PRA publishes policy statement in relation to Overseas Prudential Requirements Regime

On 14 July 2026, the Prudential Regulation Authority (PRA) published a policy statement PS16/26) in relation to rule changes rule changes to accommodate HM Treasury’s (HMT’s) Overseas Prudential Requirements Regime (OPRR).

Background

CP3/26 set out proposed amendments to the PRA Rulebook and Statement of Policy (SoP) 5/15 to accommodate HMT’s OPRR and ensure that the PRA’s rules continue to function as intended with the new legislative framework. The PRA’s proposals were intended to largely maintain both the requirements on firms and the PRA’s approach to how these articles currently operate. The PRA did, however, propose targeted improvements intended to enhance the clarity and operationalisation of its rules.

Summary

The PRA has set out that, in response to feedback, it is making the following changes to the rules as consulted on, including:

• Credit risk – Exposures to Institutions: The PRA has decided to amend its proposals by re-naming the proposed Glossary term as ‘exposures to Article 119 institutions’. The PRA considers that this change will help make the rulebook more accessible. The PRA also confirms that exposures to UK exchanges do not meet the definition of ‘exposures to Article 119 institutions’ and therefore may not be assigned to exposures to institutions exposure class.

• Large exposures: The PRA has decided to introduce a new Part-specific defined term ‘relevant exposures to Article 119 institutions’ in the Large Exposures (CRR) Part. This will have the effect of carving out exposures to exchanges from the relevant Large Exposures rules.

The PRA has also confirmed where it has decided not to make changes, including in relation to covered bonds and to central governments or central banks, regional governments or local authorities, and public sector entities.

Next steps

HMT has made the commencement regulations that revoke the relevant provisions of the Capital Requirements Regulation (CRR), which are expected to be replaced by the Overseas Prudential Requirements Regime (Credit Institutions and Investment Firms) Regulations 2026. With the agreement of HMT, the PRA has made final rules on the understanding that this statutory instrument (SI) will be made and in force prior to 1 January 2027. If the SI is amended prior to being made, or is not made, the PRA would amend or revoke the final rules as necessary.

The new rules will take effect on 1 January 2027 alongside the PRA’s implementation of the Basel 3.1 standards.