PRA publishes final Basel 3.1 policy documents

The PRA has published its final instruments, supervisory statements, statements of policy, and templates to reflect Basel 3.1. The measures reflect the revised UK implementation date for the Basel 3.1 requirements of 1 January 2027 – except for the internal model approach for market risk which will take effect on 1 January 2028. The PRA has made only minor changes from the versions of the documents it consulted on.

HM Treasury has made the necessary legislative changes to revoke the relevant provisions of the CRR and replace them with the suite of measures now finalised.

The final package comprises:

• the PRA Rulebook: CRR Firms: (CRR) Instrument 2026;
• summary of the purpose of the rules – Basel 3.1;
• corresponding CRR rules in the final rule instrument;
• CRR restatement provisions in the final instruement;
• PRA standards instrument: technical standards (economic downturn) revocation instrument;
• Final SS 10/13 – credit risk standardised approach;
• Final SS13/16 – underwriting standards for buy-to-let mortgage contracts;
• Final SS 3/24 – credit risk definition of default;
• Final SS 4/24 – credit risk IRB approach;
• Final SS 17/13 – credit risk mitigation;
• Interim SS 13/13 and final SS 13/13 – market risk (effective respectively until 31 December 2027 and from 1 January 2028);
• Final SS 12/13 – counterparty credit risk;
• Final CoP 1/19 – BoE and PRA approach to interpretation of EU Guidelines and Recommendations;
• SoP 5/15: Pillar 2 methodologies;
• Final updated disclosure and reporting templates and instructions;
• Final SS 34/15 – guidelines for completing regulatory reports;
• List of publishable respondents to consultation.

Alongside these papers, the PRA has also published its policy statement on retiring the refined methodology to Pillar 2A, which attaches the final amends to SS 31/15 – the ICAAP and SREP process. The changes align to Basel 3.1 implementation, so that from 1 January 2027 all firms, including small domestic deposit takers (SDDTs) will be subject to the Basel 3.1 standardised approach to credit risk. The final framework for the “strong and simple” regime for SDDTs has also been published, comprising:

• the PRA Rulebook: CRR Firms: SDDT Regime Instrument 2026;
• amendments to SS31/15 and SoP5/15;
• new SoP 2/25 – the PRA’s methodologies for setting Pillar 2 capital for SDDTs;
• new SS4/25- ICAAP and SREP process for SDDTs;
• amendments to SoPs and SSs on:
  • operating the SDDT regime;
  • non-systemic UK banks – the PRA’s approach to new and growing banks;
  • implementing capital buffers;
  • MREL buffers and Threshold Conditions;
  • PRA’s approach to supervising liquidity and funding risks;
  • Pillar 2 reporting and guidance to completing regulatory reports;
• final updated reporting templates and instructions; and
• corresponding CRR rules – the simplified capital regime for SDDTs.

And finally, the PRA’s suite of final materials on the restatement of the CRR, which take effect partly as a result of HM Treasury revoking parts of the CRR and otherwise on implementation of Basel 3.1 and which comprise:

• the PRA Rulebook: CRR Firms (CRR No. 2) Instrument 2026;
• corresponding provisions table;
• amendments to SS15/13 – groups;
• a new SS4/24 – credit risk: IRB approach;
• a new SoP 6/25: the PRA’s approach to IMM permission under the Counterparty Credit Risk part;
• amendments to SS9/13 – securitisation: significant risk transfer;
• amendments to SS10/18 – securitisation: general requirements and capital framework;
• a new SoP7/25 – the PRA’s approach to waivers and permissions under the Securitisation (CRR) Part of the PRA Rulebook;
•  a new SoP 8/25 – the PRA’s approach to the exercise of powers referred to in articles, 244(3)(b), 245 (3)(b), 254(4) and 258(2) of the Securitisation (CRR) part of the PRA Rulebook;
• amendments to SS10/13 – credit risk standardised approach; and
• a new SS3/24 – Credit Risk definition of default.

HM Treasury has updated its website to acknowledge all the PRA publications, to note its work on legislative change, and to say it will publish an updated policy paper in due course.