UK banking watchdog overhauls regulations to reduce costs

The Prudential Regulation Authority (PRA) is implementing a significant overhaul of financial regulations in the United Kingdom to stimulate economic growth and reduce administrative burdens. A central component of the reform involves modifying the Senior Managers and Certification Regime (SM&CR), which aims to save City firms approximately £2 billion in compliance costs.

The changes include removing the annual certification requirement for 139,000 non-senior staff members and streamlining the pre-approval process for non-executive roles. Additionally, the regulator is adjusting financial thresholds for asset managers and consumer credit lenders, raising them by nearly 50% to ensure proportionality and reduce the burden on smaller institutions.

The PRA has also expanded its mandate to explicitly consider how regulation impacts investment, capital availability, and pricing. To address emerging systemic risks, the authority is establishing a dedicated cyber resilience unit to manage threats such as ransomware and AI-driven vulnerabilities.