The Prudential Regulation Authority (PRA) published a policy statement finalising its rules on how PRA-regulated firms identify overseas “recognised exchanges” under the UK Capital Requirements Regulation and transferring the “main indices” list into the PRA Rulebook. The package also revokes Supervisory Statement 20/13 and includes consequential amendments to related credit risk provisions. The final policy introduces a new Recognised Exchanges (CRR) Part setting conditions under Article 4(1)(72)(c) UK CRR, based on firm-led assessment of (i) exchange and market structure and (ii) asset liquidity, with recognised exchange status applying only to the specific assets that meet the liquidity condition. The PRA clarified that UK regulated markets are out of scope, firms do not need to apply to the PRA for recognition, and industry-wide assessments may be used but firms remain accountable for accuracy and updates; it also added clarity that assessing an overseas exchange’s clearing and settlement mechanism should cover operational robustness. Alongside the Basel 3.1 implementation, the PRA amends the definition of “higher risk equity exposure” and restates the main indices list into the Rulebook with minor market updates including replacing the discontinued S&P NZX 15 Index with the S&P NZX 10, and removing the discontinued MSCI Russia Index and the Russian Traded Index (RTS). The rules on recognised exchange conditions and the deletion of SS20/13 take effect on 1 July 2026, while the higher risk equity exposure definition, main indices changes, and consequential amendments to the Counterparty Credit Risk (CRR) and Credit Risk Mitigation (CRR) Parts take effect on 1 January 2027. The PRA also plans to evaluate firms’ implemented approaches through post-implementation thematic reviews.

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