PRA streamlines supervision, shifts to two-year cycle
The Prudential Regulation Authority (PRA) has published its supervisory priorities for 2026, announcing a shift to a two-year supervisory cycle for larger firms from March 1. This move aims to streamline supervisory processes and enhance efficiency.
Two-year cycle for enhanced efficiency
The PRA announced a significant change to its supervisory approach for 2026, moving some supervisory activity, including Periodic Summary Meetings (PSMs), to a two-year cycle.
This shift, effective from March 1 for larger firms, aims to create a more proportionate and efficient engagement model with the PRA.
Deputy Governor Sam Woods stated, 'As we set out our priorities for 2026, we are also updating our approach by moving from an annual to a two-year supervisory cycle for firms. This will allow us to make our operations more efficient and help streamline firms' interactions with the PRA.
' This new biennial review cycle reflects the longer-term nature of supervisory workplans, enabling both firms and supervisors to focus resources more effectively on identifying and remediating key risks, building on the PRA's extensive work to maintain stability and promote growth.
Accelerating approvals and modernizing data
Beyond the new supervisory cycle, the PRA is implementing several other streamlining measures.
These include accelerating timelines for reviewing senior manager applications, new firm authorisations, and internal ratings-based model change pre-approval applications.
The authority is also developing a new UK captive regime for insurers, with a consultation planned for summer 2026 and a launch in 2027.
Furthermore, the Future Banking Data project aims to streamline and modernise reporting requirements.
These efforts align with the PRA's broader work to maintain stability and promote growth and competitiveness in the financial sector, building on recent initiatives like simplifying capital requirements for smaller firms and introducing Solvency UK for insurers.