The UK Financial Conduct Authority (FCA) published the findings from its supervisory insights and observations of firms' annual operational resilience self-assessments between 2025–26 on firms' compliance with its rules on operational resilience. The FCA notes that firms have made good progress on operational resilience since the transition period ended in March 2025. However, it finds that firms could do more to demonstrate what they can deliver now during severe but plausible disruption, rather than relying on planned remediation, transformation programmes or future investment.

The FCA identifies improving the quality of evidence as the main area for development in firms' next self-assessments. It also sets out other areas for improvement, where it has observed some firms:

• pointing to future improvements or transformation plans without explaining whether they can remain within impact tolerance now
• relying on assumptions about third-party, group, or shared service resilience without showing how those assumptions have been tested or challenged
• relying on manual workarounds without showing how they would operate during a severe disruption, and whether they are scalable for a large number of impacted users and/or services, particularly over an extended period
• reporting few or no vulnerabilities without evidence of how those conclusions were reached
• providing limited evidence that communications would work if usual channels were unavailable, degraded or compromised
• relying on board approval of the self-assessment as the main evidence of oversight, without showing the nature of challenge, decision making or prioritisation.

Firms are advised to demonstrate that they understand their residual risk, and how testing, incidents and second- and third-line input have informed decisions. The FCA will continue to discuss operational resilience with firms as part of its supervisory engagement.

The draft Financial Services and Markets Act 2023 (Central Counterparties Compensation Scheme) (Independent Valuers) Regulations 2026 were published and laid before the UK Parliament, accompanied by a draft explanatory memorandum. These Regulations relate to the special resolution regime for central counterparties (CCPs) set out in Schedule 11 to the Financial Services and Markets Act 2023. Schedule 11 provides the Bank of England (BoE) with powers to manage the failure of a CCP, which are exercisable by way of stabilisation instruments (as defined in Schedule 11) made by the BoE.

Paragraph 87 of the Schedule provides HM Treasury (HMT) with powers to establish schemes to determine whether any "no creditor worse off" (NCWO) compensation may be due to relevant persons (namely, clearing members, creditors, shareholders and certain clients of the CCP) following the making of a stabilisation instrument. These Regulations relate to the appointment of independent valuers by HMT for the purpose of any such potential scheme, as well as the methodology to be followed by the independent valuer when determining whether any NCWO compensation may be due.

The Regulations will come into force on the day after they are made.

The UK Financial Conduct Authority (FCA) published the findings from its multi-firm review assessing the cyber and operational resilience of a sample of UK trading venues. The FCA found that trading infrastructure is generally resilient, but states that there are lessons to learn, and that venues need to understand all their dependencies and test resilience right across their supply chains.

Areas of good practice included clear ownership of important business services, clear links between mapping and testing, formal tracking of lessons learned and remediation and regular testing of business continuity and disaster recovery arrangements. The most common areas for improvement included the following:

• Accountability and independent assurance: some venues had limited evidence that their boards had reviewed, challenged or approved resilience activities and remediation plans. Some venues that were part of a wider group of firms had not clearly defined the responsibility of the UK regulated entity for the resilience of its UK activities. Several venues relied on frontline teams to identify and assess reliance risk, but venues did not always provide sufficient independent challenge and assurance over these resilience risks.
• End-to-end understanding of business services and their dependencies: mapping sometimes failed to consider wider group dependencies. Some venues did not know the dependencies between third parties supporting important business services and had a limited understanding of their concentration risk.
• Managing intra-group and third-party services: while third-party contractual arrangements were generally in place, venues' due diligence, contractual standards and exit plans were not always suited to the importance of the service.
• Testing response and recovery arrangements: venues did not always test whether they could recover services as part of their change activities. They focused on whether a change had been implemented successfully, rather than what would happen if it caused disruption.
• Incident escalation, lessons learned, and remediation: some venues relied on informal processes to escalate issues, such as staff group chats, without keeping governance records. It was not always clear from venues' risk frameworks how lessons from incidents informed their remediation practices.

The FCA is not introducing new requirements at this stage. Instead, the FCA advises venues to review the findings in the context of their own business models and broader changes in the market. It also reminds them to prepare for the FCA's operational incident reporting rules, which come into force on 18 March 2027, so they can consider any changes they need to make to their processes and systems.

The UK Prudential Regulation Authority (PRA) published its second policy statement (PS20/26) responding to consultation paper CP14/24 on the large exposures (LE) framework, completing the PRA's work on the amendments proposed in that paper.

The first policy statement (PS14/25) was published in July 2025. The PRA took longer to finalise the remaining proposals which had attracted more significant feedback, particularly on mandatory substitution, intragroup exposures and the trading book excess allowance. The final measures are intended to close gaps in the framework, support a more consistent treatment of concentration risk and improve alignment with the Basel LE standards.

Read more.

The European Commission (EC) adopted a Delegated Regulation supplementing the European Market Infrastructure Regulation No 648/2012 (EMIR), as amended by EMIR 3 (Regulation (EU) 2024/2987). It sets out regulatory technical standards (RTS) specifying requirements on margin transparency and margin simulation tools by central counterparties (CCPs) and margin transparency and margin simulations by clearing service providers (CSPs). The EC states that the objective of EMIR 3 is to ensure better visibility and predictability of margin calls for clearing members, clients and indirect clients, helping them to further develop their liquidity management strategies. The Delegated Regulation is based on the draft RTS set out in the European Securities and Markets Authority's final report, published in March.

The Delegated Regulation contains provisions on:

• the information to be provided by a CCP to its clearing members
• the requirements of the CCP simulation tool
• the information to be provided by clearing members and clients providing client clearing services
• the requirements for the market stress scenarios for the CCP margin simulation tool.

The Delegated Regulation is not yet in force. It will be subject to scrutiny by the European Parliament and the Council of the EU and, if neither objects, will be published in the Official Journal of the European Union (OJ). The Delegated Regulation will enter into force 20 days following its publication in the OJ, with the requirements for the CCP simulation tool and CSP margin simulations applying 12 months later.

The European Banking Authority (EBA) published the final methodology, draft templates and template guidance for its 2027 EU-wide stress test, together with the key milestones for the exercise. The exercise will assess the resilience of EU banks and the wider banking system. The EBA consulted on the draft version of the documents in June. Following industry engagement, the EBA has streamlined the exercise by reducing the number of required data points by 55%, through simplifying the reporting templates and ensuring closer alignment with supervisory reporting.

The 2027 exercise will also, for the first time, include a dedicated module assessing climate-related risks, although this will not affect the core stress test results. The exercise is due to launch at the end of January 2027, following the publication of the macroeconomic and climate scenarios, with the results expected by the end of July 2027. To give banks sufficient time to prepare, the EBA has published the methodology and templates well ahead of the formal launch date.

The UK Financial Conduct Authority (FCA) has published a blog by Sarah Montgomery, head of department for cross-cutting policy and strategy, outlining its approach to ensuring fairness and transparency in consumer contracts. The FCA reminds firms that consumer contract terms must comply with the fairness and transparency requirements of the Consumer Rights Act 2015 (CRA). Where the FCA raises concerns, it expects firms to: (i) amend or delete the relevant terms; (ii) stop relying on the relevant terms in existing contracts; (iii) pay redress where use of the relevant terms has caused consumer harm; and (iv) in some cases, give the FCA a voluntary undertaking under the CRA. Where necessary, the FCA can apply for a court injunction to prevent the use or enforcement of unfair terms by a firm against its customers and seek a court order requiring the firm to pay redress.

The FCA highlights some of its recent interventions, including in relation to a crypto firm charging excessive storage fees, a financial adviser's excessive charge for handling a complaint, unclear travel insurance terms about what counted as a 12-hour delay and improving the terms of a new credit product before its launch. The blog sets out examples of what the FCA expects from firms in practice. Firms should regularly review consumer contracts to ensure that they are fair, clear and transparent in both their drafting and their application. This includes using plain language, avoiding surprises by making important terms easy to spot, testing whether consumers understand key terms, improving staff training and using complaints data to identify potentially unfair or unclear terms.

The UK Financial Conduct Authority (FCA) has announced the launch of its Quantum Experimentation Group (QEG), an initiative aimed at exploring applications of quantum computing in financial services. The QEG will bring together financial services firms, quantum computing providers and research laboratories to conduct participant-led experimentation, initially focusing on the use of quantum machine learning for financial crime detection. Participants will have access to an FCA synthetic dataset, with the initiative intended to build knowledge and capability, generate evidence and support the development of early regulatory insights into the use of quantum computing.

The QEG is expected to launch in Q1 2027 and UK organisations interested in participating are invited to register their interest by 31 December. The FCA notes that participation will not constitute its approval or endorsement of any participant, technology or solution, or confirmation that any resulting approach complies with applicable regulatory requirements. The FCA will share further information about eligibility and the selection process, participation arrangements and next steps as the programme develops. The FCA also published a blog setting out expectations on how firms should prepare for post-quantum cryptography.

The Basel Committee on Banking Supervision (BCBS) has published a consultation on consequential amendments to the Basel framework, following the finalisation of a new section of its website that brings together its guidelines and sound practices for banks and supervisors in a modular format, replacing PDF versions.

The BCBS proposes to amend the Basel framework by updating cross-references so that they refer to the relevant chapters of the consolidated guidelines and to migrate certain "application guidance" chapters from the Basel Framework to the consolidated guidelines. This is intended to reduce the proliferation of guidance materials across the BCBS's website and to more clearly distinguish between standards and guidelines. The deadline for comments is 21 December.

The European Banking Authority (EBA) has published final revised guidelines on internal governance under the Capital Requirements Directive (CRD). The revisions reflect changes introduced under the CRD VI (Directive 2024/1619) and other relevant legislation, including the Digital Operational Resilience Act (DORA). The revised guidelines clarify requirements relating to the responsibilities of management bodies, organisational structures, conflicts of interest and internal control frameworks.

The EBA consulted on the guidelines in August 2025. The ECB states that, following feedback, it has made changes to the final version including:

• a reduced level of detail for the mapping of duties and individual statements
• greater proportionality in the provisions applicable to third-country branches
• clearer and simpler provisions on conflicts of interest
• reduced granularity in the requirements related to monitoring diversity and inclusion.

The Bank of England (BoE) has published the Retail Payments Infrastructure Board (RPIB) response to its June consultation on the design of the UK's future "next generation" retail payments infrastructure. The RPIB welcomed the breadth of feedback received, which it states will be an important factor, alongside wider industry engagement, in developing the blueprint for the new infrastructure.

The RPIB reports broad support for the key elements of the consultation, with differences of view relating more to the next level of detail than to the overall payment journeys or design principles. Respondents identified areas requiring further consideration, including the boundary between the core infrastructure and other services, how interoperability would work in practice with new forms of digital money, fraud and consumer protection challenges, and how to minimise risks in the eventual migration to the future infrastructure. Respondents also favoured a phased approach to migration.

In its response, the RPIB sets out prospective design proposals, which it will continue to refine through industry engagement over the coming months. It proposes a single modular architecture that would provide a common platform for existing and future payment arrangements, with reusable capabilities that could support new products and forms of money over time. It would include common access arrangements and an ISO 20022 messaging approach intended to support interoperability and reduce duplication, alongside an orchestration layer that would validate, route and sequence payments. The core infrastructure would also coordinate clearing and onward settlement in central bank money through the BoE's Real-Time Gross Settlement (RTGS) service, with the design intended to allow participants to use liquidity more efficiently across different payment arrangements.

The RPIB will now work with industry and other stakeholders to develop an initial draft of the blueprint through a co-creation phase beginning in November, before handing it to an industry-led Delivery Company in spring 2027 to take forward the detailed design, procurement and implementation.

The UK Financial Conduct Authority (FCA) has published Primary Market Bulletin 67 (PMB 67), covering developments relevant to primary market participants. PMB 67 highlights:

• The FCA's new interface for the National Storage Mechanism (NSM), launched in October. The enhanced NSM is the first stage of a wider programme to modernise the publication of markets regulatory information. The FCA intends to develop the service into the FCA Markets Information Resource & Archive (FCA MIRA), which will bring together datasets to provide one authoritative place for users to find, access and reuse information. The service will be free and is intended to preserve records permanently for the public to use. Further details will be provided in a future PMB.
• Findings from its review of a small sample of sponsors' use of AI in connection with sponsor services. The FCA found a consistent theme in that AI was used to support, rather than replace, professional judgement, with responsibility for final work remaining with the employees. The FCA was encouraged by sponsors' consideration of AI-related risks and encourages them to continue considering the risks and ensure the appropriate guardrails are in place.
• Changes to user profile updates in the Electronic Submission System (ESS).
• A new version of TN 619.4, which contains guidelines on disclosure requirements under the Prospectus Rules: Admission to Trading on a Regulated Market (PRM) sourcebook and guidance on specialist issuers. The FCA states that the changes are purely consequential to reflect terminology already adopted across the PRM, the UK Listing Rules sourcebook and the Public Offers and Admissions to Trading Regulations 2024.

Separately, the FCA published a guidance consultation (GC26/8) on minor changes to its Knowledge Base. It proposes:

• consequential amendments to TN 602.5 on exemptions from the requirement to produce a prospectus and TN 605.5 on supplementary prospectuses following changes to the PRM.
• to revoke: (i) TN 103.1 on the independent business requirements for companies applying for premium listing; and (ii) Procedural Note 902.4 on listing securities via final terms, as the latter duplicates information available elsewhere on the FCA's website.

The deadline for comments on the consultation is 9 December.

The European Commission (EC) has published its 2027 work programme, set out in a communication, outlining its key policy and legislative priorities for the coming year. The EC states that it has already tabled 12 Omnibus packages and other simplification measures. For financial services, the EC will table proposals to complete the Savings and Investments Union (SIU), including the reform of the venture capital framework and a bank competitiveness and simplification package, and will conduct a mid-term review of the SIU. It will also support the co-legislators' efforts to reach a swift agreement on the digital euro and, separately, propose a broader digital transformation package on simplification and copyright.

The EC also proposes to withdraw legislative initiatives that have failed to secure sufficient support in the European Parliament and the Council of the EU, including the Regulation on a framework for financial data access (2023/0205(COD)) (FIDA Regulation) and the Regulation establishing the European Deposit Insurance Scheme (2015/0270(COD)) (EDIS Regulation, to be replaced by the proposals on banking competitiveness in Q1 2027). Alongside the work programme, the EC published four annexes which set out its plans in more detail, including the relevant acts and proposals. It also published a factsheet.

The Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2026 were laid before Parliament and published, alongside an explanatory memorandum. The Regulations extend by 12 months the transitional arrangements under Parts 2 and 3 of the Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2019. These arrangements enable specified categories of Gibraltar-based firms to provide financial services in the UK and, similarly, UK-based firms to access Gibraltar's financial services market. The arrangements, previously extended by the Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2025, are now extended to 31 December 2027. The Regulations come into force on 16 December.

The explanatory memorandum states that these temporary arrangements will be superseded by a new, long-term framework: the Gibraltar Authorisation Regime (GAR), established by the Financial Services Act 2021. Secondary legislation to implement the GAR is being prepared by HMT. In a progress statement published alongside the Regulations, HMT states that the government intends to bring the GAR into force as soon as possible. The statement also makes note of the amendments relating to the GAR to be made by the Financial Services and Markets Bill, to align with the UK's framework for Overseas Recognition Regimes.

The UK Financial Conduct Authority (FCA) has published its minimum expectations for firms making full and final settlement offers while the motor finance redress scheme is partially suspended following a legal challenge. The expectations are intended to help firms ensure that consumers are provided with clear, fair and not misleading information when deciding whether to accept an offer and to promote a consistent approach across firms.

The FCA states that, where a consumer voluntarily enters into a settlement agreement after receiving appropriate information, it would ordinarily expect the related complaint to be treated as withdrawn. This is on the basis that the lender can demonstrate that the offer reflects no less than the maximum redress available under the scheme (i.e. the amount calculated for the individual consumer under the scheme methodology, including relevant adjustments and caps). The FCA expects offer letters to make clear that the FCA has not reviewed the terms of any individual settlement offer and not to suggest or imply that it has approved the specific offer. Firms should also give consumers at least one month to respond.

The FCA sets out further expectations for the content of offers, including: the context in which the offer is being made; an explanation that the amount offered is at least equal to the maximum redress available under the scheme; the consumer's choice between accepting the offer or waiting for the outcome of the legal challenge; what accepting a "full and final settlement" means in practice; and the treatment of mixed complaints. Firms should also signpost consumers to the FCA's published FAQs. The FCA also sets out minimum expectations for the letter appendix setting out the remedy and amount of redress due, including the basis of liability, the amount payable and how it has been calculated, and how the firm has ensured that the offer is no less than the maximum redress available under the scheme.

The UK Financial Conduct Authority (FCA) has published a final policy statement (PS26/21) on streamlining the intragroup regime under the UK version of the European Market Infrastructure Regulation (UK EMIR). UK EMIR provides exemptions from the clearing obligation and bilateral margin requirements for intragroup transactions, provided the counterparties meet certain conditions. The policy statement should be read alongside HM Treasury's (HMT) statutory instrument (SI)—the Over-the-Counter Derivatives (Intragroup Transactions) Regulations 2026—which amends UK EMIR to provide for a permanent, streamlined intragroup regime.

The policy statement contains the FCA's final binding technical standards (BTS) and confirms the revocation of certain Q&As relating to the intragroup regime, implementing HMT's reforms alongside additional changes to further reduce burdens on counterparties. The relevant BTS are the UK versions of Commission Delegated Regulation (EU) 2016/2251 and Commission Delegated Regulation (EU) 149/2013.

The FCA is largely proceeding as consulted on, with some additional consequential amendments to align with the final SI. The new regime comes into effect on 1 January 2027. Key dates and actions for firms include:

• Existing exemptions: all intragroup margin and clearing exemptions that applied immediately before 1 January 2027 will continue to have effect, provided the relevant conditions apply. This includes exemptions granted temporarily under the Temporary Intragroup Exemption Regime (TIGER). Counterparties do not need to do anything to keep benefiting from them.
• New exemptions before 1 January 2027: the FCA strongly encourages counterparties to submit notifications before 5 December using the current notification process. This ensures the FCA can process them before the current regime expires.
• Notifications between 5 and 31 December: counterparties planning to notify in this period should contact the FCA as soon as possible to discuss how best to address their circumstances in light of the transition to the new regime.
• From 1 January 2027: if both counterparties to a transaction are established in the UK, they won't need to notify. Instead, they will need to self-assess that they meet the relevant condition before using the exemption. All other counterparties will need to notify under the new streamlined notification process. From 5 December, the FCA will update its Connect platform and UK EMIR webpages to implement this process.

The UK Prudential Regulation Authority (PRA) and the UK Financial Conduct Authority (FCA) have published a joint discussion paper (DP2/26) considering whether the existing regulatory and legislative framework for credit unions remains fit for purpose as the sector evolves. The review in the paper considers whether the current framework supports six broad outcomes: proportionate regulation; consumer confidence and protection; competition and innovation; long-term sustainability; operational resilience and risk management; and orderly market exit.

In particular, matters the regulators seek views on include:

• removing some requirements on internal audit and regulatory documents for smaller credit unions
• the appropriate capital requirements framework
• barriers to credit unions offering new products and services
• whether changes to FCA fees could reduce regulatory costs and support sustainable growth
• providing credit unions with a path to convert into building societies
• reviewing the current framework for solvent exit, providing further flexibility to transfer business or restructure in an orderly manner.

The responses are intended to inform the regulators' future review of the credit union framework. The deadline for comments is 5 March 2027. Separately, the PRA published a consultation paper (CP15/26) proposing amendments to its rules and supervisory expectations to accommodate planned legislative reforms to modernise the framework for Northern Ireland credit unions (NICUs).

The UK Financial Conduct Authority (FCA) has published a final policy statement (PS26/22) setting out its final rules and guidance for environmental, social and governance (ESG) rating providers. This follows the government's legislation to bring ESG ratings within the FCA's perimeter as well as the FCA's earlier consultation in December 2025. The FCA is proceeding largely as proposed, with targeted changes mainly to the transparency and stakeholder engagement proposals, intended to improve clarity and proportionality, and to support practical implementation.

The regime will take effect on 29 June 2028, from which date in-scope ESG rating providers will need to be FCA-authorised. Key features of the final regime are:

• Baseline standards: relevant FCA Handbook rules and guidance will apply, including the Threshold Conditions in COND, the Principles for Businesses in PRIN, relevant provisions in the Systems and Controls sourcebook, General Provisions and the Financial Crime Guide. The consumer duty will not apply.
• Transparency: there will be a tiered transparency framework comprising public disclosures and additional disclosures for direct users. Rated entities will receive the additional disclosures on request rather than by default. Certain disclosures can be made at product level rather than at individual-rating level.
• Governance and systems and controls: providers must keep records to explain and evidence how a rating was produced and how the outcome was determined, rather than to reproduce the rating. They must give users advance notice of material changes to methodologies but will not be required to give advance notice to rated entities.
• Conflicts of interest: firms must take all reasonable steps to prevent or manage conflicts of interest, with disclosure used only as a last resort where the conflict continues to pose a material risk to the integrity or independence of a rating.
• Stakeholder engagement and complaints: firms must notify rated entities sufficiently in advance and at least two business days before a rating is first made available. Firms must deal with complaints raised within three years. The UK Financial Ombudsman Service will not have jurisdiction and Financial Services Compensation Scheme cover will not apply.
• Senior Managers and Certification Regime (SMCR): ESG rating providers will be subject to the SMCR in the same category as Core firms, including conduct rules and fitness and propriety requirements.

The FCA also finalised perimeter guidance to clarify the scope of the regulated activity and relevant exclusions.

The authorisation gateway will open on 24 June 2027 and the FCA's pre-application support service will be available from February 2027. The FCA's directions set out when firms should apply for Part 4A permission, or a variation of permission. Larger firms should apply between 24 June 2027 and 29 July 2027. A larger firm is one that forecasts, in its application, revenue of GBP500,000 or more from providing ESG ratings in the 12 months after the day of submission. All other firms should apply between 30 July 2027 and 31 August 2027. The FCA also published a new webpage with information to help firms prepare for the new regime.

The UK Financial Conduct Authority (FCA) has published the third edition of its wholesale banks supervision insights. The FCA's earlier learnings from August 2025 and April of this year, now sit under separate webpages which can be found here and here. The insights draw on the FCA's supervisory work, risks it has seen crystallise and findings from internal audit functions. Its findings are summarised under five headings: (i) improving the resilience of firms and markets; (ii) enhancing efficient, competitive and innovative markets; (iii) preventing financial crime and market abuse; (iv) ensuring firms effectively manage conflicts of interest and conduct oversight; and (v) other learnings. Observations include:

• Data management: firms should assess the design and operating effectiveness of data ingestion at the control implementation stage and track clear data lineage from source to consumption. Banks remain responsible for communications recording and monitoring requirements even when they use third parties.
• Algorithmic trading controls: firms enhancing their algorithms should assess the impact of changes across the entire trading process, including whether the change creates unforeseen interactions with execution venues, data or fill notifications. The FCA reminds firms of the regulatory technical standard (RTS) 6 requirements.
• Operational resilience: banks should be able to explain how they have calibrated impact tolerances by reference to the potential market, client and / or counterparty harm and not rely solely on generic recovery time objectives. Firms should also show how incidents, near misses and testing outcomes have informed mapping, vulnerability assessment, remediation priorities and future scenario design. Firms with settlement-related important business services should also consider how the move to T+1 settlement may affect their operations.
• Financial crime prevention: banks' controls should identify the risks associated with funding or servicing firms that are not registered for Annex 1 activities.

The FCA also shared internal audit metrics from seven wholesale bank subsidiaries as a benchmarking reference point. Firms are advised to consider the FCA's observations and how they may apply to their own activities and practices.

The Financial Action Task Force (FATF) has announced the launch of a targeted review to accelerate global implementation of FATF Standards on virtual assets and virtual asset service providers (VASPs). The launch was agreed at the FATF's October 2026 Plenary and will primarily focus on jurisdictions with materially important VASP activity, based on their current assessment status. The FATF will follow up with relevant jurisdictions through ongoing engagement, training and capacity-building initiatives. Initial results from the review are expected in June 2027, with further results to follow in October 2027.

The Plenary also:

• approved a landmark report on fraud and scam compounds, one of the most rapidly expanding forms of organised crime globally, with a wider study and recommendations on using the FATF toolkit against fraud to follow
• removed Bulgaria, Côte d'Ivoire, the Democratic Republic of the Congo and Monaco from its "grey list" of jurisdictions under increased monitoring after successful on-site visits, and updated statements on jurisdictions under increased monitoring and those subject to a call for action
• adopted mutual evaluation reports on Mexico and the U.S. under the new round of mutual evaluations, assessing how effective each country's measures against money laundering, terrorist financing and proliferation financing are, and how far they comply with the FATF recommendations, with publication expected in December
• agreed to introduce tailored assessments for low-capacity countries, so that high-impact reforms can be prioritised on a more risk-based basis.

The Council of the EU has published an 'A' item note from the Presidency to the Permanent Representatives Committee (COREPER) on the proposed Market Integration and Supervision Package (MISP), together with separate Presidency notes setting out the general approach on each of the three legislative proposals forming part of the package, specifically:

• the text of the proposed Regulation on settlement finality, which would repeal the Settlement Finality Directive (Directive 98/26/EC) and amend the Financial Collateral Directive (Directive 2002/47/EC)
• the text of the proposed Directive amending the Undertakings for Collective Investment in Transferable Securities Directive (UCITS), Alternative Investment Fund Managers Directive (AIFMD) and Markets in Financial Instruments Directive II (MiFID II) frameworks on the further development of capital market integration and supervision within the EU (MISP Directive)
• the text of the proposed Regulation amending a range of existing EU financial services legislation to support the further development of EU capital market integration and supervision within the EU (MISP Regulation).

The texts are revised versions of the compromise texts published by the Council in October. In the 'A' item note, the Presidency invites the COREPER to confirm agreement on these texts and recommend that the Council adopt them as its general approach on the MISP legislative proposals at the Economic and Financial Affairs Council meeting on 9 November. This will enable the Presidency to begin interinstitutional negotiations as soon as the European Parliament establishes its own negotiating position.

The European Commission (EC) sent the Council of the EU its second annual progress report on simplification, implementation and enforcement for Financial Services and the Savings and Investments Union (SIU). The report covers 1 August 2025 to 31 July 2026. In that period, the EC states it intensified efforts to simplify the regulatory framework for financial services, with particular emphasis on reducing unnecessary reporting burdens.

A key milestone for the EC was the Omnibus I Directive, which entered into force in March and which, the EC states, cut the number of companies subject to mandatory reporting under the Corporate Sustainability Reporting Directive by about 85%. The EC also adopted a significantly simplified set of European Sustainability Reporting Standards in July. It proposed the Market Integration and Supervision Package to tackle cross-border regulatory and supervisory barriers and reduce market fragmentation. In addition, it adopted a communication on the competitiveness of the banking sector and the single market in banking. Building on its simplification agenda, following last year's screening, 115 Level 2 acts were deprioritised and will not be adopted before October 2027.

The report also covers other areas relating to implementation and enforcement. Looking ahead, the EC will: propose a package of measures to amend the banking regulatory framework in Q1 2027; publish an SIU mid-term review during 2027; complete its taxonomy reporting review and publish an amended Taxonomy Disclosures Delegated Act in Q1 2027; and issue a report to the European Parliament and the Council on the application of the Markets in Crypto-Assets Regulation in 2027, accompanied, if necessary, by a legislative proposal. You may also wish to read our blog post titled "EC publishes 2027 work programme".

The Central Counterparties (Equivalence) (Indonesia and the People's Republic of China) Regulations 2026 have been laid before Parliament and published, accompanied by an explanatory memorandum. Under Article 25(1) of the UK European Market Infrastructure Regulation, a central counterparty (CCP) must be recognised by the Bank of England (BoE) in order to provide clearing services to UK clearing members or trading venues. The BoE may recognise a third-country CCP only where HM Treasury has determined that the legal and supervisory arrangements of the relevant third country are equivalent to those of the UK. These Regulations determine that the regulatory and supervisory regimes for specified CCPs authorised by their respective regulatory authorities are equivalent to the UK regime. The Regulations will enter into force on 19 November.

The Bank of England (BoE) has published a consultation paper seeking views on draft supervisory expectations for central counterparties (CCPs) that wish to accept tokenised versions of collateral eligible under the proposed CCP Rulebook.

The BoE also seeks views on industry interest on a wider range of tokenised asset types, should any become eligible for acceptance as collateral in the future. The expectations are not intended to create a separate regulatory regime for tokenised collateral but instead aim to provide greater clarity on what the BoE would expect CCPs to consider when submitting applications to accept such collateral through the existing supervisory process for the assessment of new forms of collateral.

The BoE's initial view is that the existing regulatory framework does not prevent CCPs from accepting tokenised forms of eligible collateral. However, it notes from industry engagement that additional clarity may help CCPs interpret and apply the requirements. The BoE encourages firms actively considering acceptance of tokenised collateral for central clearing to engage with it on potential proposals. The deadline for responses is 12 February 2027.

The UK Financial Conduct Authority (FCA) has published findings from its supervisory work on how consumer finance firms assess, evidence and monitor fair value under the consumer duty’s price and value outcome. The publication is accompanied by a blogpost. The FCA found positive examples of firms taking structured and proportionate approaches to assessing fair value but also identified recurring areas for improvement where some firms:

• did not fully account for fees and charges when assessing the expected total price customers might pay
• did not clearly explain how their fair value conclusions were supported by the evidence available or how the price paid by customers compared with the benefits they could reasonably expect to receive
• relied heavily on assumptions, narrative statements or management information that lacked sufficient detail or supporting evidence
• gave limited consideration to non-financial costs (such as consumers’ time and effort), how value might change over time or outcomes for different customer groups, including customers with characteristics of vulnerability
• did not communicate fees and charges clearly, prominently or at the right time to support informed customer decision-making
• did not adequately monitor repeat or cumulative charges or assess their impact on customer outcomes
• could not demonstrate that their controls were appropriately designed, operating effectively or reducing the risk of causing foreseeable harm, particularly for customers experiencing financial difficulty.

Firms are advised to consider the FCA's findings and assess how they may inform their approach to meeting their consumer duty obligations. The FCA will continue to monitor this area and where it identifies significant risks of consumer harm, it will take appropriate action.

The European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) have published their respective final reports setting out their technical advice to the European Commission (EC) on proposed amendments to certain key performance indicators (KPIs) under the Taxonomy Disclosures Delegated Act. This follows the EC's March call for technical advice to support its review of the taxonomy reporting framework. The review forms part of the EC's broader omnibus simplification agenda and aims to reduce reporting burdens while maintaining meaningful sustainability disclosures for investors.

ESMA's report recommends narrowing the mandatory operational expenditure (OpEx) KPI to non-capitalised research and development expenditure. It also proposes simpler group reporting, including the removal of the weighted-average KPI, and targeted measures to make disclosures more proportionate, clearer and easier to use.

The EBA's report focuses on five areas, namely:

• removing the fees and commissions KPI and the trading book KPI from the taxonomy disclosure requirements
• simplifying the investment firms' 'other services' KPI, including services related to capital markets
• aligning the grandfathering provisions with the EU Green Bond Regulation, limited to bonds issued under that Regulation
• not including the OpEx KPI disclosed by non-financial undertakings in the calculation of financial undertakings' KPIs
• simplifying group disclosures by using the parent undertaking's KPIs and, where relevant and subject to defined conditions, complementing them with KPIs for material secondary activities, without further aggregation.

The EBA also recommends targeted improvements to the broader disclosure framework. These include simplifying and harmonising the templates for credit institutions' asset management activities, asset managers' activities and investment firms' activities, and simplifying and clarifying the Green Asset Ratio templates for credit institutions. The EBA's report is accompanied by a letter from its chair addressed to the EC.

The UK Financial Conduct Authority (FCA) has published a consultation paper (CP26/39) on proposals for sharing income among data contributors to a UK equity consolidated tape (CT), as well as enhanced operational incident reporting requirements for all CT providers (CTPs).

In its July policy statement (which was combined with a consultation on draft rules about the inclusion of systematic internaliser quotes in the equity CT, and a call for input seeking views on key contractual requirements for the equity CTP) (CP26/31), the FCA required the equity CTP to share a portion of its income with data contributors.

The FCA confirms that implementation of the income sharing arrangements will involve two key stages. First, the FCA will determine the share of income to be paid to data contributors through its five-year concession agreement with the CTP, with its requirements expected to be confirmed in early 2027 following the call for input in Chapter 11 of CP26/31. Second, the FCA will establish Handbook rules and guidance on how that share will be allocated among data contributors, which is the focus of this consultation. Under the proposed income distribution model, the FCA proposes that:

• all UK trading venues and approved publication arrangements would be eligible to receive income based on the relative value of the trades they submit to the equity CT
• half of the shared income would be reserved for central limit order book or periodic auction trading systems, which will provide pre-trade data to the CT, to incentivise the submission of high-quality pre-trade data
• trades executed on smaller trading venues would carry a greater weighting, as the costs of providing data may be more acutely felt by these venues.

While bond and equity CTPs are already subject to operational incident reporting requirements under SYSC 15A and MAR 9, the FCA also proposes to extend the requirements in SUP 15.18 to all CTPs, ensuring that significant operational incidents are reported to the FCA in a timely and consistent manner. This would align CTPs with the standards applicable to other providers of key market infrastructure, including UK recognised investment exchanges. These proposals build on PS26/2, which sets out the rules in relation to the regulators' final policy on operational incident and third-party reporting which come into force on 18 March 2027.

The deadline for comments is 17 December with the policy statement expected in spring 2027.

For readers tracking the consultation on draft rules about the inclusion of systematic internaliser quotes in the equity CT and the call for input on key contractual requirements for the equity CTP, the FCA intends to publish the respective policy statement and feedback statement in early 2027.

The FCA intends for the CTP to start operating in 2027 or early 2028.

HM Treasury has published a letter from John Healy, chancellor of the exchequer, to Andrew Bailey, Bank of England governor, setting out the updated remit and recommendations for the Financial Policy Committee (FPC) for 2026. Mr Healy welcomes the FPC's conclusions to date from its review of bank capital requirements, including proposed reforms to the leverage framework (which the FPC confirmed will go ahead) and the usability and releasability of capital buffers. He looks forward to the FPC delivering these reforms as quickly as possible and expects the next stage of the review to deliver further proposals, particularly to address overlaps identified in capital requirements relating to domestic exposures.

Mr Healy also welcomes the FPC's decision to give firms flexibility to provide more high loan-to-income (LTI) mortgages, and states that the FPC should target improving access to home ownership without prejudicing financial stability, including by considering how the LTI framework can better support this.

Other key recommendations cover strengthening resilience in the non-bank financial sector and core sterling markets, assessing global and geopolitical risks, monitoring cyber and operational risks, including those arising from AI and critical third parties, and continuing to consider climate-related financial risks.

The draft Securitisation (Amendment and Miscellaneous Provisions) Regulations 2026 (draft Regulations) have been laid before Parliament and published. The draft Regulations amend the Securitisation Regulations 2024 (Securitisation Regulations) and the Financial Services Act 2012 (Relevant Functions in relation to Complaints Scheme) Order 2014.

The draft Regulations, among other things, complete the second phase of post-Brexit securitisation reforms that kicked off earlier in 2026 with the UK Financial Conduct Authority's (FCA) consultation CP26/6 and the UK Prudential Regulation Authority's (PRA) consultation CP2/26 (final instruments amending the securitisation rulebooks of the PRA and the FCA are expected later in Q4 2026), and include legislative provisions that complete the FCA proposals to remove the regime for UK-registered securitisation repositories and also address the due diligence requirements for occupational pension scheme investors so that they become subject to the FCA due diligence rules. 

Subject to Parliamentary approval, most provisions will come into force on 1 January 2027. The remaining provisions (which include provisions relating to the removal of the UK securitisation repositories regime) will come into force on 25 May 2027.

For additional background, please see our briefing on phase 2 of the reforms to the UK securitisation framework.

The UK Financial Conduct Authority (FCA) has published findings from a multi-firm review of how small and medium-sized enterprises (SMEs) in the defence sector experience banking services. The publication is accompanied by a blogpost.

The FCA found that there is no regulatory barrier preventing banks from supporting lawful defence businesses. Even so, some defence SMEs have found the process of opening a bank account unnecessarily long and complex. The evidence points to friction and delay, rather than widespread exclusion. The FCA expects firms to take prompt action, including to:

• ensure that decisions to reject applications from defence SMEs are made on reasonable, properly considered grounds and demonstrate that they are proportionate, risk-based and consistently applied
• complete compliance checks efficiently and, where additional checks are necessary, keep applicants informed of progress and likely decision timescales (where legally permissible and appropriate)
• adopt approaches to offering and servicing accounts that reflect the specific circumstances and risks associated with individual defence businesses, and avoid blanket restrictions where a more tailored approach is possible
• ensure that reputational and environmental, social and governance-related considerations are clearly defined, consistently applied and supported by appropriate governance, noting that there are no sustainability rules preventing firms from serving defence customers
• consider whether they can identify and monitor defence SME customers with enough accuracy, including across wider supply chains and dual-use activity to understand how defence SME customers are being treated.

The FCA has written to firms that provide banking services to SMEs to share these findings and its expectations. It will monitor firms' responses through its supervision and will intervene where necessary. Firms should treat the report as a "point in time" publication, which the FCA will consider retired by December 2028.

The Bank of England (BoE) and UK Financial Conduct Authority (FCA) have published a report with the results of their fourth survey on AI and machine learning in UK financial services. The regulators state that the findings should be read as evidence from participating firms rather than a complete assessment of the UK financial sector.

The survey found that AI adoption has continued to increase, with 86% of respondents now using AI and generative AI accounting for 56% of reported AI systems. AI agents are also widely deployed, although most agents were found to operate with limited autonomy. Third-party AI systems have become more prevalent and material, with information security and operational resilience concerns the most prominent reported constraints on their adoption.

More broadly, operational efficiency, automation and productivity were the highest-rated areas of perceived benefit from AI, while data protection and security, third-party and supply chain risk, and generative AI-specific risks were the highest-rated areas of perceived risk. On regulatory constraints, 42% of respondents considered UK data protection and privacy to pose a high compliance burden, and 29% said the same of international regulation.

On governance and accountability, most respondents reported having formal AI governance arrangements, although oversight of third-party AI systems was the most commonly reported area of governance uncertainty or implementation challenge. The survey also considered frontier AI and cyber risk. Most firms expected frontier AI cyber capabilities to become material to their risk profiles, with 88% of respondents assessing evolving frontier AI cyber capabilities as having a moderate or high impact on their firm's risk profile over the next two years.

The UK Financial Conduct Authority (FCA) has updated its webpage to announce that the Upper Tribunal has extended the hearing of the legal challenges to its motor finance redress scheme. The hearing, originally listed for 16 to 26 February 2027, will now run from 16 February to 3 March 2027. This follows the FCA’s earlier announcement in October, which also included guidance for lenders.

The UK Financial Conduct Authority (FCA) has published a consultation paper (CP26/38) consulting on changes to its Financial Crime Guide to reflect recent supervisory findings and developments in financial crime risks. The FCA proposes updates to areas covering: (i) fraud, including authorised push payment fraud and money mules; (ii) cryptoassets, ahead of the new regulatory regime coming into full effect on 25 October 2027; (iii) financial and trade sanctions; (iv) proliferation financing; (v) data security, including to address emerging risks associated with AI, synthetic identity fraud and digital assets; (vi) financial crime systems and controls; (vii) money laundering and terrorist financing; and (viii) other consequential changes.

The proposed updates are intended to clarify and update existing guidance rather than introduce new requirements and include refreshed self-assessment questions and examples of good and poor practice. The deadline for responses is 24 December, after which the FCA intends to publish its feedback and the final amended guide in a policy statement. On future plans, the FCA is exploring more flexible ways to provide financial crime guidance, focused on emerging risks and priority areas. This could include question-and-answer sessions and standalone guidance without prior consultation where it is not required. The guidance would then be consolidated within the Financial Crime Guide at a future date.

The UK Financial Conduct Authority (FCA) has published Handbook Notice No.145 outlining amendments to its Handbook made by the following statutory instruments:

• UK Listing Rules (Sustainability Reporting Standards Disclosure) Instrument 2026, which comes into force on 1 January 2027. This makes changes to replace the existing climate reporting rules for listed issuers with requirements aligned with the UK endorsed International Sustainability Standards Board standards.
• UK CRR References (Amendment) Instrument 2026, which comes into force on 1 January 2027. This makes consequential amendments to FCA Handbook and Glossary references to the UK Capital Requirements Regulation in anticipation of the revocation of the remaining provisions of that Regulation.
• Fund Reporting for Asset Management Entities Instrument 2026, which comes into force on 1 February 2027, except for the amendment to COLL 2.1.4D in relation to authorised fund applications to align the direction with the wording used in the relevant forms (in Annex B of the Instrument), which comes into force on 2 November. These changes form part of the FCA's wider move towards online submissions and support the new Fund Reporting for Asset Management Entities reporting framework (FRAME) being consulted on under CP26/26.

Commission Delegated Regulation (EU) 2026/1763 has been published in the Official Journal of the European Union (OJ). The Delegated Regulation amends the regulatory technical standards (RTS) under the Markets in Financial Instruments Regulation (MiFIR) to implement changes introduced by the MiFIR Review (as implemented by Regulation (EU) 2024/791) and to support the establishment of the over-the-counter (OTC) derivatives consolidated tape.

In particular, the Delegated Regulation: (i) amends the RTS on transparency requirements for derivatives under Delegated Regulation (EU) 2017/583 (RTS 2); (ii) amends the RTS on package orders to align them with the revised transparency framework under Delegated Regulation (EU) 2017/2194; and (iii) establishes the input and output data requirements for the OTC derivatives consolidated tape under Delegated Regulation (EU) 2025/1155.

The published texts do not materially differ from the drafts adopted by the European Commission (EC) in July, except that they incorporate the amended applicable execution/publication venues for the matched principal trading flag and the negotiated transaction flags, as set out in the Corrigendum to RTS 2 published by the EC in September. The Delegated Regulation enters into force on 12 November, 20 days after its publication in the OJ, while the main substantive provisions on derivatives transparency will apply from 1 March 2027.

The publication of the Delegated Regulation also means that those elements of the European Securities and Markets Authority manual on pre-trade and post-trade transparency under MiFID II/MiFIR which are dependent on the Delegated Regulation, and so are currently to be considered as draft guidance, can be treated as final from 12 November.

The Over the Counter Derivatives (Intragroup Transactions) Regulations 2026 have been laid before Parliament and published, alongside an explanatory memorandum. The Regulations, made on 21 October, aim to replace the temporary intragroup exemption regime, which expires on 31 December, with a permanent framework for intragroup exemptions from clearing and margin requirements under the UK European Market Infrastructure Regulation. The draft version of the Regulations was published in July. For more detail on the provisions, please see our blogpost titled “Draft Over the Counter Derivatives (Intragroup Transactions) Regulations 2026 published”. The Regulations will come into force when the revocation of the existing transitional provisions as set out in Part 5 of the Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019 comes into force.

The UK Financial Conduct Authority (FCA) has announced that restrictions have been placed on six unregulated lenders, known as Annex 1 firms, following concerns about their anti-money laundering policies, controls and procedures identified while assessing their applications. The restrictions limit the firms' ability to take on new customers or conduct new business with existing customers, including extending credit, and certain firms' restrictions require an independent review of their anti-money laundering framework.

The action forms part of the FCA's enhanced oversight of Annex 1 firms, which are required to register with the FCA for supervision under the Money Laundering Regulations (MLRs) but are not otherwise authorised or subject to wider FCA regulation. The FCA reminds firms that registration under the MLRs is not a substitute for regulated firms carrying out their own appropriate due diligence to understand the firm's business, in accordance with legislative requirements. This includes seeking direct confirmation from the firm of its registration status, conducting independent checks of the information it provides, and understanding and managing any risks.

The Council of the EU has published its first reading position (dated 21 October) with a view to the adoption of the proposed revised Payment Services Directive (PSD3) and the new Payment Services Regulation (PSR), collectively known as "the Payment Services Package". The legislative package aims to modernise the EU's regulatory framework for payment services, building on the foundations of the current framework under Directive (EU) 2015/2366 (known as PSD2) to enhance consumer protection, strengthen fraud prevention and improve the functioning of open banking. It also seeks to address the pending challenges in the context of the impact and application of PSD2 in the internal market and adapt it to align with new market developments.

The Council's position follows the final compromise texts published in April, which reflected the provisional political agreement reached with the European Parliament (EP) in November 2025. The EP must now approve the Council's position at second reading. In its draft statement of reasons, also dated 21 October, the Council notes that the chair of the Committee on Economic and Monetary Affairs indicated that she would recommend that Parliament accept the position, subject to legal-linguistic verification, provided it reflects the agreed overall provisional agreement.

The UK Financial Conduct Authority (FCA) has published the findings of its multi-firm review of how private market firms identify, manage, mitigate and disclose conflicts of interest. While the review focused on private equity, private credit and real estate firms, many of the observations may also be relevant to firms operating in other areas.

The FCA found that many firms demonstrated effective governance, strong conflict identification processes and a clear focus on investor outcomes. However, standards varied considerably. The FCA highlighted recurring weaknesses in the following areas:

• Cross-fund transfers and continuation transactions: weaker firms relied more heavily on existing governance, disclosure or investor consent. There was limited evidence of how they had assessed and balanced competing investor interests.
• Gifts and entertainment: some firms relied on policy thresholds and generic approvals, and there was limited evidence that firms were effectively identifying and managing conflicts or inducement risks.
• Information barriers: some firms relied more heavily on training, judgement and informal safeguards, with limited monitoring to demonstrate that confidential information was being effectively contained.

The FCA expects firms to consider its findings to identify gaps in their approaches. Firms should assess whether their conflicts frameworks, governance and controls remain proportionate to the nature, scale and complexity of their activities, and consider whether conflicts can be reduced or avoided through business model and structure design. The FCA also states that firms should treat conflicts management as "a dynamic capability" that develops alongside the business, rather than a "static compliance framework". The FCA will carry out targeted follow-up work where appropriate.

The UK Payment Systems Regulator (PSR) has published its policy statement PS26/2, confirming its decision to remove the expiry date from its Specific Direction 17 (SD17). SD17 requires most payment service providers (PSPs) to provide the confirmation of payee (CoP) service, which helps to prevent misdirected payments and reduce certain types of authorised push payment fraud by checking whether the name on a payee's account matches the details provided by the payer. SD17 was due to expire on 1 November but will now remain in force unless varied or revoked. This addresses the potential risk that CoP coverage could weaken over time as PSPs may stop using it and new PSPs might not adopt it.

The PSR will review the requirement to provide CoP in five years' time, or sooner if significant developments affecting CoP or the wider payments landscape warrant it. It will also consider the case for expanding CoP requirements to a wider group of PSPs, to include those that currently provide CoP voluntarily. The PSR will engage with these firms to test the potential impacts identified through the July consultation, including incremental governance, compliance and legal costs, before deciding whether to consult on any future proposal. The scope of SD17 therefore remains unchanged at this stage. The PSR published the updated version of SD17 (SD17a) together with a tracked changes version, alongside its policy statement. 

The Overseas Prudential Requirements Regime (Credit Institutions and Investment Firms) Regulations 2026 have been published, accompanied by an explanatory memorandum. The Regulations support the transition to the FSMA 2000 model of regulation, under which detailed prudential requirements are set by the UK Prudential Regulation Authority within a framework established by government and Parliament. This transition entails the revocation of provisions of the UK Capital Requirements Regulation (UK CRR) and restatements, as needed, in UK legislation to facilitate the FSMA model, with UK CRR provisions replaced with regulator rules, supervisory statements and statements of policy.

The Regulations restate existing UK CRR equivalence provisions in legislation to create a single overseas prudential requirements regime (OPRR), preserving the overall scope and effect of the current equivalence regimes and also preserving existing equivalence decisions by treating them as if they were designations under the new OPRR.

The draft version of the Regulations was laid before Parliament in July. We cover the OPRR in more detail in our blog post titled “UK PRA final rule changes for overseas prudential requirements regime”. The Regulations will enter into force on 1 January 2027.

The UK Financial Conduct Authority (FCA) has published a user guide on delegating access for submitting fund authorisation applications following its recent announcement that fund authorisation applications and notifications will gradually move from an email-based system to fully digital forms submitted online. From 2 November, the FCA will start asking firms to submit certain applications and notifications online via FCA Connect, with the transition taking place in phases. The FCA states that it is introducing the changes over a two-year period to reflect the scale of the programme and the number of fund authorisation forms affected. The user guide provides instructions on how firm users can delegate the appropriate access to submit fund authorisation applications and notifications using Connect. It covers applications for authorising new schemes in the UK, requests for approval to change or wind-up an existing authorised fund and notifications of an approved change that has been made to a fund (Form FN).

The Building Societies Act 1986 (Assimilation to Company Law and Changes to Funding Limit) Order 2026 has been published, alongside an explanatory memorandum. The Order amends the Building Societies Act 1986 (BSA 1986) to align the provisions on common seals and the execution of documents by building societies with the equivalent regime under the Companies Act 2006. Building societies will therefore be able to choose whether to execute documents using a common seal or through authorised signatories, bringing them into line with the more flexible arrangements available to companies.

In addition, under section 7 of the BSA 1986, subject to specific exemptions, at least 50% of a building society's liabilities must be shares owned by individuals (known as "the funding limit"). The Order makes provisions to exclude certain sources of funding for the purposes of calculating the funding limit.

The draft version was laid before Parliament in July. More detail on the provisions can be found in our blogpost titled “Draft Building Societies Act 1986 (Assimilation to Company Law and Changes to Funding Limit) Order 2026 published”. The Order will come into force on 1 January 2027.

The European Securities and Markets Authority (ESMA) has announced it has updated its Q&As on: (i) market structure under the Markets in Financial Instruments Directive II; (ii) the Market Abuse Regulation; and (iii) the Short Selling Regulation. This is part of ESMA's Simplification and Burden Reduction initiative. ESMA has withdrawn or amended several Q&As that are outdated, duplicative or no longer relevant due to legislative changes reflected in established market practices or because they are covered in other ESMA guidance, such as supervisory briefings and opinions. The changes are intended to reduce unnecessary complexity and ensure that ESMA's Q&As remain relevant, proportionate and consistent with the current legislative framework. ESMA encourages stakeholders to consider the updated Q&As alongside its other guidance when interpreting the applicable rules.

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/36, consulting on amendments to its Perimeter Guidance Manual (PERG) within the FCA Handbook to reflect recent legislative changes to the UK's cryptoasset regulatory perimeter. The FCA previously published its final perimeter guidance in PS26/18 in September, to help firms understand the scope of the new regulated cryptoasset activities and when authorisation and permissions may be required. The day before PS26/18 was published, the government made further amendments to the regime through a second statutory instrument (SI), the Financial Services and Markets Act 2000 (Cryptoassets) (Miscellaneous Amendments) Regulations 2026, which introduces further exclusions from certain of the regulated cryptoasset activities. For more detail, you may wish to read our blog post titled "UK lays draft SI amending the 2026 Cryptoasset Regulations".

The FCA is now consulting on changes to its existing PERG 18 guidance to reflect the amendments in the second SI. The proposed changes explain the FCA's view of how the amendments in the second SI apply, and how the new exclusions interact with the regulated cryptoasset activities. In addition, the FCA also proposes to add guidance to PERG 18 on the extent to which decentralisation can affect perimeter analysis. The existing PERG 18 guidance and the proposed amendments in this consultation are intended to be read together. The FCA also proposes consequential amendments to PERG 8, its financial promotion guidance, reflecting amendments to the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 made by the second SI.

The deadline for responses is 18 November. The FCA expects to publish its final guidance in spring 2027, ahead of the new cryptoasset regulatory regime's go-live date on 25 October 2027.

The FCA also published an updated webpage in which it acknowledges that the timing of the publication of the second SI may have created uncertainty for a small number of firms around the need to be authorised. The FCA explains that where a firm can demonstrate that the uncertainty relating to the technical services provider exclusion has materially impacted its ability to submit a complete application during the application period, the FCA will exercise some forbearance. Under these circumstances, provided a firm submits an otherwise complete application during the application period, the FCA will allow the firm additional time to address any incomplete aspects of its application relating to the arranging permission. Impacted firms are encouraged to engage with the FCA through its pre-application support service.

The UK Financial Conduct Authority (FCA) and UK Prudential Regulation Authority (PRA) have published consultation papers (FCA CP26/37 and PRA CP14/26) setting out the second phase of their reforms to the Senior Managers and Certification Regime (SMCR). The proposals build on the Phase 1 reforms confirmed in April and seek to make the regime more proportionate and easier to operate while maintaining individual accountability and standards of conduct. They also anticipate changes under the Financial Services and Markets Bill 2026 (FSM Bill), which will remove many prescriptive SMCR requirements from legislation and make the regulators responsible for deciding how these requirements should apply in their rules. The regulators are consulting now alongside the FSM Bill so they can make any changes to the rules as soon as possible after royal assent.

Both regulators have sought to align proposals as far as possible to reduce complexity for dual-regulated firms. The proposed reforms would significantly streamline the Senior Managers Regime, including reducing the number of senior management functions (SMFs) requiring approvals and introducing an SMF notification process instead; simplifying the application process; extending the temporary SMF cover rule from 12 to 18 weeks; removing some senior manager prescribed responsibilities; and reducing the frequency of submission of statements of responsibilities and management responsibilities maps. The FCA is also proposing to reduce the number of firms subject to the enhanced regime by raising the relevant threshold.

The regulators also propose removing the Certification Regime and instead relying on other rules to achieve similar outcomes. Under the PRA proposals, this includes removing requirements to assess the fitness and propriety of individuals within scope of its Certification Regime, both on appointment and annually. In addition, the FCA is proposing to retire its directory of certified persons and remove the requirement for firms to provide information on directory persons, simplify conduct rules training and raise the thresholds for reporting conduct rule breaches.

The deadline for responses to both consultations is 22 January 2027. The regulators expect to publish a final policy statement in H1 2027, with a view to implementing the changes around six months later in H2 2027.

The Council of the EU and the European Parliament (EP) have announced that they have reached provisional political agreement on the European Commission's securitisation package, which was first published in June 2025. The measures aim to revive and simplify the EU securitisation market. The Council of the EU explains that the updated framework will enable banks to free up more capital than is currently the case and channel increased lending to households, small and medium-sized enterprises, and infrastructure projects. It will also reduce administrative burdens for market participants. The securitisation package forms part of the EU's savings and investments union.

The agreed amendments to the original proposals include re-calibrating capital requirements on a risk-sensitive basis for banks investing in securitisations; introducing a new 'resilient' category of securitisations and strengthening the simple, transparent and standardised (STS) label; reducing administrative burdens and strengthening EU-level supervision, including for the independent entities that verify STS compliance; and supporting greater institutional investment and cross-border participation.

The relevant legal texts must now be finalised and formally endorsed by both the Council of the EU and the EP.

The UK Financial Conduct Authority (FCA) has published a guidance consultation (GC26/7) on decentralised finance (DeFi). The FCA is consulting on non-Handbook guidance to help firms understand how existing operational resilience and financial crime requirements may apply when they provide financial services using, or interacting with, DeFi. The proposed guidance is primarily intended for FCA-authorised firms that use or interact with DeFi as part of their regulated activities, including firms carrying on future regulated cryptoasset activities. The proposed guidance provides observations on the current risk landscape and illustrative examples of measures firms may wish to consider when designing or enhancing their systems and controls. It explains how firms should assess and manage DeFi risks in the context of the FCA's operational resilience framework under SYSC 15A, including through mapping, scenario testing, communication strategies and third-party arrangements. It also addresses financial crime risks and how firms should consider relevant obligations under SYSC 6 and the Money Laundering Regulations 2017, including in relation to risk assessments, systems and controls, customer due diligence, ongoing monitoring, suspicious activity reporting and the Travel Rule.

The FCA emphasises that the guidance does not create new regulatory requirements and that firms remain responsible for complying with existing legal and regulatory requirements when using or interacting with DeFi. Where they cannot do so adequately, firms are reminded that they should consider whether the activity is appropriate for their business and clients. The deadline for responses is 18 November, with the final guidance expected in Q1 2027.

Commission Delegated Regulation (EU) 2026/2343 has been published in the Official Journal of the European Union (OJ). The Delegated Regulation amends the regulatory technical standards (RTS) on the clearing thresholds and the mechanisms that trigger their review set out in Delegated Regulation (EU) No 149/2013, to reflect changes introduced by the revised European Market Infrastructure Regulation (EMIR 3). The Delegated Regulation was adopted in July and was based on the European Securities and Markets Authority's final report published in February. There are no substantive changes made to the Delegated Regulation since its adoption. These changes are important for derivatives counterparties as the clearing thresholds determine an entity's counterparty classification under EMIR and, therefore, which EMIR obligations apply to it (for example, uncleared margin). The Delegated Regulation will enter into force on 10 November, 20 days following publication in the OJ, upon which date the new rules relating to the EU clearing thresholds will be effective. However, this will not necessarily mean that EU counterparty classifications need to be re-calculated (and, if they are different, change) with effect from 10 November, as counterparties have flexibility on whether to re-calculate their EMIR status immediately or wait until their usual annual calculation date.

The European Securities and Markets Authority (ESMA) has published a final report containing draft regulatory technical standards (RTS) specifying the circumstances in which transactions resulting from post-trade risk reduction (PTRR) services will be exempt from the clearing obligation under the revised European Market Infrastructure Regulation (EMIR 3). The draft RTS: (i) specify the requirements regarding PTRR services and their resulting transactions which are eligible for the clearing obligation exemption, including compression, portfolio rebalancing and basis risk optimisation; (ii) set out the common conditions on market risk neutrality and risk reduction; (iii) further define the obligations that PTRR service providers should meet; and (iv) detail the requirements on transparency, algorithms, execution, controls, record-keeping and monitoring of the exemption. ESMA states the aim is to facilitate the use of PTRR services and ensure that the exemption is used under the conditions laid down in EMIR 3 and does not lead to the misuse of the clearing obligation.

As feedback to the February consultation was broadly supportive, ESMA has made only limited adjustments to the final draft RTS. The final draft RTS were submitted to the European Commission (EC) on 9 October for endorsement. The EC has three months to decide whether to endorse the proposed RTS.