PRA finalises rule changes for fees, SDDT, model risk
The Bank of England's Prudential Regulation Authority (PRA) has finalised several low impact amendments to its Rulebook and policy materials. These changes, affecting regulatory fees, the Small Domestic Deposit Taker (SDDT) regime, and model risk management, take effect in April 2026.
Clarifying the rulebook
The Prudential Regulation Authority (PRA) has updated the Fees Part of its Rulebook to amend invoice due dates for firms paying £50,000 or more annually in PRA and FCA fees.
This change, effective April 30, 2026, prevents invoices from being incorrectly labelled as overdue and resolves procedural issues, a proposal that received unanimous support from four respondents to Consultation Paper (CP) 23/25. Additionally, the PRA is clarifying its policy for applicants to the Small Domestic Deposit Taker (SDDT) regime with non-UK parent undertakings.
These amendments to Statement of Policy (SoP) 2/23 provide guidance on entities to be included or excluded when assessing if a group's total assets exceed £20 billion, aiming to reduce application processing time.
This clarification, effective April 23, 2026, was made without further consultation as it does not alter existing policy.
Enhancing model risk accountability
The PRA is amending Supervisory Statement (SS) 3/18 on model risk management principles for stress testing.
From April 16, 2026, firms with internal model approval (IM firms) must assess their stress test model risk management practices against the broader guidance in SS1/23 – Model risk management principles for banks.
This change reinforces accountability and improves operational efficiency by aligning board and Internal Capital Adequacy Assessment Process (ICAAP) reporting.
All other firms will continue reporting against SS3/18 principles.
Separately, SS1/23 is clarified to state that its expectations are not conditions for internal model approval, granting new IM firms 12 months from permission grant to comply.
Both amendments, effective April 23, 2026, were made without further consultation, as they clarify existing policy and remove duplicative requirements, preserving full supervisory coverage.
Efficiency over complexity
These amendments, while minor, underscore the PRA's commitment to regulatory clarity and operational efficiency.
By streamlining fee processes and clarifying complex model risk guidelines, the authority aims to reduce administrative burdens for firms.
The focus remains on refining existing frameworks rather than introducing new substantive policy, ensuring stability without unnecessary complexity.