CP15/25 – Resolution planning: Amendments to MREL reporting

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Responses are requested by Friday 31 October 2025.

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Responses can be sent by email to: CP15_25@bankofengland.co.uk.

Alternatively, please address any comments or enquiries to:
Recovery, Resolution and Resilience Team
Prudential Regulation Authority
20 Moorgate
London
EC2R 6DA

1: Overview

1.1 The Prudential Regulation Authority (PRA) and the Bank of England (Bank) work to ensure that any firms that fail do so in an orderly manner and with as minimal disruption as possible to the stability of the UK financial system. The Resolution Pack Part of the PRA Rulebook requires firms to provide the PRA with information necessary for drawing up a resolution plan.^{footnote [1]} The PRA shares this information with the Bank, which is the UK resolution authority. This enables the PRA and the Bank to identify potential barriers to an effective resolution plan and develop remedial actions to address them.

1.2 Firms are required to maintain a minimum amount of own funds and eligible liabilities (MREL).^{footnote [2]} This is intended to ensure shareholders and other investors, rather than depositors or public funds, are first in line to bear the costs of failure.

1.3 This CP sets out proposals by the PRA to make targeted changes to the reporting expected from relevant firms^{footnote [3]} on their MREL, as part of a broader package of announcements on resolution-related policy by the Bank and the PRA. In particular, this CP should be read in conjunction with the Bank’s policy statement (MREL PS) and revised statement of policy (MREL SoP) on its approach to setting MREL.

1.4 The proposals in this CP aim to ensure that firms only report data that are aligned with the revised MREL SoP and essential to the work of the PRA and the Bank. In particular, the proposals aim to ensure that the PRA and the Bank can more effectively monitor whether firms are on track to build and maintain sufficient loss-absorbing capacity to support an effective resolution. The proposals would establish a clear, consistent and consolidated MREL reporting framework. Additionally, the proposals remove firms’ need to produce duplicative and obsolete MREL reporting data. Overall, these proposals are assessed to represent a net reduction in the reporting burden on firms.

1.5 The PRA and the Bank have worked closely to ensure a joined-up, streamlined and consistent approach to MREL reporting by firms. The Bank has also stated in the MREL PS that it intends to consult, in the future, on changes to COREP13 reporting requirements.^{footnote [4]} This may include a proposal to revoke the requirement on firms to submit four COREP13 templates that contain information about own funds instruments and liabilities.^{footnote [5]}

1.6 Subject to the outcome of this CP and the planned consultation on COREP13 requirements, firms may no longer be required by the Bank to submit those four COREP13 templates by the time that the proposals in this CP become effective. Instead, MREL reporting templates would consolidate some MREL-related data elements from COREP13, with a view to removing duplicative data submissions.

1.7 The specific proposals in this CP relate to changes to the three MREL reporting templates. They involve amendments to the data elements in both the MREL resources template (MRL001)^{footnote [6]} and the MREL debt template (MRL003),^{footnote [7]} as well as the full deletion of the MREL resources forecast template (MRL002)^{footnote [8]} (Appendix 1). Consequently, they also involve amendments to the reporting instructions (Appendix 2) and to SS19/13 – Resolution Planning (Appendix 3). As a result, the proposals in this CP would:

• keep MREL reporting up to date by aligning with the revised MREL SoP;
• address feedback based on the experience of firms and the PRA/Bank since the implementation of the MREL reporting templates and related instructions;
• streamline and retain only essential MREL data; and
• consolidate some MREL-related data elements in COREP13 into the MREL reporting templates.

1.8 The proposals in this CP advance the PRA’s primary objective to promote the safety and soundness of firms by ensuring that the PRA and the Bank can monitor whether firms are on track to build and maintain sufficient loss-absorbing capacity to support an effective resolution. The proposals also support the PRA’s secondary competition objective by streamlining and enhancing the proportionality of MREL reporting. The proposals also support the PRA’s secondary competitiveness and growth objective by aligning with the approach taken in key non-UK jurisdictions, those who also seek to avoid duplicative and unnecessary resolution data requests from firms.

1.9 This CP is relevant to UK banks, building societies, PRA-designated investment firms and their qualifying parent undertakings, to which the Resolution Pack Part of the PRA Rulebook applies. Specifically, this CP is relevant to a firm that:

• is set, or has been notified by the Bank that the firm is likely to be set,^{footnote [9]} an external and/or internal MREL above minimum capital requirements (MCR);^{footnote [10]} and/or
• is notified by the Bank that the firm’s preferred resolution strategy involves the use of stabilisation powers (namely, a bail-in or transfer strategy).

1.10 Relatedly, under the revised MREL SoP, firms with a transfer strategy are expected to be set an external and/or internal MREL equal to MCR. It would therefore no longer be necessary for the Bank to monitor progress towards and thereafter meeting MREL above the MCR. So this CP proposes that such firms would no longer be expected to submit MRL001. However, these firms would still be expected to submit MRL003, as such data is needed to facilitate the Bank’s write-down and/or conversion powers during a resolution and/or the use of the mandatory reduction power. Further details can be found within paragraphs 2.3 to 2.6 below.

1.11 The PRA has a statutory duty to consult when changing rules (section 138J of the Financial Services and Markets Act (FSMA) 2000), or new standards instruments (section 138S of FSMA). When not making rules, for example where making or amending a PRA SS as is the case in this CP, the PRA has a public law duty to consult widely where it would be fair to do so.  

1.12 In carrying out its policymaking functions, the PRA is required to comply with several legal obligations. The analysis in this CP explains how the PRA has had regard to the most significant matters in making the proposals, including an explanation of the ways in which that has affected the proposals. Due to the straightforward nature of the proposals, the PRA has not consulted any of the statutory practitioner panels about the proposals in this CP.

Background

1.13 MREL refers to the requirement for a firm to maintain a minimum amount of own funds and eligible liabilities, as directed by the Bank when exercising its powers of direction under section 3A(4) or (4B) of the Banking Act 2009. MREL reporting has been in place since January 2019. It comprises three MREL reporting templates that enable the PRA and the Bank to monitor firms’ compliance with the MREL SoP and to support the effective execution of a resolution.

1.14 Several lessons have been learned through practical experience since the implementation of the MREL reporting templates, including from the second assessment of the Resolvability Assessment Framework. The Bank’s public statement at the time stated that it would work with the PRA to consider potential updates to MREL reporting. Additionally, the Bank’s MREL SoP has now been revised. This CP is aligned to and follows these developments.

1.15 While the changes proposed in this CP would alter the content of MREL reporting, the PRA is not proposing to change the reporting frequency, reporting period start/end date and submission due date of the three MREL templates. Therefore the reporting frequency for MRL001 and MRL003 would remain aligned with COREP C 01.00, which is currently on a quarterly basis. Similarly, the reporting period start/end date and submission due date for MRL001 and MRL003 would remain aligned with COREP C 01.00.^{footnote [11]}

1.16 Moreover, the PRA is not proposing to make any changes to the data collection system for MREL reporting, which is currently collected using the Bank Electronic Data Submissions portal. The PRA also does not propose changes to the format of reporting, which is currently reported using XBRL templates.

1.17 The PRA and the Bank will continue to work together to consider if the existing content of resolution packs, as set out in SS19/13, and other resolution reporting remains appropriate. If this review leads to policy proposals, the PRA will consult on these separately.

Implementation

1.18 The Bank has published the revised MREL SoP in parallel with this CP, which will come into effect on 1 January 2026. The PRA proposes that firms will have at least 6 months following the publication of the final MREL reporting policy to implement the proposals in this CP. Subject to the outcome of this CP, the MREL reporting policy would be effective on 1 January 2027 where the firms would submit Q4 2026 data during February 2027 in line with the frequency of MREL reporting.

Responses and next steps

1.19 This consultation closes on Friday 31 October 2025. The PRA invites feedback on the proposals set out in this consultation. Please address any comments or enquiries to CP15_25@bankofengland.co.uk.

1.20 When providing your response, please tell us whether or not you consent to the PRA publishing your name, and/or the name of your organisation, as a respondent to this CP.

1.21 Please also indicate in your response if you believe any of the proposals in this consultation paper are likely to impact persons who share protected characteristics under the Equality Act 2010, and if so, please explain which groups and what the impact on such groups might be.

1.22 References related to the UK’s membership of the EU in the SS covered by this CP have been updated as part of these proposals to reflect the UK’s withdrawal from the EU. Unless otherwise stated, any remaining references to EU or assimilated legislation refer to the version of that legislation which forms part of assimilated EU law.^{footnote [12]}

2: The PRA’s proposed amendments to MREL reporting

2.1 This chapter sets out the PRA’s proposed amendments to MREL reporting. The proposals are designed to simplify and streamline reporting, aiming to ensure that firms only report data necessary for the PRA and the Bank to monitor firms’ progress towards, and ongoing compliance with, MREL requirements; and to facilitate the Bank’s use of stabilisation powers.

Scope of firms and instruments within MRL001 and MRL003

2.2 Under the current SS19/13, the PRA expects firms that have been notified by the Bank that they are, or are likely to be, set an external and/or internal MREL above MCR to submit MRL001, MRL002 and MRL003.

2.3 The PRA proposes that MRL001 should be submitted only by a firm that is set an external and/or internal MREL above MCR. The revised MREL SoP introduces a targeted change in calibration – for firms with a preferred resolution strategy of transfer, MREL would be expected to be set equal to MCR. In line with this, the PRA proposes that such firms with transfer strategy will no longer be expected to submit MRL001.

2.4 The PRA proposes that MRL003 should continue to be submitted by the following firms because such information is needed to facilitate the Bank’s write down and/or conversion powers during a resolution and/or the use of the mandatory reduction power:

• a firm that has been notified by the Bank that the firm is, or is likely to be, set an external and/or internal MREL above MCR; and/or
• a firm that has been notified by the Bank that the firm’s preferred resolution strategy is transfer.

2.5 The data elements contained within MRL003 would facilitate the Bank in exercising its write-down and/or conversion powers during a resolution, including any use of the resolution bail-in power alongside the use of transfer powers. They would also facilitate the write-down or conversion of regulatory capital instruments on entry to the special resolution regime,^{footnote [13]} prior to any exercise of transfer or other resolution powers.

2.6 To address feedback received from firms and enhance clarity, the PRA proposes to clarify the scope of instruments expected to be reported in MRL001 and MRL003 through amendments to the reporting instructions and SS19/13.

Amendments to MRL001: MREL resources

2.7 The purpose of MRL001 is to collect aggregate information on firms’ MREL resources, alongside metrics on certain ineligible resources, split across several maturity profile buckets. An understanding of firms’ aggregate MREL resources is needed to monitor whether firms are on track to build and maintain sufficient loss-absorbing capacity to meet an MREL requirement set above MCR, thereby supporting an effective resolution. Similarly, information on certain ineligible resources is important, as such instruments can act as a barrier to resolution by limiting the scope of loss absorption. Moreover, in some instances, ineligible resources ranking at the same level or below MREL eligible resources may create a No Creditor Worse Off (NCWO) risk by possibly exposing written down or bailed-in creditors to greater losses than they would have incurred in insolvency. Lastly, a breakdown across maturity profile buckets is essential for understanding the overall picture and duration of firms’ resources.

2.8 The PRA proposes to clarify that the scope of instruments for MRL001 should include, and is not limited to:

• all own funds instruments that qualify to count towards MREL;
• MREL eligible liabilities instruments; and
• certain own funds and other liabilities that do not qualify to count towards MREL.^{footnote [14]}

2.9 Table 1 summarises the proposed amendments to MRL001, accompanied by the rationale for each amendment and/or, where applicable, the corresponding policy. Paragraphs 2.10 to 2.15 below further explain the key proposed amendments.

2.10 The PRA proposes to add data elements to reflect that an ELI that is intended to count towards MREL resources should be measured at the full accounting value (ie including accrued interest and fair value hedge adjustments if applicable), in line with the revised MREL SoP. Moreover, the PRA proposes amending and adding data elements to reflect that the eligible liabilities deductions regime is now extended to apply to all firms through the revised MREL SoP.

2.11 As noted in the revised MREL SoP, once a Tier 2 capital instrument has reached a residual maturity of less than one year, only the residual amortising Tier 2 capital may contribute to MREL resources, provided the instrument is not rendered ineligible for MREL by any other provisions in the revised MREL SoP. As such, the PRA proposes amending data elements to correctly reflect this part of a Tier 2 capital instrument’s 3-phase life cycle.

2.12 To ensure clarity and consistent treatment across all instruments that are liability-accounted and contribute to MREL resources, the PRA proposes to clarify in the reporting instructions that Tier 2 capital instruments should be measured at the full accounting value. Firms are expected to report both accounting value and nominal outstanding value in MRL001.

2.13 The PRA proposes adding new data elements for firms subject to structural subordination to be consistent with the revised MREL SoP. These new data elements reflect that external MREL resources issued by resolution entities should not rank pari passu with significant amounts of other liabilities that do not qualify to count towards MREL.^{footnote [15]} This is commonly known as the ‘clean holding company requirement’. It is intended to ensure that, in writing down or converting external MREL, the Bank is not required to bail in significant amounts of liabilities that might otherwise rank pari passu and which may act as a barrier to resolution due to being difficult to bail in. Accordingly, firms would be expected to report the proportion of liabilities that do not qualify for external MREL relative to:

• their overall external MREL resources, when this ratio exceeds 2.5%; and
• for each creditor class, the proportion of liabilities that do not qualify for external MREL relative to the overall external MREL resources in that same creditor class, when this ratio exceeds 5%.

2.14 Relatedly, the PRA proposes adding new data elements to reflect that, in accordance with the revised MREL SoP, internal MREL resources must be subordinated to the operating liabilities of the group entities issuing them. As such, internal MREL eligible liabilities will need to be contractually or statutorily subordinated. This is commonly known as the ‘subordination requirement’ and is in place for the same reason as the ‘clean holding company requirement’ referred to in paragraph 2.13. However, as noted in the revised MREL SoP, a firm that is a holding company may be permitted to issue internal MREL instruments as senior liabilities provided that certain conditions are met.^{footnote [16]} In order to enable compliance with these conditions to be monitored, firms would be expected to report the proportion of liabilities that do not qualify for internal MREL relative to:

• their overall internal MREL resources, when this ratio exceeds 2.5%; and
• for each creditor class, the proportion of liabilities that do not qualify for internal MREL resources in that same creditor class relative to the overall internal MREL, when this ratio exceeds 5%.

2.15 To enhance MREL reporting data quality, the PRA proposes that firms should explain the ‘basis of preparation’ by providing any idiosyncratic details, firm-specific assumptions and/or interpretations with their submission in a free text format. This would reduce the need for ad-hoc correspondence between firms and the PRA/Bank to clarify the reported data.

Deletion of MRL002: MREL resources forecast

2.16 The purpose of MRL002 is to collect the same data as MRL001, but with a single data element capturing information on the aggregate (total) current metrics, instead of a breakdown across maturity profiles. Further, a forecast of those resources over the next eight quarters and year-end following the eighth quarter is included.

2.17 Table 2 shows the proposed deletion of MRL002, alongside the rationale behind the deletion:

2.18 Although the PRA proposes to delete MRL002, firms are reminded that they are required to proactively raise relevant issues with the PRA and the Bank and maintain an open dialogue to support effective supervision. Where a firm anticipates that it may be unable to meet its MREL requirements with its MREL resources, it is the firm’s responsibility to take timely action and engage with the Bank and the PRA.^{footnote [17]}

Amendments to MRL003: MREL debt

2.19 The purpose of MRL003 is to collect instrument-level information on the characteristics of firms’ MREL resources, alongside certain ineligible resources. An understanding of firms’ MREL resources on an instrument-level is needed to monitor whether firms are on track to build and maintain sufficient loss-absorbing capacity to meet an MREL requirement set above MCR, thereby supporting an effective resolution. Moreover, instrument-level information facilitates the Bank’s exercise of its statutory write-down and/or conversion powers during a resolution and/or the use of the mandatory reduction power. This includes information on certain instruments ineligible for MREL, which is necessary to enable the Bank to treat such instruments in the correct manner when exercising those powers.

2.20 The PRA proposes to clarify that the scope of instruments for MRL003 should include, and is not limited to:

• own funds instruments that qualify to count towards MREL;
• MREL eligible liabilities instruments;
• liabilities that were previously qualified to be MREL eligible liabilities, but now do not qualify due to having reached a residual maturity of less than one year;
• bail-in liabilities that on issuance did not qualify as own funds or MREL eligible liabilities;^{footnote [18]}
• any shares or other equity interests that do not qualify as own funds; and
• instruments that were previously qualified to be own funds or MREL eligible liabilities but now do not qualify due to changes in legal or regulatory requirements.

2.21 Table 3 summarises the proposed amendments to MRL003, accompanied by the rationale for each amendment and/or, where applicable, the corresponding policy. Paragraphs 2.22 to 2.26 below further explain the key proposed amendments.

2.22 As part of the feedback received from firms since the implementation of the MREL reporting policy, the PRA proposes amending data elements to allow for the accurate reflection of the accounting treatment for equity instruments.

2.23 As mentioned in paragraph 1.6, to enable MREL data to be contained within one place, the PRA proposes to include in MRL003 some MREL-related data elements that currently reside in COREP13. As mentioned in paragraph 1.5, the Bank intends to consult, in the future, on changes to COREP13 reporting requirements. This may lead to a deletion of four COREP13 templates that contain information about own funds instruments and liabilities.^{footnote [19]}

2.24 To align with the revised MREL SoP, the PRA proposes to add a data element for firms to indicate, in accordance with the revised MREL SoP, for issuances of MREL eligible liabilities instruments only, whether either:

• an instrument-level legal opinion on MREL eligibility of that specific individual issuance has been obtained; or
• the issuance is a ‘repeat issuance’^{footnote [20]} and the issuing entity has relied on a previous eligibility legal opinion.

2.25 To enhance MREL reporting data quality, the PRA proposes that firms should set out the ‘basis of preparation’ by providing any idiosyncratic details, firm-specific assumptions and/or interpretations with their submission in a free text format. This would reduce the need for ad-hoc correspondence between firms and the PRA/Bank to clarify the reported data.

2.26 To streamline and retain only essential data, the PRA proposes that several data elements relating to the form of the security be consolidated and deleted.

Reporting frequency

2.27 Currently, firms’ MREL reporting frequency, reporting start/end date and submission due dates align to COREP C 01.00 quarterly submissions for MRL001 and MRL003.

2.28 The PRA is not proposing to change the frequency, reporting end date and submission due date.

Consequential and other amendments to SS19/13 and MREL reporting instructions

2.29 The PRA proposes amendments to the reporting instructions to reflect the MREL reporting changes as described in paragraphs 2.2 to 2.26 above. The proposals in this CP would also result in consequential changes to SS19/13. The PRA proposes to:

• align description and content of MRL001 and MRL003 with the proposed amendments in this CP, and remove all information related to MRL002;
• clarify the scope of instruments that should be reported on;
• update the level of application in line with the proposed scope of firms expected to report each template; and
• clarify that the frequency of submissions will be aligned with the Basel 3.1 reporting of C 01.00 and will therefore remain on a quarterly basis.

2.30 The PRA also proposes refreshing references, such as paragraph 2.36 of SS19/13 about Single Customer View files and making minor typographic edits. Please refer to Appendix 3 for the tracked-changes version.

PRA objectives analysis

2.31 The PRA considers that the proposals in this CP would advance the PRA’s primary objective of ensuring the safety and soundness of firms, which the PRA must pursue by (among other things) seeking to minimise the adverse effect that the failure of firms may have on the stability of the UK financial system. The proposals would enable the PRA and the Bank to more effectively monitor firms’ progress towards meeting MREL, which is a critical element of an effective resolution strategy. This would help ensure a firm is prepared for resolution so that, if the need arises, it can be resolved in an orderly manner with a minimal disruption of critical services.^{footnote [21]}

2.32 The proposals would support the PRA’s secondary objective of facilitating international competitiveness and growth by enhancing the proportionality of MREL reporting. The streamlined templates and enhanced reporting instructions help ensure a more efficient use of firms’ resources via time savings and elimination of duplicative reporting. These efficiencies would enable firms to allocate resources more effectively. The PRA’s proposals align with the approach taken in some key non-UK jurisdictions, which have sought to remove duplicative and unnecessary resolution data requests from firms. The proposals support the PRA’s effective and proportionate regulatory regime, ensuring that the UK remains competitive and attractive as a place to do business.

Cost benefit analysis (CBA)

2.33 This section sets out the PRA’s quantitative and qualitative impact analysis of the expected costs and benefits associated with implementing the amendments to MREL reporting outlined in this CP. The PRA has not consulted the CBA panel in the preparation of this CBA, given that the threshold for consultation was not met due to the limited scope and impact of the proposals. Additionally, these proposals do not impact PRA rules but rather the expectation in SS19/13 and, therefore, the PRA is not legally required to publish a CBA. Nonetheless, the PRA has included a CBA of the proposals for transparency.

2.34 Overall, the PRA assesses that the proposals in this CP would result in a net benefit to firms in quantitative terms. The PRA estimates that the aggregate present value of the total net benefit to firms would be around £1.1 million after the implementation of the revised MREL reporting templates.^{footnote [22]} This net benefit is estimated based on the costs saved by firms in preparing and submitting regulatory reporting, and one-off costs to implement the proposed changes. The additional benefits of clearer and simpler reporting and enhanced ability for the PRA/Bank to monitor firms’ compliance are assessed qualitatively but have not been quantified. The PRA expects its own costs for implementing the proposed amendments to be around £162,000.

Benefits

2.35 Targeted reporting entity: The PRA considers that firms with a transfer strategy would benefit from the proposals in this CP, as they would only be expected to report MRL003. These firms would also benefit from not being expected to report 100 data points under MRL001. Moreover, the PRA proposes confining MRL001 to apply to firms that are set MREL above MCR (instead of firms that are likely to be set MREL above MCR).^{footnote [23]}

2.36 Streamlined data request: The PRA considers that firms would be able to save costs through streamlining and not reporting non-essential and duplicative information. For example, the proposed deletion of MRL002 would remove 170 data points, while the deletion of some T2 instruments data in MRL001 would eliminate 24 data points for bail-in firms. More data elements would also be deleted for firms with transfer strategy. Moreover, the PRA considers that firms would benefit from the consolidation of some information in a reduced number of data elements (eg form of security in MRL003). Furthermore, the PRA considers that the proposals in this CP would facilitate future simplification of reporting in COREP13 by the Bank, which would further reduce the overall compliance cost on firms, though this CP does not include these potential savings. In particular, the Bank confirms in the MREL PS that, subject to its intended consultation in the future, firms will no longer need to report four templates in COREP13 (ie Z 02.00, Z 03.00, Z 04.00 and Z 05.01) by time that the proposals in this CP become effective.

2.37 Enhanced ability for the PRA/Bank to monitor firms’ compliance with their MREL requirements and increased likelihood of a successful execution of resolution: Having access to consistent, high-quality, and fit for purpose MREL data in business as usual increases the likelihood that, when firms fail, the Bank can effectively use these resources in the execution of its stabilisation powers. For example, the MREL data proposed in this CP enables the PRA/Bank to assess whether a contractual trigger for certain own funds instruments exists. This provides necessary operational information to enable the Bank to direct a write-down and/or conversion of certain instruments in resolution and minimises risks to financial stability and risks to public funds.

2.38 Clearer and simpler reporting for firms: Engagement with firms on the completion of the existing templates suggests that reporting instructions need to be updated and made clearer. The clarified instructions proposed in this CP could reduce instances and risk of misreporting by firms, enhance data quality, and save firms’ time. Moreover, firms would be able to explain their ‘basis of preparation’, which provides idiosyncratic details with their submission as a free-text box in each of MRL001 and MRL003. This would save firms’ time by reducing the need for ad-hoc correspondence between firms and the PRA/Bank to clarify the reported data. It would also eliminate potential duplicative queries from the PRA and the Bank.

Costs to firms

2.39 Additional data: The PRA considers that new data or disaggregation of existing data elements would impose some costs on firms. For example, the addition of the accounting value in MRL001 would create 133 new data points. While this adds reporting burden on firms, it is considered necessary as it more accurately reflects the amount available for loss absorption and recapitalisation. Similarly, incorporating certain ineligible resources in MRL001 would add 28 new data points; however, information on certain ineligible resources is important as such instruments can act as a barrier to resolution by limiting the scope of loss absorption. In some instances, ineligible resources ranking at the same level or below MREL eligible resources may create a NCWO risk. Regarding MRL003, the most significant new addition would be the bringing into scope of reporting of certain bail-in-able instruments that did not qualify as MREL eligible liabilities. However, this would consolidate some MREL-related data elements and allow for future potential deletions in COREP13. The possible number of new data points would depend on the quantity of instruments reported by each firm. The PRA anticipates that this will be a limited number in practice.

2.40 Amendments to existing data:

• Some of the amendments may affect the data reported by firms, which creates implementation costs. For example, the proposed MRL001 requests data about a firm’s holdings of MREL eligible liabilities instruments of G-SIB entities, in which the firm has a significant investment (New Row 140). This replaces Current Row 140 of the existing MRL001 that requests data about holdings of investments in non-regulatory capital MREL eligible instruments of financial sector entities, where the firms owns more than 10% of the issued common share capital of the entity. Although this constitutes a change, the PRA considers it not unduly burdensome, as firms have ready access to the necessary data.
• Other changes are more straightforward: they involve renaming data elements for clarity but do not affect the data reported. For example, the proposed MRL001 renames ‘MREL eligible subordinated liabilities’ (Current Row 50) to ‘MREL legally subordinated eligible liabilities (senior non-preferred)’ (New Row 050). The PRA considers that these changes would incur minimal costs and do not require quantification.

Quantification of costs and benefits from amendments to MREL reporting

2.41 Ongoing costs and benefits: The PRA estimates that the ongoing cost of reporting a template to be £3,000 per firm for each time it reports, which corresponds to the median ongoing cost of complying with reporting requirements provided by survey respondents.^{footnote [24]} Based on this, the estimated annual ongoing net benefit from the proposals in this CP would amount to around £10,000 per firm, or £310,000 in aggregate based on the analysis below:

• The PRA estimates ongoing costs for firms to submit new data in the proposed templates to be as follows: firms with bail-in strategy would be expected to report additional data in both MRL001 and MRL003, while firms with transfer strategy would only need to report additional data under MRL003. Given that the frequency of submission for both MRL001 and MRL003 is quarterly, the PRA expects these annual ongoing costs to be around £9,000 per firm, or £230,000 in aggregate.
• The PRA expects annual ongoing cost savings from the deletion of MRL002 to be either around £45,000 (for firms that report quarterly) or £10,000 for firms that report semi-annually. Likewise, the PRA estimates that the annual ongoing cost savings for transfer firms from not submitting MRL001 to be around £18,000 per year. This leads to an aggregate annual ongoing benefit to be around £540,000.

2.42 One-off costs: The PRA estimates that the one-off cost per template to be £26,000, which corresponds to the median of the survey respondents. The PRA estimates one-off costs associated with amendments to existing data elements (eg familiarising with the new reporting, creating new collection processes) in MRL001 and MRL003 to be as follows: given that bail-in firms would have to report both MRL001 and MRL003, while transfer firms only MRL003, the PRA expects that the one-off implementation costs would amount around £55,000 per firm, or £1.5 million in aggregate.

2.43 Appendix 4 provides detailed estimation of the costs and benefits related to the amendments, both at the individual MREL reporting template level and in aggregate.

Quantification of costs to the PRA

2.44 There would be additional costs to the PRA implementing the changes necessary for the proposed amendments. These would be one-off costs, so there would not be ongoing costs to the PRA. The PRA estimates that the total cost would be £162,000. Table 4 summarises the estimated one-off costs for the PRA.

‘Have regards’ analysis

2.45 In developing these proposals, the PRA has had regard to the FSMA regulatory principles, and the aspects of the Government’s economic policy as set out in the HMT recommendation letter from November 2024. The following factors, to which the PRA is required to have regard, were significant in the PRA’s analysis of the proposal:

• Proportionality: The PRA considers that the proposals in this CP align with the principle that burdens and restrictions imposed on firms are proportionate to the benefits that it expects to achieve.
  • The proposals take into account both the different resolution strategies for firms (bail-in vs transfer) when determining their level of reporting expected.
  • The proposals aim to simplify and reduce reporting burden by removing data that are outdated, or on balance, neither serve an important need for monitoring firms’ compliance with MREL requirements nor facilitate execution of resolution (eg deletion of MRL002 for all firms).
  • The PRA also considers that the proposed new data are material for resolution purposes. Additionally, some of the data should not result in significant cost for firms, as they are already reported at a different levels of disaggregation. For example, the new accounting value data in MRL001 are already provided at the instrument level in MRL003, though not broken down by maturity buckets.
• Efficient use of PRA resources: The PRA considers that the proposed reporting changes would promote efficient use of PRA resources. This is because the proposals are limited to those changes considered essential for MREL reporting data and avoid duplication with other PRA and Bank returns. The proposals also use existing reporting templates and instructions as the basis for changes. Together, this means the scale of the changes to be implemented by the PRA should be less than it otherwise would be. The PRA also considers that the proposals would result in clearer reporting expectations and instructions for firms, which could result in reduced reporting costs and errors. Moreover, the PRA will not need to spend effort reviewing obsolete and outdated reporting.
• Transparency: The PRA considers that the proposals in this CP would significantly support the transparency of the MREL reporting framework. With the accompanying appendices, the proposals would ensure that firms can better understand the reporting expectations that apply to them.

2.46 The PRA has had regard to other factors as required. Where analysis has not been provided against a ‘have regard’ for these proposals, it is because the PRA considers that ‘have regard’ to not be a significant factor for these proposals.

Impact on mutuals

2.47 FSMA requires that the PRA assess whether, in its opinion, the impact of the proposed rules on mutuals will be significantly different from the impact on other firms. The proposals in this CP affect some of the largest building societies. Although variations in impact may arise due to the distinct funding and capital structures between banks and building societies, the PRA considers that the associated costs are not expected to be substantially different from those incurred by banks of similar size.

Equality and diversity

2.48 In developing its proposals, the PRA has had due regard to the equality objectives under section 149 of the Equality Act 2010. The PRA considers that the proposals do not give rise to equality and diversity implications.