The following posts provide a snapshot of selected UK, EU and global financial regulatory developments of interest to banks, investment firms, broker-dealers, market infrastructures, asset managers and corporates.
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FCA publishes consultation on streamlining data collection requirements
16 April 2025
The UK Financial Conduct Authority (FCA) has published a consultation paper (CP) proposing the removal of reporting and notification requirements as part of its strategy to prevent unnecessary collection of data to reduce regulatory burden and costs. The consultation paper is accompanied by a press release and an updated webpage. The FCA seeks feedback on the proposals, which include:- eliminating the requirement to provide data relating to: (i) FSA039 – Client money Assets; (ii) Section F of the RMAR; and (iii) Form G – The Retail Investment Adviser Complaints Notifications Form;
- simplifying the FCA Handbook to remove guidance about data collections that have already been decommissioned; and
- entirely removing forms that are already included in the Annexes to SUP 16.
Topic : Other Developments -
Omnibus I 'stop-the-clock' directive published in Official Journal of the EU
16 April 2025
The Directive (EU) 2025/794, amending the EU Corporate Sustainability Reporting Directive (CSRD) and EU Corporate Sustainability Due Diligence Directive (CSDDD), was published in the Official Journal of the EU (OJ), implementing the "stop-the-clock" proposal discussed under the EU Omnibus I package. The Directive entered into force on 17 April. Member states must transpose the Directive by 31 December.
The Directive postpones:- by two years, the application of CSRD reporting requirements to large companies that have not yet started reporting and SMEs. These entities will now have to report in 2028 and 2029, respectively, for financial years starting on or after 1 January 2027 and 1 January 2028 (as applicable); and
- by one year, the transposition deadline and first phase of application of certain due diligence provisions under CSDDD. EU Member States will now have until 26 July 2027 to transpose CSDDD, and the first companies will not have to apply the first phase of measures until 26 July 2028.
Topic : Sustainable Finance -
FCA consults on further proposals to support Consumer Composite Investments regime
16 April 2025
The UK Financial Conduct Authority (FCA) has published a consultation paper together with a related press release and webpage setting out further proposals on product information for Consumer Composite Investments (CCIs). The consultation paper follows the FCA's December 2024 consultation paper on a new product information framework for CCIs, which closed on 20 March.
The regime will apply in respect of a CCI which is or may be distributed to a retail investor in the UK and seeks to help consumers understand the products they are buying while giving firms flexibility to innovate. The proposals include: (i) removal of the requirement for firms to calculate and disclose implicit transaction costs as part of their CCI cost disclosures; (ii) alignment for CCI products of the pre- and post-sale cost disclosure requirements under the FCA Handbook Conduct of Business (COBS) rules derived from the MiFID Org Reg, to ensure no duplication or conflict in respect of investments within the scope of the CCI rules; (iii) proposed drafting on transitional provisions granting firms flexibility to move across to the new CCI regime when they are ready; and (iv) proposed consequential amendments to the FCA Handbook.
The CCI regime will replace the onshored Packaged Retail and Insurance-Based Investment Products regime. Responses to the consultation paper should be submitted by 28 May 2025. -
FCA expansion in the United States and Asia-Pacific
15 April 2025
The UK Financial Conduct Authority (FCA) has announced its first-ever establishment of a presence in the United States (US) and Asia-Pacific (APAC) region as part of its new strategy to support growth. The FCA representatives will be based in Washington DC in the US and Australia in APAC. The aim of the expanded presence is to support the export of UK financial services internationally and attract more inward investment from third countries into the UK.Topic : Other Developments -
FSB publishes finalised format for FIRE framework
15 April 2025
The Financial Stability Board (FSB) has published its finalised Format for Incident Reporting Exchange (FIRE), together with a press release and updated webpage. FIRE provides a standardised format for financial institutions to report cyber and other operational incidents to national regulators. It is intended to provide a foundation upon which to build for jurisdictions which do not currently have standardised reporting formats, and to be interoperable with existing systems for those jurisdictions with existing frameworks. National regulators are free to decide the extent to which they wish to adopt FIRE, if they do at all. The framework specifies the information items to be included in reports, identifying items which are essential and optional, as well as a baseline view of the reporting of individual information items against each reporting phase. The FSB will hold a workshop with industry and authorities two years after FIRE is finalised (e.g., in 2027) to take stock of their experiences with FIRE, including implementation challenges.Topic : Operational Resilience -
ESMA publishes final draft RTS and guidelines on Liquidity Management Tools for Funds
15 April 2025
The European Securities and Markets Authority (ESMA) has published its final draft regulatory technical standards (RTS) relating to liquidity management tools (LMTs) under the Alternative Investment Fund Managers Directive (AIFM) and the Undertakings for the Collective Investment in Transferable Securities Directive (UCITS). The draft RTS will apply to Alternative Investment Fund Managers managing open-ended Alternative Investment Funds (AIFs) and UCITS. The final draft RTS under the AIFMD are detailed in Annex IV of the report, while those under the UCITS Directive are outlined in Annex V. The draft RTS have been submitted to the European Commission (EC) for adoption, which has three months to decide whether to adopt them.
ESMA has also published its final guidelines for national competent authorities and fund managers on LMTs of UCITS and open-ended AIFs, providing guidance on how managers should select and calibrate LMTs for liquidity risk management and mitigating financial stability risks. The guidelines, set out in Annex III of the report, will now be translated into the official EU languages and published on ESMA's website. National competent authorities and financial market participants must make every effort to comply with the guidelines. Within two months after the date of publication on ESMA's website, national competent authorities must notify ESMA whether they comply or do not comply, together with their reasons for not complying (if applicable). Financial market participants are not required to report on compliance. The Guidelines will apply upon the application date of the RTS on the characteristics of the LMT's. ESMA previously consulted on both the draft guidelines and draft RTS in July—for further background please see our update.Topic : Fund Regulation -
EC launches targeted consultation on barriers to EU capital markets integration
15 April 2025
The European Commission (EC) has published its targeted consultation on the integration of EU capital markets under its savings and investments union (SIU) strategy, accompanied by a press release and updated webpage. The consultation seeks feedback on issues and possible measures to address: (i) barriers to the integration and modernisation of trading and post-trading infrastructures, the distribution of funds across the EU and efficient cross-border operations of asset management; and (ii) barriers specifically linked to supervision, with respondents invited to indicate any areas in which regulatory simplification would be appropriate in line with the simplification Communication. The questions have been split into six key topics: (i) simplification and burden reduction; (ii) trading; (iii) post trading; (iv) horizontal barriers to trading and post-trading infrastructures; (v) asset management and funds; and (vi) supervision. The consultation is a crucial step in the implementation of the SIU, with insights that are collected helping shape measures to be presented in a comprehensive package in the fourth quarter of 2025. The deadline for responses is 10 June. -
EBA publishes report on remuneration and gender pay gap for financial institutions
15 April 2025
The European Banking Authority (EBA) has issued its latest report on remuneration and gender pay gap benchmarking for institutions and investment firms, together with a press release. The report covers information on remuneration trends and practices from 2021 to 2023 and highlights a material gender pay gap found within EU institutions and investment firms. The data collected shows that, on average, female staff in institutions earned 24.48% less in 2023 than their male counterparts. The pay gap was even more pronounced in investment firms, with female staff earning 32.0% and female-identified staff earning 31.74% less than their male colleagues. This was mainly caused by an underrepresentation of women in higher paid positions. The EBA emphasises the need for entities to address these disparities with the data raising concerns about the application of the obligation to ensure equal opportunities and pay equity for staff.Topic : Corporate Governance -
UK 2025 Regulatory Initiatives Grid published
14 April 2025
The Financial Services Regulatory Initiatives Forum (the Forum) has published the Regulatory Initiatives Forum Grid (the Grid), with the UK Financial Conduct Authority (FCA) also updating its webpage. The previous Grid was due to be published in May 2024 but was postponed due to the General Election, meaning the Forum published only an interim update in October 2024.
The 2025 Grid sets out the regulatory pipeline for the next 24 months and reflects the reprioritisation that has taken place since the new government came into power. Notable initiatives include:- motor finance commission review: the FCA intends to confirm, within six weeks of the Supreme Court's decision on past use of discretionary commission arrangements by motor finance firms, whether it will propose a redress scheme;
- liquidity risk management in funds: the FCA will consult on refined proposals regarding liquidity risk management in funds to implement FSB and IOSCO guidelines;
- Consumer Composite Investments (CCI) Regulation: the FCA published a second consultation paper on the new CCI regime on 16 April (see our update) and plans to issue a Policy Statement with final rules in late 2025;
Topics : Client Asset Protection, Conduct and Culture, Consumer / Retail, Financial Crime and Sanctions, Financial Market Infrastructure, FinTech, Fund Regulation, MiFID II, Operational Resilience, Other Developments, Payment Services and Payment Systems, Prudential Regulation, Recovery and Resolution, Securities -
FCA findings on multi-firm review of customers in vulnerable circumstances
12 April 2025
The UK Financial Conduct Authority (FCA) has published a webpage summarising the findings of its multi-firm review on retail banks' treatment of customers in vulnerable circumstances involving bereavement and power of attorney (PoA). The webpage is accompanied by a press release. The Consumer Duty requires firms to deliver good outcomes for all customers, including those in vulnerable circumstances. The multi-firm review makes a series of findings, including on:- policies and procedures: the FCA calls for firms to make guidance for staff accessible and policies to be clear that staff should adapt to customers' needs and recognise when matters should be escalated.
- identifying and responding to customer needs: the FCA encourages firms to identify signs of vulnerability and seek information from consumers to address their needs. The FCA also wants firms to establish feedback loops to enable continuous improvement of staff and processes based on previous errors.
Topic : Consumer / Retail -
EPC publishes Guidelines for PSPs joining payment schemes
11 April 2025
The European Payments Council (EPC) has issued Version 7.0 of the Adherence Guide to the EPC Payment Schemes, together with an updated webpage. The updated guide provides guidelines and template application forms for payment service providers (PSPs) seeking to adhere to one or more of the EPC managed payment schemes (namely, the SEPA Credit Transfer Scheme, the SEPA Instant Credit Transfer Scheme, the SEPA Direct Debit Core Scheme, the SEPA Direct Debit Business-to-Business Scheme and the One-Leg Out Instant Credit Transfer Scheme). The Guide sets out: (i) detailed instructions for completing adherence documents; (ii) the eligibility criteria; and (iii) the adherence process to be followed. -
FCA findings on multi-firm review of trading apps
11 April 2025
The UK Financial Conduct Authority (FCA) has published a webpage summarising the findings from its multi-firm review of trading apps, together with a press release. The FCA notes that this is a growing sector allowing more retail investors easier access to a wider range of investments which can help to improve financial lives. Some trading apps, though, offer high-risk investments that were traditionally aimed at wholesale markets. The FCA's review made a series of findings, including on:- business models: trading app firms operate in various ways. The FCA stresses that regulated firms must ensure they understand the Handbook's requirements for manufacturers and distributors, regardless of their business model, and that firms with overseas affiliates must clearly inform customers that their trading agreement is with the overseas entity and disclose any potential loss of asset protection.
- target markets: firms are likely to be both manufacturers of a trading app and distributors of products sold on it, and therefore should consider the relevant rules under PRIN 2A.3 and PROD 3 on the need to identify a target market for the products and services they manufacture and distribute. The FCA found some firms had not specified their target market at a sufficiently granular level and, in some cases, offered lower-risk and less complex products alongside more complex or high-risk ones.
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BoE reports on digital pound developments and implementation
10 April 2025
The Bank of England (BoE) has published a series of documents regarding its work on implementing the digital pound. The Digital Pound Experiment Report on Offline Payments assesses the technical feasibility of implementing an offline payment functionality for a digital pound to ensure that the digital pound can be used without an internet connection, enhancing its accessibility and resilience. While it might be technically feasible, there are trade-offs, particularly around user experience and preventing double spending and counterfeiting, that make implementing it challenging. No final decision has been made yet on whether an offline payment functionality will be implemented. The minutes of the CBDC Engagement Forum (November 2024) sets out continued stakeholder discussions on the progress of the digital pound, highlighting the benefits for consumers and merchants, such as innovation and cost efficiency, but also the challenges, including ensuring strong performance at all levels of payment volume, operational costs and security and network connectivity issues. The Intermediary Roles and Scheme Rulebook Design Note outlines the roles and responsibilities of digital pound intermediaries and a preliminary conceptual framework for a digital pound rulebook (or similar document) to support the proper management of the digital pound if launched.Topic : FinTech -
UK PRA proposed fees for 2025/26
10 April 2025
The Prudential Regulation Authority (PRA) has published a consultation setting out proposals for its fees for 2025/26. The proposals would make amendments to the Fees Part of the PRA Rulebook (Appendix) and include: (i) the fee rates to meet the PRA's 2025/26 Annual Funding Requirement (AFR); (ii) the introduction of a cost allocation to fund the PRA's activities in the Future Banking Data project; (iii) changes to internal model application fees, the model maintenance fee, the Special Project Fee for restructuring, the minimum fee and the new firm authorisation fee for Type 3 applications; (iv) changes to the fees rules for firms applying to cancel before the start of the fee year; (v) how the PRA intends to allocate the surplus from the 2024/25 AFR (Chapter 3); and (vi) the retained penalties for 2024/25 (Chapter 4). The PRA's proposed Total Funding Requirement for 2025/26 is £342.5 million, a decrease of £10.5 million (3%) from 2024/25 (£353.0 million). This consultation closes on 9 May.Topic : Fees / Levies -
UK FCA concludes consumer investment policy sprint
10 April 2025
The UK Financial Conduct Authority (FCA) has announced the conclusion of its six-week policy sprint aimed at improving consumer investment decisions to support its key objective of supporting growth. With only 9% of UK consumers taking regulated financial advice last year, the sprint focused on developing targeted support to bridge the gap between bespoke financial advice and guidance. For the first time, the sprint tested future rules before formal consultation involving industry, consumer groups and other members of the regulatory family, such as the Financial Ombudsman Service and the Information Commissioner's Office, with its aim to accelerate final policy proposals by June. The sprint is part of the work being carried out in relation to the Advice Guidance Boundary Review and other initiatives aiming to change how consumers interact with retail investments.Topic : Consumer / Retail -
ESMA TRV report on fund names: ESG-related changes and their impact on investment flows
10 April 2025
The European Securities and Markets Authority (ESMA) has published a trends, risks and vulnerabilities (TRV) risk analysis report on ESG-related changes to fund names and their impact on investment flows. The report examines whether the fund managers decision to incorporate environmental, social, governance or sustainability-related (ESG) terms into their funds' names leads to more investor interest. If so, this has the potential to incentivise greenwashing behaviour, undermine investor trust and hinder efforts to promote sustainability within EU financial markets.
Read more.Topic : Sustainable Finance -
FCA update on PISCES and pre-application support
10 April 2025
The UK Financial Conduct Authority (FCA) has published an update on the Private Intermittent Securities and Capital Exchange System (PISCES) sandbox, following the consultation in December 2024 (CP24/29). PISCES will be a new platform designed for intermittent trading of private company shares. The FCA confirms that no major changes to the proposals on its 'private plus' approach are planned, given that it was largely supported by consultation respondents. The FCA also sets out a table of post-consultation changes it is proposing to assist potential operators of a PISCES to develop their own rulebooks and engage with participants. The changes outlined include:- Clarification of core disclosures (including on financial information, employee share schemes and director transactions);
- Narrowing certain disclosure requirements (including, among others, on directors' transactions, material contracts or agreements, significant changes and post-trade events); and
- Removal of certain disclosure requirements (including on litigation, sustainability and forward-looking information).
Further changes include refined expectations around operator oversights, complaints handling and access to historic disclosures. The FCA also proposes setting a discretionary threshold of up to 25% to PISCES operators for identifying major shareholders. Final rules for PISCES will be set out in a policy statement expected to be published in June. In the meantime, the FCA will provide pre-application support and welcomes requests from prospective PISCES operators for preliminary feedback on their proposed models and draft rulebooks.Topic : Securities -
UK PRA business plan 2025/26
10 April 2025
The Prudential Regulation Authority (PRA) has published its Business Plan 2025/26 which sets out the workplan for and regulatory initiatives to advance its strategic priorities. This year's business plan is said to reflect the evolution of the PRA's priorities, and in particular the work it is doing to deliver its new secondary objective on competitiveness and growth. Specific initiatives include:- Implementing the Basel 3.1 standards, where the PRA intends to publish its final rules, once Parliament has revoked the relevant parts of the Capital Requirements Regulation (CRR).
- Finalising and implementing the strong and simple framework for small domestic deposit takers. During 2025/26, the PRA will finalise the simplified capital regime and the additional liquidity simplifications. It intends to publish a policy statement on these in Q4.
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UK PSR delays APP scams claims management consultation
10 April 2025
The Payment Systems Regulator (PSR) has published an update regarding next steps for its claims management consultation and its intention to adopt reporting standard B by December 2026. The claims management consultation was originally planned for April this year but is being delayed. The PSR notes how effective claims management and receiving quality compliance data are crucial components in its APP reimbursement policy, which went live on October 2024. Having considered stakeholder feedback, the PSR has updated the timing of the planned consultation to take into account the work being carried out in relation to the UK government's National Payments Vision (NPV) (for further background, please see our update). The PSR expects to consult within three to six months, subject to NPV developments. The additional time will enable Pay.UK and the wider industry to continue working on an effective common system that meets the needs of all its users. The future consultation will not propose placing a regulatory mandate on PSPs to use a particular system for managing claims or for meeting the Reporting Standard B requirements. In line with previous plans, the deadline for comments to the consultation for adopting Reporting Standard B, is December 2026. -
ESMA final report on systematic internaliser ITS, volume cap and transparency calculations and trading venue RTS
10 April 2025
The European Securities and Markets Authority (ESMA) has published a final report in relation to certain changes being made as a result of the MiFID II/MiFIR review, together with an accompanying press release. The changes covered by this final report were part of the third consultation package following the MiFID II/MiFIR review, and relate to:- A new set of implementing technical standards for investment firms notifying competent authorities when it gains the status of systematic internaliser or decides to opt-in to the systematic internaliser regime. ESMA confirmed that it is making some changes to the original proposals, including reducing the number of reporting fields in the notification template to ease the reporting burden and extending the notification period from two weeks to 20 calendar days. ESMA also confirmed it will discuss with competent authorities areas where further guidance is required.
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ESMA final report on order execution policy technical standards
10 April 2025
The European Securities and Markets Authority (ESMA) has published a final report in relation to the draft regulatory technical standards (RTS) specifying criteria for establishing and assessing the effectiveness of investment firms' order execution policies, accounting for whether the orders are executed on behalf of retail or professional clients. The report is accompanied by a press release. ESMA's mandate for developing the new RTS was included as part of the changes made to best execution requirements following the EU MiFID II/MiFIR review. During the review, areas for improvement were identified including insufficiently documented and demonstrated satisfaction of best execution processes. In addition, feedback from competent authorities and other stakeholders evidenced that further clarification of order execution policy requirements would be helpful.
Read more.Topic : MiFID II -
UK Financial Stability in Focus report: AI in the financial system
9 April 2025
The Financial Policy Committee (FPC) of the Bank of England (BoE) has published the Financial Stability in Focus report on AI in the UK financial system. The FPC considers the potential benefits of AI with its growing development, but also the macro-prudential implications on the financial system. Specifically, the report focuses on the following four areas:- Greater use of AI in banks' and insurers' core financial decision-making. The report highlights that while there is existing regulation to manage AI related risks and the supervisory tool of the senior managers and certification regime ensures individual accountability for conduct and competence, existing legal frameworks still need to evolve (as per previous regulator publications, summarised in the FS2/23 feedback statement), and consideration should be given to potential macro-financial vulnerabilities.
Read more.Topic : Artificial Intelligence -
EU recommendations on ESG disclosures under the Benchmarks Regulation
9 April 2025
The European Securities and Markets Authority (ESMA) has published a final report on the outcome of the 2024 Common Supervisory Action (CSA) on ESG disclosures under the Benchmarks Regulation (BMR). The CSA was conducted by ESMA with national competent authorities and assessed how benchmark administrators supervised in the EU comply with the BMR's ESG disclosure requirements. The report presents the findings of the CSA, including that: (i) the lack of specific guidance on the definition and calculation of ESG factors has led to divergent and inconsistent calculation and disclosure practices across benchmarks and administrators; and (ii) there are inconsistent approaches to the underlying assumptions used by administrators for determining the factors. The CSA report recommends that the European Commission considers amendments such as rationalising ESG disclosure requirements, for which ESMA would be able to assist with technical advice. The report also provides clarifications for administrators on transparency expectations and guidance on definitions and methodology used for calculating ESG factors.Topic : Sustainable Finance -
PRA Dear CFO letter: prudential expectations on significant risk transfer financing
9 April 2025
The Prudential Regulation Authority (PRA) has published a Dear CFO letter outlining its prudential expectations regarding practices related to illiquid and structured financing portfolios. The PRA focuses on significant risk transfer (SRT) financing activities, but holds a wider expectation that firms should consider its expectations for all relevant financing portfolios. The PRA emphasises the expectation that firms analyse the characteristics of different collateral types when determining the appropriate regulatory capital treatment. The PRA is concerned that not all firms conduct sufficiently through assessments of collateral eligibility and that some firms have adopted imprudent approaches to the recognition of collateral for regulatory capital purposes, leading to an undercapitalisation of risks. The PRA highlights that its expectations align with the near-final rule changes for implementation of the Basel 3.1 Standards.
The PRA expects firms to consider the concerns identified in the letter and ensure, where needed, that policies, control frameworks and reporting are enhanced to address them. Supervisors will be requesting relevant firms to provide a response to the letter by 11 June.Topic : Prudential Regulation -
ESMA calls for clarity on the qualification of fractional shares
9 April 2025
The European Securities and Markets Authority (ESMA) has published a letter to the European Commission on the inconsistent regulation of trading of fractional shares across the EU. There has been an increase in the significance of fractional shares, which accounted for more than 10% of the total number of transactions reported in 2023-2024. However, shares and fractional shares are not uniformly defined under the Markets in Financial Instruments Directive (MiFID II) or the Markets in Financial Instruments Regulation (MiFIR), resulting in regulatory inconsistencies across the EU. ESMA states that while it has already taken action through its 2023 public statement to protect retail investors, uncertainty continues. The inconsistent treatment of fractional shares has the following key effects: (i) it impacts transparency and reporting requirements, (ii) it affects compliance with the MiFID systematic internaliser and share trading obligation rules; and (iii) it impacts the calculation of thresholds for data reporting services providers derogation criteria. ESMA believes consistent classification would help create a level playing field for firms and support retail participation in this market segment. ESMA suggests it would be beneficial to clarify that fractional shares, which replicate the key characteristics and trading environment of shares, should remain subject to the MiFIR rules for shares. -
UK FCA consults on fees and levies for 2025/26
8 April 2025
The UK Financial Conduct Authority (FCA) has published a consultation paper (CP25/7) on its rates proposals for regulated fees and levies for 2025/26 and proposed amendments to the FEES manual. The annual funding requirement (AFR) required for the FCA to deliver its programme of work for the year is £783.5 million, which includes the baseline cost of ongoing regulatory activities and exceptional projects. The FCA's key proposals, among others, include adjustment to periodic fees, application fees, and levies for the Financial Ombudsman Service, Money and Pensions Service and other government departments with plans to also introduce a new fee-block (CC4) for motor finance lenders involved in discretionary commission arrangements (DCA) between 2007 and 2021 to recover costs of the FCA's review following the Court of Appeal ruling on the motor finance commission complaints. The consultation closes 13 May, with final rules expected to be published in early July.Topic : Fees / Levies -
EMIR 3: ESMA proposes clearing thresholds
8 April 2025
The European Securities and Markets Authority (ESMA) has published a consultation paper setting out draft regulatory technical standards (RTS) amending the RTS on the clearing thresholds (CTs) under the European Markets Infrastructure Regulation (EMIR). Under the latest revisions to EMIR, known as EMIR 3, the calculation of CTs will be amended (once these RTS enter into force), shifting away from distinguishing between exchange-traded derivatives (ETD) and over-the-counter (OTC) derivatives (where only OTC derivatives counted towards the threshold) to a framework based on the level of OTC-uncleared transactions. Financial counterparties (FCs) will need to calculate their uncleared positions and their aggregate OTC exposure (both cleared and uncleared) to determine if they exceed the CTs. Non-financial counterparties (NFCs) will be required to count only their uncleared positions towards the CTs.
Read more.Topic : Derivatives -
New FCA work programme for 2025/26
8 April 2025
The UK Financial Conduct Authority (FCA) has published its work programme for 2025/26, alongside a press release summarising its approach to supporting the testing of innovative products and new firms. The work programme sets out how the FCA will deliver its four strategic priorities of being a smarter regulator, supporting growth, helping consumers navigate their financial lives and fighting financial crime, as set out in the FCA's five year strategy.
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BoE response to discussion paper on reviewing access to RTGS accounts for settlement
8 April 2025
On 8 April, the Bank of England (BoE) has published its response to the discussion paper on reviewing access to Real-Time Gross Settlement (RTGS) accounts for settlement. In the discussion paper, initially published on 8 February 2024, the BoE requested for feedback on four priority areas to further improve access to settlement in central bank money, remove unwarranted barriers, and realise the capabilities and benefits of the renewed RTGS service. The feedback was generally supportive of the review and underpinned the importance of clear, transparent processes and criteria to facilitate access to RTGS accounts.
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ESMA publishes technical advice on research provisions under MiFID Delegated Directive
8 April 2025
The European Securities and Markets Authority (ESMA) has published a final report setting out its technical advice to the European Commission on the amendments to the research provisions in the context of the Listing Act legislative package. The Listing Act amended the EU requirements in the Markets in Financial Instruments Directive (MiFID II) on how payments are made for investment research, enabling joint payments for execution services and research for all issuers, irrespective of the market capitalisation of the issuers covered by the research. EU firms will be permitted to choose whether to make joint or separate payments for third-party research and execution services. This follows the UK's approach which resulted in amended rules taking effect in August 2024. We discuss UK changes in our note, "UK allows bundled payments for third-party research and trading commissions." EU member states will have until 4 June 2026 to transpose the Listing Act changes to MiFID II. ESMA's advice relates to the changes to Article 13 of Commission Delegated Directive (EU) 2017/593, known as the MiFID II Delegated Directive, which sets out the conditions that firms have to meet under the regime that required unbundled payments for research. ESMA proposes that where an investment firm chooses to use a separate research payment account, most of the existing conditions should continue to apply. Where an investment firm pays jointly for execution services and research, ESMA's advice is to require those firms to enter into an agreement on joint payments that (i) prevents the investment firm from paying substantially more for the research component than would be the case if the firm paid directly for the research; and (ii) does not impede the firm's ability to comply with the best execution requirements.Topic : MiFID II -
EBA peer review report on the performance of stress tests by deposit guarantee schemes
7 April 2025
The European Banking Authority (EBA) has published a report on the findings of a peer review of the performance of stress tests by deposit guarantee schemes (DGS). The aim of the peer review was to assess the performance of stress tests by seven national DGS against five benchmarks stemming from the Deposit Guarantee Schemes Directive and the revised guidelines on stress tests of DGS. The EBA found that (i) all DGS effectively developed their stress testing programs in accordance with the methodology outlined in the guidelines, with only minor shortcomings, (ii) all DGS demonstrated effective cooperation with relevant authorities, with robust stress testing of these arrangements, (iii) five DGS could fully or largely showcase increased severity and complexity of their testing scenarios to adequately stress test their ability to intervene, with one partially demonstrating this and one, not at all, and (iv) five DGS could fully or largely showcase that they identified areas for improvement in their systems and have taken, or have planned to, take measures to address these areas, with only two partially demonstrating this. The report also details several follow-up measures for all EU DGS focusing on the prompt development of stress tests; the performance of stress tests; cooperation; severity and complexity of stress tests; and the identification of areas of improvement. The EBA will conduct a follow-up peer review of the implementation of the measures included in the report in two years.Topic : Recovery and Resolution -
UK seeks feedback on revisions to regulation of alternative investment fund managers
7 April 2025
The HM Treasury (HMT) has launched a consultation on proposals to revise the legislative regime applicable to Alternative Investment Fund Managers (AIFMs) and the depositories they use. The government intends to use the powers and framework provided for under the Financial Services and Markets Act 2023 to repeal the existing AIFM regulations, maintaining or replacing those with key legislative provisions and moving much of the detail to the FCA's Handbook. The FCA has also issued a call for input, together with a press release and has updated the FCA's webpage, setting out its proposed approach to regulating AIFMs within HMT's proposed framework.
Read more.Topic : Fund Regulation -
EBA 2024 reports: Market and credit risk benchmarking exercises
4 April 2025
The European Banking Authority (EBA) has published its 2024 Reports on the annual market and credit risk benchmarking exercises. Both reports are mandated by Article 78 of the Capital Requirements Directive to assist competent authorities at monitoring the consistency of risk weighted assets (RWAs) across all EU institutions authorised to use internal approaches for the calculation of capital requirements. Regarding market risk, the report summarises the conclusions drawn from a hypothetical portfolio exercise conducted in 2023/24, performed on a sample of 43 European banks from 13 jurisdictions. The results confirm that most participating banks in the exercise have seen a relatively low dispersion in the initial market valuation, though slightly higher compared to 2023. However, there was a decrease in the dispersion of risk measures submissions compared to the previous exercise, as well as variability in general through most exercises, owing to better data submissions by participating banks because of improved instructions, knowledge of the portfolio and the resolution of issues encountered in the previous exercise. The EBA has also released, for the first time, a specific report on the fundamental review of the trading book Alternative Standardised Approach (ASA). This report expands the findings of the market risk report. In the future, benchmarking exercises will be extended to banks that apply the ASA methodology independently of the current requirement to obtain approval to adopt internal models for market risk own funds requirements. For credit risk, the results confirmed that the variability of RWAs remained stable compared to the previous year, but for some asset classes and parameters, a reduction could be observed in the longer run.Topic : Prudential Regulation -
European Parliament votes to delay sustainability and due diligence requirements
3 April 2025
The European Parliament has voted in favour of its 'stop the clock proposal' to delay the application of new sustainability reporting and due diligence under the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). The delay was proposed as part of the European Commission's (EC) "Omnibus I" simplification package, designed to address overlapping or disproportionate rules that are creating unnecessary burdens for EU businesses. The proposal postpones the application of CSRD reporting requirements for companies due to report in 2026 and 2027 (referred to as second and third wave companies), and postpones the transposition deadline and first wave application of the CSDDD by one year (to 2028). The EC had invited the co-legislators to prioritise this proposal in particular, and the Council of the EU endorsed the proposal on 26 March. The draft rules will need to be formally approved by the Council, and then can enter into force.Topic : Sustainable Finance -
ESMA MiFIR review consultation package on derivatives transparency, package orders and CTP data
3 April 2025
The European Securities and Markets Authority (ESMA) has launched its consultation in relation to derivatives transparency, package orders, and input and output data for consolidated tape providers (CTPs). This is the fourth ESMA consultation package under the EU's MiFIR review workstream, and proposes a new standalone set of regulatory technical standards (RTS) for derivative transparency ahead of a future comprehensive recast of the current RTS on non-equity transparency (RTS 2). It also includes draft amends to the respective RTS for package orders and data for CTPs. ESMA proposes a new derivatives transparency regime as per the new scope defined by MiFIR, which was amended so that the regime applies to derivatives based on certain characteristics rather than simply delineating between those traded on- and off-venue. The consultation sets out detailed calibrations as to liquidity determination (relevant for both pre-trade transparency waivers and post-trade deferrals), and the size thresholds, and duration periods to be used for the new deferral regime. The deadline for comments is 3 July. ESMA will then publish its final report, and submit the technical standards to the European Commission in Q4. -
UK FCA policy statement on the DTO and PTRR services
3 April 2025
The UK Financial Conduct Authority (FCA) has published its policy statement (PS25/2) with final rules on the classes of derivatives subject to the derivatives trading obligation (DTO) and the new framework for the exemptions for post-trade risk reduction services (PTRR) in respect of the DTO, best execution and transparency. The original DTO and PTRR proposals were consulted on in July 2024, with an earlier consultation in December 2023 including proposals in relation to post-trade transparency for derivatives.
Read more.Topic : MiFID II -
UK FOS Plans and Budget published for 2025/2026
3 April 2025
The UK Financial Ombudsman Service (FOS) has published its plans and budget for 2025/2026, together with an accompanying press release. The FOS notes that there has been more uncertainty than usual over the last year, and this will continue into the next year. This is, in particular, due to the ongoing legal and regulatory developments in relation to motor finance commission complaints and the introduction of a fee for certain professional representatives, which the FOS expects will lead to a volume reduction as it will receive fewer cases without merit. In addition, the FOS expect disputed transactions cases in relation to fraud and scams to remain high, and an increase in respect of volumes of complaints in relation to authorised push payments. Despite the high level of complaints being referred, the FOS is not raising the case fees for businesses, and will be maintaining the reduced compulsory and voluntary jurisdiction levies. The FOS also confirms that it will carry out work over the course of the coming year to understand the impact of the introduction of regulatory rules in relation to deferred payment credit (previously referred to as buy now, pay later), which the FCA has said that it will consult on in the upcoming 2025/2026 period. -
UK FCA consultation on loan to income flow limit in mortgage lending
3 April 2025
The UK Financial Conduct Authority (FCA) has published a consultation on proposed amendments to the Prudential Regulation Authority's (PRA) rulebook and FCA guidance on the de minimis threshold for the loan to income flow limit in mortgage lending (CP25/6). The consultation follows the UK Financial Policy Committee's recommendation in November 2024 that the threshold be raised so that the loan to income flow limit would only apply to lenders extending residential mortgages above GBP150 million (up from GBP100 million, the current threshold) per four rolling quarters. The changes proposed amend the relevant references to the GBP100m figure used in the PRA rulebook and the FCA guidance and make some other minor consequential changes. The deadline for comments is 8 May.Topic : Consumer / Retail -
EBA guidelines on reporting templates to assist competent authorities with supervisory duties under MiCAR
2 April 2025
The European Banking Authority (EBA) has updated its webpage with the official translations of the guidelines on templates to assist competent authorities in performing their supervisory duties regarding issuers' compliance under Titles III and IV of the Markets in crypto-assets Regulation, initially published on 26 March. These guidelines apply to competent authorities, issuers of asset-referenced tokens (ARTs) and issuers of e-money tokens (EMTs) and specify instructions and common templates to be used by ART and EMT issuers to provide competent authorities and the EBA with the necessary information, and to collect the data they need from relevant crypto-asset service providers. The guidelines apply from 26 May. Competent authorities must notify the EBA by 26 May whether they (i) comply, (ii) do not comply, but intend to comply, or (iii) do not comply and do not intend to comply with the guidelines, with their reasons for not complying. In the absence of any notification by this deadline, competent authorities will be considered by the EBA to be non-compliant.Topic : Fees / Levies -
UK CMA review of the SME Banking Undertakings 2002
2 April 2025
The UK's Competition and Markets Authority (CMA) has confirmed its decision to review the remaining SME Banking Undertakings 2002 and has launched its consultation seeking views on whether the undertakings need to be updated. In 2002, certain banks signed up a set of legal obligations to target specific features of the SME banking markets which were barriers to competition. This included the provisions referred to as the limitation on bundling provisions, which restricted the banks from requiring an SME customer to open or maintain a business current account in order to access business loans or deposit accounts. Although most of the undertakings were released by the CMA in 2016, the limitation on bundling provisions still remains. The CMA is therefore looking for views and evidence on changes to the structure and competitiveness of SME banking markets since 2016 and whether the limitation on bundling provisions is still appropriate. The deadline for comments is 7 May. In terms of next steps, the CMA expects to consult on its provisional decision in summer, with a final decision published in autumn.Topic : Other Developments -
UK FCA feedback on responses to discussion paper on finance for positive sustainable change
2 April 2025
The UK Financial Conduct Authority (FCA) has published feedback on the views it received in response to its discussion paper DP 23/1 on finance for positive sustainable change. The discussion paper included sections on a number of areas including business strategy, senior management, accountability, incentives, remuneration and training. The feedback notes that a common theme across responses was the need to wait for new regulation in this area, for example the consumer duty and sustainability disclosure requirements (SDR), to become embedded and a number of responses considered that the existing rules were sufficient. The FCA confirms that it is not currently considering introducing new rules on the discussion paper topics (although notes that since DP 23/1 was published, certain new rules have been introduced including the SDR and labelling rules, and the anti-greenwashing rule). The FCA does, however, confirm that it will continue to monitor developments and promote the themes covered by the discussion paper to help the sustainable finance market grow and promote the UK as a leading financial centre.Topic : Sustainable Finance -
SRB consultation on expectations on valuation capabilities
2 April 2025
The Single Resolution Board (SRB) has published a press release confirming it had launched a public consultation on its expectations on valuation capabilities (dated 1 April). The consultation forms part of the Single Resolution Mechanism's Vision 2028 strategy. The expectations, which banks are expected to consider when implementing Principle 5.2 of the SRB's Expectations for Banks which requires banks to have management information systems in place for valuations. The expectations document, which is published alongside the relevant annexes, covers three key areas: (i) valuation data index, which includes an enhanced version of the SRB valuation data set and comprises information and documentation that is already available at bank level and publicly available or accessible to the SRB; (ii) data repositories for resolution, which is expected to be populated with valuation data index (see (i) above) information; and (iii) valuation playbooks. The deadline for comments is 2 July.Topic : Recovery and Resolution -
UK PSR consults on remedies following market review of card scheme and processing fees
2 April 2025
The UK Payment Systems Regulator (PSR) has published its consultation CP25/1 on potential remedies to address findings following the PSR's final report (published on 6 March) on its review of card schemes and processing fees. The consultation seeks to address the findings of the review, namely that there were ineffective competitive restraints, fees have risen without sufficient evidence of the rationale, and there is insufficiently clear and detailed information provided in respect of costs and pricing. The proposals in the consultation paper relate to:- Information transparency and complexity remedies – to ensure that acquirers have sufficient information to understand the fees they are charged and enable merchants to make informed decisions about fees. The PSR is also seeking input on the reduction of the volume of fees being charged, and complexity.
- Regulatory financial reporting – this would provide the PSR with more detailed and accurate information of the profits the card schemes earn from UK businesses so it can monitor their performance and assess whether any future regulatory action is needed.
Read more. -
ESMA update on consolidated tape provider for bonds
2 April 2025
The European Securities and Markets Authority (ESMA) has issued a press release in preparation for the launch of a consolidated tape for bonds. The selection process for a provider is in motion and ESMA intends to decide on the selected applicant by early July, at which point data contributors should engage with the selected provider in relation to practical and technical matters. There will then be an expedited authorisation process for the selected provider, and when the application is complete, ESMA will determine whether authorisation is to be granted within three months. ESMA also acknowledges that it has the ability to grant a transition period if requested by the applicant, if needed. In terms of the current expected timeline, authorisation of the bond consolidated tape provider is expected in Q3/4, with the launch of the first selection for an equity consolidated tape provider in June, and the launch of the first selection for an over-the-counter derivatives consolidated tape provider in Q1 2026.Topic : MiFID II -
ESMA 2024 CCP peer review report
2 April 2025
The European Securities and Markets Authority (ESMA) has published its 2024 peer review report in respect of central counterparties (CCPs), as required by Regulation (EU) No 648/2012 (EMIR). The focus of the report is supervisory activities related to the EMIR requirements for outsourcing and intragroup governance arrangements. The report covered supervisory activities of all competent authorities of authorised CCPs conducted in 2022 and 2023 and found that for the most part, competent authorities managed CCP colleges compliantly. In terms of the three supervisory expectations specified in the mandate for this peer review, the report concluded the following:- Regarding the notification process for new outsourcing arrangements, most competent authorities met (fully or largely) this expectation with the exception of three authorities which did not require CCPs to have complete written outsourcing agreements in place.
- Regarding the compliance of CCP outsourcing arrangements with EMIR requirements, all competent authorities met this expectation.
- Regarding the compliance with EMIR of CCP governance arrangements in relation to outsourcing, all competent authorities met (fully or largely) this expectation.
The report includes recommendations directed at specific competent authorities in respect of areas identified for improvement. Authorities are expected to address these recommendations within a year from the publication of the report. -
UK FCA updated webpage on cash-based money laundering
2 April 2025
The UK Financial Conduct Authority (FCA) has updated its webpage on cash-based money laundering and confirmed its intention to carry out a multi-firm review in this area in the financial year 2025/2026. The webpage sets out an overview of the FCA's work to reduce money laundering through cash deposit services such as those provided by the Post Office under the terms of the Banking Framework Agreement. The FCA sets out its expectations for firms who are part of the Banking Framework Agreement, including measures in relation to transaction verification and monitoring, deposit limits, suspicious activity reports, intelligence sharing and training. More broadly, the FCA expects firms to focus on communication with their customers. As mentioned above, the FCA also confirms that it is planning a multi-firm review in the financial year 2025/2026 in relation to the financial crime risks from cash-based money laundering. This review will be broader in scope than the Post Office and will consider other routes by which cash enters the financial system.Topic : Financial Crime and Sanctions -
ECB opinion on moving to T+1
1 April 2025
The European Central Bank (ECB) has published its opinion of 31 March on the proposal to shorten the securities settlement cycle from two business days (T+2) to one business day after trading takes place (T+1), by amending the Central Securities Depositories Regulation. The opinion was published in response to requests from the Council of the European Union and the European Parliament. The ECB confirms that it welcomes the proposed move to T+1, and notes that moving to T+1 would facilitate the objective of promoting settlement efficiency in the European Union (EU) and ensure the EU was aligned with other global jurisdictions such as the UK which have also moved, or are moving, to a shorter securities settlement cycle. The EU T+1 Industry Taskforce is currently working towards a T+1 go-live date of 11 October 2027. -
ICO reports findings of children's data protection in financial services
1 April 2025
The Information Commissioner's Office (ICO) has published its report alongside a press release following a review into the gathering and use of children's data in financial services, particularly from services supplying them with current accounts, savings accounts, trust accounts, ISAs and prepaid cards. The report, part of the ICO's strategic ICO25 plan, highlights areas of good practice, while identifying key areas requiring improvement such as: (i) governance – while most organisations have data protection policies in place, there is limited monitoring of compliance with these policies, with only a small percentage providing specific training; (ii) transparency – many organisations lack age-appropriate privacy information and rely on parents or guardians to convey terms to children, creating a risk of children either misunderstanding or not understanding information at all; (iii) consent – some organisations are failing to review and refresh parental consent received on behalf of a child, as the child matures, making original consent likely void until it is obtained from the child; and (iv) contact including marketing – most organisations do not consider the challenges which arise in distinguishing parents and children when communications are provided, thereby increasing non-compliance risks. The ICO's findings highlight an urgent call for organisations, particularly in the financial services sector offering products for children, to align UK GDPR standards in practice, to mitigate risks and advance in compliance efforts.Topic : Other Developments -
EU platform on sustainable finance reports on technical criteria for new activities and review of the Climate Delegated Act
1 April 2025
Following its call for feedback on a draft report, The Platform on Sustainable Finance, an advisory body to the European Commission (EC) has published a final report on technical criterial for new activities and first review of the Climate Delegated Act. The report covers the activities and technical screening criteria to be updated or included in the EU taxonomy. The report sets out recommendations relating to: (i) the review of the criteria and analysis for the EU Taxonomy Climate Delegated Act; (ii) new activities mandated by the European Commission; (iii) new activities mandated by the European Commission but not completed; and (iv) further recommendations for climate change adaptation.Topic : Sustainable Finance -
UK FOS new charging structure applied
1 April 2025
The UK Financial Ombudsman Service (FOS) has updated its webpage confirming that the new charging structure, which includes charges for professional representatives referring cases, now applies. The changes have been made in accordance with the two implementing instruments (FOS 2025/1 and FOS 2025/2) whose relevant provisions came into force on 1 April. The rules have been introduced to make the funding arrangements for the FOS fairer, and to encourage professional representatives – including authorised claims management companies and certain legal professionals – to give complaints more consideration before deciding to refer them to the FOS. As detailed in the policy statement published on 7 February, professional representatives can now refer up to ten cases for free each financial year. Subsequently, they will be charged £250 for each additional case but will receive £175 back in credit if the case outcome is in favour of the consumer. In terms of the charges to be paid by the firm against whom the complaint is made, if the complaint is not upheld or withdrawn, the firm's fee will be reduced to £475 instead of £650 (these figures being subject to any group charging arrangement). Individuals, families, friends, charities, and voluntary organisations who bring cases directly to the FOS will continue to be able to use their service for free.