Promote the safety and soundness of the firms we regulate
Contribute to securing an appropriate degree of protection for insurance policyholders
Facilitate effective competition between firms
Facilitate the international competitiveness of the UK economy (in particular the financial services sector) and its growth in the medium to long term
The Financial Services and Markets Act 2000 (FSMA) states that:
‛When discharging its general functions in a way that advances its objectives […] the PRA must, so far as reasonably possible, act in a way that advances the following secondary objectives –
(a) the competition objective, and
(b) the competitiveness and growth objective.’
The secondary competition objective (SCO) is: ‘facilitating effective competition in the markets for services provided by PRA authorised persons in carrying on regulated activities’.
Since it came into effect, our SCO has helped inform the design of several important parts of our framework for prudential regulation. In addition to new policies, we take a proactive approach to our secondary competition objective by considering changes to existing policies to facilitate effective competition, and undertake research on competition in UK financial markets. Read the Annual Competition Report 2023 in the PRA Annual Report 2023.
The secondary competitiveness and growth objective (SCGO) is: ‘facilitating, subject to aligning with relevant international standards – (a) the international competitiveness of the economy of the United Kingdom (including in particular, the financial services sector through the contribution of PRA authorised persons), and (b) its growth in the medium to long term’.
The SCGO came into force on Tuesday 29 August 2023 and sits alongside our SCO. We are taking a proactive approach to the SCGO and have embedded competitiveness and growth considerations in our policymaking processes. We are required to report yearly on how it has advanced the SCGO. The first report will be published within 12 months after the objective came into force.
Our latest secondary objectives work
6 July 2023: We published the Annual Competition Report 2023 as part of the PRA Annual Report 2022/23.
23 June 2022: We published the Annual Competition Report 2022 on pages 66-81 of the PRA Annual Report 2022.
17 June 2021: We published the Annual Competition Report 2021 on pages 53-61 of the PRA Annual Report 2021.
18 June 2020: We published the Annual Competition Report 2020 on pages 47-57 of the PRA Annual Report 2020.
24 October 2019: We published a speech ‘Credit union meets robot’ given by Sam Woods, Deputy Governor for Prudential Regulation and PRA Chief Executive at the Mansion House, London. The speech looks at the barriers to growth for small banks and credit unions, which can be the result of complex regulatory rules and ‘cliff-edge’ thresholds, and explains what we are doing about them at the PRA.
Our key communications
Our work in relation to the SCO and SCGO is covered in further detail in the following key communications.
Secondary objectives communications
PRA Business Plan
The PRA Business Plan 2023/24 sets out the PRA’s strategy, workplan and budget. As part of our strategy for 2023/24 we have a strategic goal to support competitive and dynamic markets in the sectors that we regulate by actively considering the proportionality of our approach as it contributes to the safety and soundness of the UK financial system. Read our workplan to deliver this strategic goal in the PRA Business Plan 2023/24.
To deliver this strategic goal, we consulted on:
- a first set of policy proposals for the Strong and Simple framework for non-systemic banks and building societies
- a set of proposals to implement Basel 3.1 standards
- simplifications to remuneration rules for smaller banks and building societies and the removal of the current limits on the ratio between fixed and variable components of total remuneration (‘bonus cap’)
- the review of Solvency II to tailor it better for the UK market, including a more proportionate approach to reporting requirements
- changes in the PRA’s approach to authorising and supervising ISPVs
SCO key communications
PRA Annual Competition Report
The PRA Annual Competition Report is produced in response to a request included in HM Treasury’s 2015 Productivity Plan ‘Fixing the foundations: creating a more prosperous nation’ that the PRA should publish an annual report setting out how it is delivering against its secondary competition objective (SCO) and, in particular, ‘the steps it is taking to drive more competition and innovation in financial services markets and to help ensure that the right incentives exist for new banks to enter the market’. Read the Annual Competition Report 2023 in the PRA Annual Report 2023.
The Annual Competition Report sets out our work over 2022/23 to support the delivery of our secondary competition objective.
Latest version of the report
Historical list of reports
SCGO key communications
The PRA will report yearly on how it has advanced this new objective.
In September 2022, the PRA published discussion paper (DP) 4/22 – The Prudential Regulation Authority’s future approach to policy setting out its intended approach to policymaking, including its approach to the SCGO. A consultation paper will be published during 2023.
Bank officials have delivered several speeches on the objective. They are reported below. On Tuesday 19 September 2023, the PRA is hosting an international conference to develop a deeper understanding of the core linkages and relationships between financial regulation and international competitiveness and growth.