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A UK bank or building society can join the PRA’s strong and simple regime only if it meets nine criteria in the PRA Rulebook.
The criteria: average total assets of £20 billion or less, lending mainly in the UK, limited trading book and foreign exchange positions, no commodities, no internal ratings based models, no clearing or correspondent services for other banks, no payment system to run and no parent outside the UK.
Answer the nine questions for a first view. The checker applies each rule as written, shows your headroom against the limits and sets out what joining involves.
Built by Mark Dougherty, CPA (CAN).
Tool
Every question cites its rule, and where a test averages over time the note under it says how. The example answers describe a firm that qualifies; replace them with your own.
Worked example
The example answers already in the checker describe a firm with average total assets of £4.5 billion, 97% of its relevant credit exposures in the UK now and 96% on average, no trading book, a net foreign exchange position of 0.4% of own funds with monthly averages within 2%, no commodity positions, no IRB models, no services to other banks, no payment system and no parent undertaking. The checker’s result: it meets all nine SDDT criteria on those answers.
| Criterion | Result |
|---|---|
| 1. Size | Meets: £4.5bn against the £20bn limit, £15.5bn of headroom |
| 2. UK exposures | Meets: 97.0% now (75% needed) and 96.0% on average (85% needed) |
| 3. Trading book | Meets: no trading book business |
| 4. Foreign exchange | Meets: 0.4% of own funds (3.5% limit), with monthly averages within 2% |
| 5. Commodities | Meets: no commodity positions |
| 6. Internal models | Meets: standardised approach to credit risk |
| 7. Services to other banks | Meets: none provided |
| 8. Payment systems | Meets: not a payment system operator |
| 9. Ownership | Meets: no parent undertaking |
Such a firm could choose to become an SDDT. Entry is voluntary, by a modification of the rules made with its consent, and the firm then applies the simplified capital regime in PS4/26 from 1 January 2027.
The rules
For a group, criteria one to six must also be met on a consolidated basis by the CRR consolidation entity and by each UK bank and building society in the group, and criteria seven and eight by each UK bank and building society (rule 2.2). Parts of the month-end tests in criteria three and four do not apply to a firm until it has been authorised long enough (rule 2.7).
Source: PRA Rulebook, SDDT Regime General Application Part, chapters 2 and 3, version in force on 29 September 2026.
Joining
By asking the PRA. Entry is by a modification of the rules made with the firm’s consent, a route the PRA chose so that eligible firms can stay outside the regime if they prefer (PS15/23, paragraph 2.99). On the day it consents, the firm certifies that it meets the criteria (rule 3.3), and a group’s CRR consolidation entity follows the same route (rules 3.2 and 3.5).
Membership brings the liquidity and disclosure simplifications in force since 2024 and, from 1 January 2027, the simplified capital regime in PS4/26: Pillar 1 built on the Basel 3.1 standardised approaches to credit and operational risk, a single capital buffer in place of the conservation, countercyclical and PRA buffers, and simplified Pillar 2A methodologies. For SDDTs other than new and growing banks, the two-yearly ICAAP and ILAAP cycle has applied since 20 January 2026. Our SDDT regime page and the strong and simple white paper cover the choice in full.
An SDDT that stops meeting a criterion must tell the PRA within 14 days (rule 3.4).
Sources: PRA PS15/23 (5 December 2023), paragraphs 2.27 and 2.99; PS20/25 (28 October 2025), paragraphs 1.14 and 1.38; PS4/26 (20 January 2026), paragraphs 1.12 and 1.15; PRA Rulebook, SDDT Regime General Application Part, rules 3.1 to 3.6.
FAQ
As the arithmetic mean of the total assets reported on each reporting due date in the previous 36 months, from row 380 of FINREP template F 01.01 (rules 2.1(1) and 2.3). A firm not yet reporting can rely on a reasonable forecast for its first reporting date.
Yes. Loans that would count as residential loans to individuals in the FCA’s Mortgage Lenders and Administrators Return may be treated as UK exposures, whether or not they would otherwise be located in the UK (rule 2.6).
No. It tests eligibility. Whether to join depends on what the simplifications are worth against the single capital buffer the PRA sets for each SDDT, which it has said will be no lower than 3.5% of risk-weighted assets (SoP5/25, paragraph 12.11).
It must notify the PRA within 14 days of the day it stops meeting them (rule 3.4). The rules require the notification but do not end SDDT status automatically, so the next step is a conversation with the PRA.
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