The Prudential Regulation Authority (PRA) has published its supervisory priorities for 2026, outlining in a letter its sector-specific priorities for the coming year to all banks, building societies, insurers and other PRA-regulated firms.
These include important plans to streamline the supervisory process by moving some supervisory activity, including Periodic Summary Meetings (PSMs), to a two-year cycle.
These meetings are an internal, formal review led by the PRA to consider potential risks posed by a regulated firm to the PRA’s objectives, and to set the supervisory strategy for the coming period.
Over recent years, the PRA has transitioned some firms to biennial review cycles, reflecting the longer-term nature of supervisory workplans and allowing firms and supervisors to focus resources more efficiently on identifying and remediating key risks.
From 1 March larger firms will begin to move to this two-year cycle, while maintaining a regular cadence for discussion of important matters, alongside ad hoc supervisory meetings. This will result in firms having a more proportionate and efficient set of engagements with the PRA.
The Priorities letters are designed to help firms understand the main areas of supervisory focus over the next year, addressing key risks in each sector while setting out the PRA’s priorities to support competition, competitiveness and growth. Other streamlining measures include:
- Accelerating timelines for reviewing senior manager applications, new firm authorisations and internal ratings-based model change pre-approval applications;
- Developing the new UK captive regime for insurers, through a summer 2026 consultation with a view to launch the new regime in 2027;
- And streamlining and modernising reporting requirements through the Future Banking Data project.
Sam Woods, Deputy Governor for Prudential Regulation and Chief Executive Officer of the PRA, said:
‘As we set out our priorities for 2026, we are also updating our approach by moving from an annual to a two-year supervisory cycle for firms. This will allow us to make our operations more efficient and help streamline firms’ interactions with the PRA.’
These priorities build on the PRA’s extensive work to maintain stability and promote growth and competitiveness in the financial sector. Recent changes include:
- The removal of the Building Societies Sourcebook alongside new measures to support the growth of the mutuals sector;
- Simplifying capital requirements for smaller firms through Strong and Simple, while simultaneously introducing Basel 3.1 for larger firms;
- Supporting increased and rapid investment by insurance firms through the Matching Adjustment Investment Accelerator;
- And the introduction of Solvency UK, significantly cutting red tape for insurance firms.
Source: Bank of England
