PS3/26 – Restatement of CRR requirements – 2027 implementation – final

1: Overview

1.1 This Prudential Regulation Authority (PRA) policy statement (PS) provides the final policy to restate the remaining relevant provisions in the Capital Requirements Regulation (CRR)^{footnote [1]} within the PRA Rulebook and other policy material such as supervisory statements (SSs) or statements of policy (SoPs) (‘PRA policy materials’), and amendments to the PRA’s policy regarding ECAI mapping.^{footnote [2]} These were published as near-final in PS19/25 – Restatement of CRR requirements – 2027 implementation – near-final.

1.2 This PS contains the PRA’s final policy materials detailed below:

• PRA Rulebook: CRR Firms: (CRR No. 2) Instrument 2026 (Appendix 1);
• Corresponding provisions table (Appendix 2);
• amendments to SS15/13 – Groups (Appendix 3);
• the introduction of SS4/24 – Credit risk: Internal ratings based approach (Appendix 4);
• the introduction of SoP6/25 – The PRA's approach to Internal Model Method (IMM) permission under the Counterparty Credit Risk (CRR) Part (Appendix 5);
• amendments to SS9/13 – Securitisation: Significant Risk Transfer (Appendix 6);
• amendments to SS10/18 – Securitisation: General requirements and capital framework (Appendix 7);
• the introduction of SoP7/25 – The PRA’s approach to waivers and permissions under the Securitisation (CRR) Part of the PRA Rulebook (Appendix 8);
• the introduction of SoP8/25 – The PRA’s approach to the exercise of powers referred to in Articles 244(3)(b), 245(3)(b), 254(4) and 258(2) of the Securitisation (CRR) Part of the PRA Rulebook (Appendix 9);
• amendments to SS10/13 – Credit risk – Standardised Approach (Appendix 10); and
• the introduction of SS3/24 – Credit risk definition of default (Appendix 11).

1.3 This PS is relevant to PRA-authorised banks, building societies, PRA-designated investment firms and PRA-approved, or PRA-designated, financial or mixed financial holding companies (collectively ‘firms’). It is not relevant to credit unions or third-country branches. In addition, the policies on ECAI mapping are also relevant to UK Solvency II firms, the Society of Lloyds and its managing agents, and insurance and reinsurance undertakings that have a UK branch (third country branch undertakings), hereafter collectively referred to as ‘Solvency II firms’.^{footnote [3]}

1.4 This final PS has been published on Tuesday 20 January 2026. Alongside this PS, the PRA has also published final policy, rules, and supervisory expectations on a number of related banking capital frameworks:

• PS1/26 – Implementation of Basel 3.1: Final rules;
• PS2/26 – Retiring the refined methodology to Pillar 2A – final; and
• PS4/26 – The Strong and Simple Framework: The simplified capital regime for Small Domestic Deposit Takers (SDDTs) – final.

Background

1.5 In CP13/24 – Remainder of CRR: Restatement of assimilated law, the PRA proposed to, amongst others, restate the relevant provisions in the CRR (remainder CRR) in the PRA Rulebook and other PRA policy materials without material changes to the policy substance, except for some targeted changes to the securitisation requirements. Some of the PRA’s proposals in CP13/24 were finalised in PS12/25 – Restatement of CRR and Solvency II requirements in PRA Rulebook – 2026 implementation. In PS19/25, the PRA published the near-final policy for the restatement of the remainder CRR.

1.6 In determining its policy, the PRA considers representations received in response to the consultation, publishing an account of them and the PRA’s response (‘feedback’). See PS19/25 for a general account of the representations made in response to CP13/24 and the PRA’s feedback.

Summary of responses

1.7 The PRA received 16 responses to CP13/24. Appendix 1 of PS19/25 shows the names of respondents to the CP who consented to their names being published. Paragraphs 1.16 and Chapters 2 to 4 in PS19/25 summarise respondents’ comments on the proposals.

Changes to draft policy

1.8 In PS19/25, the PRA provided a summary of the changes made to the draft policy in the near-final policy.^{footnote [4]} Chapters 2 to 4 in PS19/25 provided more detail about the changes and the PRA’s feedback to responses.

1.9 The PRA considers that there is no substantive difference between the near-final rules (see PS19/25) and the final rules and policy. Minor amendments have been made to the rules published as near-final, and to certain SSs and SoPs, to reflect the finalisation of the Basel 3.1 rules and policies in PS1/26. The PRA has also made minor non-consequential changes that do not affect the substance of the policy.

1.10 However, as set out in paragraph 2.4 of PS1/26, the CRR definitions of ‘probability of default’ (‘PD’), ‘loss given default’ (‘LGD’) and ‘conversion factor’ have been revoked by The Financial Services and Markets Act 2023 (Commencement No. 12 and Saving Provisions) Regulations 2026 and replaced by definitions in the PRA Rulebook Glossary. The PRA has italicised these terms throughout the final rule instrument set out in Appendix 1 where the Glossary definitions are to be applied, and left these terms unitalicised where the Glossary definitions are not relevant. The PRA considers that these changes are necessary for the final rules to be coherent and to have their intended effect.

1.11 This PS takes account of how the policy advances the PRA objectives and of significant matters that the decision maker has regard to.^{footnote [5]} Statements about how the near-final policy advances PRA objectives, the regulatory principles the PRA considers most material to the near-final policy, and the impact of the near-final policy on mutuals can be found in PS19/25. The PRA considers these statements remain valid for the final policy. The PRA considers the differences between the proposed rules and final rules are not significant. Statements about PRA obligations related to the making of CRR Rules and certain rules applying to holding companies^{footnote [6]} can also be found in PS19/25.

1.12 The PRA has included in this PS a statement identifying CRR restatement provisions (set out in Appendix 2).

Implementation

1.13 HMT has made the commencement regulations^{footnote [7]} that revoke relevant provisions of the CRR. Those provisions will be replaced by the rules and the policy materials in this PS. The policies on the remainder CRR will take effect on Friday 1 January 2027.

1.14 The policy materials in this PS have been updated 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 law.^{footnote [8]}