The Prudential Regulation Authority (PRA) has published Consultation Paper 11/25 proposing to delete Supervisory Statement 20/15, which sets out supervisory expectations for building societies’ treasury and lending activities. The PRA’s review concluded that the statement is no longer consistent with its broader policy approach and may create a level-playing-field issue by imposing prescriptive expectations on building societies that do not apply to banks, while risk management in the sector has become more sophisticated; the proposal would not require changes to the PRA Rulebook. SS20/15, introduced in 2015, sets out frameworks for treasury and lending risk management approaches and indicative activity limits, which the PRA says have often been treated by firms as requirements. The PRA considers withdrawal would give societies greater flexibility to design board-approved financial risk management frameworks tailored to their business models, while supervision would continue to rely on existing requirements and tools including the Risk Control Part of the PRA Rulebook, the Senior Managers and Certification Regime, routine supervision using the PRA risk model, and firms’ ICAAPs and ILAAPs, supported by thematic and firm-specific reviews. The PRA also signals that cross-references to SS20/15 in SS2/23 (Supervising Credit Unions) would be removed the next time SS2/23 is updated. Responses are requested by Friday 8 August 2025, with an implementation date proposed for 1 January 2026. Respondents are asked to indicate consent to publication of their name and to flag any potential impacts on persons with protected characteristics under the Equality Act 2010.
Prudential Regulation Authority 2025-05-08
Prudential Regulation Authority consults on withdrawing its supervisory expectations for building societies’ treasury and lending activities
The Prudential Regulation Authority (PRA) has issued Consultation Paper 11/25 proposing the deletion of Supervisory Statement 20/15, which outlines expectations for building societies' treasury and lending activities. The PRA argues that the statement is inconsistent with its broader policy approach and may create a level-playing-field issue, as it imposes prescriptive expectations not applicable to banks. The proposal aims to provide building societies with greater flexibility in financial risk management while maintaining supervision through existing requirements and tools.