Prudential Regulation Authority—Fundamental Rules

Copyright © 2025 LexisNexis

Published by a LexisNexis Financial Services expert

Practice notes

Prudential Regulation Authority—Fundamental Rules

Copyright © 2025 LexisNexis

Published by a LexisNexis Financial Services expert

Practice notes

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Background to the Fundamental rules

In June 2014, the PRA published Policy Statement PS5/14, which among other things, established a set of Fundamental Rules. The Fundamental Rules form part of the PRA Rulebook.

The Fundamental Rules appear in the same form in four separate locations in the PRA Rulebook:

•
CRR Firms—Fundamental Rules (for consistency all links to the Fundamental Rules in this Practice Note are to this location)
•
Non-CRR Firms—Fundamental Rules
•
Solvency II Firms—Fundamental Rules, and
•
Non-Solvency II Firms—Fundamental Rules

The Fundamental Rules

The Fundamental Rules are high-level rules, which collectively set out the PRA’s expectations of firms and act as an expression of the PRA’s general objective of promoting the safety and soundness of firms and the insurance objective of securing an appropriate degree of protection to those who are or may become policy holders.

The Fundamental Rules are:

•
Fundamental Rule 1—a firm must conduct its business with integrity.
•
Fundamental Rule 2—a firm must conduct its business with due skill, care and diligence.
•
Fundamental Rule 3—a firm must act in a prudent manner.

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Jurisdiction(s):

United Kingdom

Key definition:

Authority definition

What does Authority mean?

The public sector body procuring the project. This might, for example, be a local authority, an NHS trust, a central Government Department or a Non-Departmental Public Body.

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