CRR Restatement: PRA Policy Simplifies AM Software Compliance
The Prudential Regulation Authority (PRA) has published its final Policy Statement, summarising the outcome of Consultation Papers CP8/24 and parts of CP13/24. Its central focus is the restatement of Capital Requirements Regulation (CRR) provisions in the PRA Rulebook, particularly on capital definitions, external credit rating mappings (ECAI mapping), and supervisory expectations for securitisation.
Key Provisions:
- Capital Definition: Most CRR provisions governing own funds are restated without substantive change. Crucially, the PRA introduces clarifications concerning interim profits, the treatment of capital instruments, and permission processes for capital adjustments.
- ECAI Mapping: A new section covering the Credit Risk Standardised Approach will be deployed for CRR firms, accompanied by amendments affecting Solvency II entities.
- Securitisation: Updates are made to supervisory statements related to significant risk transfer and the securitisation capital framework.
- Effective Date: All final rules are scheduled to take effect from 1 January 2026.
Regulatory Context and Rationale
This policy statement reflects the PRA’s ongoing effort to translate EU-derived CRR requirements into UK domestic law, with a focus on transparency and proportionality. The consultation phase saw general industry support. Feedback has been incorporated through targeted clarifications and expanded guidance, rather than policy shifts.
Relevance for Asset Managers & Compliance Software
For asset managers and providers of regulatory compliance software, this clarified and consistent regulatory framework offers a strategic advantage. Alignment with the restated CRR definitions supports seamless system integration, more efficient automation of reporting, and strengthened compliance processes.
Original source: “Restatement of CRR and Solvency II requirements in PRA Rulebook – Policy Statement”, published by the Bank of England’s Prudential Regulation Authority, July 2025.
