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4 July 2025

PRA Consults On Withdrawing Supervisory Statement On Building Societies' Treasury And Lending Activities

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On 8 May 2025, the Prudential Regulation Authority (PRA) published a Consultation Paper (CP11/25) on withdrawing Supervisory Statement (SS) 20/15...
United Kingdom Finance and Banking

On 8 May 2025, the Prudential Regulation Authority (PRA) published a Consultation Paper (CP11/25) on withdrawing Supervisory Statement (SS) 20/15, which sets expectations for building societies' treasury and lending activities. This is aimed at reducing administrative burdens and provide greater flexibility for societies in managing treasury assets and funding.

On 8 May 2025, the PRA published a Consultation Paper (CP11/25) on withdrawing Supervisory Statement (SS) 20/15. The Supervisory Statement sets expectations for building societies' treasury and lending activities. The PRA has concluded that the statement is no longer aligned with its broader policy approach, imposes prescriptive expectations on building societies that banks are not subject to, and is unnecessary given the sector's improved risk management and existing regulatory tools. The proposed withdrawal would take effect from 1 January 2026.

The PRA believes that removing SS20/15 will enhance building societies' ability to compete and grow without imposing additional costs. It considers that the guidance and limits within SS20/15 have often been misinterpreted as requirements, restricting societies' ability to tailor risk management frameworks to their business models. The withdrawal aligns with the PRA's objectives of safety, soundness, competition, and growth.

The PRA has sufficient regulatory tools to ensure effective risk management by building societies, such as the Senior Managers and Certification Regime (SMCR), routine supervision, and existing requirements in the PRA Rulebook. It also highlights that the removal of SS20/15 will reduce administrative burdens and provide greater flexibility for societies in managing treasury assets and funding. While acknowledging potential risks, the PRA considers these to be minimal given the current regulatory framework.

The consultation closes on 8 August 2025.

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