Updating SS5/21 on branch and subsidiary supervision, PS6/25 brings new requirements and further clarifications for international banks operating in the UK. It follows the collapse of Silicon Valley Bank (SVB) in 2023, when the Bank of England transferred its business to protect retail customers. This wouldn’t have been possible had SVB still been a branch, which it had been just six months prior. Additionally, most deposits were from high net-worth individuals (HNWI) or small businesses and exceeded the Financial Services Compensation Scheme (FSCS) threshold, posing additional risks to financial stability. Subsequently, the Prudential Regulation Authority (PRA) has focused on improving branch oversight and supervision.
Perhaps the biggest change in PS6/25 focuses on threshold conditions between branches and subsidiaries. This is a tricky balancing act to protect consumers and promote competition, which the PRA is maintaining through its ‘responsible openness’ approach.
Under the new rules, branches holding over £300 million in retail or small customer deposits (regardless of FSCS coverage) must become a subsidiary. On the flip side, the PRA has upped some threshold conditions to reflect inflation. The threshold for retail and small company deposits in transactional or instant access accounts (covered by FCSC), has increased from £100 million to £130 million. Similarly, the threshold for total FSCS-covered deposits has gone up from £500 million to £650 million.
However, if a branch exceeds thresholds limits, but the majority of the deposits are from HNWIs, then the PRA may allow it to remain a branch. This is because most HNWI accounts aren’t transactional and may reflect a lower risk profile, with appropriate controls in place. In these instances, the PRA will take a ‘look-through’ approach over what constitutes an HNWI deposit, including those held by non-individuals, for example trusts or special purpose vehicles.
The PRA’s PS6/25 also clarifies that:
threshold conditions only refer to instant access deposits, not transactional ones
firms no longer need to routinely report transactional deposit data, but it must be available on request.
Where firms book their trades, assets and liabilities impacts PRA’s visibility over that activity and its ability to supervise it. Building on SS5/21, PS6/25 clarifies that the rules apply to both international and UK trading banks, with a focus on prudential risk management – especially for complex or split desks. The PRA notes that banking book activities such as secured financing, warehouse loans or leveraged finance are likely to fall in scope.
Additional points to note include:
the PRA discourages 100% remote booking into the UK. Where they do occur, these activities must be subject to greater scrutiny and appropriate, well documented, controls
split desks should be the exception and need effective, centralised risk oversight through a consolidated risk function
firms must inform the PRA early if planning significant booking model changes.
Under PS6/25, the PRA introduces new liquidity reporting rules to streamline obligations while maintaining oversight and supporting resolution planning. The Branch Return Form will now include a summary of Liquidity Coverage Ratios (LCR) and Net Stable Funding Ratios (NSFR) data. Simplifying data submission processes also grants greater accessibility for third-country supervisors and more consistency with broader PRA reporting expectations.
These new rules take effect on 1 March 2026, with the first reporting date of 30 June 2026. However, the PRA has provided flexibility over the reporting end dates for better alignment with the home state supervisor. Where these dates don’t align, firms can provide the most recent data submitted to the home state supervisor, noting the reporting end date used. There’s also a degree of flexibility over the metrics firms can apply. Recognising that none are infallible, firms should assess which metrics are the most material and relevant for their risk profile.
During stress events, the PRA may request additional information, aligned to the home state regulator’s requirements.
The PRA has also clarified key definitions and tweaked the rules’ language accordingly. For example, the term ‘instant access deposits’ is defined as "…those from which customers can withdraw money unconditionally, without providing notice or paying penalties". Crucially, this includes instant access accounts that are behaviourally non-transactional. This is because customers can change their behaviour during financial uncertainty, posing a risk to financial stability. Splitting these accounts into two buckets would also create additional complexity and cost for firms.
PS6/25 also addresses the question of instrument v products. The original consultation used both terms, raising uncertainty over whether firms need to identify every instrument v every product, which is inherently broader. The PRA has updated all references to product, citing investment grade bonds, high yield bonds and distressed bonds to help firms gauge granularity.
With PS6/25, there’s a lot for firms to think about. To get started, branches may want to assess their current customer deposits in light of the threshold changes, and future strategic direction to grow the bank. This includes assessing the value of HNWI deposits, to check if remaining a branch would be appropriate for the firm’s risk profile, business activities and recovery and resolution plans. If so, they need to follow up with the PRA to check suitability, or to get plans in motion to become a subsidiary. Branches becoming subsidiaries need to consider their business model, governance, financials, capital and liquidity, risk management processes and resolvability. Specifically, how to manage these elements on an entity, rather than group, level.
Branches may also need to rethink their current booking models to ensure they meet the PRA’s expectations and provide appropriate transparency and oversight. They must pay particular attention to remote booking and split desks, noting the heightened risk and ensuring appropriate safeguards are in place. For split desks, banks will need to establish a consolidated risk function, with clear accountability and robust reporting processes.
With branch reporting changes applying for returns from June 2026, firms also need to review their underlying reporting processes. International bank branches need to assess their current liquidity reporting structures to capture all relevant information in the appropriate format and remain consistent with reporting to the home state regulator.
Contact Kantilal Pithia and Charles Ebienang for more information.
