The Prudential Regulation Authority issued a policy statement finalising its Approach to Policy, setting out how it will develop and evaluate prudential rules and policy under the UK framework as amended by the Financial Services and Markets Act 2023. The approach applies to all PRA-regulated firms and takes effect on publication. The final approach expands how the secondary competitiveness and growth objective is considered, clarifying that the capital allocation channel covers both banking and insurance and that proportionate calibration sits within the first two regulatory foundations. It confirms that secondary objectives are applied when exercising the PRA’s general functions such as making rules and technical standards and do not directly apply to firm-specific supervisory decisions, though supervisory engagement should feed insights into policy work. On international standards, the PRA retained a minimum target of achieving at least a largely compliant outcome in relevant external assessments and stated that it intends to implement all relevant standards, including data reporting requirements, across Basel Committee on Banking Supervision and International Association of Insurance Supervisors frameworks, with UK-specific deviations expected to be evidence-based. The statement also elaborates on stakeholder engagement through the policy cycle, including use of subject expert groups and the Practitioner Panels, and establishes a channel for stakeholders to make representations on potential rule reviews as the Rulebook continues to be streamlined and digitised. The PRA invited further feedback on its statement of policy on cost benefit analysis by 30 September 2025 and reiterated its intention to report on delivery of the secondary competitiveness and growth objective within 12 and 24 months after the objective is brought into force, supported by quantitative metrics agreed with HM Treasury that will be kept under review.

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