UK revokes CRR cross-references; PRA rules 1 Jan 2026
You’ll start 2026 with a tidier rulebook for UK banks. The Treasury’s Financial Services and Markets Act 2023 (Prudential Regulation of Credit Institutions) (Consequential Amendments) Regulations 2025 take effect on 1 January 2026, as confirmed on UK Parliament’s statutory instrument tracker.
What’s actually changing? This instrument cleans up UK law after parts of the retained EU Capital Requirements Regulation (CRR) are switched off under the Financial Services and Markets Act 2023. It removes or rewrites cross‑references so that UK statutes point to domestic rules instead.
Why now? FSMA 2023 shifts detailed prudential requirements into the Prudential Regulation Authority (PRA) Rulebook. The PRA has already confirmed that some CRR material is being restated in the Rulebook from 1 January 2026, while the broader Basel 3.1 package begins on 1 January 2027. That staggered approach explains the tidy‑up dates here.
What does the instrument amend in practice? The Bank Recovery and Resolution (No. 2) Order’s definition of “response period” will no longer rely on CRR Articles 92a and 494. Those articles cover extra loss‑absorbing requirements for global systemically important banks and transitional capital provisions, so removing the references keeps the Order accurate once the CRR passages are revoked.
It also tweaks two definitions in section 3 of the Banking Act 2009 so they align with the UK’s rulebook: “Common Equity Tier 1 instruments” and “own funds requirements”. In addition, a redundant sub‑paragraph is dropped from a 2019 regulation on financial conglomerates, and the 2020 Bank Levy rules are updated so they no longer cite CRR Article 92a. HM Treasury set out this package when laying the draft in October.
Is this a policy change? For most readers, no. Think of it as cross‑reference maintenance so that the law points to the correct place once CRR sections are switched off. The substance sits in PRA rules: some restatements land from 1 January 2026; the wider Basel 3.1 rewrite follows in 2027.
What this means in plain English: if your lecture notes or textbooks show UK laws pointing to CRR numbers, expect those citations to disappear or be replaced with PRA Rulebook terms from 1 January 2026. When revising, start with the PRA Rulebook, then check how Acts and orders cross‑refer back to it.
Key dates to teach: on 14 July 2025 the Commencement No. 10 Regulations set 1 January 2026 as the date when specified CRR provisions and related technical standards fall away. On 20 October 2025 the Treasury laid this consequential amendments instrument. On 1 January 2026 the tidy‑up takes effect.
A short glossary for your students: the Capital Requirements Regulation (CRR) is the EU law that sets minimum capital and risk‑weight rules, kept in the UK as “assimilated law” after EU exit; the Prudential Regulation Authority (PRA) is the part of the Bank of England that writes prudential rules; its Rulebook is now the main home for material moving across.
Two terms you’ll see in class: Common Equity Tier 1 (CET1) is the highest‑quality capital a bank holds, such as ordinary shares and retained earnings; “own funds” is the label for the types of capital a bank can count towards regulatory requirements. For the very largest banks, EU CRR Article 92a once set out additional loss‑absorbing requirements; UK law is moving away from citing that article directly.
Where to read more for assignments: the UK Parliament page shows the start date and the laying history; the Commencement No. 10 Regulations explain which CRR pieces were switched off; the Bank of England’s PRA policy statements explain what is being restated in the PRA Rulebook.