Prudential Regulation Authority consults on deleting ring-fenced banks shared services rules, citing overlap with resolution and resilience regimes

The Prudential Regulation Authority has launched a consultation on removing the shared services rules for ring-fenced banks from the Ring-fenced Bodies Part of its Rulebook and updating related guidance in Supervisory Statement 8/16. The PRA’s core proposal is to delete the Continuity of Provision of Services Chapter on the basis that Operational Continuity in Resolution, Operational Resilience, Outsourcing and Third Party Risk, and existing arm’s-length requirements now deliver similar protections in a more flexible way. It argues the change would give ring-fenced groups more freedom over service and resource sharing without undermining safety and soundness or the objectives of the ring-fencing regime. The consultation would remove rules 9.1, 9.2 and 9.3, which currently restrict regular operational services being provided across the ring-fence unless through a dedicated service company and require continuity protections for services linked to core deposit taking. It would also delete related definitions, remove rule 2.1(2), and replace Chapter 8 guidance in SS8/16 with references to the other prudential and resolution frameworks that would continue to govern these arrangements. The PRA says the current rules create operational frictions and costs for ring-fenced banks and potential future ring-fenced groups, including firms that may come into scope if they exceed the GBP 35 billion core deposit threshold and conduct material trading activity. The consultation closes on 14 October 2026. The PRA intends to finalise the policy in 2027, while noting that the Financial Services and Markets Bill 2026, which includes ring-fencing-related changes, is still before Parliament.