PS11/26 – Disclosure: resolvability resources, capital distribution constraints and the basis for firm Pillar 3 disclosure

1: Overview

1.1 The Prudential Regulation Authority (PRA) considers that users of Pillar 3 disclosures benefit from clearer and more consistent information on firms’ resolvability resources and the application of capital distribution constraints. In particular, the PRA identified a need for more consistent information on the adequacy of firms’ MREL resources, more meaningful information on the likely impact of Capital Distribution Constraints (CDCs), and greater clarity for users on which Pillar 3 disclosure regime applies to a given firm (and therefore which disclosures to expect and at what frequency). This policy statement (PS) finalises the proposals consulted on in consultation paper (CP) 16/25 – Disclosure: resolvability resources, capital distribution constraints and the basis for firm Pillar 3 disclosure, including standardised MREL disclosure templates, a qualitative CDC narrative in UK CC1, and a requirement for firms to state the basis on which their Pillar 3 disclosures are prepared, to improve comparability and user understanding and support market discipline and confidence in orderly resolution.

1.2 This PS provides feedback to responses the PRA received to CP16/25 and contains the PRA’s final policy. This PS is relevant to PRA-authorised banks and building societies, PRA-designated UK investment firms and CRR consolidation entities.

Background

1.3 In CP16/25, the PRA proposed to introduce:

• Standardised Minimum Requirements for Own Funds and Eligible Liabilities (MREL) disclosure templates, aligned with the Basel Committee on Banking Supervision (BCBS) Total Loss Absorbing Capacity (TLAC) formats but adapted for the UK. These templates replace current free-form disclosures and expand the scope of firms required to disclose. The policy improves the consistency and comparability of Pillar 3 disclosures and strengthens market discipline by increasing users’ understanding of firms’ resolvability resources and confidence in orderly resolution. The regime applies proportionately across different types of firms.
• Increased transparency and consistency of firms’ disclosure on MREL resources to strengthen market discipline, support confidence in orderly resolution, and enhance overall financial stability.
• A new qualitative disclosure requirement for firms subject to CDCs to allow for more meaningful assessment by market participants of the likely impact of those capital distribution restrictions. As the Systemic Risk Buffer (SRB) has been replaced in the UK by the O-SII buffer since December 2020, the PRA also proposed removing the SRB disclosure requirement to ensure consistency with the current capital buffer framework.
• A new disclosure requirement to increase clarity about the basis upon which firms are required to produce Pillar 3 disclosures to improve user understanding.
• A set of minor amendments to disclosure and reporting to reflect HM Treasury’s (HMT) intention to revoke Article 92a of the onshored Capital Requirements Regulation (CRR).

1.4 In determining its policy, the PRA considers representations received in response to consultation, publishing an account of them and the PRA’s response (‘feedback’). Details of any significant changes are also published. In this PS, the ‘Summary of responses’ section contains a general account of the representations made in response to the CP and the ‘Feedback to responses’ chapter contains the PRA’s feedback.

1.5 In carrying out its policymaking functions, the PRA is required to have regard to various matters. In CP16/25, the PRA explained how it had regard to the most relevant of these matters in relation to the proposed policy. The PRA considers that these matters remain appropriately reflected in this final policy. In particular:

• Proportionality: The PRA considers that the final policy is proportionate, as the new disclosure requirements are designed to provide market participants with clear, standardised information, tailored to the firms disclosing, and limiting additional burden where possible.
• Efficient and economic use of resources: The use of standard templates and instructions supports comparisons between firms and reduces the need for firms to explain disclosure practices.
• Transparency: The policy improves the clarity, comparability and usefulness of MREL‑related and CDC‑related disclosures, enhancing market discipline.
• Competitiveness and growth: By improving market understanding of firms’ loss‑absorbing resources and capital positions, the policy contributes to maintaining a resilient and competitive financial sector.
• Effective competition: The use of consistent templates helps ensure a level playing field between firms, particularly between large and mid‑tier MREL firms.

Where a ‘have regard’ is not discussed, this is because the PRA considers it was not a significant consideration for this policy.

Summary of responses

1.6 The PRA received two responses to the CP. The names of respondents to the CP who consented to their names being published are set out in Appendix 7.

1.7 Respondents generally welcomed the PRA’s proposals and made a number of observations and requests for clarification which are set out in Chapter 2.

1.8 Respondents noted that the extension of Pillar 3 disclosures to mid-tier MREL firms is proportionate and aligned with existing practices, even if it creates some additional burden. They welcomed the streamlined approach to disclosure frequency, the clarity provided by the new metrics on external MREL resources, and the increased transparency for firms subject to distribution constraints. Respondents also supported efforts to consolidate and simplify the framework by transferring relevant requirements into the PRA Rulebook.

1.9 One of the respondents requested greater clarity on the rationale for introducing the disclosure of average MREL resources and raised concerns that it may create further complexity and burden for firms. They sought clarification on own funds measurements, the calculation of CDCs, and whether UK CC1 should reflect an adjustment to the CET1 requirement (including where CET1 is used to cover AT1/T2 and temporary MREL shortfalls). They also requested clarity on the scope of firms for certain disclosure templates and the updating of references to the UK CRR. The respondent also noted a concern that disclosure could inadvertently reveal the PRA buffer. In addition, the drafting was considered to create uncertainty regarding which Article 437 disclosure requirements apply to certain firms. Clearer guidance was therefore requested to avoid inconsistent or unnecessary disclosures.

Changes to draft policy

1.10 Having considered the responses to CP16/25, the PRA has made no changes to the draft policy but has made minor corrections and clarifications to the draft rules and instructions. These clarifications do not affect the substance of the policy or rules as set out in the CP. The PRA’s assessment of the costs and benefits of this policy is also unchanged.

Additional responses outside the scope of the CP

1.11 In addition to the responses to the proposals in CP16/25, one respondent provided a range of suggestions on broader topics, which are detailed further below in the ‘General comments and responses outside the scope of the proposals in CP16/25’ section. The respondent also provided feedback on CP15/25 – Resolution planning: Amendments to MREL reporting including a request to align the frequency of MREL reporting with the semi-annual MREL disclosure frequency proposed in CP16/25. They also suggested removing duplicated data points across MREL reporting templates, MREL disclosure templates and the Pillar 3 UK CAA disclosure template. Although this feedback does not relate to CP16/25, the PRA considered it jointly with feedback to CP15/25. The PRA’s response to these points is set out in PS9/26 – Resolution planning: Amendments to MREL reporting templates.

Implementation and next steps

1.12 The PRA’s final policy is set out in the appendices:

• amendments to the Disclosure (CRR) and Reporting (CRR) Parts of the PRA Rulebook (Appendix 1);
• the introduction of four new disclosure templates and instruction files (Appendix 2); and
• amendments to the existing CC1 disclosure templates (Appendix 5) and instructions (Appendix 6).

1.13 The implementation date for all requirements is 1 January 2027, with a first reference date for the period ending 31 December 2026 as set out in the CP. For clarity, this would mean that the first set of disclosures under the new templates would be made for the period ending 31 December 2026. This aligns with the implementation date for the changes set out in PS15/25 – Closing liquidity reporting gaps and streamlining Standard Formula reporting.

Links with other resolution-related policy changes

1.14 The Bank of England (the Bank) published a revised MREL statement of policy (MREL SoP) in July 2025. The changes aimed to balance, on the one hand, the value of a proportionate regime that fosters growth, innovation, and competition by recognising that smaller and less complex firms generally present lower risks to the UK’s financial stability. On the other hand, it reflected the need for greater capabilities and assurance over resolvability as a firm’s complexity, size and risk grows. The Bank’s revised MREL policy came into effect on 1 January 2026.

1.15 The changes formed part of a broader package of announcements on resolution-related policy by the Bank and the PRA. Alongside the Bank’s revised MREL policy, the Bank and PRA published consultations on changes to MREL-related reporting and disclosure, and to the Resolution Assessment threshold under the Resolvability Assessment Framework (RAF). Final policies have now been published for all those consultations, including this PS.

1.16 To support readers in understanding when these changes will come into effect and to make it easier to locate relevant policy documents, the PRA has provided an overview in Table A. Taken together, the policy changes set out in Table A are expected to result in a net reduction in costs to firms, while ensuring that the resolution framework remains fit for purpose and ready for use. The policies in Table A where the PRA is the lead authority support the PRA’s primary objective of ensuring the safety and soundness of firms by enabling the Bank and PRA to supervise and prepare for resolution. These PRA led policies also support the PRA’s secondary objectives by enhancing proportionality and promoting market transparency.

2: Feedback to responses

2.1 Before making any proposed rules or Technical Standards, the PRA is required by FSMA to have regard to any representations made to it in response to the consultation, and to publish an account, in general terms, of those representations and its feedback to them.^{footnote [1]}

2.2 The PRA has considered the representations received in response to the CP. This chapter sets out the PRA’s feedback to those responses, and its final decisions.

2.3 The sections below have been structured broadly along the same lines as the chapters of CP16/25, with some areas rearranged to better respond to related issues. For clarity, the responses have been grouped into three themes:

• the PRA’s proposals on MREL disclosure;
• capital distribution constraints disclosure; and
• general comments and responses outside the scope of the proposals in CP16/25.

The PRA’s proposals on MREL disclosure

2.4 The PRA proposed that Pillar 3 disclosures are made in a prescribed format of fixed templates as set out by the BCBS, to support efficient information processing by users, and to foster consistency and comparability across UK firms, and with peers in other jurisdictions. The PRA also proposed to widen the scope of these templates to mid-tier MREL firms.

2.5 Respondents broadly agreed with the proposals, noting that the extension of Pillar 3 disclosures to mid-tier MREL firms is proportionate and aligned with existing practices, even if it creates some additional burden. They welcomed the proposal that mid-tier MREL firms disclose the UK KM2 template annually, compared with quarterly disclosure for Article 92a and OSII firms, as well as the clarity provided by the new metrics on external MREL resources and the increased transparency for firms subject to distribution constraints. Respondents also supported efforts to consolidate and simplify the framework by transferring relevant requirements into the PRA Rulebook. In response, the PRA recognises that the proposals may introduce additional requirements for some firms. However, as set out in the CP, the PRA considers that much of the core information required in the proposed MREL disclosure templates should already be readily available given its relevance to firms’ existing capital management processes. This should help to limit additional complexity or burden.

2.6 One of the respondents requested greater clarity on the rationale for introducing the disclosure of average MREL resources and expressed concern that it may create further complexity and burden for firms. The PRA clarifies that the requirement to disclose average MREL resources is designed to be proportionate as it will only apply to institutions whose MREL requirement is constrained by the leverage ratio. For these firms, the use of an average measure is intended to enhance the reliability and comparability of disclosures, given that period end figures may not always reflect a firm’s typical position, particularly where balances fluctuate around reporting dates. This measure also brings the disclosure framework closer to the approach used for UK leverage ratio reporting, where larger firms must disclose average values alongside period end figures. The Bank intends to cease its current annual publication on firm-specific external MREL requirements as the relevant information will be publicly available through firms’ Pillar 3 disclosures.

2.7 The same respondent sought clarification on whether, for UK CCA and UK MREL 3 disclosures, the own-funds measurements should relate to capital instruments only (Articles 28, 52 and 63 of UK CRR) or to regulatory values relating to capital items (Articles 26, 51 and 62 of UK CRR). The PRA clarifies that the UK CCA requirements apply to both capital instruments and capital items, as relevant, and therefore requires firms to disclose the main features of all own‑funds components. Accordingly, all CRR firms are required to disclose the main features of their own funds instruments. Additionally, all MREL firms, other than material subsidiaries of non‑UK G‑SIIs, must also disclose the main features of their eligible liabilities instruments, as set out in paragraph 2.7 of CP16/25 and the proposed amendments to Article 437 in the PRA Rulebook instrument annexed to the CP. For UK MREL3, the PRA confirms that the scope of the disclosure applies to capital instruments (Articles 28, 52 and 63 of the UK CRR) as well as MREL eligible liabilities instruments, which are within the scope of this template, and should be reported at nominal value. This is consistent with the BCBS measurement basis and UK MREL 3 is limited to instrument‑level disclosures rather than item‑level regulatory values.

2.8 The respondent also sought clarification on the entity scope of CRR Article 437, as they considered that rules 2.2 and 2.3 appeared to overlap and did not clearly distinguish between different types of entities, making it unclear whether certain firms should disclose the full set of Article 437 requirements or only a subset. The PRA clarifies that rules 2.2 and 2.3 are not intended to overlap, as an entity will always fall into one category only. In summary, rule 2.2 applies to MREL firms that are resolution entities and do not have subsidiaries (including G-SIIs or part of a G-SII, O-SIIs, and any other large or other institutions that are resolution entities and do not have subsidiaries). Rule 2.2 also specifies the limited Article 437a requirements that apply to material subsidiaries of non-UK GSIIs that are not resolution entities. Rule 2.3 applies exclusively to large subsidiaries of UK parent institutions, UK parent financial holding or mixed financial holding companies, or parent undertakings established in a third country.

2.9 The same respondent sought clarification on the draft rules, as they considered that the reference to CRR Article 6(3) second sub-paragraph under Level of Application rules 2.1 and 2.2 did not appear to be correct as article 6(3) had not been transposed to the rulebook from the European Banking Authority (EBA) text. The PRA confirms that some minor amendments have been made to the rule instrument to remove references to the CRR that will be obsolete when the rules take effect. As set out in the consultation package, the draft rules are constructed on the basis of the PRA Rulebook as it is expected to stand on 1 January 2027, incorporating all relevant rule changes to date, including those in PS1/26 – Implementation of Basel 3.1: Final rules and the draft rules consulted on in CP13/24 – Remainder of CRR: Restatement of assimilated law. These amendments are non‑substantive and do not alter the policy intent.

2.10 The respondent also sought clarification on the scope of firms required to complete the disclosure templates. The PRA clarifies that the requirement to complete all four templates (UK KM2, UK MREL 1, UK MREL 2, and UK MREL 3) applies to UK resolution entities that are G‑SIIs (Article 92a firms) or O‑SIIs. UK material subsidiaries of international G‑SIIs are only required to complete the UK MREL 2 template, which must be disclosed for each material subsidiary on a legal‑entity basis. They are treated separately, as these entities are not UK resolution entities. In addition, the PRA clarifies that for resolution entities that are G‑SIIs (Article 92a firms) or O‑SIIs, the disclosure in UK MREL 2 must be made in respect of each UK material subsidiary at the legal‑entity level.

2.11 Having considered the responses, the PRA has made only minor clarifications. These clarifications do not affect the substance of the policy or rules as set out in CP16/25.

2.12 The PRA has made minor drafting amendments to the rule instrument to remove references in the notes to corresponding CRR provisions. These references will be obsolete when the rules take effect, as the UK CRR will have been revoked by that time.

Capital distribution constraints disclosure

2.13 The PRA proposed introducing a qualitative narrative disclosure requirement for firms subject to capital distribution constraints (CDCs), to be included within the existing UK CC1 disclosure template. The proposal aimed to improve market participants’ understanding of the application and effects of CDCs while avoiding the introduction of additional quantitative disclosure requirements.

2.14 One respondent requested clarification on several aspects of the proposal. In particular, they asked whether the requirement to disclose a narrative describing CDCs would require firms to disclose firm-specific PRA buffer information (such as Pillar 2B), and whether this could result in the disclosure of confidential supervisory information. The respondent also sought clarification on whether the disclosure expectations would apply where firms breach minimum leverage capital requirements or buffers, and how the amended UK CC1 disclosure should be interpreted in practice.

2.15 The PRA clarifies that the qualitative CDC disclosure introduced does not require firms to disclose the source of CDCs, the composition of individual buffer components, or any confidential firm-specific supervisory information (including PRA buffer (Pillar 2B) or individual Pillar 2A elements). The narrative should describe the level of constraints applicable under the Capital Buffers Part of the PRA Rulebook and include a link to that Part.

2.16 The PRA also clarifies that it is not implementing the BCBS’s quantitative CDC disclosure template. The disclosure is anchored to the UK capital buffer framework as reflected in UK CC1. It does not introduce additional disclosure expectations in relation to breaches of minimum leverage requirements or leverage ratio buffers; CDCs in the UK are not triggered by leverage ratio metrics.

2.17 To avoid doubt, the PRA will clarify the qualitative narrative disclosure requirement in the UK CC1 instructions to clarify that any common equity tier 1 capital (CET1) an institution uses to meet its additional tier 1 and tier 2 capital requirements under the capital framework must be considered when assessing whether distribution restrictions apply.

2.18 Regarding the amendments to UK CC1, the PRA confirms that the disclosure is intended to improve transparency around the level of CET1 below which restrictions on distributions apply, consistent with the Capital Buffers Part of the PRA Rulebook. For completion of UK CC1, firms should reflect the CET1 available to meet the combined buffer (i.e. CET1 not used to meet Pillar 1 requirements or any Pillar 2A requirement), consistent with the PRA Rulebook. Firms should complete UK CC1 in accordance with the UK CC1 template and accompanying instructions published alongside this PS. The PRA notes that UK CC1 and UK MREL disclosure templates serve distinct but related purposes. UK CC1 focuses on capital requirements and buffers, while UK MREL templates focus on resources available after meeting minimum capital and MREL requirements. While there is conceptual consistency between these disclosures, firms should apply the specific instructions for each template rather than assume direct equivalence between individual rows. The PRA expects firms to apply the instructions consistently, providing a clear and coherent picture of capital and MREL resources.

2.19 Overall, the PRA has not made any substantive policy changes as a result of consultation responses. The final policy remains consistent with the proposals set out in CP16/25. The clarifications made are technical in nature and intended solely to support consistent implementation by firms.

General comments and responses outside the scope of the proposals in CP16/25

2.20 One respondent made comments and requests not directly related to the proposals in CP16/25. The respondent highlighted the importance of individual firms’ business models and strategies when determining resolution risk assessments. The respondent also emphasised the importance of clear communication between the Bank and firms to determine proportionate expectations regarding regulatory requirements. These themes were also raised by the respondent in relation to CP14/25 and CP15/25.

2.21 The PRA considers that proportionality is inherent in the RAF, as an outcomes-based framework. Each firm is expected to develop and maintain capabilities, resources, and arrangements to achieve the three resolvability outcomes in a way that is appropriate to its size and business model and that takes account of its preferred resolution strategy. A larger or more complex firm will therefore need to develop more extensive capabilities in order to achieve the three outcomes. All firms must be prepared to be safely resolved without severe disruption to critical functions or financial stability.^{footnote [2]}

2.22 Additionally, the Bank and PRA are proportionate in their approach to assessments under the RAF and continue to evolve their approach, for example, by carrying out assessments less frequently but with an increased focus on realistic testing of firms’ operational readiness.^{footnote [3]} The Bank and the PRA will continue to engage with firms on their expectations ahead of future RAF assessments.^{footnote [4]}