The Prudential Regulation Authority (PRA) has issued final policy to retire the refined methodology to Pillar 2A, and has updated Supervisory Statement 31/15 on the Internal Capital Adequacy Assessment Process (ICAAP) and the Supervisory Review and Evaluation Process (SREP). The changes apply to all PRA-regulated banks, building societies, designated investment firms, and PRA-approved or PRA-designated holding companies, including Small Domestic Deposit Takers (SDDTs) and firms considering SDDT status. The final policy is unchanged from the near-final version published in PS18/25, following feedback to Consultation Paper 9/24, which received 12 responses. Implementation is aligned with the PRA’s Basel 3.1 implementation date. The refined methodology will cease to apply from 1 January 2027 for all firms, including SDDTs, as they will be subject to the Basel 3.1 standardised approach to credit risk from that date.
Prudential Regulation Authority2026-01-20
Prudential Regulation Authority finalises retirement of the refined Pillar 2A methodology from 1 January 2027
The Prudential Regulation Authority has issued final policy retiring the refined methodology to Pillar 2A and updated Supervisory Statement 31/15 on the Internal Capital Adequacy Assessment Process and the Supervisory Review and Evaluation Process. The policy, unchanged from the near-final version in PS18/25, applies to all PRA-regulated firms and aligns implementation with the Basel 3.1 start date, from which the refined methodology will cease to apply and firms will be subject to the Basel 3.1 standardised approach to credit risk.