On 20 May 2025, the Prudential Regulation Authority (PRA) published a policy statement, PS6/15 – International firms: Updates to SS5/21 and branch reporting, in which it sets out its final rules and policy on its approach to branch and subsidiary supervision.

Background

The PRA published a consultation paper, CP11/24, in July 2024 on proposed updates to its approach to international banks. The proposals included targeted updates to reflect developments since supervisory statement SS5/21 was published and to provide detail or clarification on certain aspects of the PRA’s approach.

In particular, the PRA proposed changes relating to:

  • Branch risk appetite – introducing some additional indicative criteria that it would consider when determining whether it would be appropriate for an international bank to operate in the UK as a branch rather than a subsidiary.
  • Booking models – clarifying expectations around firms’ booking arrangements and extending their formal application to a subset of UK banks.
  • Liquidity reporting – amending the PRA branch return designed to improve the collection of whole-firm liquidity data.
  • SS5/21– minor amendments to clarify some of the PRA’s existing expectations and processes.

For more information on the proposals, see our further blog and podcast.

Final rules and policy

In PS6/15, the PRA clarifies its expectations around business conducted within branches of international banks operating in the UK, as well as its booking model expectations and liquidity reporting for such branches. It explains that its approach is underpinned by its “continuing openness to hosting highly integrated international banking operations, recognising the efficiency benefits and growth that these can bring”. 

The final rules contain some changes to the original proposals, including:

  • On branch risk appetite, the PRA has increased the existing £100m and £500m thresholds around Financial Services Compensation Scheme-covered deposits by 30%, reflecting inflationary developments since these were originally calibrated, with the aim of giving international firms additional room to expand activity in their UK branches. However, noting openness may increase the risk of contagion, the PRA has introduced a new indicative threshold of £300m of total retail and small business instant access deposits – beyond this, international banks are generally expected to operate in the UK as subsidiaries rather than branches.
  • On booking models, the scope of application has been clarified, notably on branches and UK trading banks and in relation to Article 21c of the Capital Requirements Directive 6. The PRA has also modified booking responsibilities and trade capture language.
  • On liquidity reporting, the final policy provides flexibility on the reporting as at dates firms can use for the provision of liquidity information where there is a mismatch between the PRA’s Branch Return submission deadlines and the Home State Supervisor’s requirements. The implementation of revised Branch Return reporting rules has also been postponed, and clarification has been added around reporting expectations in stress, the scope of whole-firm reporting, and certain reporting definitions.

PS6/15 and the updated SS5/21 are relevant to all international firms operating in the UK.

Next steps

In terms of implementation:

  • The new policy updating SS5/21 took effect upon publication of PS6/15.
  • For branch reporting, the new policy updating SS34/15, reporting guidance for the Branch Return Form, and updated branch reporting rules take effect from 1 March 2026. Firms are required to use the revised Branch Return Form for the first time for their data as at 30 June 2026 (unless otherwise stated in the Branch Return Form), with a due date of 30 business days after 30 June 2026.
  • For booking arrangements, relevant firms should carry out a self-assessment against the revised expectations to a timeline they agree with their PRA supervisory contact.