasury's (HMT) overseas prudential requirements regime (OPRR), which will revoke and restate certain Capital Requirements Regulation (CRR) equivalence provisions in UK legislation. HMT consulted on the creation of the regime in July 2025 and published its response in February, in parallel to the PRA's consultation on that same date. The changes are intended largely to maintain the existing prudential framework while ensuring that PRA rules operate effectively under the new legislative regime.

Following consultation feedback from a single joint response, the PRA has made a number of clarificatory and technical amendments, including changes to certain defined terms, as well as minor updates to Pillar 2 instructions, supervisory statements (SoP5/25, SS31/15 and SS4/26) and reporting instructions to reflect the introduction of the OPRR and revocation of the CRR provisions. The amended materials are included in the appendices of the policy statement. Final rules will apply from 1 January 2027 (alongside the implementation of Basel 3.1). This will coincide with HMT's commencement regulations that revoke the relevant provisions of the UK CRR, which are expected to be replaced by the draft Overseas Prudential Requirements Regime (Credit Institutions and Investment Firms) Regulations 2026.

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