The Prudential Regulation Authority (PRA) has published a consultation proposing to move most definitions currently set out in Articles 4, 4A, 4B and 5 of the Capital Requirements Regulation (CRR) into the PRA Rulebook Glossary, alongside consequential amendments across the Rulebook and a related update to Supervisory Statement 13/13 on market risk. The package is intended to maintain continuity as HM Treasury revokes remaining CRR provisions under the UK’s Financial Services and Markets Act model, with the PRA describing the approach as largely a “lift and shift” of CRR text with targeted drafting improvements that are not intended to change policy materially. The proposals are most relevant to PRA-authorised UK banks, building societies, PRA-designated UK investment firms and qualifying parent undertakings, but the PRA notes potential relevance across the Rulebook, including for UK Solvency II firms and other insurers where definitions intersect. Key changes include creating a CRR Terms List and amending the Rulebook’s interpretation provisions so that unitalicised CRR terms used in certain PRA rules would also take their meaning from the Glossary; converting key size thresholds into GBP in the definitions of “large institution” (EUR 30 billion to GBP 26 billion) and “small and non-complex institution” (EUR 5 billion to GBP 4.4 billion); broadening the definition of “SME” to align with the near-final Basel 3.1 credit risk rules and applying it across the Rulebook; and adjusting certain credit risk definitions (including probability of default, loss given default and conversion factor) following HM Treasury’s decision not to restate them in legislation. Other elements include updated insurance-related definitions following Solvency II restatement, transferring the “recognised exchange” definition into the Glossary on the assumption that earlier proposals proceed as consulted, and deleting an obsolete recognised-exchanges list from SS13/13. Responses are requested by 30 October 2025. The PRA proposes that resulting changes would take effect alongside the Basel 3.1 package, expected on 1 January 2027, and notes it may share consultation responses with HM Treasury and the Financial Conduct Authority.
Prudential Regulation Authority 2025-07-30
Prudential Regulation Authority consults on restating Capital Requirements Regulation definitions in the PRA Rulebook ahead of Basel 3.1
The Prudential Regulation Authority (PRA) plans to transfer most definitions from the Capital Requirements Regulation (CRR) into the PRA Rulebook Glossary, updating Supervisory Statement 13/13 on market risk. This aims to maintain continuity as HM Treasury revokes CRR provisions, aligning with Basel 3.1 credit risk rules. The changes affect PRA-authorised UK banks, building societies, investment firms, and insurers, with implementation expected on 1 January 2027.