The Prudential Regulation Authority (PRA) has issued final policy materials for the Strong and Simple simplified capital regime and additional liquidity simplifications for Small Domestic Deposit Takers (SDDTs) and SDDT consolidation entities, finalising the near-final approach previously set out in PS20/25. The package includes final rules, updated supervisory and policy statements, and finalised SDDT-specific reporting templates. The final framework is accompanied by new SDDT-specific methodologies and expectations for Pillar 2 capital and ICAAP/SREP, while removing SDDTs from existing cross-firm materials. The PRA reports no substantive changes from the near-final policy, but makes minor rule and drafting amendments, minor corrections and clarifications to reporting templates and instructions, and confirms deletion of the interim capital regime statement of policy (SoP3/23). Related updates also amend existing guidance and policies covering operation of the SDDT regime, capital buffers, MREL buffers and Threshold Conditions, liquidity and funding supervision, and regulatory reporting guidance. Implementation of the SDDT capital regime is set for 1 January 2027, while changes to operating the SDDT regime and rules and expectations on the frequency of ICAAP updates (including reverse stress-testing) and ILAAP updates take effect from 20 January 2026. The PRA also plans to publish a final reporting taxonomy shortly, with the SDDT reporting requirements applying from 1 January 2027.
Prudential Regulation Authority 2026-01-20
Prudential Regulation Authority finalises simplified capital and liquidity regime for Small Domestic Deposit Takers with 2027 implementation
The Prudential Regulation Authority has issued final policy materials for the Strong and Simple simplified capital regime and additional liquidity simplifications for Small Domestic Deposit Takers and SDDT consolidation entities, finalising the near-final approach in PS20/25. The package includes final rules, updated supervisory and policy statements, SDDT-specific Pillar 2 and ICAAP/SREP methodologies, and finalised SDDT reporting templates, with only minor drafting and template clarifications and deletion of the interim capital regime statement of policy. Related amendments update guidance on the operation of the SDDT regime, capital and MREL buffers, Threshold Conditions, liquidity and funding supervision, and regulatory reporting.