This chapter discusses options for how the simpler regime for the smallest banks and building societies could be designed. It discusses how firms in scope of the regime could be determined, prudential requirements under the regime, arrangements for how firms could transition out of it, and how the regime once it is in place might evolve over time.

Scope

4.1 The first key design choice is how to determine which firms should be in scope of the simpler regime. The basis for determining whether a firm is in scope would ideally be simple, objective, and transparent. This would help firms to understand whether they are in or out of scope of the simpler regime and to predict whether their business plans could alter their status. It would also help to explain to other stakeholders how the PRA has arrived at choices about which firms are subject to a simpler set of prudential requirements.