Our competition objective

In addition to our primary objectives, we have a secondary competition objective (SCO) to facilitate effective competition.

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This page was produced before the UK’s withdrawal from the EU. The UK has now entered into a transition period, due to end on 31 December 2020, during which EU law will continue to apply. We will update this page at a later date, as appropriate, to reflect the legal and regulatory framework applicable at the end of the transition period.

Our latest secondary competition objective work

18 June 2020: We published the Annual Competition Report 2020 on pages 47-57 of the PRA Annual Report 2020.

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.

What is our secondary competition objective?

We have three objectives to: 
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Promote the safety and soundness of the firms we regulate

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Contribute to securing an appropriate degree of protection for insurance policyholders

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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 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 2020 on pages 47-57 of the PRA Annual Report 2020

As part of our strategy for 2019/20 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:

  • Continued to support the joint PRA and FCA New Bank Start-up Unit (NBSU) and New Insurer Start-up Unit (NISU)
  • Consulted on changes to the capital requirements that apply to credit unions to remove barriers to expansion and encourage their successful growth.
  • Conducted further analysis on barriers to growth for smaller firms, including by assessing the extent to which the overall regulatory burden is affected as firms grow organically in size and complexity.

The Annual Competition Report, on pages 47-57, sets out our work over 2019/20 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 2020/21 sets out the PRA’s strategy, workplan and budget. As part of our strategy for 2020/21 we have 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. Read our workplan to deliver this strategic goal in the PRA Business Plan 2020/21. 

Speeches and other publications

In addition to the written word, we continue our engagement with firms and other industry participants in a variety of forms.

24 October 2019 

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.

17 January 2019

Given at a roundtable to mark the fifth anniversary of the PRA’s Secondary Competition Objective.

8 March 2017

Letter from the Chancellor of the Exchequer to the Governor of the Bank of England.

23 March 2016

The Independent Evaluation Office’s evaluation on whether the requisite change was taking place for the new statutory duty, and the PRA’s response.

15 December 2015

This article explains the rationale for the objective, how the PRA interpret it, and what this means for the PRA’s regulation of banks and insurers.

To find more of our communications on competition, search for ‘competition’ on our website.

  • 6 June 2019: We published the Annual Competition Report 2019 on pages 48-53 of the PRA Annual Report 2019.

    17 January 2019: We published a speech ‘Seven awkward questions’ by Sam Woods, Deputy Governor for Prudential Regulation and PRA Chief Executive. This speech was delivered at a panel to celebrate the fifth anniversary of our secondary competition objective.

This page was last updated 18 June 2020
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