Promote the safety and soundness of the firms we regulate
Contribute to securing an appropriate degree of protection for insurance policyholders
Facilitate effective competition between firms
The secondary competition objective (SCO), as set out in Financial Services and Markets Act 2000 (FSMA), came into force on 1 March 2014 and states that:
‘When discharging its general functions in a way that advances its objectives, the PRA must so far as is reasonably possible act in a way which, as a secondary objective, facilitates effective competition in the markets for services provided by PRA‑authorised persons in carrying on regulated activities’.
Since it came into effect, our SCO has helped inform the design of several important parts of our framework for prudential regulation. In addition to new policies, we take a proactive approach to our secondary competition objective by considering changes to existing policies to facilitate effective competition, and undertake research on competition in UK financial markets. Read the Annual Competition Report 2022 on pages 66-81 of the PRA Annual Report 2022.
Our latest secondary competition objective work
23 June 2022: We published the Annual Competition Report 2022 on pages 66-81 of the PRA Annual Report 2022.
24 October 2019: We published a speech ‘Credit union meets robot’ given by Sam Woods, Deputy Governor for Prudential Regulation and PRA Chief Executive at the Mansion House, London. The speech looks at the barriers to growth for small banks and credit unions, which can be the result of complex regulatory rules and ‘cliff-edge’ thresholds, and explains what we are doing about them at the PRA.
18 June 2020: We published the Annual Competition Report 2020 on pages 47-57 of the PRA Annual Report 2020.
Our key communications
Our work in relation to the SCO is covered in further detail in the following key communications.
PRA Annual Competition Report
The PRA Annual Competition Report is produced in response to a request included in HM Treasury’s 2015 Productivity Plan ‘Fixing the foundations: creating a more prosperous nation’ that the PRA should publish an annual report setting out how it is delivering against its secondary competition objective (SCO) and, in particular, ‘the steps it is taking to drive more competition and innovation in financial services markets and to help ensure that the right incentives exist for new banks to enter the market’. Read the Annual Competition Report 2022 on pages 66-81 of the PRA Annual Report 2022.
As part of our strategy for 2021/22 we had a strategic goal to ‘facilitate effective competition by actively considering the proportionality of our approach as it contributes to the safety and soundness of the UK financial system’. To deliver this strategic goal we:
- consulted on our intention to develop a new ‘Strong and simple’ framework for non-systemic and domestic banks and building societies was announced
- announced simplifications to reporting under Solvency II , reducing the burden on smaller Firms.
The Annual Competition Report, on pages 66-81, sets out our work over 2021/22 to support the delivery of our secondary competition objective.
Latest version of the report
Historical list of reports
PRA Business Plan
The PRA Business Plan 2022/23 sets out the PRA’s strategy, workplan and budget. As part of our strategy for 2022/23 we have a strategic goal to support competitive and dynamic markets in the sectors that we regulate by actively considering the proportionality of our approach as it contributes to the safety and soundness of the UK financial system. Read our workplan to deliver this strategic goal in the PRA Business Plan 2022/23.