Published 12 September 2024
Last updated 4 August 2025 — See all updates
Change made: Applying the Financial Services and Markets Act 2000
model of regulation to the UK Capital Requirements Regulation:
Policy Update 2025 updated. The deadlines for responses to the
Policy Update on Overseas Recognition Regimes, Key UK CRR
Definitions, and associated draft legislation have been extended
following feedback requesting additional time.Basel 3.1
transitional Statutory Instrument: new deadline 23:45, 12
September 2025. Chapters 3 and 4 (Overseas Recognition Regimes
and Key UK CRR Definitions) of the Policy Update, and the draft
Key UK CRR Definitions Statutory Instrument: new deadline 23:45,
30 September 2025
Applying the Financial Services
and Markets Act 2000 model of regulation to the UK Capital
Requirements Regulation: Policy Update 2025
PDF, 221 KB, 22
pages
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Basel 3.1 Market Risk
Transitional Provision - draft regulations
PDF, 199 KB, 3
pages
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Restatement of Capital
Requirements Regulation definitions - draft
regulations
PDF, 331 KB, 12
pages
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Applying the FSMA 2000 model of
regulation to the Capital Requirements Regulation
PDF, 203 KB, 22
pages
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Revocation of CRR provisions to
implement Basel 3.1 - draft regulations
PDF, 311 KB, 11
pages
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Restatement of provisions on
capital buffers - draft regulations
PDF, 233 KB, 10
pages
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Revocation of CRR provisions on
the definition of capital - draft regulations
PDF, 204 KB, 6
pages
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Details
HM Treasury is progressing work to apply the UK's established
model of regulation for financial services, known as the
FSMA
model, to the law the UK inherited from the EU (known as
assimilated law) on the capital framework for banks, building
societies and investment firms. FSMA refers to
the Financial Services and Markets Act 2000.
This policy update confirms the legislative approach for
implementing the final post-crisis reforms to banks' capital
requirements, known as Basel 3.1. It explains how HM Treasury
will revoke certain parts of the Capital Requirements Regulation
(“the CRR”,
which is the central piece of assimilated law on bank capital
requirements), which the Prudential Regulation Authority
(PRA) will
then replace with rules implementing the new Basel standards.
The update also outlines the proposed legislative approach for
revoking the remainder of the CRR and for revoking and
restating with modifications the Capital Buffers Regulation.
Completing the application of the FSMA model to
this area of assimilated law will pave the way for a number of
further reforms to the prudential regime proposed by the
PRA,
including a proportionate prudential regime for smaller banks and
building societies.
HM Treasury has published three pieces of draft legislation
alongside the policy update and would welcome technical comments
on the proposed legislative approach within the next 6 weeks. The
PRA has also
published a number of corresponding policy documents that set out
the final Basel 3.1 package and further reforms the PRA proposes to make to
the prudential regime.
Update as of 17 January 2025: The Prudential
Regulation Authority (PRA), in consultation
with HM Treasury, has decided to delay the implementation of
Basel 3.1 in the UK by one year until 1 January 2027. Read the
press
notice for more information.
Update as of 19 March 2025: The PRA has published a
Consultation Paper (CP
3/25), proposing a set of conditions for identifying
recognised exchanges or assets traded on these exchanges. HMT
will implement the necessary legislative changes to support the
PRA's
proposals outlined in the consultation paper.
Update as of 4 August 2025: On 15 July 2025, HM
Treasury published a Policy Update inviting responses on the
Overseas Recognition Regimes and Key CRR Definitions
(outlined in Chapters 3 and 4 of the consultation document), as
well as on the associated draft legislation. Responses were
originally requested by 5 September 2025.
In response to feedback that additional time would be helpful, HM
Treasury has extended the consultation period as follows:
