# The Capital Requirements Regulation (Market Risk Transitional Provision) Regulations 2026, Note: Explanatory note


(This note is not part of the Regulations)
Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms (“the Capital Requirements Regulation”) provides, among other things, for capital requirements relating to market risk. Some of these capital requirements were revoked by the Financial Services Act 2021 (Prudential Regulation of Credit Institutions and Investment Firms) (Consequential Amendments and Miscellaneous Provisions) Regulations 2021 (S.I. 2021/1376). Remaining provisions are revoked by section 1 of, and Schedule 1 to, the Financial Services and Markets Act 2023 (c. 29). This later revocation comes into force on 1st January 2027 by virtue of the Financial Services and Markets Act 2023 (Commencement No. 12 and Saving Provisions) Regulations 2026 (S.I. 2026/45 (C. 5)).
The revoked capital requirements will be replaced by rules made by the Prudential Regulation Authority (“PRA”) on 13th January 2026 through the PRA Rulebook: CRR Firms: (CRR) Instrument 2026 (PRA 2026/1), which will come into force on 1st January 2027. That Instrument and the rules are available on https://www.prarulebook.co.uk and copies can be obtained from the PRA, 20 Moorgate, London, EC2R 6DA.
Regulation 2 inserts new Article 465A into the Capital Requirements Regulation, which requires credit institutions and Part 4A investment firms not to apply specified PRA rules for the period between 1st January 2027 and 31st December 2027 (“the transitional period”). Article 465A comes into force on 30th December 2026, that is, immediately before the relevant provisions of the Capital Requirements Regulation are revoked.
During the transitional period, credit institutions and Part 4A investment firms will be able to continue using their existing market risk models or use new standardised approaches in accordance with the PRA rules. Article 465A(2) gives the Treasury the power to extend the transitional period by regulations.
No impact assessment has been published in respect of these Regulations because no impact, or no significant impact, on the private, voluntary or public sector is foreseen.

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Source: https://www.legislation.gov.uk/ukdsi/2026/9780348280197/note (the official version)
Page: https://openlegislation.uk/draft-capital-requirements-regulation-market-risk-transitional-provision-regulations-2026/note
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.