Prudential regulation of credit institutions and investment firms The Basel III Standards The PRA’s general rule-making power
Section 137G of FSMA sets out a general rule-making power allowing the PRA to make rules applying to PRA-authorised persons to advance the PRA’s objectives. Section 2B of FSMA specifies the general objective for the PRA: promoting the safety and soundness of PRA-authorised persons. Sections 2C and 2H of FSMA also set out two further objectives for the PRA: contributing to the securing of an appropriate degree of protection for those who are or may become policyholders (the insurance objective), and facilitating effective competition in the markets for services provided by PRA-authorised persons in carrying on regulated activities (the secondary competition objective).
	The Act allows for substantial parts of the CRR to be revoked and for the PRA to replace it, with updates, in PRA rules, to implement changes relating to the outstanding Basel standards. In order to do so, the PRA will rely on its existing general FSMA rule-making power and the rule-making power for holding companies in section 192V of FSMA, which is being replaced by this Act, as explained in paragraph 28 above.