On 20 January 2026, the Prudential Regulation Authority (PRA) published Policy Statement 4/26 – The Strong and Simple Framework: The simplified capital regime for Small Domestic Deposit Takers (PS4/26).
Background
In CP7/24, the PRA proposed to create a significantly simpler capital regime for small domestic deposit takers (SDDTs), while ensuring they maintain adequate capital. In PS20/25, the PRA published the near-final policy for the SDDT capital regime, along with additional simplifications to liquidity requirements.
Key changes
The PRA has confirmed in PS4/26 that it has not made substantive changes to the near-final policy and rules set out in PS20/25.
However, the PRA has highlighted that it has made minor:
- Amendments to the rules published as near-final, principally to reflect minor amendments made to PRA Rulebook: CRR Firms: (CRR) Instrument 2026 and PRA Rulebook: CRR Firms: (CRR No.2) Instrument 2026.
- Amendments to the supervisory statements (SS) and statements of policy (SoPs) to enhance clarity and readability.
- Corrections and clarifications to the reporting templates and instructions.
The PRA also confirms the deletion of the paragraph in SS4/25 – The Internal Capital Adequacy Assessment Process (ICAAP) and the Supervisory Review and Evaluation Process for SDDTs, which refers to SS20/15 – Supervising building societies’ treasury and lending activities. In Policy Statement 26/25 – Discontinuing SS20/15: Supervising building societies’ treasury and lending activities, the PRA stated its intention to remove the paragraph that referred to SS20/15 that was in the near-final version of SS4/25 when it publishes final policy and rule instruments on the SDDT capital regime.
Next steps
The PRA has also confirmed that the SDDT capital regime will take effect on 1 January 2027, other than the changes to SoP2/23 which takes effect on the date when PS4/26 is published (20 January 2026).