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UK Prudential Regulation Authority: objectives, supervisory approach, ring-fencing reforms, regulatory principles, insurance and competition duties, and the PRA-FCA memorandum of understanding

Practice notes
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Scope of PRA regulation

Whilst firms authorised by the Prudential Regulation Authority (PRA) are overseen by the Financial Conduct Authority (FCA) for conduct matters, the PRA is chiefly responsible for prudential oversight. Those within the PRA’s remit are the institutions with the greatest potential to affect the stability of the UK economy, including banks, building societies, insurers and certain investment firms.

General objective of the PRA

The PRA has a single overarching aim: promoting the safety and soundness of PRA‑authorised firms (i.e. dual‑regulated firms). This objective appears in section 2B of the Financial Services and Markets Act 2000 (FSMA 2000), as inserted by section 6 of the Financial Services Act 2012.

This objective is mainly progressed by:

  • Regulation intended to ensure the business of PRA‑authorised persons is conducted so as to avoid adverse effects on the stability of the UK financial system; for example, the PRA sets and implements policies and rules it expects firms to satisfy in areas such as capital adequacy and liquidity, and
  • Supervision aimed at minimising the adverse effect that the failure of a PRA‑authorised person could be expected to have on the stability of the UK financial system...
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Web page updated on 22/05/2026

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