On 8 May 2025, the Prudential Regulation Authority (PRA) published a consultation paper, CP11/25 – Discontinuing SS20/15: Supervising building societies’ treasury and lending activities.
Background
The PRA’s supervisory statement (SS) 20/15, introduced in 2015, sets out its expectations around building societies’ compliance with the requirements of the Building Societies Act 1986 (1986 Act), the Financial Services and Markets Act 2000, the PRA Rulebook and SS24/15.
Having reviewed SS20/15 (and engaged with the Building Societies Association and UK Finance as part of that review), the PRA has concluded that:
- The expectations set out in SS20/15 are no longer consistent with the PRA’s broader policy approach.
- SS20/15 causes a potential level-playing field issue as it imposes prescriptive expectations on building societies that banks are not subject to.
- Risk management in the building societies sector has become more sophisticated since SS20/15 was introduced, and the PRA now has a number of requirements and tools against which it can supervise firms’ risk management.
In light of these conclusions, the PRA has decided to consult on withdrawing SS20/15 (noting that this would not require changes to its Rulebook).
Proposals
CP11/25 sets out the PRA’s proposals to delete SS20/15 in its entirety. The PRA explains that it has considered whether to update SS20/15 to introduce new guidance and expectations, but decided that it would be disproportionate to impose expectations on building societies (which are already limited by legislative restrictions in the 1986 Act, and whose business models the PRA considers to be stable) without equivalent expectations on banks, as this would create an unlevel playing field between the two sectors. In withdrawing SS20/15, the PRA aims to boost the ability of building societies to compete.
Next steps
The consultation closes on 8 August 2025. The proposed implementation date for the changes would be 1 January 2026.