Draft Overseas Prudential Requirements Regime (Credit Institutions and Investment Firms) Regulations 2026
Draft Over the Counter Derivatives (Intragroup Transactions) Regulations 2026
Draft Building Societies Act 1986 (Assimilation to Company Law and Changes to Funding Limit) Order 2026
(1 day, 13 hours ago)
General CommitteesRead Hansard Text Read Debate Ministerial Extracts
The Economic Secretary to the Treasury (Lucy Rigby)
I beg to move,
That the Committee has considered the draft Overseas Prudential Requirements Regime (Credit Institutions and Investment Firms) Regulations 2026.
The Chair
With this it will be convenient to consider the draft Over the Counter Derivatives (Intragroup Transactions) Regulations 2026 and the draft Building Societies Act 1986 (Assimilation to Company Law and Changes to Funding Limit) Order 2026.
I will now call the Minister to move the first motion and speak to all three instruments. At the end of the debate, I will put the question on the first motion and then ask the Minister to move the remaining motions formally.
Lucy Rigby
Although the three instruments before us concern distinct parts of the financial services regulatory system, they share a common purpose, which is to ensure that the UK regulatory framework remains clear, proportionate and able to support growth, while maintaining appropriate safeguards and financial stability. I will address each instrument in turn, beginning with the overseas prudential requirements regime regulations.
Following EU exit, the UK retained a body of EU-derived financial services legislation, including the UK capital requirements regulation, which sets prudential requirements for banks, building societies and larger investment firms. The first instrument supports the Government’s programme of replacing that assimilated law with a framework tailored to the UK. It brings the existing UK capital requirements regulation equivalence regimes together in a single overseas prudential requirements regime. It also makes targeted changes so that the treatment of exposures to overseas exchanges better reflects the underlying risk; updates the definition of overseas investment firms without changing the overall scope of existing treatment; and enables eligible overseas covered bonds to be recognised in future, subject to a further statutory instrument.
The second SI makes a targeted and important reform to the UK’s framework for regulating over-the-counter derivatives—those traded directly between buyer and seller—by addressing intragroup transactions. It replaces the temporary intragroup exemption regime, which everyone present will know as TIGER, with a permanent framework. In doing so, it provides firms with long-term certainty while preserving appropriate safeguards and regulatory oversight. The benefits of oversight of intragroup transactions are well recognised, so exemptions from certain clearing and margin requirements for certain transactions are a feature of regulatory regimes in the UK and other jurisdictions.
TIGER was introduced following EU exit to provide a temporary regime for exempting certain transactions, but it was only ever intended to be temporary. Having been extended once already, it is due to expire at the end of this year, and the Government consider that a further time-limited extension would not provide the long-term framework and stability that firms need. The instrument therefore establishes a permanent framework for qualifying intragroup transactions.
The third SI concerns the legislation governing building societies—specifically the Building Societies Act 1986. The order makes two specific changes. First, it removes the requirement placed on building societies to execute legal documents such as mortgage deeds using a common seal, enabling them to use authorised signatures instead. That is a practical and proportionate modernisation, reducing unnecessary administrative burdens. Secondly, the order makes specific and limited exemptions from the wholesale funding calculation that building societies are required to make, to ensure that they continue to be majority owned by their members.
Taken together, these instruments modernise our financial services framework. They replace or update inherited arrangements, provide greater clarity and certainty, and support the effective functioning and competitiveness of the UK financial sector, while maintaining appropriate safeguards. I commend them to the Committee.
Mark Garnier (Wyre Forest) (Con)
Dr Murrison, you will be delighted to hear that this is a highly uncontentious set of proposals, which the Opposition are fully behind. There is an opportunity, potentially, to talk about the merits of the Building Societies Act 1986 and how it could be updated, but now is probably not the time. You will therefore be delighted to hear that I will bring my words to a close right now.
Lucy Rigby
I welcome those comments, and I suspect that this is a preview of the Budget debate.
The Chair
You might think that. I could not possibly comment.
Question put and agreed to.
DRAFT OVER THE COUNTER DERIVATIVES (INTRAGROUP TRANSACTIONS) REGULATIONS 2026
Resolved,
That the Committee has considered the draft Over the Counter Derivatives (Intragroup Transactions) Regulations 2026.—(Lucy Rigby.)
DRAFT BUILDING SOCIETIES ACT 1986 (ASSIMILATION TO COMPANY LAW AND CHANGES TO FUNDING LIMIT) ORDER 2026
Resolved,
That the Committee has considered the draft Building Societies Act 1986 (Assimilation to Company Law and Changes to Funding Limit) Order 2026—(Lucy Rigby.)