The Prudential Regulation Authority (PRA) issued a statement of policy setting out how it will identify UK Global Systemically Important Institutions (G-SIIs) and calibrate firm-specific G-SII buffers, aligned to the Basel Committee on Banking Supervision G-SIB framework. The policy is effective from 31 July 2025 and applies to PRA-authorised UK-headquartered banks, building societies and PRA-designated UK-headquartered investment firms, and their qualifying parent undertakings, assessed on a group consolidated basis. A G-SII buffer is set as a proportion of worldwide risk-weighted exposures and must be met solely with Common Equity Tier 1 capital. Where imposed, the PRA will invite a firm to apply for a requirement under section 55M of the Financial Services and Markets Act 2000 (FSMA) or use section 192C FSMA to set a buffer for an approved holding company, with scope to impose a requirement on its own initiative if a firm does not apply. Capital held to meet the G-SII buffer cannot be used to meet other capital requirements or buffers, and where both an O-SII buffer and a G-SII buffer apply on the same consolidation basis, the higher buffer applies. Firms with a non-zero G-SII buffer will also be subject to an additional leverage ratio buffer rate. Identification is annual and follows the BCBS indicator-based scoring methodology, with a 130 basis point cut-off for designation and bucketed buffer rates from 1.0% to 3.5% of risk-weighted assets based on score ranges. The PRA uses BCBS-defined indicators, denominators and exchange rates, and may apply supervisory judgement only in exceptional cases to designate a firm or move it to a higher bucket, subject to international peer review. The PRA expects to publish the list of G-SIIs, their scores and buffers by 1 December each year, with buffers applied on an ongoing basis by 1 January of the second year following the calendar year of announcement, subject to adjustment where appropriate.

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