PRA Banking Taxonomy 4.0.0

The Prudential Regulation Authority (PRA) published its taxonomy 4.0.0 on 27^th February. This taxonomy is for the Basel 3.1 and the Small Domestic Deposit Takers regulations that are effective from 1^st January 2027. Whistlebrook’s regulatory reporting solution will be updated to include this final version of the taxonomy.

 

Operational Resilience

The PRA published Policy Statement 7-26 on Incident and Third-Party Reporting. This Policy Statement follows on from Consultation Paper 17-24. The Policy Statement will introduce reporting requirements applicable to UK banks, building societies, PRA regulated investment firms and third country branches. Templates for reporting have been provided by the regulator.

Incidents should be reported via the FCA’s Connect portal.

External third-party arrangements (including outsourced and non-outsourced) that a firm deems to be material have two reporting requirements. Neither applies to third country branches. A register of existing arrangements is to be submitted to the FCA’s RegData and any new or changes to third parties is to be provided via FCA Connect.

The implementation date of the incident and third-party arrangements reporting is 18 March 2027.

Further details are in Supervisory Statement 1-26.

 

Modernising the UK Liquidity Framework

Consultation Paper 5-26 was issued by the PRA and is intended to address insufficient preparedness for quick monetisation. The proposals will affect Pillar 2 liquidity and PRA110 reporting. Of note in this paper are:

• Firms will be required to design and perform a sudden and severe stress test (with significant outflows in the first few days). The test is proposed be over seven days only. The idea is to test a firm’s ability to monetise liquid assets.
• The ‘Monetisation Actions’ section of PRA110 will be removed. In its place will be the increased focus on monetisation within stress testing.
• The Liquidity Coverage Operational Requirement has an exemption on monetisation testing of Level 1 assets (excluding extremely high quality covered bonds). That exemption is to be removed.
• Firms are to be required to monitor their drawing capacity that would be available from their pre-positioned collateral at the central bank. That information will be expected to be included in a firm’s ILAAP.

 

Expectations on Approach to Climate Related Risks

The PRA published its expectations on climate risk in Supervisory Statement 5-25. In this document, it is stated that firms will have six months (ending on 3 June 2026) to complete:

• An internal assessment that measures the institution’s current ability to meet the regulator’s expectations.
• Plans that will address any shortfalls (between expectations and current ability to meet them) highlighted in the internal review.
• Identification of data gaps that limit scenario analysis and stress testing.

Further details are in Consultation Paper 10-25, Policy Statement 25-25.

 

Fully Authorised Deferred Payment Credit Providers

Providers of interest free credit (with repayment in 12 or fewer instalments) to fund the purchase of goods or services from a retailer, will with effect from 15 July 2026, require such agreements to be included in aggregated returns i.e. CCR001, CCR003, FIN073, FIN074, REP-CRIM, REP008, REP024 and REP025. The lending activity is to become subject to FCA regulation from the aforementioned date. Further details are in FCA Policy Statement 26-1 and Consultation Paper 25-23.

 

Foreign Institutions’ UK Branch Reporting

Changes to the Branch return were effective from 1^st March 2026. Details are in PRA Policy Statement 6-25.

 

WIRES Releases

Version No.	Content	Estimated Release Date
7.3.0	Basel 3.1 and the Small Domestic Deposit Takers Regime – Taxonomy 4.0.0	01/07/2026

 

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This regulatory update is Whistlebrook’s understanding of the position as at 23rd March 2026.