The European Securities Markets Authority (ESMA) has issued a statement on the discretionary transitional regime for cryptoasset service providers (CASPs) that offered their services in accordance with applicable law prior to 30 December 2024, contained in the markets in cryptoassets regulation (MiCAR). Member States may decide not to apply the transitional regime or to reduce its duration. Given the national divergence in transitional periods applicable across the EU member states, ESMA expects CASPs not yet authorised under MiCAR to have implemented orderly wind-down plans for the services they provided in member states in which the transitional period is over and orderly wind-down plans in place ready for implementation ahead of the end of the remaining transitional periods in case they should not be authorised by then.

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The European Commission (EC) has published a Communication to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee and the Committee of the Regions on further development of capital market integration and supervision within the Union, announcing a set of major legislative reforms. The package seeks to address obstacles to innovation and barriers to integration resulting from divergent rules, duplicative requirements and inconsistent supervision. The EC proposes a suite of amendments to key EU financial services and capital markets legislation in a package described as a central component of the savings and investments union (SIU), specifically a:

• Regulation which will amend: (i) the European Securities and Markets Authority (ESMA) Regulation; (ii) the European Markets Infrastructure Regulation (EMIR); (iii) the Markets in Financial Instruments Regulation (MIFIR); (iv) the Central Securities Depositories Regulation (CSDR); (v) the Distributed Ledger technology Pilot Regulation (DLTPR); (vi) the Markets in cryptoasset Regulation (MiCAR); and (vi) the Cross-Border Distribution of Funds Regulation (CBDR). It also includes targeted amendments, in line with the changes proposed to the ESMA regulation aimed at making EU supervision more efficient, to: (a) the Central Counterparties Recovery and Resolution Regulation (CCPRRR); (b) the Securities Financing Transactions Regulation (SFTR); (c) the Credit Ratings Agency Regulation (CRAR); (d) the Benchmark Regulation (BMR); (e) the simple, transparent and standardised (STS) securitisation Regulation; (f) the European Green Bond Regulation (EuGB Regulation); (g) the Environmental, Social and Governance (ESG) rating Regulation.

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The Bank of England (BoE) has launched its second system-wide exploratory scenario (SWES) exercise, this time focused on the private markets ecosystem. It will be run in collaboration with a group of banks and NBFIs active in these markets. Its aim is to better understand how banks and non-banks active in private markets would respond to a severe but plausible global downturn, how their actions interact at a system level, and whether these interactions can amplify stress across the financial system and pose risks to UK financial stability and the provision of finance to the UK real economy. The exercise is not a test of the resilience of the individual firms that will participate in the exercise. Its focus is system wide, exploring the resilience of the provision of private market and related public market finance to the UK corporate sector. It will focus on private equity (PE) sponsored UK corporates, credit originated to finance these corporates (including leveraged loans and high-yield bonds) and broader private credit (PC) provided to the UK corporate sector. The SWES will aim to include key participants in the private markets ecosystem. This includes alternative asset managers that manage PE and PC funds; large banks that provide credit to both private market funds and PE-sponsored corporates; and institutional investors that participate in private markets and related public markets. The BoE anticipates having largely completed firm engagement and analysis in 2026, with the final report to be published in early 2027 and interim findings over the course of 2026.

The UK's Treasury has published a policy update on creating a provisional licences authorisation regime for early-stage financial services firms seeking FCA authorisation. The purpose is to reduce the barriers that financial services firms face when seeking authorisation. The proposed "provisional licences" regime will enable the FCA to grant time-limited permissions (generally up to 18 months) so that firms can get "up and running" in a controlled environment with strong regulatory oversight, whilst working towards full authorisation. The policy update sets out details of how the government intends to deliver this. It discusses the purpose and design of the regime including its scope and eligibility, the duration of provisional licences and other restrictions and requirements on firms during the provisional licence period. It concludes with a discussion of exiting the regime, ideally with full authorisation. This provisional licence regime will require. primary legislation, and the updates reports that the government will take this forward when parliamentary time allows. The FCA will engage with industry on the design of the regime and consult as necessary.

The European Commission (EC) has announced that it has listed Russia as a high-risk country with strategic deficiencies in its anti-money laundering and counter-terrorist financing frameworks (AML/CFT) pursuant to the EU's directive on anti-money laundering and terrorist financing (AMLD IV). This follows Delegated Regulation (EU) 2025/1393, adopted in July, which committed the EC to conclude a review of third countries not listed by the Financial Action Task Force (FATF), but whose membership is suspended. This included Russia which, following a technical assessment, the EC concludes meets the criteria to be designated as a high-risk third country. The EC has therefore adopted a delegated regulation adding Russia to its list of high-risk jurisdictions presenting strategic deficiencies in their national AML/CFT regimes. On the following day, 4 December, the EC made a further announcement that it has updated its list of high-risk jurisdictions presenting strategic deficiencies in their national AML/CFT regimes following the decisions taken at the FATF and its list of 'Jurisdictions under Increased Monitoring' ('grey list'), following the plenaries of June and October 2025. The EU has adopted a further delegated regulation under AMLD IV adding new third-country jurisdictions (Bolivia and the British Virgin Islands) to the list of jurisdictions with strategic deficiencies and delisting a number of others (Burkina Faso, Mali, Mozambique, Nigeria, South Africa and Tanzania). The delegated regulations will enter into force after scrutiny and non-objection of the European Parliament and the Council within a period of one month (which can be extended by a further month). EU entities covered by the EU's AML framework are required to apply enhanced vigilance in transactions involving such high-risk jurisdictions.

The UK Financial Conduct Authority (FCA) has published policy statement PS25/19, confirming final rules to modernise complaints reporting. Following its May consultation, the FCA confirms the rules largely as proposed, including: replacing five existing returns with a single consolidated return; removing group-level reporting; updating complaints categorisation to reflect evolving product types; improving guidance on products subject to complaints reporting; and introducing a category to capture complaints by vulnerable consumers. Minor adjustments were made following feedback, such as taxonomy updates. Firms have 12 months from publication (until December 2026) to implement the changes and make the appropriate internal process and system changes. The first reporting period under the new arrangements is set for 1 January to 30 June 2027, with further details set out in Chapter 3 of the policy statement. The FCA will provide further communication and user testing to support a smooth transition and will review effectiveness post-implementation after five years. Separately, Chapter 4 outlines a consultation on whether to extend the capture of vulnerability-related data to payment services, funeral plans and claims management company firms. The deadline for responses is 2 February 2026.

The UK Prudential Regulation Authority (PRA) has published a policy statement and supervisory statement SS4/25, updating expectations for banks and insurers on managing climate-related financial risks. The final policy replaces SS3/19 in its entirety and applies with immediate effect. Following feedback from the April consultation, the PRA makes changes to the final policy (i) clarifying proportionality, allowing firms to tailor governance and risk management based on materiality and business models; (ii) recognising litigation risk as a potential transmission channel; and (iii) confirming that the six-month review period is to conduct an internal gap analysis, not an implementation timeline. Firms may integrate climate responsibilities within existing governance frameworks and embed climate risks into current risk registers or sub-registers, with flexibility in approach. The PRA emphasises a principles-based, proportionate framework aligned with international standards, encouraging scenario analysis, reverse stress testing and engagement with the Climate Financial Risk Forum (CFRF).

The European Banking Authority (EBA) has published a consultation paper on draft amendments to the regulatory technical standards (RTS) under Delegated Regulation (EU) 2017/390, supplementing the Central Securities Depositories Regulation (CSDR) prudential framework. The changes respond to the CSDR Refit (Regulation (EU) 2023/2845), which now permits banking CSDs to provide banking-type ancillary services to participants of other CSDs, including foreign currency cash settlement. This expansion introduces potential credit, liquidity, and concentration risks, prompting the EBA to propose updates to prudential requirements, including enhanced frameworks for intraday credit and liquidity risk management, credit limits and collateral management. The draft RTS also aligns references with amendments made to the Capital Requirements Regulation. The deadline for comments is 3 March 2026.

The UK Financial Conduct Authority (FCA) has published a policy statement on changes to handling rules for motor finance complaints. The FCA consulted on proposed changes in Chapter 11 of CP25/27, and this aspect of the consultation closed on 4 November to allow time to finalise any changes and give firms notice before the current extension in the rules for handling motor finance complaints ended on 4 December. The FCA confirms that it is:

• Excluding leasing complaints from any further extension, meaning that firms need to start sending final responses to them from 5 December.
• Further extending the time firms have to send final responses to all other relevant discretionary commission arrangement (DCA) complaints and non‑DCA commission complaints to 31 May 2026 (two months earlier than consulted on). This is so firms will not have to start sending final responses before the FCA has decided whether the redress scheme will go ahead, and which complaints will be covered if it does, without making consumers wait any longer than necessary for a complaint response if they do not fall within any scheme.
• Requiring firms to update their public facing communications to reflect the changes to the time limits, reverting back to the usual six months that consumers will have to refer a complaint to the Financial Ombudsman Service for final responses sent after 29 January 2026.
• Extending record keeping and retention requirements until 11 April 2031.

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The UK Financial Conduct Authority (FCA) has published an update on its AI Live Testing service. The 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 initiative complements the FCA's Supercharged Sandbox and follows its September feedback statement on AI benefits and risks. Applications for the first AI Live Testing cohort closed on 15 September. The application window for the second cohort will open in January 2026, with testing commencing in April 2026.

The European Securities and Markets Authority (ESMA) has announced that it will launch a Common Supervisory Action (CSA) with national competent authorities in 2026 to review compliance with MiFID II conflicts of interest requirements in the distribution of financial instruments. The press release confirms the CSA will examine how firms identify, prevent and manage conflicts when offering investment products to retail clients. It will focus on: (i) the possible influence of staff remuneration and inducements on what products are offered to investors; (ii) the role of digital platforms in product selection, and whether this serves the investor's best interests; and (iii) the management of conflicts between firm profitability and the needs of retail investors.

The Property (Digital Assets etc) Bill has received royal assent and entered the statute book as the Property (Digital Assets etc) Act 2025. The Act gives effect to recommendations of the Law Commission confirming in statute that a thing that is digital or electronic in nature can be recognised as personal property even if it does not fall within the traditional categories of 'things in possession' or 'things in action'. This means that certain digital assets such as crypto-tokens or crypto currencies can now be recognised as property providing legal certainty for businesses and individuals. The Act applies to England, Wales and Northern Ireland.

The Bank of England's (BoE) Financial Policy Committee (FPC) has published a Financial Stability in Focus report, revisiting its assessment of bank capital requirements. The FPC now judges that the appropriate benchmark for the system-wide level of Tier 1 capital requirements is around 13% of risk-weighted assets, equivalent to a Common Equity Tier 1 (CET1) ratio of around 11%. This represents a reduction from the 2019 assessment, which set the benchmark at 14%, reflecting improvements in risk measurement, a lower systemic importance of some banks, and a decline in banks' average risk weights.

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The UK Financial Conduct Authority (FCA) has published an update on its forthcoming review of the access to cash regime. The regime, introduced under the Financial Services and Markets Act 2023, seeks to maintain responsible provision of cash access services to consumers and businesses. The FCA expects to begin its review in Q4 2026 and publish findings in Q2 2027. While the exact scope and methodology will be determined closer to the time, the review will assess compliance, costs to firms and the regime's effectiveness in preventing gaps in cash access. It will include quantitative analysis and evaluation of indicators such as consumer sentiment and cash coverage data, alongside stakeholder engagement.

The Single Resolution Board (SRB) has published a list of consultations and industry requests for 2026. The list is presented in four tables covering expected consultations, data requests and deliverables arising from EU legal acts, SRB Expectations for Banks and the ongoing shift towards bank-led testing and resolvability assessments. For clarity, the SRB has explicitly separated data- and content-related requests into two categories: those applicable to all banks earmarked for resolution; and those targeting a subset of banks based on their resolution strategy and risk profile. The tables provide a comprehensive overview of potential requirements for 2026. Banks have been informed through their priority letters which, if any, additional obligations apply to them individually. From 2026, many bank-specific deliverables previously requested annually will only be required in exceptional cases, such as when gaps in resolvability remain or previously submitted information becomes outdated.

The UK Competition and Markets Authority (CMA) has published its final decision following a review of the SME Banking (Behavioural) Undertakings 2002, specifically the limitation on bundling provisions (LOBP). These provisions prohibited bound banks from requiring SMEs to open or maintain a business current account as a condition for obtaining a business loan or deposit account. Following its review, the CMA concluded that, due to significant changes in market conditions since 2002, including increased competition, reduced barriers to entry, technological developments, greater customer willingness to switch providers and the introduction of the consumer duty, the LOBP are no longer appropriate and should be released. The CMA found that banks previously bound by these undertakings no longer hold sufficient market power in SME loans and deposit accounts to justify retaining these restrictions, and that competitive constraints would prevent adverse effects on competition if such tying practices were reintroduced. The LOBP were the last remaining provisions of the SME Banking (Behavioural) Undertakings 2002 meaning that these have now been released in their entirety.

The UK Financial Conduct Authority (FCA) has published consultation paper CP25/34, setting out its proposed regulatory regime for environmental, social and governance (ESG) rating providers. This follows the government's draft legislation to bring this activity within the FCA's perimeter.

The proposed regime combines: (i) existing baseline standards set out in specific sections of the FCA's Handbook, including Threshold Conditions (COND), Principles for Businesses (PRIN), Systems and Controls (SYSC), the Senior Managers and Certification Regime (SM&CR) and General Provisions (GEN); and (ii) tailored requirements, informed by the International Organization of Securities Commissions, to address risks specific to ESG ratings. These tailored rules, set out in Chapters 3 to 6 of the consultation paper, focus on transparency, systems and controls, governance, conflicts of interest and stakeholder engagement.

While rating providers will be regulated, the FCA expects users to continue conducting due diligence to assess ratings' relevance and suitability, noting that the scope of regulation may require distinguishing between regulated and unregulated products. The FCA will monitor whether further guidance for firms on using ESG ratings will be useful.

The deadline for responses is 31 March 2026, with final rules expected in Q4 2026. The authorisation gateway is expected to open in June 2027, and the regime is scheduled to go live on 29 June 2028. In parallel, the FCA published a research note titled "Understanding the UK ESG Ratings Market: Findings from Our Surveys".

The European Securities Markets Authority (ESMA) has issued a statement to support the smooth implementation of the regulation on markets in cryptoassets (MiCAR) data standards and format requirements. The statement provides technical specifications on:

• The format of order book records for cryptoasset service providers (CASPs) operating a trading platform for cryptoassets, as defined by Commission Delegated Regulation (EU) 2025/416.
• Record-keeping obligations for CASPs as defined by Commission Delegated Regulation (EU) 2025/1140, specifying records to be kept of all cryptoasset services, activities, orders and transactions undertaken.
• Presentation of transparency data by CASPs operating a trading platform for cryptoassets, as defined by Commission Delegated Regulation (EU) 2025/417.
• Format and data standards requirements for MiCAR white papers, under Commission Implementing Regulation (EU) 2024/2984.
• Data necessary for the classification of cryptoasset white papers, as defined by Commission Delegated Regulation (EU) 2025/421 and the practical arrangements to ensure that such data is machine-readable.

This public statement aims to provide further practical guidance to market participants in complying with the above requirements.

The UK Prudential Regulation Authority (PRA) has published a letter addressed to credit union directors. It summarises key findings from its 2025 assessment of credit unions with assets up to GBP50 million and sets out supervisory priorities for 2026. The PRA identifies operational resilience as a key risk, with thematic work planned in 2026 to strengthen this area, including contingency planning and ensuring robust arrangements for replacing key staff and directors. The second key risk highlighted is disorderly failure: boards are expected to monitor prudential positions and financial forecasts proactively, act promptly on emerging issues and consider alternatives where activities become unsustainable, to avoid disorderly wind-down. In addition to these priorities, the PRA will maintain a focus on risk management throughout 2026. Governance standards also remain a priority, with emphasis on reducing dependency on key individuals and improving risk oversight. Areas for continued attention include succession planning, policy reviews, business planning and board performance appraisals (noted as a non-exhaustive list). The PRA reminds credit unions of their regulatory obligations, including maintaining open and cooperative engagement under Fundamental Rule 7. The letter should be read alongside the January Dear CEO letter to UK deposit takers, which outlines the PRA's priorities in this sector.

The UK Financial Conduct Authority (FCA) has published policy statement PS25/17 on removing the systematic internaliser regime for bonds, derivatives, structured finance products and emission allowances from 1 December.

Following feedback from its July consultation, the FCA is adopting all proposals as consulted on, except for the second proposed change to the price waiver. That change would have allowed a trading venue to derive the price from the best bid and offer prices on the lit order book where reference price orders are placed, which would allow placing mid-price dark orders below large in scale on lit order books. The FCA remains minded to implement this change after gathering further information to ensure the change does not weaken the information content of post-trade data. The FCA expects to finalise a proposal on post-trade transparency in its forthcoming consultation on equity transparency. Meanwhile, from 20 March 2026, trading venue operators will be permitted to use a broader set of prices from a wider set of venues when crossing orders for equities under the reference price waiver.

The FCA also confirms the repeal of the rule that prevents investment firms from carrying out matched principal trading on their multilateral trading facilities and from operating an organised trading facility in the same entity for which they are a systematic internaliser from 30 March 2026.

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The UK Financial Conduct Authority (FCA) has published findings from a multi-firm review assessing the effectiveness and governance of rating committees at UK-registered credit rating agencies (CRAs). The review focused on four areas: purpose, people, processes, and internal controls, highlighting both good practices and areas for improvement. Most firms had systems supporting compliance with internal policies and the EU Credit Rating Agencies Regulation (as amended by the CRA Regulations (EU Exit) 2019), alongside controls to prevent unauthorised access to information. Most firms also had robust governance frameworks in place with three lines of defence. However, some lacked clear documentation of rating committees, making it difficult to determine variations by asset class or whether any deviations or exceptions were permitted. Good practices on people included collective decision-making, in-house training for committee Chairs and systems for member selection, while improvements were needed in meeting minimum quorum requirements and monitoring conduct and culture risks. 

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The UK Financial Conduct Authority (FCA) has published Handbook Notice 135 outlining amendments to the FCA Handbook resulting from the following statutory instruments:

• Markets in Financial Instruments (Systematic Internalisers Multilateral Trading Facilities and Equity Transparency) Instrument 2025 – now in force – and the Technical Standards (Markets in Financial Instruments Regulation) (Equity Transparency) (Amendment) Instrument 2025, which will enter into force on 30 March 2026. These instruments make changes to repeal the systematic internaliser regime for bonds and derivatives and remove certain obligations and restrictions placed on UK venues by onshored EU legislation.
• Berne Financial Services Agreement Instrument 2025, which enters into force on 1 January 2026, to add a new Handbook guide and update related guidance provisions.
• Dispute Resolution: Complaints Sourcebook (Eligibility of Complainants) Instrument 2025, which entered into force on 28 November, to add new guidance to clarify DISP 2.7.6R(4).
• Compensation Sourcebook (Assignments Under Scots Law) Instrument 2025, which entered into force on 28 November, making changes to ensure the Financial Services Compensation Scheme's electronic assignments comply with Scots law.

The UK Financial Conduct Authority (FCA) has published Primary Market Bulletin 60, highlighting its consultation paper on proposed changes to the UK short selling regime. The proposals aim to repeal and replace assimilated EU law by introducing a new Short Selling Sourcebook within the FCA Handbook, supporting the UK Short Selling Regulations 2025 (SSR 2025). To further aid firms' understanding of the proposals, the FCA has produced a derivation and changes table which now accompanies the consultation as outlined in its updated webpage. This document shows how the FCA proposes to transfer rules and guidance from the UK Short Selling Regulation, relevant Commission Delegated Regulation, Technical Standards, ESMA Guidelines and ESMA Q&A into its new Short Selling Sourcebook. Following the industry event held on 6 November, other materials discussed have also been published as additional information for firms: Aggregated Net Short Positions (ANSP) by issuer and anonymisation of position holders and Reportable Shares List under SSR 2025 implementation and key changes.

The UK Prudential Regulatory Authority (PRA) and the UK Financial Conduct Authority (FCA) have published a policy statement finalising amendments to the Binding Technical Standards (BTS 2016/2251) on margin requirements for non-centrally cleared derivatives under UK EMIR. Following feedback on its March consultation, the regulators confirm the rules are largely as proposed, including: (i) an indefinite exemption from the bilateral margining requirements for single-stock equity options and index options; (ii) the removal of the obligation to exchange initial margin (IM) on outstanding legacy contracts where a firm subsequently falls below the in-scope thresholds; and (iii) allowing UK firms to use another jurisdiction's threshold assessment calculation periods and entry into scope dates to determine whether those transactions are subject to certain IM requirements, when transacting with a counterparty subjected to the margin requirements in that jurisdiction. Other than these, only minor technical amendments were made. The final text of the FCA and PRA instruments amending BTS 2016/2251 can be found in the appendices to the policy statement. The amendments to the BTS are effective immediately, from 27 November.

The UK Financial Conduct Authority (FCA) has published its latest Regulation Round-up, a monthly newsletter to firms covering hot topics, events and sector news. Areas for firms to note include: (i) the launch of the InvestSmart Hype Type Revealer, a behavioural tool designed to help retail investors recognise how hype can influence their investment decisions; (ii) plans to standardise financial data collection at the authorisation gateway, introducing sector-specific templates to accelerate authorisation processes and reduce follow-up queries. The improvements are live for wholesale applicants with templates available on the FCA website, with further rollout coming for other sector firms; and (iii) enhancing the Digital Gateway experience by testing and rolling out a series of improved digital online forms for authorisations and notifications, providing clearer guidance and improved navigation for firms. The list of forms is included within the newsletter.

The Council of the EU and the European Parliament have announced a provisional political agreement on the EU payments package. While the final texts of the third Payment Services Directive (PSD3) and the Payment Services Regulation (PSR) are not yet available, press releases indicate that negotiations centred on three key areas: fraud prevention, transparency and open banking. For further details, you may like to read our blog post "European Council and Parliament reach provisional agreement on EU Payments Package".

The UK Financial Ombudsman Service (FOS) has launched a consultation on its plans and budget for 2026/27. Key proposals include increasing its case fee to GBP680 and compulsory levy to GBP86 million. The FOS has also announced that it will simplify its billing process for the next financial year by replacing the free case allowance with a monetary value of GBP2,000 for both respondent businesses and professional representatives. It is also introducing quarterly billing in advance for the largest businesses expected to account for the most cases. The FOS anticipates receiving 188,000 cases across a range of financial products, including bank accounts, credit cards and insurance, and resolving 245,000 cases as it works through its existing backlog. Of these, around 60,000 are expected to relate to motor finance commission complaints. The FOS is also preparing for deferred payment credit (buy now, pay later) complaints to fall within its remit from July 2026, meaning it is likely to start receiving these complaints in the second half of 2026/27. The deadline for comments is 21 January 2026.

HM Treasury (HMT) has published a letter from Rachel Reeves, Chancellor of the Exchequer, to Andrew Bailey, Bank of England Governor, setting out the remit and recommendations for the Financial Policy Committee (FPC) for 2025/26. The letter reaffirms the FPC's objectives to maintain UK financial stability and support the government's economic policy. The letter also highlights the need for regulation that balances resilience with growth, aligning with the Financial Services Growth and Competitiveness Strategy and the Leeds Reforms. Key priorities include reviewing the level of bank capital requirements, which should ensure the UK's capital framework strikes the optimal balance to deliver resilience, growth and competitiveness. Ms Reeves also looks forward to the FPC's findings on where there is potential to increase the ability of the financial sector to contribute to sustainable economic growth. The next steps in this work should identify how to support the supply of long-term capital for productive investment. The letter also highlights the critical nature of the FPC's work in the light of challenges for the global financial system such as the adoption of transformative technologies, climate change and the net zero transition, while also facing global macroeconomic uncertainty.

The UK Financial Conduct Authority (FCA) has published a new webpage with updated forms and checklists to support the UK's new Public Offers and Admission to Trading regime (POATR) which fully comes into force on 19 January 2026. The FCA's new sourcebook for admissions to trading on regulated markets, Prospectus Rules: Admission to Trading on a Regulated Market (PRM), also comes into force on 19 January 2026. From this date, the FCA will be able to approve documents under the new PRM sourcebook. From 1 December, the FCA confirms that issuers can submit a draft prospectus, registration document, universal registration document and/or a securities note and summary prepared under the new framework for review with a view to seeking approval once the new regime goes live. This can be done as usual via the FCA's Electronic Submission System (ESS).

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The Single Resolution Board (SRB) has published its 2026 work programme, outlining key priorities and building on the Single Resolution Mechanism (SRM) Vision 2028 strategy. The SRB will focus on advancing further the operationalisation of resolution tools and apply revised methodologies, including the revamped resolvability assessment and dry runs in close cooperation with the national resolution authorities. It will also implement the new multi-annual testing framework established under EBA guidelines to ensure banks' resolvability capabilities remain adequate over time. Further, the SRB will support EU and global policy debates on simplification initiatives without compromising on resolvability and contribute to regulatory work on the implementation of the crisis management and deposit insurance (CMDI) framework, completion of the Banking Union as part of the Savings and Investment Union, digitalisation in financial services, the macroprudential framework review and other global developments.

Additionally, the SRB will host its first international economic conference to foster dialogue on resolution policy and competitiveness in the EU financial sector. The overarching goal is to ensure banks are resolvable not only in theory but in practice. The SRB will also intensify efforts to streamline decision-making processes and to foster a shared SRM culture together with national resolution authorities. Other priorities include advancing digital transformation through a Data Quality Framework, accelerating key data initiatives, conducting a mid-term review of the SRM Vision 2028 and progressing HR initiatives on mobility, talent management and diversity and inclusion.

The UK Financial Conduct Authority (FCA) has published findings from its data quality review of prudential regulatory reporting by MIFIDPRU investment firms, covering submissions from January 2024 to March 2025. The FCA found that 60% of firms passed all data quality tests and saw good practice in reporting across time periods and accurate cross-validation returns. However, the FCA identified significant areas for improvement firms, including: (i) inconsistent reporting across multiple data sources; (ii) inaccurate implementation of reporting guidance; (iii) incorrect reporting of type of investment firm; and (iv) incorrect reporting units and data entry issues. From the 10% of firms that were not meeting their reporting requirements, the FCA found recurring reporting errors, indicating weaknesses in these firms' regulatory systems and controls.

The FCA urges firms to review their reporting processes against the relevant provisions in its Handbook, including MIFIDPRU 9 Annex 2, and ensure accuracy, noting that no new requirements or guidance are being introduced. Notifications highlighting data quality failures will be issued to firms and further detailed examples of data quality issues the FCA has seen will be shared in an upcoming IFPR Newsletter.

The European Banking Authority (EBA) has published a peer review report assessing how competent authorities have implemented and supervised gender diversity requirements. EU legislation requires that credit institutions have robust governance arrangements, including gender-neutral remuneration policies and diversity policies. The review examined six competent authorities, including the European Central Bank, on the application of the respective requirements under the fourth Capital Requirements Directive (CRD IV), the Capital Requirements Regulation and certain EBA guidelines across six major areas. It found that most requirements checked have been fully or largely incorporated into the supervisory framework by all supervisors reviewed.

However, deficiencies were noted, particularly in the use of supervisors' own benchmarking of diversity practices, where three supervisors were rated "partially applied" overall, with five out of six supervisors being rated "partially applied" on the second criteria of that benchmark, which concerns the further use of own diversity benchmarking results. The EBA recommends improvements in collecting and publishing supervisors' benchmarking results to enhance transparency and to improve the ability of credit institutions to compare with their peers. Both individual and general follow-up measures, as well as best practices have been adopted to strengthen consistency and effectiveness across the EU. The EBA will conduct a follow-up peer review of the implementation of the measures included in the report in two years.

The UK Financial Conduct Authority (FCA) has published a new webpage announcing the launch of a special stablecoins cohort within its Regulatory Sandbox for firms issuing stablecoins. This will enable UK firms planning to issue stablecoins to test products under the UK's evolving regulatory regime. The cohort supports innovation in financial services and complements projects such as the Digital Securities Sandbox. For a successful application, firms must demonstrate: (i) clear readiness to begin testing; (ii) hold appropriate permissions and resources; (iii) prepare a well-aligned test plan consistent with the recent FCA stablecoin issuance consultation paper CP25/14; and (iv) include as much detail as possible. Applications close on 18 January 2026. Successful participants will be notified by the FCA, and feedback will be provided to unsuccessful applicants.

The UK Serious Fraud Office (SFO) has published updated guidance on evaluating corporate compliance programmes, clarifying when and how such assessments occur. The updated guidance identifies six scenarios in which it may need to evaluate an organisation's compliance programme: (i) determining decisions on prosecution; (ii) considering deferred prosecution agreements (DPAs); (iii) including compliance terms and monitorships as part of any DPA; (iv) determining whether an organisation has a defence of "adequate procedures" under the Bribery Act 2010; (v) determining whether an organisation has a defence of "reasonable procedures" under the Economic Crime and Corporate Transparency Act 2023 (ECCTA); and (vi) sentencing considerations. In relation to statutory defences, the updated guidance draws on the six statutory principles in relation to proportionate procedures, top-level commitment, risk assessment, due diligence, communication (including training), and monitoring and ongoing review. It includes a "FAQs/general guidance" section, explaining the distinction between "adequate" or "reasonable" procedures (for statutory defences) and an "effective compliance programme" under failure-to-prevent offences. The SFO stresses that assessments depend on an organisation's individual circumstances. Having policies and controls in place does not automatically mean a programme is effective; the focus is on how policies translate into conduct on the ground.

The European Parliament (EP) has adopted a resolution on the impact of AI on the financial sector. This follows the final report published by the EP's Committee on Economic and Monetary Affairs (ECON) earlier in November. The press release confirms that the resolution highlights AI's potential benefits to the financial sector, including through fraud detection, personalised advice, transaction monitoring and environmental, social and governance (ESG) data analysis. However, it also warns of risks such as data bias, model opacity, cybersecurity threats and over-reliance on major tech providers. MEPs call for human oversight, robust data governance and updates to supervisory tools — emphasising that no new legislation is needed; instead, existing rules should be clarified and streamlined to foster innovation without compromising consumer protection or financial stability. The resolution urges the European Commission and supervisors to provide proportionate guidance and to enhance cross-border cooperation and support initiatives such as setting up AI-specific regulatory sandboxes, increasing AI literacy, researching AI's environmental impact, and reducing regulatory barriers for AI-based financial firms.

The European Commission has adopted a Delegated Regulation amending Delegated Regulation (EU) 2017/567 as regards regulatory technical standards (RTS) on equity transparency requirements under the Markets in Financial Instrument Regulation (MiFIR). The amendments follow the EBA's final report in December 2024 and reflect changes introduced by the MiFIR review and the amendments to the second Markets in Financial Instruments Directive (MiFID II). The changes cover: (i) the determination of what constitutes a liquid market for equity instruments, with liquidity assessment now based on the "market capitalisation" criterion, replacing the previous "free-float" criterion; (ii) the obligation to provide market data on a "reasonable commercial basis"; (iii) the size specific to the financial instrument for the purposes of obligations for systematic internalisers; and (iv) the definition of, and disclosure for, post-trade risk reduction (PTRR) services. The Delegated Regulation will be subject to scrutiny by the Council of the EU and the European Parliament. If neither object, it will be published in the Official Journal of the European Union (OJ). It will enter into force on the third day following publication in the OJ, with Article 1, point (4), applying from 23 August 2026.

The European Banking Authority (EBA) has published a fact sheet summarising the findings from its 2025 mapping exercise on the interaction between the EU AI Act (Regulation EU 2024/1689) and existing banking and payments legislation. This includes the Capital Requirements Regulation (575/2013), the Consumer Credit Directive (2008/48/EC), the Mortgage Credit Directive (2014/17/EU) and the Payment Services Directive ((EU) 2015/2366). The EBA's key findings include: (i) no significant contradictions have been found between the AI Act and EU banking and payment legislation; (ii) the AI Act is complementary to EU banking and payment sector legislation, which already provides a comprehensive framework to manage risks. However, some efforts may be required by banks and other financial institutions to integrate the two frameworks effectively; and (iii) the co-existence of multiple authorities supervising financial entities' compliance highlights the importance of supervisory cooperation to ensure effective implementation of the AI Act.

The EBA also concludes that no immediate changes to its guidelines or new EBA guidelines are planned. Instead, the EBA will follow up with actions to contribute to a common supervisory approach to supervisory cooperation and implementation of sectoral requirements alongside AI Act requirements. The EBA will undertake specific activities in 2026–2027 to support the implementation of the AI Act in the EU banking and payments sector by: promoting common supervisory approaches and cooperation among national competent authorities responsible for financial sector supervision and market surveillance authorities; and providing input to the AI office, as appropriate, and participating in discussions of the AI Board Subgroup on Financial Services.

Commission Implementing Regulation (EU) 2025/2338 (Amending Regulation) has been published in the Official Journal of the European Union. The amendments update the implementing technical standards (ITS) under Commission Implementing Regulation (EU) 2016/100, which govern the joint decision process for competent authorities when granting permission to use internal models for credit risk, counterparty credit risk and market risk for prudential purposes for certain entities in banking groups, as required by Article 20(8) of the Capital Requirements Regulation (CRR). The Amending Regulation introduces three key changes: (i) the removal of the Advanced Measurement Approach for operational risk, reflecting amendments to the CRR by CRR III (Regulation (EU) 2024/1623); (ii) the alignment with new RTS and ITS on the functioning of supervisory colleges that were published in August (Commission Delegated Regulation (EU) 2025/791 and Implementing Regulation (EU) 2025/790); and (iii) Commission Delegated Regulation (EU) 2025/1496, which sets out that the current requirements on the calculation of own funds requirements for market risk will apply until 1 January 2027. The Amending Regulation enters into force on 11 December.

The European Central Bank (ECB) has published its guide on implementing the Threat Intelligence-based Ethical Red Teaming (TIBER-EU) framework for mandatory threat-led penetration testing (TLPT) of significant institutions under the Digital Operational Resilience Act (DORA). Under Articles 26 and 27 of DORA, significant institutions must conduct advanced operational resilience testing by means of TLPT at least every three years. To assist significant institutions in fulfilling the DORA TLPT requirements, the ECB has decided to adopt the TIBER-EU framework. The guide sets out: the ECB's role in identifying significant institutions subject to TLPT requirements; the testing process (preparation, execution and closure); key stakeholder responsibilities, including the use of external threat intelligence providers and red team testers; and general considerations for TLPT, including test management, secrecy and risk management. The ECB clarifies that while the TIBER-EU implementation guide provides detailed operational steps, only DORA and its accompanying regulatory technical standards on TLPT remain legally binding.

The UK Financial Conduct Authority (FCA) has published consultation paper CP25/32 setting out proposals to improve the UK transaction reporting regime under the Markets in Financial Instruments Regulation (MiFIR). HM Treasury previously confirmed that assimilated law (law inherited from the EU at the point of Brexit) in this area will be repealed, enabling the FCA to deliver a more streamlined framework aimed at reducing the regulatory burden on firms and increasing the FCA's ability to fight financial crime and protect market integrity. In particular, the FCA is looking to replace the regulatory technical standards in Commission Delegated Regulations (EU) 2017/590 (RTS 22), 2017/585 (RTS 23), and 2017/580 (RTS 24) with new rules in its Market Conduct Sourcebook (MAR). Key proposals are set out below.

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The UK Financial Conduct Authority (FCA) has published consultation paper CP25/33 outlining its proposed changes to the fees and levies framework ahead of the 2026/27 fee cycle. The consultation paper is structured as follows:

• Chapter 2 sets out proposed changes to the fees manual of the FCA Handbook (FEES). These cover, among other things, introducing the Private Intermittent Securities and Capital Exchange System (PISCES) periodic fee, targeted support fees and levies, cryptoasset firms' application fees and deferred payment credit (often called buy-now, pay-later) fees and levies.
• Chapter 3 sets out proposed changes to FEES 5 (regarding the UK Financial Ombudsman) and FEES 6 (regarding the UK Financial Services Compensation Scheme).
• Chapter 4 sets out joint proposals with the UK Prudential Regulation Authority (PRA) to amend invoice due dates for firms which pay GBP50,000 or more in FCA and/or PRA fees in a year (referred to as "payments on account").
• Chapter 5 provides updates on various areas of fee policy, including section 166 costs for motor finance firms, pro-rating fees for firms which cancel their permissions, and technical changes to the financial penalty scheme. The FCA also confirms that it does not propose to charge fees to incoming Swiss firms for regulated activities they perform under the Berne Financial Services Agreement.

The deadline for responses is 9 January 2026 for targeted support proposals and 16 January 2026 for all other proposals.

The European Commission (EC) has adopted a proposal for a regulation to amend the Sustainable Finance Disclosure Regulation (SFDR). The SFDR, which has been in application since March 2021, sets detailed sustainability disclosure requirements for financial intermediaries and financial products regarding consideration of environmental, social, and governance (ESG) factors. The proposed amendments are aimed at simplifying the framework and making disclosures more retail friendly. An EC review found that the current regime produces lengthy, complex disclosures that hinder investor understanding and comparability.

Key elements of the proposal include: (i) removing entity-level disclosure requirements on principal adverse impacts and reducing product-level requirements; (ii) introducing a new clear categorisation system comprising of three product categories for ESG claims, based on existing market practice and the latest regulatory guidance; and (iii) repealing Commission Delegated Regulation (EU) 2022/1288 supplementing the SFDR, to remove the complex templates and entity-level requirements under it. The EC proposal will now be submitted to the European Parliament and Council of the EU for their deliberation.

The European Insurance and Occupational Pensions Authority (EIOPA) has published a Q&A under the Digital Operational Resilience Act (DORA) on the interpretation of Article 13 of Commission Delegated Regulation (EU) 2024/1774 (comprising the regulatory technical standards on ICT risk management), which supplements DORA. The clarification concerns the Article 13(c) which requires financial entities to implement the use of a separate and dedicated network for the administration of ICT assets. EIOPA confirms that such administration should be interpreted broadly so as to include both manual and automated activities and processes, and cross refers to other DORA articles which are relevant for interpreting this provision.

The draft Central Securities Depositories (Amendment) (Intended Settlement Date) Regulations 2026 has been laid before the UK Parliament, accompanied by a policy note . The draft statutory instrument (SI) amends the UK Central Securities Depositories Regulation to mandate settlement "no later than the first business day after trading," making T+1 the standard settlement period in the UK from 11 October 2027. The SI introduces exemptions for certain securities financing transactions, specifically: securities or commodities lending; securities or commodities borrowing; buy-sell back transactions; sell-buy back transactions and repurchase transactions (to the extent they involve transferable securities). The policy note explains the approach taken and clarifies issues not addressed in the legislation. The deadline for technical comments on the draft SI is 27 February 2026. Subject to feedback, the government intends to lay the final SI well before the implementation date, to allow for Parliamentary scrutiny and provide early certainty for the sector.

The Basel Committee has published a summary of its latest meeting in which members discussed a range of initiatives. The Committee reaffirmed its commitment to full and consistent implementation of Basel III standards and approved final principles for managing third-party risk in banking, which will be released next month. It also agreed to expedite a targeted review of its prudential standard for banks' cryptoasset exposures in response to market developments. Other priorities include examining synthetic risk transfers (SRTs), consulting on machine-readable Pillar 3 disclosures (expected in December) and consolidating guidelines into a more user-friendly format. The Committee also approved assessment reports on the UK implementation of the net stable funding ratio and large exposures framework, which are expected next month, and committed to pursue further analytical work of financial risks from extreme weather events.

The UK Financial Conduct Authority (FCA) has published consultation paper CP25/31 outlining a proposed framework for introducing an equity consolidated tape (CT) in the UK, operated by a consolidated tape provider (CTP). The proposals are linked to broader considerations on the structure and transparency of UK equity markets in CP25/20. The FCA plans a separate consultation on the equity transparency regime in 2026.For the purposes of this consultation, the FCA states an equity CT collates and distributes market data, such as prices and trade volumes, across trading venues and over-the-counter transactions, providing a comprehensive view of equity markets. In the paper, "equity" is defined as including shares, exchange-traded funds, depositary receipts, certificates and similar instruments.  

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The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2025 has been laid before the UK Parliament, accompanied by an explanatory memorandum. This follows the draft version laid in July. The order amends the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO) to reform the ancillary activities exemption (AAE). The AAE allows firms dealing in commodity derivatives, emissions allowances or related derivatives as an ancillary activity to be exempt from seeking investment firm authorisation. The order introduces changes giving the FCA a new rule-making power to set criteria for determining when such trading qualifies for exemption. The current AAE is replaced with a more proportionate regime offering two options: (i) assessing whether the activity is ancillary to the firm's main business at group level; or (ii) checking whether the activity is below an annual monetary threshold determined by the FCA. The order also makes consequential amendments allowing the FCA to direct how firms provide calculation data under both tests and removes references to assimilated law that FCA rules will replace.

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The UK Property (Digital Assets etc) Bill has completed its third reading in the House of Commons with further amendments and now awaits royal assent before becoming law. The Bill gives effect to recommendations of the Law Commission confirming in statute that a thing that is digital or electronic in nature can be recognised as personal property even if it does not fall within the traditional categories of "things in possession" or "things in action". The Bill applies to England, Wales and Northern Ireland.

The European Commission (EC) has adopted its Digital Omnibus Package with a set of proposals which seek to simplify rules on AI, data and cybersecurity. This forms part of the EC's broader digital initiative to help EU businesses innovate, scale and save on administrative costs. At the core of the package is the proposal for a regulation on simplification of the digital legislation which introduces technical amendments to a large range of digital laws.

Key measures include:

• AI – providing clarifications and practical measures to ensure smooth application of AI rules, including provisions for regulatory sandboxes and SME-friendly compliance pathways. Further targeted amendments to the EU AI Act are made through a separate legal proposal within the package.
• Cybersecurity – establishing a single-entry reporting mechanism that consolidates mandatory obligations under, among others, the NIS2 Directive, the General Data Protection Regulation (GDPR) and the Digital Operational Resilience Act (DORA). In a second stage, sector-specific rules in areas such as energy and aviation will also be integrated into this single-entry point.

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The European Central Bank (ECB) has published the results of its 2025 supervisory review and evaluation process (SREP) and supervisory priorities for 2026–2028. The review covers 105 banks under ECB supervision and looks at their capital, liquidity, profitability, governance and risk management. Overall, banks maintained robust capital and liquidity positions and strong profitability in the second quarter of 2025.

Looking ahead, the ECB's supervisory priorities for 2026–2028 reflect a comprehensive assessment of emerging risks and vulnerabilities for supervised entities. Each supervisory priority targets a specific set of vulnerabilities in the banking sector for which dedicated strategic objectives have been set and tailored work programmes developed.

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