Common Questions

What does the Prudential Regulation Authority do?: The PRA regulates the safety and soundness of around 1,500 UK firms — banks, building societies, credit unions, insurers, and major investment firms — focusing on capital adequacy, liquidity, and resolvability. It sits within the Bank of England.
Why did the PRA cut SM&CR certification roles in 2026?: The PRA joined the FCA in cutting SM&CR certification roles by 15% in April 2026 as phase one of a 50% reduction target, aiming to reduce compliance drag on smaller authorised fintech firms without removing senior manager accountability at the top tier.Source: FCA / PRA joint announcement
What is the difference between the PRA and the FCA?: The PRA supervises the financial soundness of banks, insurers, and major investment firms (around 1,500 firms). The FCA regulates conduct across all ~50,000 authorised firms. Together they form the UK's twin-peaks regulatory model.
Is the PRA part of the Bank of England?: Yes. The PRA has been an operationally independent subsidiary of the Bank of England since 2013, when it replaced the Financial Services Authority. Its board is chaired by the Bank of England's Deputy Governor for Prudential Regulation.

Background

On 22 April 2026, the PRA acted jointly with the FCA to cut certification roles under the Senior Managers and Certification Regime (SM&CR) by 15%, the first phase of a 50% reduction target. The cut marks a deliberate shift in the PRA's posture: the prudential regulator, which historically prioritised maximal individual accountability after the 2008 crisis, is now a co-author of the rollback. Its involvement signals institutional consensus for the change rather than FCA pressure alone.

The PRA is the UK's prudential regulator, established as an operationally independent body within the Bank of England in 2013 under the Financial Services Act 2012, replacing the Financial Services Authority. It is responsible for the safety and soundness of approximately 1,500 firms — banks, building societies, credit unions, insurers, and major investment firms. Its core focus areas are capital adequacy, liquidity, and resolvability. It operates alongside the FCA in a twin-peaks model: the PRA supervises institutional stability while the FCA supervises how firms treat customers and behave in markets. The PRA's policy decisions feed into the Basel III and Solvency II frameworks that govern international bank and insurer capital standards.

The April 2026 SM&CR action reflects a broader UK regulatory rebalancing, moving away from the post-2008 maximal-oversight posture towards a regime designed to support UK competitiveness. For the PRA, which sets prudential standards for the largest and most systemically important firms, the change is primarily symbolic at the top tier — the most senior accountable individuals remain in scope. The practical reduction falls disproportionately on smaller authorised firms regulated by the FCA alone, where the PRA's day-to-day supervisory footprint is limited.

How the World Sees Them

UK fintech sector

Welcomes the PRA's co-sponsorship of the SM&CR cut as evidence the rollback has cross-regulator support, reducing the risk of a reversal under a future FCA chief.

Consumer advocates

Concerned that a prudential regulator endorsing certification cuts may erode the accountability framework built after RBS and HBOS failures. The PRA's credibility rests partly on being the harder line of the twin-peaks pair.

UK banking industry

Views the PRA's participation as appropriate; large banks absorbed SM&CR implementation costs in 2016 and now benefit marginally from simplification of annual certification cycles.