PRA restates CRR definitions into PRA rulebook: what firms need to know before 1 January 2027

TLT picks out the key points you shouldn't miss...

What's this about?

The Prudential Regulation Authority (PRA) has published PS14/26, confirming how Capital Requirements Regulation (CRR) definitions will be restated into the PRA Rulebook, alongside updates to SS15/13 (Groups), with effect from 1 January 2027.

While the PRA has adopted a “lift and shift” approach, transferring most definitions without substantive policy change, this should not be treated as a purely technical exercise.

The move from directly applicable CRR text to the PRA Rulebook Glossary, combined with targeted definitional changes and new supervisory expectations, creates a material implementation exercise for firms.

This development is most relevant to:

PRA-authorised UK banks
Building societies
PRA-designated investment firms
Parent undertakings within prudential groups

However, the impact may extend more widely where definitions affect counterparties and FCA lead regulated counterparties.

Andrzej Wieckowski, Financial Regulation Partner at TLT LLP, says...

"Firms should not underestimate the scale of this change. Although labelled a ‘lift and shift’, the introduction of targeted definitional amendments, new participations guidance and reliance on the corresponding provisions table means these new rules need a careful mapping and interpretation exercise – not just for those who track RWAs but also for those responsible for monitoring minority investments or contemplating M&A on the bank’s balance sheet.

With implementation aligning with Basel 3.1, firms that delay preparation risk facing concentrated compliance pressure across multiple prudential areas."

The points not to miss...

"Lift and shift" approach — but not a like for like exercise

The PRA has sought to preserve continuity, but firms cannot assume mechanical equivalence.

• Definitions have moved location

• Targeted clarifications have been made

• Interpretation now relies on PRA Rulebook context

Corresponding provisions table is central to compliance

Appendix 2 maps PRA rules to revoked CRR provisions and is the primary reference tool for continuity of meaning.

Targeted definitional changes matter

Key updates include:

• “Branch” – aligned with CRR wording

• “Recognised exchange” – moved fully into the Glossary, with the previous rulebook part deleted

• Adjustments to regulatory capital-related definitions

"Large institution" and "small and non-complex institution" (SNCI) definitions refined

Certain CRR elements have been removed where redundant or replaced by PRA supervisory powers.

Credit risk: distinct ECAI nominations required for securitisation and standardised approach exposures

The PRA has clarified that ECAI nominations for:

• Securitisation exposures; and

• Standardised credit risk exposures

must be distinct and independently maintained.

"Public sector entity" (PSE) definition — unchanged but ambiguity remains

Despite feedback, the PRA has retained the existing definition, acknowledging that ambiguity may remain.

SME definition and regulatory thresholds — further consultation to follow in 2026

The PRA has maintained Basel-aligned thresholds but signalled further consultation in 2026 on updating regulatory thresholds (potentially via indexation).

Credit risk mitigation — collateral valuation clarified

The PRA has amended Article 229(3) to refer explicitly to market value, addressing a previous gap for certain physical collateral types.

New “long-term link” framework for participations

Updated and detailed guidance in re-stated SS15/13 to take effect 1 Jan 2027 clarifies when holdings below 20% may constitute a participation, replacing earlier “durable link” guidance.

Broader consolidation expectations and scrutiny

The PRA has reinforced expectations across:

• Individual consolidation permissions

• Minority interest impacts

• Sub-consolidation structures

• Step in risk assessment

At a glance...

Publication link	PS14/26 – CRR Definitions: restatement in PRA Rulebook
Published date	27 May 2026
Who has published it?	Prudential Regulation Authority (PRA)
Publication type	Policy Statement (PS) / Final Rules / Updated Supervisory Statement
Key Dates	– February 2026: HMT commencement SI revoking CRR Articles 4–5 with effect from 1 January 2027 – April 2026: HMT CRR Definitions SI restating certain CRR definitions in legislation (including amended "securitisation" definition) – Later in 2026: PRA intends to consult on a framework for more systematic updating of regulatory thresholds (including possible automatic indexation) – 1 January 2027: PRA Rulebook Definitions and Interpretation (CRR) Instrument 2026, the corresponding provisions table (Appendix 2), and the updated SS15/13 (including the new long-term link chapter) all take effect, coinciding with the Basel 3.1 implementation date
What's it relevant to?	Banking; Consumer Credit; Mortgage Lending; Payments; Cryptoassets and Digital Assets; Stablecoins; Insurance; Pensions; Investment Management; Retail Investments; Wholesale Markets; Consumer Duty; Operational Resilience; Sustainable Finance / ESG; SM&CR; Data Protection; Open Banking

Author: James Greig

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at June 2026. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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