UK Leverage Ratio Framework

The Prudential Regulation Authority (PRA) published policy statement 22-25 in which it advised that the threshold of retail deposits that determines if a firm is subject to the framework, is increasing from £50bn to £75bn. The effective date of this change is 1^st January 2026. The £75bn is an average over 3 years. It is understood that the average will be of the year end balances. The level of non-UK assets threshold (the alternative measure of when the framework becomes applicable) will remain at £10bn.

Any institution that was allowed to disapply the framework whilst the retail deposits threshold was being reviewed, will be permitted to continue with that arrangement until 30^th June 2026.

Small Domestic Deposit Takers (SDDT) Regime

The PRA issued policy statement 20-25 which has the “near final” rules on capital requirements for SDDT institutions. These rules will be applicable from 1^st January 2027. If a firm meets the qualification criteria of the regulation and wishes to be subject to it, that preference needs to be expressed to the PRA by 31^st March 2026. Failure to meet that deadline will mean that the entity will have to comply with Basel 3.1 until a date agreed with the regulator.

Similar to Basel 3.1, SDDT firms will have a firm specific Pillar 2A Off Cycle Review. The purpose of this exercise is to enable an adjustment to Pillar 2A capital that will reduce the effects of an increase in Pillar 1. That rise will be a result of the removal of SME and Infrastructure Supporting Factors that are available in the Capital Requirements Regulation. The report reference date is 31^st December 2025 and the data are to be submitted by 31^st March 2026. The information is to be provided on a best-efforts basis, using the Lending Adjustment templates and sent to the regulator by e-mail. These forms will be available in the WIRES regulatory software. Firms that do wish to apply for the Pillar 2A lending adjustment need not submit data.

Of note in SDDT capital requirements are:

• ILAAP and ICAAP frequency to be reduced (expected to commence in 2026) from annual to every two years. That change will not apply to firms that have been operating for up to five years or are authorised with restrictions.
• The Interim Capital Regime previously consulted, will not apply.
• Market risk exposure values will be calculated using the standardised approach to credit risk. Foreign exchange will not be subject to market risk and no commodities can be held.
• Counterparty credit risk for most exposures is removed.
• Credit value adjustment will not be relevant.
• There will be a single capital buffer, only.
• Base add-ons will be introduced for credit concentration exposures.
• Bank of England Banking Taxonomy for SDDT is in its second draft version and is available for comment until 19^th December 2025.
• Reporting – the various templates to be applicable are available in the appendix section of the PRA’s policy statement 20-25.
• Amongst the reduced reporting for SDDT firms is the removal of FSA076, FSA077, FSA078 and FSA079.

Basel 3.1 Pillar 2A Off Cycle Review

This review is similar to that for SDDT firms, described above. Any institution that does not wish to apply for a Pillar 2A adjustment in relation to the removal of the SME and Infrastructure Supporting Factors, need not provide data. Submissions can be made using the Lending Adjustment templates that are available in the WIRES regulatory software. The information is to be sent by e-mail.

Data are to be as at 31^st December 2025 and must be delivered by 31^st March 2026. Further details are available in https://www.bankofengland.co.uk/prudential-regulation/key-initiatives/capital-requirements-directive-iv/basel-3-1-data-collection-exercise.

UK Deposit Protection Limit

The £85,000 limit on protected deposits is being increased to £120,000 with effect from 1^st December 2025. In addition to that change, the temporary high balance cap is being increased from £1million to £1.4million. The term of this protection will remain at six months. These changes will affect regulatory reporting:

• PRA110 Cash Flow Mismatch
• COREP C 81.00 Net Stable Funding
• COREP C 73.00 Liquidity Coverage Ratio
• Additional Liquidity Monitoring Metrics C 68.00.

Step-in Risk

Reporting of Step-in risk is effective from 1^st January 2026. Nil returns are required, but data are not needed from SDDT firms. Submission will be part of an entity’s ICAAP. This risk refers to the likelihood that a firm would provide financial support to a related entity that is not part of the consolidated group. The assistance could be expected in a stress situation and for reputational reasons.

Further details can be found in PRA Consultation Paper 23-23, Policy Statement 5-25 and Supervisory Statement 1-25.

The templates to be populated with the data are under the name PRA 115 and are available in the latest version of the WIRES regulatory software.

Consumer Credit Product Sales Data Reporting

Firms that qualify as ‘small’ providers of consumer credit will be required to submit product sales data with a first report reference date of 31^st March 2026. ‘Small’ is based on data provided to the Financial Conduct Authority (FCA) on its return CCR003 for report reference date ending between 1 April 2023 and 31 March 2024, where consumer credit:

• Outstanding balances are at least £2million, but less than £20million and / or
• New advances reported are within the aforementioned range.

There are three templates (PSD008, PSD008a and PSD009) to be populated. Further details are in the FCA’s Consultation Paper 23-21 and Policy Statement 24-3.

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This regulatory update is Whistlebrook’s understanding of the position as at 28th November 2025.