Overview

On 26 March 2026, the PRA published three coordinated policy statements finalising changes to the UK’s resolution and recovery framework. Taken together, they represent a notable recalibration, one that reduces regulatory burden for smaller firms while strengthening transparency and market discipline for larger, more complex institutions.

The three policy statements are:

PS9/26 — Resolution planning: Amendments to MREL reporting templates

PS10/26 — Amendments to Resolution Assessment threshold and Recovery Plans review frequency

PS11/26 — Disclosure: resolvability resources, capital distribution constraints and the basis for firm Pillar 3 disclosure

Not all of these changes will directly affect smaller firms. But taken together, they signal where the PRA is heading, and that direction has implications for every UK bank, regardless of size. This article focuses on what matters most for small and medium sized firms.

These publications form part of a broader package of resolution-related reforms that began with the Bank of England’s revised MREL Statement of Policy in July 2025. The overarching theme is clear: the PRA is pursuing a more proportionate framework that supports its secondary objectives of competition, competitiveness and growth, while keeping the post-crisis resolution regime robust and fit for purpose.

At a Glance: What’s Changing

Policy Statement	Key Change	Who's Affected	Effective Date
PS9/26 — MREL Reporting	MRL002 deleted; MRL001 and MRL003 streamlined; transfer-strategy firms released from MRL001 immediately	Firms currently set, or expected to be set, an external/internal MREL above minimum capital requirements	Revised templates: 1 January 2027; some deletions immediate
PS10/26 — Resolution Assessment & Recovery Plans	Resolution Assessment threshold raised from £50bn to £100bn retail deposits; Recovery Plan review frequency reduced from annual to biennial for SDDTs	All PRA-authorised UK banks and building societies; recovery planning changes specific to SDDTs only	1 April 2026
PS11/26 — Disclosure	Standardised MREL disclosure templates introduced; new qualitative CDC narrative in UK CC1; firms must state the basis of their Pillar 3 disclosures	PRA-authorised banks, building societies, designated investment firms, CRR consolidation entities	1 January 2027

Policy Statement Updates

1.Streamlining MREL Reporting (PS9/26)

PS9/26 streamlines the MREL reporting suite, deleting the MRL002 forecast template and refining data elements in MRL001 and MRL003. While these changes primarily affect firms set an MREL above minimum capital requirements, the underlying principle is relevant to all banks: the PRA increasingly favours fewer, higher-quality data points over comprehensive but underused reporting, an approach that is likely to influence supervisory expectations more broadly over time

2. Recovery Planning and Proportionality (PS10/26)

PS10/26 introduces welcome changes for smaller banks, reducing the frequency of recovery plan reviews for SDDTs and recalibrating the scope of the Resolution Assessment Framework to better reflect the distinction between systemic and non-systemic firms

What is Changing:

Reduced recovery plan review frequency for SDDTs
- SDDTs will now only be required to review their recovery plans at least once every two years, down from the current annual minimum. This brings recovery planning into alignment with the ICAAP and ILAAP review cycles, which were similarly reduced to biennial under the Strong and Simple Framework (PS4/26). The PRA's rationale is that misalignment between these documents could lead to inconsistent regulatory submissions, aligning the cycles supports both quality and proportionality.
- However, the biennial minimum is exactly that, an ‘at least’. SDDTs must still update their recovery plans promptly if there is a material change in circumstances, and the PRA expects that 'new and growing' banks will need to review more frequently.

Resolution Assessment Threshold Increase
- The PRA has doubled the retail deposit threshold at which firms come into scope of the Resolution Assessment Part of the Rulebook from £50bn to £100bn in retail deposits. This reduces the number of firms required to conduct full resolvability self-assessments and disclosures, and removes a significant compliance burden for such firms.
- In practice, the higher threshold means fewer firms will need to produce detailed resolvability assessments or publicly disclose their resolution capabilities, a meaningful reduction in burden for mid-sized firms that fall below the new £100 billion mark.

What the PRA is trying to achieve:

The PRA is sharpening the distinction between:

Systemic firms → subject to intensive, detailed resolution scrutiny
Non-systemic firms → subject to proportionate, risk-based expectations

This reflects a broader policy aim of supporting competition and growth, without weakening core resolvability standards.‍ ‍

3. Disclosure and Transparency (PS11/26)

PS11/26 updates the disclosure framework, with new requirements around MREL reporting, capital distribution constraints and Pillar 3 disclosures. Most of the changes are aimed at larger firms, but the PRA's expectations around consistency and governance apply across the board.

What is Changing:

Disclosure of Capital Distribution Constraints (CDC)
- Greater transparency on restrictions on dividends, AT1 coupons, and other distributions via inclusions of qualitative narrative in the UK CC1 disclosure template explaining when restrictions on distributions would apply, helping to further clarify how constraints may apply under stress or resolution scenarios
- Note: Confidential supervisory information i.e. PRA Buffer or individual Pillar 2A components, are not required to be disclosed.
Updates to Pillar 3 structure and content
- PS11/26 requires firms to explicitly state the basis on which their Pillar 3 disclosures are prepared. A minor but practical change that improves clarity for market participants as the disclosure landscape expands.
- Even for firms outside the MREL disclosure scope, the PRA's expectations around disclosure consistency and governance are worth noting. Supervisors will increasingly expect that what firms tell the market, what they report to the PRA, and what they use internally for risk management all tell the same story:
  - Disclosures must be aligned with the MREL framework and consistent with resolution planning outputs and regulatory reporting
  - Firms should ensure their public disclosures are internally consistent with risk management information and supervisory submissions, the PRA does not want divergent narratives across different channels
  - Existing expectations around governance, controls and validation remain in force, and firms must continue to ensure disclosures are accurate and supported by robust sign-off processes
Update to MREL disclosure templates
- The PRA is introducing four standardised MREL disclosure templates (UK KM2, UK MREL 1–3), primarily affecting G-SIIs, O-SIIs and mid-tier MREL firms. These templates are not directly applicable to most smaller banks.

Implementation Timeline

Apr 2026

Oct 2026

Jan 2027

Feb 2027

Jun 2027

PS10/26 live

£100bn threshold applied for
large banks
Biennial Recovery Plan for
SDDTs

Resolution
Assessments

Reports due

PS9/26 + PS11/26

Revised MREL templates
New disclosures

First MREL
Submission

Reporting (Q4 data)

First Pillar 3
Disclosures

Featuring updated MREL +
CDC requirements

Firms should be preparing now

Recovery plans, MREL data processes, disclosure readiness

*Dates primarily affecting firms with MREL above minimum capital requirements or £100bn+ retail deposits are included for reference

What this Means for Your Bank

For SDDTs, the immediate benefit is tangible, the move to biennial recovery plan reviews reduces a recurring compliance workload. However, firms should use this as an opportunity to improve the quality of their recovery plans rather than simply deferring effort. The alignment with ICAAP and ILAAP cycles creates a natural rhythm for integrated planning, and firms that coordinate these exercises effectively will produce stronger, more coherent submissions.

The PRA's direction of travel is clear, recovery plans, ICAAPs, ILAAPs and stress testing frameworks should not exist as standalone documents produced in isolation. They need to tell a consistent story about the firm's risk profile, capital and liquidity adequacy, and preparedness for stress. Firms that treat these as separate compliance exercises will increasingly find themselves on the back foot when challenged by supervisors.

At Katalysys, this is precisely where we add value. We help firms build an integrated planning cycle that connects a single coherent framework, not just as documents, but as processes embedded in the firm's risk management culture and governance. The result is not only stronger regulatory submissions, but better-informed decision-making across the firm.

For banks approaching or exceeding MREL thresholds, the introduction of standardised disclosure templates means internal data processes need to be in place by 1 January 2027. Firms not previously subject to structured MREL disclosure should begin assessing readiness now.

For all firms, the broader direction of travel is worth noting. The PRA is actively recalibrating regulatory thresholds to avoid cliff-edge effects and support growth, but it is also raising the bar on transparency and operational readiness for resolution. The expectation is clear: proportionality in requirements, but no reduction in standards of preparedness.

How We Can Help

Firms may face a variety of challenges when navigating changes to the resolution and recovery framework, whether adapting recovery plans to the new biennial cycle, preparing for expanded MREL disclosure requirements, or ensuring internal alignment across capital, liquidity and resolution planning. At Katalysys, we have deep experience supporting UK banks across the full spectrum of prudential requirements, with particular strength in recovery planning, ICAAP, ILAAP, stress testing and regulatory change management. As outlined above, the PRA's expectation is that these frameworks work together, and that's exactly how we approach every engagement.

We also provide risk management and stress testing solutions as part of our k-alm® suite of products. All k-alm® modules are offered as cloud-based solutions to support firms' risk management practices and strategic decision-making.

Our team has supported a wide range of clients, from those seeking first authorisation to well-established firms. Whether you need:

Recovery plan review, update or alignment with ICAAP/ILAAP cycles
ICAAP or ILAAP enhancement, support or review
Stress testing framework development or calibration
Independent review of your resolution and recovery preparedness

We have the knowledge and technical skills to help. Some of our recent engagements include:

Recovery planning workshops and board-level scenario design
Integrated ICAAP/ILAAP and recovery plan alignment programmes
Stress test modelling exercises, and model reviews
Gap analysis for new and evolving PRA requirements, such as Basel 3.1/SDDT
k-alm® Liquidity Stress Testing implementations

For further information please contact:

Resolution and Recovery: What the PRA's March 2026 Reforms mean for UK Banks (PS9 to 11/26)