UK PRA delays Basel 3.1 implementation until 2027

January 17, 2025 — The Prudential Regulation Authority (PRA) in the UK, in consultation with HM Treasury, has announced a further delay to the implementation of Basel 3.1 in the UK, pushing the start date back by one year to 1 January 2027. This decision aims to allow for greater clarity regarding implementation plans in the United States.

Basel 3.1 represents the final set of international banking reforms established in response to the 2008 global financial crisis. Its core objective is to enhance banks’ internal risk measurement and standardise approaches across firms, thereby promoting greater consistency and comparability in capital ratios.

On 12 September 2024, the PRA published PS9/24, outlining its near-final rules for implementing Basel 3.1 within the PRA rulebook. This publication had already delayed the implementation date by six months to 1 January 2026, following feedback from consultations and the PRA’s ongoing monitoring of implementation timelines in other jurisdictions.

The latest delay is attributed to the current uncertainty surrounding the timing of Basel 3.1 implementation in the US. Taking into account competitiveness and growth considerations, the PRA, after consulting with HM Treasury, opted for a further postponement. While the expected implementation date is now 1 January 2027, the PRA has stated it will continue to monitor developments.

To maintain the original full implementation target of 1 January 2030, as initially proposed, the transitional periods within the rules will be reduced, mirroring the approach taken with the six-month delay in PS9/24.

Furthermore, the PRA has announced the immediate pause of a planned firm data collection exercise. This exercise was intended to inform an off-cycle review of firm-specific Pillar 2 capital requirements, aligning updates with the Basel 3.1 implementation. The original deadline for data submission was 31 March 2025.

Finally, the end-date for joining the Interim Capital Regime, previously set for 28 February 2025, will also be adjusted due to the implementation delay. The PRA has promised to provide further details on this matter in due course.

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