PS20/26 – Amendments to the Large Exposures Framework – Part 2

Building on Part 1, this statement provides clarity on the final rules, likely aligning with international standards and addressing emerging risks. For compliance teams, this means updating policies and procedures to reflect new exposure definitions, limits, and reporting templates. Firms must assess the impact on capital planning and risk management systems, and ensure data infrastructure can capture the required granularity.

The changes may require adjustments to counterparty identification and connected group treatment. Action is needed to: review the final rules against current practices, update internal limits and controls, enhance reporting to the PRA, and train staff. The implementation timeline, though not specified in the title, will likely require a phased approach.

Executives should prioritise gap analysis and resource allocation to meet the compliance deadline. While the amendments strengthen financial stability, they also present an opportunity to improve risk oversight and operational efficiency. Firms should engage with the PRA for clarifications and monitor for further guidance.