The PRA's approach to the implementation of the O-SII buffer

First published on 5 December 2016

This Statement of Policy (SoP) sets out the Prudential Regulation Authority’s (PRA) approach to the implementation of the other systemically important institutions (O-SII) buffer, and prior to that, the systemic risk buffer (SRB). 

In line with the Independent Commission on Banking (ICB) recommendations, the UK legislation implementing the SRB requires the Financial Policy Committee (FPC) to establish a framework for an SRB that applies to large building societies and ring-fenced bodies (RFBs). The SRB Regulations require the PRA to apply the framework set out by the FPC on the SRB from 1 January 2019.

The FPC published ‘The Financial Policy Committee’s framework for the systemic risk buffer’ (‘FPC framework’) in May 2016. Alongside the FPC framework, this SoP will form the Bank of England’s broader framework for the SRB.

The PRA will review this SoP at least every two years.

This SoP is relevant to RFBs, within the meaning of section 142A of the Financial Services and Markets Act 2000 (FSMA), and large building societies that hold more than £25 billion in deposits (where one or more of the account holders is a small business) and shares (excluding deferred shares) – jointly ‘SRB institutions’.

Current version

Published on 20 November 2023. Effective from 20 November 2023.

Statement of policy – ‘The PRA’s approach to the implementation of the O-SII buffer (clean version) (PDF) - this contains amendments as tracked here – statement of policy (showing changes)

 - These amendments follow on from – An FPC Response – Amendments to the FPC’s framework for the O-SII buffer.

Past versions