The UK Financial Conduct Authority (FCA) has published a research note examining the potential applications of quantum computing within UK financial services, and exploring how firms can prepare for their emergence. Points of particular interest include: (i) the UK is well-positioned to benefit from quantum computing in financial services, but coordinated action across industry, government, academia and regulators is required to realise this potential; (ii) leading firms are already building quantum readiness strategies, focusing on optimisation, machine learning and stochastic modelling through hybrid quantum classical methods; (iii) regulatory change is not immediately required, though future quantum applications may intersect with existing themes of explainability and operational resilience which are already central in regulatory frameworks (iv) regulatory awareness among quantum computing vendors remains limited, presenting an opportunity to build early relationships with regulators, which can help provide technical and regulatory clarity; and (v) regulators could evolve existing innovation tools to better support quantum development, including sandboxes, which could be expanded to offer firms safe environments for experimentation.

The European Banking Authority (EBA) has published its 2026 work programme, setting out its key priorities and planned initiatives. The programme is driven by three overarching priorities: (i) developing a rulebook to foster a resilient and efficient financial single market, with proposals to simplify rules, improve public sector coordination and assess the framework's impact. This includes continuing work on the EU banking package and advancing proposals on the forthcoming revised Payment Services Directive 3, the Payment Services Regulation and the Financial Data Access Act; (ii) strengthening risk assessment capabilities through improved data, methodologies and oversight under the Digital Operational Resilience Act (for critical ICT third-party providers), Markets in Crypto-Assets Regulation (for supervision of crypto-asset issuers) and European Market Infrastructure Regulation (for validation of initial margin models); and (iii) advancing innovation and technological capacity across the financial sector, with a focus on AI and machine learning, including its contribution to the implementation of the EU AI Act. In parallel, the EBA has published a report (EBA/REP/2025/26) proposing ways to streamline the EU's regulatory and supervisory framework, following a comprehensive review earlier this year of four key areas: level 2 and 3 measures, reporting burdens on financial institutions, the EBA's role in the prudential framework and its internal processes. The review resulted in 21 recommendations which are set out in the report.

The UK Prudential Regulation Authority (PRA) has published a Dear CFO letter to selected deposit-takers providing thematic feedback from its review of written reports from auditors of UK-headquartered banks and building societies. The PRA's focus this year was accounting for IFRS 9 expected credit losses (ECL) and climate risk. The review highlighted several key findings: (i) model risk remains elevated in light of persistent macroeconomic and geopolitical uncertainty, with current credit risk factors differing from those that existing models were built to capture. The PRA emphasises the need for firms to critically assess the responsiveness of their modelling frameworks and the completeness of post-model adjustments; (ii) firms are making progress on multi-year model redevelopment plans to address longstanding limitations. The PRA encourages firms to ensure that investment is appropriately targeted to better capture risk, and that it is supported by strong governance and controls; (iii) the risk of historical bias in Loss Given Default (LGD) estimates continues, and so the PRA urges firms to strengthen their processes to challenge the realism of recovery assumptions, particularly underpinning LGD for vulnerable sectors and borrowers; and (iv) regarding climate risks, the PRA acknowledges improvements in firms' capabilities to incorporate climate-related factors into ECL modelling, despite ongoing data limitations, and encourages further efforts to align with existing supervisory expectations, including those set out in its recent consultation.

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The European Securities and Markets Authority (ESMA) has published official translations of its final report updating the 2021 guidelines on outsourcing to cloud service providers. The updated guidelines, initially published in July, narrow the scope to exclude entities covered by the Digital Operational Resilience Act (DORA), ensuring they remain applicable only to financial entities outside DORA's remit, specifically, certain types of depositary under the Alternative Investment Fund Managers Directive and the Undertakings for Collective Investment in Transferable Securities Directive. The revision aims to prevent regulatory overlap, as DORA now governs ICT third-party risk for most financial entities. The revised guidelines apply from 30 September. National competent authorities must notify ESMA by 30 November whether they comply or intend to comply with the guidelines, and must inform ESMA of their reasons for non-compliance. Firms are not required to report on whether they comply.

The UK Financial Conduct Authority (FCA) has published Market Watch 84, sharing observations on the first year of UK European Market Infrastructure Regulation (EMIR) Refit implementation. The Refit, effective from 30 September 2024, made changes to the UK EMIR reporting regime aimed to enhance transparency and data quality in derivatives reporting. The FCA reports that by the end of the transition period on 31 March, 95% of reports were successfully uplifted, though some counterparties failed to meet the deadline. The FCA identified two main drivers for this: (i) inadequate resource planning, which led to delays in system testing, late discovery of issues and insufficient time for resolution. The FCA emphasises the need for firms to allocate appropriate resources to change management supported by clear policies, procedures and effective change-related documentation; and (ii) over-reliance on external vendors, who struggled to support clients due to limited capacity and competing priorities. The FCA reminds firms that while vendors may assist with reporting, the responsibility for data accuracy and completeness remains with the counterparty.

The FCA also raised concerns over the low volume of breach notifications received, suggesting underreporting of material issues. Firms are reminded of their obligation to ensure complete and accurate reporting, regardless of vendor involvement, and to notify the FCA promptly of any material errors. Looking ahead, the FCA's focus over the next 12 months will be on improving data quality, monitoring reconciliation rates and assessing firms' systems and controls. Counterparties should review their arrangements in light of these priorities.

The UK Financial Conduct Authority (FCA) has published a letter to HM Treasury (HMT), addressing concerns about the consumer duty's application to wholesale firms. While the consumer duty aims to enhance retail consumer outcomes, the FCA clarifies that wholesale activities with minimal retail impact generally fall outside its scope. Following extensive industry engagement, the FCA acknowledges confusion and disproportionate compliance burdens. In response, it outlines a four-point action plan and suggests legislative updates for HMT to consider.

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The European Banking Authority (EBA) has announced the launch of its 2025 EU-wide transparency exercise, aimed at enhancing transparency and market discipline across the EU financial system. The exercise complements banks' own Pillar 3 disclosures under the Capital Requirements Directive (CRD) and will cover data from over 100 major EU banks, including capital positions, financial assets, risk exposures, sovereign exposures and asset quality, spanning Q3 2024 to Q2 2025. The results, to be published in December alongside the EBA's risk assessment report, will be based solely on supervisory reporting data, ensuring no additional burden on banks. The EBA will also provide interactive tools for data comparison across time, jurisdictions and individual banks.

HM Treasury (HMT) has launched a consultation and call for evidence to assess potential enhancements to the UK's Commercial Credit Data Sharing (CCDS) scheme. CCDS, established under the Small and Medium Sized Business (Credit Information) Regulations 2015, mandates that designated banks share SME credit data with designated credit reference agencies (CRAs) to improve access to finance. The consultation sets out specific proposals aimed at improving CCDS operations, including a standardised data format, enhancing data amendment processes, tightening deadlines for data submission and exploring expansion of the scope of CCDS to include a wider range of finance providers. HMT is also seeking views on several related areas, including whether CRAs should set up online data amendment portals (similar to those used under the consumer credit data sharing scheme) and the costs and benefits of them doing so; whether changes are needed to the CCDS regime to improve the timely amendment of data by CRAs and/or lenders, which could potentially be supported through legislative changes or guidance; and the status quo for amending data and what challenges may arise to help formulate a position. The deadline for comments is 11:59am on 20 November. The consultation will help determine whether changes should be made to the existing CCDS regulations or whether policy objectives can be achieved through non-legislative means.

The Single Resolution Board (SRB) has published its final operational guidance on resolvability testing for banks under the SRB's remit, following its March consultation. The guidance outlines a multi-annual testing programme designed to enhance banks' crisis readiness and ensure the operational viability of resolution strategies. It provides practical instructions for implementing the revised EBA guidelines on resolvability, covering testing methods, governance, environments and follow-up procedures. The framework supports the SRM Vision 2028 and introduces a harmonised approach to resolvability self-assessment. Following feedback, several sections of the guidance text have been simplified, and clarification has been provided on aspects such as testing environments. The multi-annual testing programme will define the testing exercises banks will conduct over a three-year period, with an annual review to incorporate developments from the previous year. A natural feedback loop exists between resolvability assessment and testing. A feedback statement has been published alongside the final version of the guidance.

The UK Financial Conduct Authority (FCA) has published consultation paper CP25/26 proposing consequential updates to the FCA Handbook following its June consultation (now closed) on a new regulated activity of "targeted support". This new form of support seeks to help consumers navigate their financial lives by enabling firms to offer investment product suggestions to groups of consumers with shared characteristics. The FCA is now consulting on additional Handbook changes to ensure that the targeted support proposals work effectively with existing requirements. Specifically, the FCA seeks to refine earlier proposals, including rules on commissions, charging structures and disclosure obligations, and ensure that the new regulated activity aligns with the wider regulatory framework, such as reporting requirements. The changes impact the glossary of definitions and several sourcebooks. The deadline for comments is 17 October, with a final policy statement incorporating feedback from this and the June consultation, expected in December.

The UK Financial Conduct Authority (FCA) has issued a statement highlighting the growing concern over high-risk investment schemes promoted by unregulated firms. The FCA notes that these schemes, which often involve unlisted loan notes or mini-bonds used to fund property developments, may be marketed to investors through enticing websites, marketing campaigns and social media influencer promotions. Many of these firms operate outside the FCA's regulatory remit due to legal exemptions, meaning investors may not have access to the UK Financial Ombudsman Service or the Financial Services Compensation Scheme if things go wrong. The FCA emphasises that such investments are generally suitable only for experienced or self-certified "sophisticated investors" under strict criteria and urges individuals to verify a firm's regulatory status using its register, before investing. The statement also includes a section of "top tips to investors" which includes, among others, advising caution around promised high returns, encouraging diversification of investments and recommending limited exposure to high-risk investments to no more than 10% of an investment portfolio.

The European Securities and Markets Authority (ESMA) has published updated reporting instructions and XML schema (version 1.2.0) for weekly commodity derivatives position reporting under MiFID II. The changes reflect amendments to ITS 4, as outlined in ESMA's final report on proposed amendments to MiFID II technical standards in relation to commodity derivatives. The amendments are in response to changes introduced by the MiFID II review, submitted to the European Commission in December 2024 and currently pending adoption. Beyond the changes directly originating from MiFID II, such as the requirement to publish two weekly reports and the exclusion of (spot) emission allowances from position reporting, the update also introduces harmonisation of reporting units for energy derivatives. The new schema and instructions will apply from 1 April 2026, after which reporting entities must use version 1.2.0 exclusively.

A Delegated Regulation amending Delegated Regulation 876/2013 supplementing EMIR (Regulation 648/2012) regarding changes to the functioning and management of colleges for central counterparties, has been published in the Official Journal of the European Union (OJ). The amendments are limited in scope and aim to align the existing regulatory framework with recent changes made by Regulation 2024/2987—part of the broader EMIR 3 reform package. The Regulation will enter into force on 15 October.

The European Banking Authority (EBA) has published its advice and recommendations to the European Commission, in response to the July 2023 Call for Advice (CfA) on the review and performance of the EU covered bond framework. The framework comprises the Covered Bond Directive (Directive 2019/2162) and Regulation 2019/2160 on exposures in the form of covered bonds amending the Capital Requirements Regulation. The EBA submitted its advice alongside a letter to John Berrigan, Director-General at DG FISMA. The EBA's recommendations are intended to: (i) harmonise further the EU covered bond framework; (ii) strengthen safeguards and disclosure in all national frameworks; (iii) simplify the framework by bringing the Covered Bond Directive into closer alignment with the Capital Requirements Regulation; and (iv) develop and expand the framework including with the introduction of a third-country equivalence regime.

The Bank of England (BoE) has published a consultation paper proposing the partial revocation of the UK Technical Standard (UKTS) 2018/1624 on resolution reporting, specifically relating to COREP13 templates. The proposal seeks to remove six templates that collect on- and off-balance sheet data from firms for resolution planning, to reduce duplicative and non-essential reporting for firms regulated by the UK Prudential Regulation Authority (PRA). The BoE intends to rely on alternative means to have access to information it requires to meet its obligations, such as the Resolvability Assessment Framework and revised PRA Minimum Requirement for Own Funds and Eligible Liabilities (MREL) reporting templates expected to take effect from 1 January 2027. The BoE plans to publish the revised policy by the end of Q1 2026, with the proposed revocation date taking effect from 1 April 2026, ahead of the next annual reporting cycle. Firms would no longer be required to submit the six deleted templates, although they may remain visible in the RegData reporting system due to technical limitations. In such cases, firms are expected to use simple negative filing indicators. The remaining COREP13 templates will be kept under review as part of ongoing efforts to simplify resolution-related reporting. The deadline for comments is 21 November, with the proposed changes set out in the draft Bank Resolution Standards Instrument: The Technical Standards (COREP13) Instrument 2025.

The UK Prudential Regulation Authority (PRA) has published a consultation paper CP21/25, proposing changes to streamline regulatory reporting for banks as part of its Future Banking Data project. The proposals include: (i) deleting 34 Financial Reporting (FINREP) templates; (ii) consolidating FINREP requirements into a single chapter within the PRA Rulebook; and (iii) removing three further templates including two Common Reporting templates and PRA 109, which are now considered obsolete. These changes mark the first phase of broader efforts to simplify data collection and are intended to eliminate reporting that no longer materially contributes to the PRA's supervisory or policy objectives. The changes will be implemented through the draft statutory instrument and draft amendments to Supervisory Statement 34/15 on guidelines for completing regulatory reports, both of which are included in the appendices to the consultation paper. The deadline for comments is 22 October, with implementation proposed for 31 December. A discussion paper outlining the PRA's future approach to banking data is expected later this year. The consultation complements wider simplification efforts across the financial sector, including for resolution-related reporting, which is addressed in a separate consultation.

The Bank of England (BoE) has announced a consultation on discontinuing the collection and publication of statistical data via Form BN, on the further sectoral breakdown of non-resident business by UK Monetary Financial Institutions (MFIs). Following an internal review, the BoE concluded that the operational costs of collecting and publishing Form BN data outweigh its benefits, as sufficient non-resident data is already available through Forms CC and CL (albeit on a quarterly rather than monthly basis). If the proposal is confirmed, the final reference period for Form BN will be April 2026, with publication expected in May 2026. The deadline for comments, particularly on the impact of the proposal, is 31 December.

The Bank of England (BoE) has published its consultation response and policy statement confirming the expansion of mandatory ISO 20022 enhanced data requirements for CHAPS payments, following its 2024 consultation. Following feedback, it confirms that effective from November 2027, mandatory Purpose Code requirements will apply to all CHAPS payments through channels within direct participants' (DPs) control. The new requirements will not extend to payment initiation channels outside DPs' control at this stage, however, the BoE does expect more payments to move into DPs' control as ISO 20022 adoption increases. DPs are expected to communicate CHAPS requirements to all parties to whom they provide CHAPS access and are encouraged to implement systematic controls and customer education programmes to ensure successful adoption. Pay.UK will apply a similar approach for Faster Payments DPs and will continue to collaborate with the BoE to encourage adoption and best usage practices. While changes to the LEI policy was not part of the consultation, the BoE received feedback on its the approach to including LEIs within ISO 20022 payment messages. In response, the BoE describes steps taken to enhance the stakeholder experience in conjunction with other organisations in the annex to the policy statement. The BoE remains committed to providing at least 18 months' notice for future changes and, in line with this, expects to provide an update by May 2026 on LEI and structured remittance expansions.

HM Treasury has announced the formation of a "Transatlantic Taskforce for Markets of the Future", jointly established by UK Chancellor Rachel Reeves and U.S. Treasury Secretary Scott Bessent. The Taskforce aims to strengthen collaboration between the UK and U.S. financial systems, particularly in capital markets and digital assets. Reporting back with recommendations to both ministries through the UK-U.S. Financial Regulatory Working Group (FRWG), the Taskforce will explore short- and long-term opportunities on digital assets while legislation and regulatory regimes are still developing, and in wholesale digital markets innovation. It will also assess ways to reduce cross-border capital-raising burdens and enhance market competitiveness in both UK and U.S. markets. The Taskforce is expected to deliver its recommendations within 180 days.

The Swiss Financial Market Supervisory Authority, the UK Financial Conduct Authority (FCA), and the Bank of England (including the UK Prudential Regulation Authority) have entered into a Memorandum of Understanding (MoU) under Article 14 of the Berne Financial Services Agreement (BFSA). The MoU establishes a framework for supervisory cooperation and information sharing between the UK and Switzerland in the insurance and investment services sectors. It sets out procedures for mutual assistance, the exchange of confidential information, and sector-specific cooperation, including notification, reporting and the maintenance of public registers for covered financial services suppliers. The general provisions of the MoU are complemented by annexes and an appendix, which further specify aspects of cooperation.

Delegated Regulation 2025/1496 amending Regulation 575/2013 (the Capital Requirements Regulation or CRR) regarding the date of application of the own funds requirements for market risk has been published in the Official Journal of the European Union (OJ). While the application of the new market risk requirements, which form part of the Fundamental Review of the Trading Book (FRTB) under the Basel III international standards, had already been postponed to 1 January 2026, this Delegated Regulation further delays their application to 1 January 2027. It follows continued delays and uncertainty regarding FRTB implementation in other key jurisdictions, raising concerns about a level playing field for internationally active banks. Until the new date, financial institutions must continue to apply the existing market risk framework as set out in the CRR as of 8 July 2024 and maintain current reporting and disclosure requirements under pre-FRTB approaches. Competent authorities are encouraged to exercise flexibility in their assessment of internal models during this transitional period to avoid unintended impacts on own funds requirements that are not linked to increases in the underlying market risk. The Regulation entered into force on 20 September and applies from 1 January 2026.

The European Supervisory Authorities (ESAs, comprising the European Banking Authority, the European Insurance and Occupational Pensions Authority, and the European Securities Markets Authority) have published the Joint Committee's Autumn 2025 report, highlighting global risks to the EU financial system and recommending policy actions amid instability. The risks, attributed to ongoing geopolitical tensions including the U.S.'s imposition of widespread tariffs and continued conflicts in Ukraine and the Middle East, are said to have led to downward revisions in global and EU growth forecasts and divergence in monetary policy between the EU and U.S.

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The UK Financial Conduct Authority (FCA) has published consultation paper CP25/25 (CP), alongside a press release, setting out its proposed regulatory framework for cryptoasset activities under the Financial Services and Markets Act 2000 (FSMA). This follows HM Treasury's (HMT) draft statutory instrument (SI) to bring qualifying cryptoasset activities within the scope of the Regulated Activities Order 2001 (RAO) and under the FCA's remit. Qualifying cryptoasset activities will include issuing qualifying stablecoins, safeguarding qualifying cryptoassets and specified investment cryptoassets, operating a qualifying cryptoasset trading platform (CATP), intermediation and staking. Firms and individuals undertaking these activities will require FCA authorisation before operating by way of business in the UK.

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The Central Counterparties (Transitional Provision) (Extension and Amendment) Regulations 2025 have been made and published alongside an explanatory memorandum. The Regulations extend key transitional provisions for the temporary recognition regime (TRR) for overseas central counterparties (CCPs) and for exposures to CCPs. First, the Regulations amend regulation 18 of the Central Counterparties (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2018 to extend to 31 December 2027 the TRR. This means that overseas CCPs that are in the TRR may continue offering clearing services in the UK while their recognition applications are being assessed by the Bank of England. It will also allow time for the revisions to the UK regime for UK and overseas CCPs to be finalised.

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The European Central Bank (ECB) has launched a consultation on a draft Guideline, accompanied by a press release, aimed at harmonising the supervisory approach of national competent authorities (NCAs) to non-performing exposures (NPEs) held by less significant institutions (LSIs). The Guideline seeks to address persistent legacy NPE challenges by establishing supervisory coverage expectations for exposures originated before 26 April 2019, which fall outside the scope of existing Capital Requirements Regulation deduction requirements. Developed in collaboration with NCAs, it reflects the ECB's oversight role within the Single Supervisory Mechanism, promoting the consistent application of high supervisory standards across participating Member States while allowing for the NCAs' supervisory discretion under the Pillar 2 framework. Building on the successful application of a similar approach for significant institutions since 2018, the Guideline is tailored to the specific characteristics of LSIs.

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The UK Financial Services and Markets Act 2023 (Capital Buffers and Macro-prudential Measures) (Consequential Amendments) Regulations 2025 have been made and an explanatory memorandum published. The Regulations are part of the continued process to repeal and replace assimilated EU financial services law following Brexit. The Regulations make consequential amendments to UK legislation following the replacement as of 31 July by the new Capital Buffers and Macro-prudential Measures Regulations 2025 (S.I. 2025/653) of the Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014 (S.I. 2014/894), which have been revoked. The Regulations amend existing UK legislation to replace references to the 2014 Capital Buffers Regulations with references to the Capital Buffers and Macroprudential Measures Regulations 2025. The Regulations will enter into force on 30 November.

Two Commission Regulations supplementing the Markets in Crypto-Assets Regulation have been published in the Official Journal of the European Union (OJ), namely the:

• Commission Delegated Regulation (EU) 2025/1125 of 5 June, which sets out regulatory technical standards specifying the information in an application for authorisation to offer asset-referenced tokens to the public or to seek their admission to trading; and
• Commission Implementing Regulation (EU) 2025/1126 of 5 June, which lays down implementing technical standards establishing standard forms, templates and procedures for the information to be included in such applications.

Both Regulations enter into force on the 20th day following publication in the OJ and apply from 5 October.

The Markets in Financial Instruments (Miscellaneous Amendments) Regulations 2025 have been made and an explanatory memorandum published. The Regulations form part of the continued process to repeal and replace assimilated EU financial services law following Brexit. Specifically, these Regulations will restate, with appropriate modifications, key definitions from the Commission Delegated Regulation (EU) 2017/565 (MiFID Org Regulation) into UK law. The main affected legislation includes the Financial Services and Markets Act 2000 and the Financial Services and Markets Act 2000 Regulated Activities Order 2001. Clarificatory changes are also made to the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges and Clearing Houses) Regulations 2001 and the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017, and related cross references are updated in the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005.

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The European Commission has adopted a Delegated Regulation supplementing the EU Green Bonds Regulation (Regulation (EU) 2023/2631) (EUGB) regarding regulatory technical standards (RTS) on the external review regime. From 21 June 2026, any entity wishing to provide external review services under the EUGB must be registered with and supervised by the European Securities Markets Authority (ESMA), which is also tasked with developing the relevant RTS/ITS specifying certain provisions for external reviewers. This Delegated Regulation sets out RTS relating to: (i) the conditions for the registration of external reviewers; (ii) the criteria for assessing the sound and prudent management of external reviewers; (iii) the knowledge, experience and training of the external reviewers' employees; and (iv) the conditions under which external reviewers can outsource their assessment activities. The Delegated Regulation will enter into force once it is published in the Official Journal of the European Union.

The European Banking Authority (EBA) has published its final report amending the implementing technical standards (ITS) under Commission Implementing Regulation (EU) 2021/622, which governs the reporting of Minimum Requirement for Own Funds and Eligible Liabilities (MREL) decisions by resolution authorities. The amendments aim to strengthen the EBA's ability to monitor the consistent implementation of MREL across the EU, as required under Directive 2014/59/EU (the Bank and Recovery Resolution Directive). The revised ITS increase the reporting frequency from annual to biannual, with submissions due from resolution authorities by 16 September and 18 March, covering MREL applicable as of 30 June and 31 December, respectively. This change addresses the current lag in the EBA's publications and assessments, which previously excluded decisions adopted after 1 May until the following year. The revised ITS also introduce changes to better capture discretionary elements applied by resolution authorities, align reporting with recent legislative updates, including the "Daisy Chain Act" (Directive (EU) 2024/1174), and streamline templates to reduce administrative burden. The proposed amendments to the Annexes of Regulation (EU) 2021/622 are available on the EBA's webpage. As the changes are addressed exclusively to resolution authorities and do not alter institutions' reporting obligations, the EBA did not conduct a public consultation. The final draft ITS will be submitted to the European Commission for endorsement, and once adopted, will be published in the Official Journal of the European Union. The amended ITS are expected to apply from 31 December.

The UK Financial Conduct Authority (FCA) has announced a GBP1 million public awareness campaign regarding its proposed motor finance compensation scheme. The campaign aims to inform consumers that they do not need to engage claims management companies (CMCs) or law firms to access redress, potentially saving them up to 30% of any compensation awarded. The FCA has taken regulatory action against misleading promotions, requiring CMCs to amend or remove 396 advertisements since January 2024. A formal consultation on the scheme is expected in early October, with potential compensation payments commencing in 2026.

The UK Financial Conduct Authority (FCA) has published a new webpage highlighting good practices and areas of improvement it has observed in firm applications for authorisation and registration. These cover three key areas:

• Staff with the appropriate skills, experience and capacity to provide the relevant financial service. The FCA observed that some firms overly rely on compliance consultants and fail to show independent understanding of regulatory obligations. Others do not adequately explain how individuals with multiple roles will manage their responsibilities, and some lack sufficient evidence of UK-based operations or staff eligibility to work in the UK. Examples of good practice include firms submitting their own internal suitability assessments, identifying gaps in staff resources and clearly explaining how and when these should be addressed and providing clear ownership structure charts.

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The European Commission (EC) has published its second report mandated under Article 27 of the Payments Account Directive 2014/92/EU (PAD), on assembling specific payment related data from Member States on the comparability of fees related to payment accounts, payment account switching and access to payment accounts with basic features (PABFs). The EC highlights that the differences in data collection methods across Member States and that existing data gaps make it difficult to draw firm conclusions about the extent of PAD's benefits to European consumers, though the report offers some tentative findings. The report covers information relating to 2022 and 2023, as well as complete data for 2021 that was not available at the time of the first report. The report confirms general compliance by payment service providers with Articles 4, 5 and 6, which require the provision of standardised fee information, annual fee statements and consistent terminology in consumer communications. Most Member States also have operational comparison websites as required under Article 7, with websites updated regularly and some offering information through various communication channels and public campaigns, helping to raise consumer awareness.

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The European Parliament (EP) has published a press release announcing it has voted to adopt a report on facilitating the financing of investments and reforms to boost European competitiveness and creating a Capital Markets Union (CMU). The report considers reforms that will form part of the European Commission's Savings and Investments Union (SIU). It has also published the text of the resolution that it has adopted on the report. The report sets out the views of the Committee on Economic and Monetary Affairs on measures intended to mobilise private investment and ease access to finance proposed by the Draghi report on the future of European competitiveness, which was published in September 2024. The European Commission subsequently adopted many of the proposals made in the Draghi report in its strategy for the SIU, which was published in March. ECON voted to adopt the report in June.

The UK Financial Conduct Authority has published its quarterly consultation paper No 49, accompanied by a new webpage, inviting key feedback on proposed amendments to its Handbook.
Key proposals include:

• Broadening the scope of the FCA's Decision Procedure and Penalties Manual on penalties policy to include the Private Intermittent Securities and Capital Exchange System (PISCES).
• Removing most statutory declarations from mutuals registration function forms to reduce the time and expense involved for mutual societies submitting applications to the FCA.

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The European Parliament has adopted its position at first reading on the proposed Regulation to amend the Central Securities Depositories Regulation (CSDR), which introduces a shorter settlement cycle for transferable securities transactions within the EU. The proposed Regulation will reduce the settlement period from two business days after trading takes place (T+2) to one business day (T+1), with the aim of promoting settlement efficiency, improving the liquidity of capital markets and eliminating costs linked to the misalignment of settlement cycles between the EU and other jurisdictions. A provisional agreement on the proposal was reached in June between the Council of the EU and the European Parliament, under which they agreed certain securities financing transactions (SFTs) will be exempt from the T+1 settlement cycle requirement. The exemption will only apply to SFTs that are formally documented as single transactions comprising two linked operations, in order to prevent the potential circumvention of the T+1 rule. The next step is for the Council of the EU to formally adopt the agreed text. Once adopted, the Regulation will be published in the Official Journal of the European Union and enter into force on the twentieth day following its publication. It will apply from 11 October 2027.

The Joint Committee of the European Supervisory Authorities (comprising the European Banking Authority, the European Insurance Occupational Pensions Authority and the European Securities and Markets Authority - ESAs) has published its fourth annual report on Principal Adverse Impact disclosures (PAI) under the Sustainable Finance Disclosure Regulation (SFDR). The report refers to PAI disclosures published by 30 June 2024 for the reference period from 1 January to 31 December 2023. The analysis included both mandatory and voluntary disclosures by financial market participants (FMPs). Building on the progress identified in previous reports, the report notes an effort from FMPs to publish more complete information and in full compliance with the SFDR's disclosure requirements, with a general improvement in the quality of information provided. The findings confirm the trends of previous years, such as that the FMPs that are part of larger multinational groups disclose the information on sustainability in a more detailed and appropriate manner, and that smaller entities mix information on ESG / general marketing information with SFDR disclosures, for example a lot of text, but no clear information whether principal adverse impacts are considered or not.

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The UK Financial Conduct Authority (FCA) has published a new webpage to support the safe and responsible adoption of AI in UK financial markets. The FCA confirms it does not intend to introduce new AI-specific regulations, opting instead to rely on existing frameworks which mitigate many of the risks associated with AI. The webpage outlines the requirements already in place that are relevant for using AI safely: the consumer duty and the accountability and governance requirements under the senior managers and certification regime. Firms are encouraged to visit the FCA's AI Lab for support on developing AI models and solutions safely and responsibly. The FCA confirms that it is leveraging AI tools, including predictive models and large language models, to enhance supervisory efficiency and consumer engagement. The webpage also highlights ongoing collaboration with domestic and international partners, including co-chairing the AI consortium with the Bank of England and signposting links to research the FCA has been involved in. In parallel, the FCA has confirmed on the same day that it intends to proceed with AI live testing.

The UK Financial Conduct Authority (FCA) has published feedback statement FS25/5, summarising responses to its April engagement paper on AI live testing. The AI live testing service aims to promote the safe and responsible adoption of AI in UK financial services through a collaborative, real-world testing environment. The live testing service is voluntary and open to firms that have developed AI proofs of concept and are active in UK financial markets, subject to competitive selection criteria. The FCA has made it clear that the feedback statement does not set out its policy position or views on AI use in financial markets. The feedback reveals strong industry support for the proposal, with respondents recognising the potential of AI live testing.

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The European Central Bank (ECB) has adopted Regulation (EU) (ECB/2025/31) (Amending Regulation) amending Regulation (EU) 2015/534 on the reporting of supervisory financial information (the Financial Reporting Regulation) under the Single Supervisory Mechanism (SSM). The Financial Reporting Regulation sets out reporting requirements based on templates developed by the European Banking Authority and laid down in Commission Implementing Regulation (EU) 2021/451, now repealed and replaced by Implementing Regulation (EU) 2024/3117. In line with the principle of proportionality, less significant credit institutions and branches with total assets of EUR3 billion or less are subject to reduced reporting requirements, limited to a subset of data points as specified in Annex III of the Financial Reporting Regulation. In order to exercise oversight over the functioning of the SSM and to promote the consistent application of high supervisory standards, the ECB needs additional data points concerning these less significant credit institutions. The Amending Regulation amends the Financial Reporting Regulation to enable the ECB to collect additional data on those institutions, to enable comparability of outcomes of the supervisory review and evaluation process. The Amending Regulation will enter into force on the twentieth day following its publication in the Official Journal of the European Union and will apply from 30 December.

The Wolfsberg Group has published comprehensive guidance on managing financial crime risks for financial institutions (FIs) that provide banking services to fiat-backed stablecoin issuers. While recognising the legitimate benefits of stablecoins, such as pseudonymity, rapid settlement and global reach, the Group also highlights that these same benefits introduce unique risks. The guidance therefore introduces a risk-based framework for assessing and monitoring relationships with issuers operating in regulated jurisdictions. It notes that although existing financial crime risk management principles remain applicable, existing controls may require adapting to address the specific risks posed by stablecoin issuers. The guidance introduces the relevant terminology used by the Group on stablecoins and describes the typical fiat-based services an FI may offer to a stablecoin issuer, highlighting how financial crime-related controls may require adjustment. It also explains how, under a risk-based approach, an FI may evaluate the issuer's compliance obligations on the blockchain. Ultimately, the Group's view is that the approach to banking a stablecoin issuer mirrors that of any customer relationship: firstly to identify and understand the risks associated with both the customer and the nature of the relationship, as well as evaluate how the issuer manages those risks; secondly to determine whether the issuer's risk profile and mitigation strategies align with its own risk appetite; and finally, the FI should implement a proportionate risk management framework that enables ongoing monitoring of the issuer's behaviour and supports timely corrective action when necessary.

The UK Financial Conduct Authority (FCA) has published Market Watch 83, sharing findings from a series of reviews on market abuse risks and related systems and controls at corporate finance firms that provide advisory and corporate broking services to small and mid-cap companies.

The FCA has observed the following in relation to market soundings:

• Disclosing Market Participants (DMPs) extending their market soundings to a relatively large number of Market Sounding Recipients (MSRs) without a process for considering the appropriateness or the number of MSRs contacted. The FCA highlights that a good practice was a simple governance process where a senior employee or relevant committee approved the initial proposed list of MSRs, as well as any additions to it. The FCA encourages firms to consider whether their policies and procedures help effectively manage the number of MSRs to control the flow of inside information.

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HM Treasury (HMT) has published a consultation paper "A Streamlined Approach to Payment Systems Regulation" seeking views on its proposals on the consolidation of the UK Payment Systems Regulator's (PSR) functions within the UK Financial Conduct Authority (FCA). The move, announced in March as part of the UK government's broader Regulatory Action Plan, aims to simplify the regulatory framework to help support growth, better manage burdens on businesses and minimise overlaps between regulators' responsibilities. Under the proposal, the FCA will assume the PSR's responsibilities, including on promoting competition and innovation, and supporting consumer protection in payment systems. Transitional work is already underway, and the consultation now sets out the government's proposed policy approach.

Key things to note include:

• HMT intends to align the PSR's functions within the FCA's existing framework under the Financial Services and Markets Act 2000 (FSMA 2000), to the extent this is practicable. Where full integration is not feasible, the relevant functions are expected to be set out in a new part of FSMA 2000.

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The Bank of England has published a discussion paper (DP) setting out potential measures to enhance the resilience of the UK gilt repo market and support broader financial stability. Developed in consultation with the UK Financial Conduct Authority and informed by input from HM Treasury and the UK Debt Management Office, the DP reflects on insights from the Bank's System-wide Exploratory Scenario and considers international developments, most notably in the U.S., where the Securities and Exchange Commission (SEC) has mandated central clearing for most repo and cash US Treasury transactions by mid-2027. To strengthen the UK gilt repo market, the paper explores two primary options: (i) increasing central clearing of gilt repo transactions; and (ii) introducing minimum haircuts or margins on non-centrally cleared repos. These options aim to reduce counterparty credit risk and mitigate systemic vulnerabilities. The DP also considers additional measures that could improve market resilience, such as enhanced public and private counterparty disclosures. These could serve as alternatives to, or complement, the two core proposals. The deadline for responses is 28 November. Next steps will be considered closely with other UK authorities, with further consultation to follow should any measures be progressed.

The European Banking Authority has announced an extension to the consultation deadline for its draft guidelines on credit conversion factor estimations (EBA/CP/2025/10) under the Capital Requirements Regulation (CRR), as amended by the revised Capital Requirements Regulation (CRR III). The original deadline of 15 October has now been extended to 29 October. The consultation paper sets out draft guidelines on the methodology institutions shall apply for their own estimation and application of credit conversion factors under Article 182(5) of the CRR, to ensure alignment and consistency with existing guidelines on the Probability of Default and Loss Given Default estimation.

The BIS Innovation Hub London Centre, in collaboration with the Bank of England, has announced the launch of Project Keystone, an initiative exploring how technology can enhance the analytical use of ISO 20022 data. 93% of payment system operators have either implemented or are preparing to implement ISO 20022. Project Keystone aims to support this transition by offering a standardised data analytics platform focused on ISO 20022 data. The tool comprises two modules: one for managing the complex data structure and storage needs of ISO 20022, and another for conducting data-driven analysis. Keystone is intended to be an off-the-shelf component for payment system operators to integrate into their own systems, enabling enhanced use of enriched payments data. Central banks and other regulatory bodies could leverage this to gain deeper insights into real-time economic activity, monitor system-wide liquidity and enhance participant confidence, including ensuring adherence to the ISO 20022 standard itself.

The Interim Working Group (IWG) advising on the UK Financial Conduct Authority's (FCA) Credit Information Market Study has issued a formal response to the FCA's feedback on its final report regarding the establishment of the Credit Information Governance Body (CIGB). The IWG welcomes the FCA's support and acknowledges its recommendations, confirming these will be communicated to the newly appointed CIGB staff. The response addresses key areas including supporting positive outcomes for financial inclusion, effectiveness reviews for the CIGB, Memoranda of Understanding (MoUs) between the FCA and CIGB, decision-making safeguards, funding transparency and commercial data governance. While the IWG agrees with the FCA's emphasis on inclusive and transparent governance, it notes that certain initiatives, such as early MoUs and effectiveness reviews, may be delayed due to resource constraints during the CIGB's initial operational phase.

HM Treasury (HMT) has published a formal response letter dated 2 September to the House of Lords Financial Services Regulation Committee's June report on the UK Financial Conduct Authority (FCA) and UK Prudential Regulation Authority's (PRA) secondary international competitiveness and growth objectives. The letter welcomes the Committee's recommendations and notes their alignment with the UK government's Financial Services Growth and Competitiveness Strategy, announced in July, reaffirming its commitment to regulatory reform. HMT's response outlines ongoing efforts that directly address the Committee's recommendations, including reforms to the UK Financial Ombudsman Service (FOS) to restore its original role as a swift and impartial dispute resolution body, a review of the consumer duty's application to wholesale firms, with the FCA due to report back to the Chancellor by the end of September, and the prioritisation of the Advice Guidance Boundary Review to tackle the advice gap. Appendix A of the letter provides further detail on the government's response to each of the Committee's recommendations, including ongoing work and future priorities.

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The UK Payment Systems Regulator (PSR) has published its annual report and accounts for 2024/25, summarising the PSR's progress across its key activities over the year. In March, the UK government announced that the PSR would consolidate into the UK Financial Conduct Authority (FCA) to streamline regulation and enhance efficiency. While legislation is pending, the report highlights the transitional work already underway to support a more streamlined approach. You may like to read our opinion piece "UK Payment Systems Regulator to be abolished - what's next?" which explores key considerations and potential impacts of the transition. The PSR's annual report sets out significant achievements in its work over the past year, including in fraud prevention through the reimbursement requirement for authorised push payment fraud scams, resulting in 99% of victims being reimbursed in the first three months.

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Delegated Regulation (EU) 2025/1768 and Delegated Regulation (EU) 2025/884 have been published in the Official Journal of the European Union (OJ), extending the scope of rules on fines and fees for data reporting service providers (DRSPs) to include consolidated tape providers (CTPs). Previously, these rules applied only to two types of DRSPs: approved publication arrangements and approved reporting mechanisms. The amendments align with the EU's review of the Markets in Financial Instruments Directive and Regulation, which aims to improve market data transparency and support the emergence of CTPs in the EU.

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