The Prudential Regulation Authority (PRA) has published draft proposals for a “transparent, rules-based framework” designed to revise “in-scope regulatory thresholds” every five years, with the opening recalculation scheduled for 1 July 2031.
The system marks a shift away from isolated, “case-by-case” reviews in favour of a uniform methodology across the PRA Rulebook, supervisory statements, and statements of policy.
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The authority has identified 128 thresholds.
Under the proposals, numerical figures would be linked to movements in UK nominal gross domestic product figures compiled by the Office for National Statistics.
The calculation model uses 2026 as a fixed baseline, running an introductory three-year term before moving into recurring five-year cycles.
The regulator stated that introducing this “systematic, predictable and transparent approach” aims to curb prudential drag by preventing institutions from facing “burdensome requirements solely because of nominal growth in the economy”.
It added that the adjustments would “support competition, reduce barriers” to business expansion and improve service delivery within the UK economy.
These include banks, building societies, credit unions, designated investment firms, insurance companies, and overseas branches, alongside groups assessed on a consolidated basis and solo-regulated Financial Conduct Authority firms.
The PRA plans to exclude benchmarks that are not expressed as fixed monetary sums, those that cannot be amended via internal administrative powers, and instances where automatic modifications would run counter to statutory goals or require individual supervisory judgement.
Under the framework, adjustments to the Rulebook would execute automatically through a dedicated rule instrument without separate consultations.
Affected institutions would receive public notification six months prior to any revised figure taking effect.
While market participants will incur preliminary outlays to modify internal governance, reporting infrastructure, and compliance procedures, the regulator anticipates these will be offset by fewer disruptive, ad hoc policy reviews.
The publication also contains a discussion paper covering additional limits where the net financial impact is less distinct, with stakeholder responses determining whether these are formally consulted on later.
Responses to the consultation close on 7 February 2027, ahead of the planned implementation prior to July 2031.
