On 30 July 2025, the Prudential Regulation Authority (PRA) published Consultation Paper 19/25 – CRR Definitions: restatement in PRA Rulebook (CP19/25).

Background

Articles 4, 4a, 4b, and 5 of the UK Capital Requirements Regulation (UK CRR) set out the definitions for key terms used in the UK CRR relating to the requirements which apply to credit institutions and designated investment firms. In accordance with the model under The Financial Services and Markets Act 2000, HM Treasury (HMT) plans to revoke all definitions contained in the UK CRR. The PRA will replace appropriate definitions with definitions in PRA rules, and HMT will restate in legislation those definitions that are necessary.

Consultation

In CP19/25 the PRA sets out proposed PRA Rulebook Glossary definitions that would replace definitions in Articles 4, 4A, 4B, and 5 of the UK CRR. The PRA proposes to expressly define certain terms in the PRA Rulebook Glossary that are currently implicitly defined in other provisions of the UK CRR. The PRA also proposes to make consequential amendments across the PRA Rulebook that are related to the transfer of UK CRR definitions into the PRA Rulebook Glossary.

The PRA is proposing to restate the vast majority of the UK CRR definitions in the PRA Rulebook without changes in substance. The PRA does, however, in a few areas propose targeted improvements to enhance the clarity of the definitions, with no material change to policy.

The PRA’s default stance in transferring these definitions has been to take the original text, unchanged, and incorporate it directly into the PRA Rulebook where possible – ‘lift and shift’ for shorthand.

With ‘lift and shift’ as a starting point, the PRA has, in a few areas, taken the opportunity to improve the clarity of the definitions without changing policy substance. These amendments include:

  • Removing legacy drafting, such as references to assimilated legislation that can be made more directly.
  • Making small fixes to address known technical issues with definitions.
  • Adapting definitions to fit the style of PRA Rulebook Glossary definitions or align existing PRA Rulebook Glossary definitions with UK CRR definitions.

For example:

  • The PRA proposes to convert the currency thresholds within the definitions of ‘large institution’ and ‘small and non-complex institution’ to GBP in line with the PRA’s past approach to such conversions (EUR 30 billion to GBP 26 billion and EUR 5 billion to GBP 4.4 billion respectively).
  • The PRA is proposing to align the definition of ‘SME’ with the definition published in the near-final Basel 3.1 rules for credit risk.
  • The PRA does not propose a replacement for the UK CRR definition of ‘third-country investment firm’. However, the PRA intends to create in the PRA Rulebook Glossary a suitable definition and to reflect appropriate consequential amendments to PRA rules once the details of the new Overseas Prudential Requirements Regimes are available.

Next steps

The deadline for comments on CP19/25 is 30 October 2025.

The PRA proposes that changes resulting from CP19/25 would become effective alongside the Basel 3.1 package, expected to be 1 January 2027.