Prudential Regulation Authority finalises capital buffers framework updates including a new policy approach to G-SII identification and buffers

The Prudential Regulation Authority (PRA) has published its final policy for amendments to the UK capital buffers framework, following Consultation Paper 10/24, and streamlined related policy materials to improve clarity and usability. The package updates how requirements on buffers are set out, alongside HM Treasury’s amendments to the Capital Buffers Regulations, with some material moving out of legislation and into PRA policy, rules and technical standards. The final policy includes a new statement of policy on the PRA’s approach to identifying global systemically important institutions (G-SIIs) and setting G-SII buffers, amendments to statements of policy on other systemically important institutions (O-SIIs) and implementation of the O-SII buffer, updated reporting instructions for assigning G-SII buffer rates, a PRA technical standards instrument specifying the G-SII identification methodology, and consequential amendments to the PRA Rulebook for CRR firms on capital buffers. It applies to PRA-authorised UK banks, building societies and PRA-designated UK investment firms, their qualifying parent undertakings and relevant subsidiaries regardless of location, and is also relevant to certain counterparties where financial contracts are governed by third-country law, but it does not apply to credit unions. HM Treasury’s updated Capital Buffers Regulations enter into effect on 31 July 2025, and the PRA’s policy material in this policy statement takes effect on the same date.