Resolution & Recovery Framework Streamlined - MREL, RAF & Disclosure
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The PRA published three coordinated policy statements, PS9/26, PS10/26, and PS11/26, finalising targeted reforms to the UK's bank resolution and recovery framework. Changes include raised Resolution Assessment Framework (RAF) thresholds, biennial recovery plan reviews for SDDTs, simplified MREL reporting templates, and enhanced Pillar 3 disclosure requirements.
Context:
These three policy statements form part of a broader package of resolution-related reforms following the Bank of England's revised MREL Statement of Policy in July 2025, responding to three consultation papers published simultaneously. The overarching objective is a proportionate recalibration: reducing regulatory burden for smaller, less complex firms while strengthening transparency and market discipline for larger institutions.
PS10/26 raises the Resolution Assessment Framework threshold from £50bn to £100bn in retail deposits, meaning fewer mid-sized firms must produce detailed resolvability assessments or public disclosures. Additionally, Small Domestic Deposit Takers (SDDTs) move from annual to biennial recovery plan reviews. PS9/26 introduces four standardised MREL disclosure templates (UK KM2, UK MREL 1–3) primarily for G-SIIs, O-SIIs, and mid-tier MREL firms. PS11/26 updates the Pillar 3 disclosure framework around resolvability resources and capital distribution constraints.
The Bank of England confirmed that several resolution reporting templates will be deleted from 1 April 2026, reducing overall data submission burden. Deputy Governor Dave Ramsden stated the changes 'reflect the reduced risks that smaller and less complex firms pose to UK financial stability, while ensuring that the largest firms remain resolvable.'
Rules & Guidelines:
RAF threshold raised to £100bn in retail deposits — firms below this level are no longer in scope for full Resolution Assessment Framework reporting and public disclosure (effective 1 April 2026)
SDDTs transition to biennial recovery plan reviews instead of annual, reducing compliance frequency by 50%
Four new standardised MREL disclosure templates (UK KM2, UK MREL 1–3) apply to G-SIIs, O-SIIs, and mid-tier MREL firms
PS11/26 requires enhanced qualitative narrative in capital distribution constraint disclosures (UK CC1 template), clarifying when distribution restrictions would apply under stress or resolution
Public disclosures must be internally consistent with risk management information and supervisory submissions
Existing governance, controls, and validation requirements remain in force, disclosures must be supported by robust sign-off processes
Businesses Affected:
G-SIIs and O-SIIs: must implement all four new MREL templates and enhanced PS11 disclosures
Mid-tier banks and building societies between £50bn–£100bn in retail deposits: materially reduced RAF burden but still subject to certain MREL requirements
SDDTs: reduced recovery plan frequency is a meaningful compliance cost saving
Resolution planning and treasury teams across all PRA-regulated deposit-takers
Investor relations and regulatory reporting teams are responsible for Pillar 3 and MREL disclosures
Auditors and external reviewers who sign off on the resolution and recovery framework documentation
Next Steps:
Determine whether your firm falls above or below the new £100bn RAF threshold and adjust your resolution planning resource accordingly
If you are an SDDT, update your recovery plan review schedule to biennial and brief your board on the reduced regulatory requirement
G-SIIs, O-SIIs, and mid-tier MREL firms should immediately review the four new MREL templates and begin gap analysis against existing disclosures
Update Pillar 3 UK CC1 disclosure templates to incorporate the qualitative narrative on capital distribution constraints required by PS11/26
Ensure cross-document consistency between new resolution disclosures, risk management MI, and supervisory submissions
Confirm which legacy resolution reporting templates are deleted from 1 April 2026, and remove them from your regulatory reporting calendar
