Posted on: October 28, 2026
October 2026 Regulation Update
Basel 3.1 and the Small Domestic Deposit Takers Regime
Whistlebrook understands that a RegData test environment will be provided in November and enable testing of submissions. Tests of Whistlebrook’s regulatory solution will be carried out once the environment becomes available. The intention is to ensure that users of the software will be able to submit data to the regulator, with the assurance that thorough testing has been performed.
High Loan to Income Lending
The Financial Conduct Authority and the Prudential Regulation Authority jointly issued Policy Statements on implementation of the high loan to income (LTi) flow limit for residential mortgages. The change to application of the limit will be effective from 28th October 2026. Prior to implementation, the flow limit applied to individual firms making new residential mortgages of or above an LTi of 4.5. That lending was restricted to 15% of the volume of all new residential mortgages averaged over the previous four quarters. The restriction did not affect lenders with new residential mortgages of less than £150million or 300 in volume (over two consecutive four quarterly periods rolling by one quarter).
Under the new rule, an individual firm will be able to increase its lending beyond the 15% limit. The upper restriction will apply at an aggregate level across all firms. It is understood that the regulators will actively monitor the aggregate position. The £150million and 300 volume, will continue to be in place.
Regulatory Thresholds Indexation
The PRA published Consultation Paper 13-26 and proposed automatic indexation of certain thresholds every five years. These thresholds determine if a firm is subject to certain regulatory requirements. The first update will be effective from 1st July 2031. Indexation will apply to thresholds that are expressed in fixed numerical numbers and are affected by economic growth and inflation. UK nominal Gross Domestic Product (GDP) will be used to increase the thresholds. Firms will be given six months to implement the revised thresholds after their publication. Appendices 3 and 4 of the Consultation Paper have details of the thresholds to which indexation will be applicable.
Senior Manager and Certification Regime (SMCR)
The PRA published Consultation Paper 14-26 in which it has proposed changes to SMCR. It is expected that implementation will be in H2 of 2027. Of note:
- Removal of the certification regime. Please refer to paragraph 2.10 of the Consultation paper. In its place will be a requirement to prove that an individual has honesty, integrity and other characteristics required to perform their role. The assessment would be done at recruitment and when considered necessary thereafter.
- The pre-approval requirement will be removed for almost half of the current Senior Manager Functions. Accompanying that removal will be the introduction of the ‘notified’ role. That means a firm will be required to assess a candidate for the role at the time of the appointment, rather than seeking regulatory pre-approval. The process should be quicker and simpler. Responsibility of an individual will be unaffected by the proposed change.
- Temporary senior manager cover (in unforeseen circumstances) without regulatory approval, will be extended from 12 to 18 weeks.
Restatement of CRR Requirements
PRA Policy Statement 19-25 restates remaining provisions in the Capital Requirements Regulation to be in the PRA Rulebook. The effective date of the restatement and some changes is 1st January 2027. Of note are:
- Under the standardised approach for positions in securitised retail residential mortgages that are part of the Mortgage Guarantee Scheme, risk weighting will be as in the following table.
| LTV | Risk Weight |
| <= 55% | 20% |
| > 55% and <= 80% | 75% |
| > 80% and <= 95% | 0% |
- For Small Domestic Deposit Takers, securitisation positions will be included in the CET1 deduction. An excess of the aggregate position relative to 25% of the firm’s Own Funds, will be deducted from Common Equity Tier 1 capital. The remainder will be risk weighted at 1,250%. Refer to paragraph 2.41 of Policy Statement 19-25.
- An off balance sheet securitisation position that is an unconditionally cancellable cash advance facility, will have its credit conversion factor increased from 0% to 10%.
Complaints Return
Three separate FCA Complaints returns (i.e. Complaints DISP 1 Ann 1R; Consumer Credit Complaints; PS Complaints) will be replaced by a single one (named COM001) tailored to each firm’s permissions. The FCA’s template will include information on customer vulnerability. The new reporting will be effective from July 2027 and periods will be fixed at six months. The first of those intervals will be 1st January 2027 to 30th June 2027. The due date is 30 business days after the report reference one. This form will be added into Whistlebrook’s regulatory reporting solution.
WIRES Releases
| Version | Estimated Delivery | Content |
| 7.4.0 | November 2026 | · Bank of England Taxonomy 4.1.1 (MREL)
· Revised Pillar 3 disclosure templates for Basel 3.1 and SDDT firms. · General enhancements and any bug fixes. |
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This regulatory update is Whistlebrook’s understanding of the position as at 26th October 2026.