The UK Prudential Regulation Authority (PRA) has unveiled several key documents and updates, including its Business Plan for 2025/26, a consultation paper on climate risk management expectations for banks, prudential expectations on significant risk transfer financing, and the final policy on step-in risk. The supervisory statement SS1/25 concerning step-in risk will become effective from January 1, 2026.

The Business Plan outlines strategic priorities for the upcoming year. Notably, the implementation of Basel 3.1 standards has been postponed to January 1, 2027. The PRA plans to publish the final Basel 3.1 rules after Parliament revokes relevant sections of the Capital Requirements Regulation (CRR). Additionally, the PRA aims to finalize a simplified capital regime and liquidity simplifications by Q4 2025.

A Bank Capital Stress Test is scheduled for 2025 involving major UK banks. In terms of regulatory developments, the PRA proposed CP8/24 and CP13/24 in 2024 concerning CRR requirements restatement in the PRA Rulebook. Final rules will be issued post-CRR revocation by Parliament.

Further consultations are planned for H2 2025 regarding securitization rule changes and ICT/cyber resilience risks management expectations. The liquidity supervisory framework will also undergo review with potential changes subject to consultation in 2026.

On crypto-assets, the PRA intends to develop policies aligning with BCBS standards. Proposals for removing underused reporting templates and creating a firm-facing portal are also in development to enhance data collection interactions.

In addition, a letter detailing prudential expectations on significant risk transfer financing activities was published. It addresses core concerns and specific focus areas identified through recent supervisory activities alongside ongoing firm expectations. Firms must respond by June 11, 2025, outlining compliance measures with Article 299(2)(c) UK CRR regarding securities financing transactions (SFTs).

The letter requests details on policies ensuring compliance with SFT collateral eligibility regulations and any proposed enhancements or changes impacting regulatory capital approaches related to specific collateral types.