The UK Financial Conduct Authority (FCA) has published a feedback statement (FS26/2) from its review into whether regulation affects small and medium-sized enterprises' (SMEs) ability to access finance. The review found no evidence that FCA regulation is a major barrier to SME lending, but instead, found that many of the challenges relate to the wider market, information and capability. This is particularly the case for microbusinesses, who face issues such as limited awareness of finance options, complex application processes, duplicated customer checks and difficulties obtaining finance where businesses have limited collateral or predominantly intangible assets.

To reduce friction and support growth, the FCA has identified three priority areas for further work: (i) supporting a more proportionate regulatory framework through reform of the Consumer Credit Act; (ii) advancing open finance with SME lending as a priority use case; and (iii) monitoring industry work to explore whether digital verification could reduce duplication in customer checks, while maintaining effective financial crime controls.

The House of Lords Financial Services Regulation Committee has launched a call for evidence as part of its inquiry into regulatory sandboxes in UK financial services. The inquiry will examine the purpose, effectiveness and wider impact of regulatory sandboxes, including the UK Financial Conduct Authority (FCA)'s Regulatory Sandbox and Digital Sandboxes, as well as the Digital Securities Sandbox operated jointly with the Bank of England. The Committee is seeking views on whether sandboxes promote innovation, offer wider public benefits and value for money, shape markets through their selection of firms, and help to produce good regulatory policy, particularly for emerging technologies. The inquiry will also consider firms' experiences of participation, the use of sandboxes to test agentic AI, and how the UK's approach compares with those adopted in other jurisdictions and sectors.

The European Commission adopted a Delegated Regulation supplementing the Capital Requirements Directive 2013/36/EU, as amended by Directive 2024/1619 (CRD VI), with regard to regulatory technical standards (RTS) specifying the booking arrangements that third-country branches (TCBs) must apply for the purposes of Article 48h CRD. The RTS set out the methodology that TCBs must follow to track and maintain a precise and comprehensive record of all assets and liabilities booked or originated by the TCB, and off-balance sheet items, in each case that arise from transactions on the basis of their authorised activities, transactions that do not require authorisation, intragroup transactions, and transactions entered into on the basis of reverse solicitation of services.

The RTS also specify the minimum information that must be maintained in the registry book, together with information on their associated risks, taking into account the size and complexity of their operations. The Regulation is based on the European Banking Authority's final draft RTS published in January. It will enter into force on the 20th day following publication in the Official Journal of the European Union and will apply from 11 January 2027.

The Single Resolution Board (SRB) has published its operational guidance for banks' communication in resolution scenarios, along with a communication testing supplement to its existing operational guidance on resolvability testing for banks. The guidance is aligned with the European Banking Authority resolvability framework and supports the implementation of the existing SRB's Expectations for Banks. The SRB states that it does not introduce new requirements but instead clarifies how banks should prepare and test their ability to communicate effectively with internal and external stakeholders during a resolution event or crisis.

Key areas covered include: (i) coordination between banks and the resolution authorities; (ii) consideration of moratorium tools under the Bank Recovery and Resolution Directive in communication planning; (iii) banks' communication plans for resolution; and (iv) governance arrangements for communication during resolution. The guidance was consulted on in October 2025. The SRB confirms that banks will have until April 2028 to consider and incorporate the operational guidance, where necessary, into their communication plans.

The UK Financial Conduct Authority (FCA) has published findings from its review of how payments and e-money firms are supporting consumers in vulnerable circumstances under the consumer duty. The review assessed firms' approaches to identifying vulnerability, providing tailored support and monitoring customer outcomes. The FCA found many examples of positive practice but also identified specific areas for improvement, including:

• Some firms identified very few or no customers in vulnerable circumstances, despite having customer bases where characteristics of vulnerability may reasonably be expected.
• There was limited testing or assurance to assess how effectively identification policies were being implemented in practice.
• Approaches on support arrangements were not always applied consistently across the customer journey, and some firms could not clearly evidence how vulnerability information translated into tailored support for customers.
• Communications relied primarily on standard formats, with limited tailoring for customers with different needs, and limited assessment on whether communications were understood and effective in practice.
• The frequency and quality of management information provided to senior management and boards could be improved. Boards at certain firms received limited insight beyond annual consumer duty reporting, and vulnerability data and outcomes information were not consistently recorded, reducing firms' ability to identify trends and take corrective action.
• Understanding the impact of distribution arrangements on consumer outcomes.

Firms are advised to consider these findings when assessing their own arrangements. The FCA will continue to engage with firms in this area and intervene where necessary.

The UK Financial Conduct Authority (FCA) has published policy statement PS26/18, setting out its final perimeter guidance on the new regulated cryptoasset activities introduced under the upcoming UK cryptoassets regime (PERG 18). The guidance seeks to clarify the scope of those activities, the regulatory perimeter, and when authorisation and permissions may be needed.

Following the April consultation, the FCA has proceeded largely as consulted on, with a number of targeted clarifications following feedback, including on the application of the "by way of business" test, the territorial scope of the regime, the distinction between qualifying cryptoassets and specified investment cryptoassets, the treatment of cryptoassets that are solely records of rights or value and of hybrid token structures, and the distinction between activities that do amount to arranging and activities that are unlikely to do so.

The government has also laid a further statutory instrument (SI) before Parliament amending the Cryptoasset Regulations 2026. The FCA states that the guidance in PS26/18 does not yet reflect the new SI. The FCA plans to consult in early Q4 on further PERG amendments addressing the new SI, with final amended guidance expected in early 2027.

The Financial Services and Markets Bill has completed its third reading in the House of Lords and was subsequently introduced in the House of Commons for first reading. Parliament also published the Bill as brought from the Lords, reflecting amendments agreed during its passage through the House of Lords. A date for the second reading in the House of Commons has not yet been announced.

The European Parliament's Economic and Monetary Affairs Committee (ECON) has published the text of the report it has adopted on the European Commission's proposal for a Regulation amending the Sustainable Finance Disclosure Regulation (SFDR), following the adoption of its negotiating mandate on 10 September. The report includes a draft European Parliament legislative resolution setting out the Parliament's proposed amendments to the Regulation (known as the SFDR 2.0 proposal). The Council of the EU previously adopted its negotiating position in June.

The Financial Services and Markets Act 2000 (Cryptoassets) (Miscellaneous Amendments) Regulations 2026 were laid before Parliament, accompanied by a draft explanatory memorandum. The Regulations were previously consulted on in April and make targeted amendments to the UK cryptoassets regulatory framework established by the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026.

Amongst other amendments and additions, the Regulations:

• Exclude activities involving UK qualifying stablecoins by an authorised person under FSMA for the activity of issuing such stablecoins from the regulated activities of dealing in qualifying cryptoassets as principal, dealing as agent, and arranging deals in qualifying cryptoassets.
• Exclude the temporary holding of UK qualifying stablecoins from the cryptoasset safeguarding activity, where they are being held in connection with a payment transaction.
• Clarify the regulatory perimeter for issuing UK qualifying stablecoins and exclude backing asset arrangements for those stablecoins from the relevant safeguarding regulated activities.
• Introduce targeted exemptions for certain cryptoasset proprietary trading, market making, technical services, and central securities depository activities.
• Make related changes to the financial promotion regime, including clarifying the regulatory perimeter for stablecoin issuance and backing asset arrangements and mirroring the exemptions in the FSMA (Regulated Activities) Order 2001 for certain proprietary trading, market making and central securities depository activities.
• Create a new controlled activity for the purposes of the financial promotion restriction (issuing qualifying stablecoin) and consequently a new controlled investment (qualifying stablecoin).
• Bring forward the commencement of provisions that provide that assets backing qualifying stablecoins are not treated as collective investment schemes, alternative investment funds or electronic money.

The changes are intended to remove overlapping or disproportionate regulatory requirements and unnecessary regulatory barriers, while maintaining high standards of regulation for activities that present material risks to consumers or market integrity. Firms excluded from regulation by this instrument continue to have obligations under other legislation, including anti-money laundering requirements.

The UK government has published its anti-money laundering and asset recovery strategy 2026–2029, setting the direction for the UK's response to money laundering and criminal asset recovery over the next three years. Alongside the UK Anti-Corruption Strategy and UK Fraud Strategies, this strategy forms part of the Government's overall approach to economic crime as will be set out in the forthcoming Economic Crime Plan 2026-29.

Measures proposed include:

• Structural reform of the UK's anti-money laundering and counter-terrorist financing supervisory regime (AML/CFT), reducing the number of supervisors from 25 to three.
• Review of how the future of financial payments will impact threats and addressing risks and opportunities presented by the growing use of stablecoins.
• Developing a policy roadmap for addressing risks and opportunities of privacy enhancing technologies in relation to cryptoassets.
• Review of the suspicious activity reporting (SARs) regime for opportunities to reduce low-value activity, including whether to raise the suspicion threshold in POCA and finalising implementation of the SARs Digital Service with AI-enhanced analytics.
• Develop an agreed problem statement regarding law enforcement speed of access to basic bank account information and a review of options.
• Use of the UK's FATF Presidency (2026–28) and G20 Presidency (2027) to promote reform of international AML standards to support a more risk-based approach and reduce low-value compliance activity.

Annex A to the strategy sets out a delivery plan, detailing key actions and milestones across 2026–29.

The UK Financial Conduct Authority (FCA) has published a call for input on whether tokenisation could improve the trading, transfer, mobilisation and use of gold as collateral while maintaining market integrity and consumer protection. The call follows feedback received in response to the FCA's and Bank of England's joint call for input on tokenisation, recognising gold as a significant potential use case given the international strength of the London spot gold market, and the increase in tokenised gold and other gold-related products in recent years.

In terms of scope, the FCA acknowledges a number of key questions around the regulatory perimeter and the status of gold as a commodity, and states that its objective is not to regulate segments of the gold trading market that fall outside the FCA's current remit. The call focuses on gold products that confer ownership rights in underlying physical gold which are clearly defined and have reliable redemption arrangements.

The call for input considers the legal, regulatory and operational conditions needed to support the safe and effective use of tokenised gold, including its incorporation in wholesale market use cases, and the development of industry-led market standards to improve interoperability. Like many recent initiatives from the UK government and regulators, it highlights the increasing momentum behind the development of tokenised asset markets and the importance that industry places on unlocking the use of tokenised securities and commodities in particular for collateral and settlement purposes. As tokenised gold may engage multiple regulatory regimes depending on the use case and participants involved, the FCA is seeking views on areas that may present challenges.

In addition to collateral and settlement, another specific area the FCA seeks feedback on is whether uncertainty around the collective investment scheme and alternative investment fund regimes regulatory perimeter may affect the development of certain use cases for tokenised gold, and whether regulatory clarification or alternative policy measures may be appropriate. The regulator raises two policy options that could be pursued: the first being clarification of the existing regulatory perimeter; and the second being a potential targeted exemption from those regimes for the benefit of gold market infrastructure.

The deadline for comments is 23 October. Alongside this call for input, the FCA, together with the Bank of England, published a feedback statement setting out their joint ambition to support tokenisation in the UK's wholesale financial markets. We cover this in more detail in the securities section below.

The Central Counterparties (Transitional Provision) (Extension and Amendment) Regulations 2026 were laid before Parliament, accompanied by an explanatory memorandum. The Regulations extend the transitional provisions for overseas qualifying central counterparties (QCCPs) under Article 497 of the UK Capital Requirements Regulation by a further 12 months, to seven years after an application for recognition was made. This extension aims to ensure that UK firms with indirect exposures to these overseas CCPs do not face a sudden and disruptive increase in their capital requirements upon expiry of the QCCP transitional regime, which the explanatory memorandum notes for some CCPs within the regime could otherwise fall as early as 31 December.

As part of broader efforts to modernise the UK regulatory framework for UK and overseas CCPs, the government has already announced proposals for a new permanent framework for determining QCCP status. This would replace the current QCCP transitional regime. HM Treasury intends to legislate to implement these reforms later in the year.

The Regulations also make consequential amendments to the Financial Services and Markets Act 2023 (Commencement No. 15 and Saving and Transitional Provisions) Regulations 2026 to ensure that the saving and transitional provisions in that instrument in respect of QCCPs align with the extended expiry date.

The European Parliament's Committee on Economic and Monetary Affairs (ECON) has published a draft report (dated 10 September) and motion for a resolution on the competitiveness of the banking sector in the EU. The report welcomes the European Commission's (EC) July communication on "Competitiveness of the Banking Sector and the Single Market in Banking" but calls for ambitious legislative action to complete the Banking Union, remove unjustified national barriers to the single market and facilitate market-led cross-border consolidation.

Key proposals include:

• Broadening the mandates of the European Supervisory Authorities (ESAs) to include competitiveness and innovation as a formal secondary objective, without prejudice to their primary objective of financial stability.
• Simplifying the capital stack by reducing overlapping buffers and supervisory add-ons, and exploring a significantly simpler regime for small, non-systemic banks.
• Enhancing the small and medium-sized enterprise supporting factor and raising the threshold for qualifying exposures.
• Launching an omnibus legislative initiative to eliminate obsolete, duplicative or excessively burdensome provisions, and empowering the ESAs to challenge disproportionate national gold-plating.
• Encouraging banks to deploy AI in areas such as creditworthiness assessments, fraud prevention and risk management.
• Clarifying the interaction between the AI Act and sectoral financial services legislation and shaping the regulatory framework for digital assets and tokenisation to preserve the EU's role in global finance.

The EC's detailed package of proposed legislative reform is expected in Q1 2027.

The UK Financial Conduct Authority (FCA) and the Bank of England (BoE) have published a feedback statement on tokenisation in UK wholesale financial markets, summarising responses to their May joint call for input. Respondents were largely supportive of the authorities' vision and recognised that industry and regulators would need to work together to tokenise wholesale markets. The most frequently raised themes included:

• A desire for faster progress, with clear timelines and implementation milestones in the forthcoming tokenisation roadmap.
• A move beyond sandboxes and pilots towards full production, scale and permanence.
• Clarity on the prudential treatment of tokenised assets and the eligibility of tokenised assets as collateral (in both central bank operations and for central clearing at central counterparties), with tokenised Money Market Funds frequently mentioned by buy-side firms.
• Access to insolvency protections under the settlement finality regulations for blockchain-settled transactions, and the use of stablecoins as settlement assets.
• Prioritisation of regulatory work on interoperability, encompassing legal, regulatory and cross-jurisdictional dimensions.
• A preference for aligning custody rules for relevant specified investment cryptoassets (RSICs) broadly with CASS 6, with targeted overlays for blockchain-specific risks such as private key management.

The FCA and BoE confirm they will publish a tokenisation roadmap later in the year setting out detailed workstreams and target dates. Key commitments include progressing work on tokenised collateral, with a supervisory statement and discussion paper on central counterparties collateral due later this year, and consulting on rules for the safeguarding of RSICs in the first half of 2027.

Alongside the feedback statement, the FCA has issued a call for input on tokenised gold.

Commission Delegated Regulation (EU) 2026/1221 was published in the Official Journal of the European Union (OJ). The Regulation makes targeted amendments to the EU prudential framework for banks' market risk, specifically the Fundamental Review of the Trading Book (FRTB) under the Capital Requirements Regulation (CRR).

While most Basel III reforms have applied since 1 January 2025, the FRTB has been deferred on several occasions, most recently to 1 January 2027 in response to uncertainty around implementation timelines and potential deviations from the Basel standards in other major jurisdictions.

This Delegated Regulation sets out amendments intended to support a level playing field for EU banks competing internationally in trading activities by offsetting the negative capital impact of the FRTB for a period of three years – until 31 December 2029, in aspects of the framework where deviations in other jurisdictions have been identified or are likely, including:

• The profit and loss attribution test (PLAT): to allow banks to calculate the PLAT only for monitoring purposes during the three-year period, with no direct impact on the own funds requirements.
• The non-modellable risk factors (NMRFs) framework: to modify the conditions on the number of verifiable price observations needed for a risk factor to be considered modellable and hence be capitalised under the expected shortfall calculation.
• Internal default risk model requirements: applying a multiplier equal to 0 to the probability of default of issuers/obligors that attract a 0 % risk-weight under the alternative standardised approach (allowing banks under the internal model approach to treat exposures to those issuers identically to how those exposures would be treated under the alternative standardised approach).
• The expected shortfall risk measure and the stress scenario risk measure calculations: allowing banks under the alternative internal model approach to temporarily calculate and disclose the values of the regulatory expected shortfall risk measure and stress scenario risk measure on a weekly rather than daily basis.
• Exposures to Collective Investment Undertakings: allowing and specifying thresholds for a partial look-through, while requiring a more conservative treatment for the part that cannot be looked through.
• The residual risk add-on (RRAO): applying multipliers for instruments that have future realised volatility as an underlying, that are options that can be exercised on a finite number of dates, or that are options on the difference between two constant maturity swap rates denominated in the same currency, where those instruments attract an RRAO charge only for those reasons.
• Default risk under the alternative standardised approach: recognising economic hedges between an equity derivative and a cash position of the same underlying.
• The output floor: limiting the phase-in of the own funds requirements for market risk under the alternative standardised approach, and allowing banks that apply the simplified standardised approach to similarly benefit from the phase-in.
• Additional proportionality for banks with small trading book businesses: allowing use of the simplified standardised approach for their non-trading book positions subject to foreign exchange risk and commodity risk.
• Limiting capital impacts: allowing credit institutions adversely impacted by the implementation of the new market risk rules, even after applying the targeted amendments, to limit that capital impact for the three-year period.

The Regulation entered into force on 12 September, with the amendments applying from 1 January 2027.

The House of Lords has published an updated webpage for the Financial Services and Markets Bill, confirming that the Bill is scheduled for third reading in the House of Lords on 15 September. Materials relating to the final report stage sitting on 9 September have also been published, providing details of the debates and proceedings during the Bill's consideration in the House of Lords, together with a current version of the Bill (as amended on report). After it concludes the third reading, the Bill will pass to the House of Commons for first reading.

The European Parliament's Economic and Monetary Affairs Committee (ECON) has announced it has adopted its negotiating mandate for proposed reforms to the Sustainable Finance Disclosure Regulation (SFDR). The proposals are intended to simplify the framework and make sustainable financial products more transparent, comparable and credible, while reducing administrative burden. The text has not yet been made available.

The mandate supports the European Commission's proposal, adopted in November 2025, to introduce three standard product categories (sustainable, transition and ESG basics), each of which would be required to disclose the main adverse impacts of its investments on sustainability. However, Members of the European Parliament insisted that transition products should exclude investments in companies earning revenue from fossil fuel exploration, extraction, mining or refining, subject to limited exceptions, while ESG basics products would be required to disclose their exposure to the fossil fuel sector. All three categories would also exclude investments in companies that violate human rights or humanitarian law. The reforms would further limit sustainability impact disclosure requirements to the largest financial market participants, exempt professional investors, and remove financial advice and portfolio management from the regulation's scope.

In addition, firms offering categorised products would be required to maintain due diligence and monitoring processes, review them at least annually, and report on matters including fossil fuel exposure, greenhouse gas emissions and activities affecting biodiversity-sensitive areas, disclosing any adverse impacts on a product's ESG objectives. The proposed negotiating mandate is expected to be announced at the October I plenary session before interinstitutional negotiations with the Council of the EU commence.

The European Banking Authority has published a letter dated 8 September in response to the European Commission's (EC) decision not to endorse the EBA's final regulatory technical standards (RTS) amending Commission Delegated Regulation (EU) No 241/2014. The draft RTS would have shortened the timeframe for competent and resolution authorities to process an institution's application to reduce own funds and eligible liabilities instruments from four to three months. While acknowledging the reasoning behind the EC's decision, the EBA notes that the amendment was intended to address concerns from supervisors and institutions who considered the current timeframe too long. The EBA confirms that it will not resubmit revised draft RTS. Instead, in line with the EC's suggestion, it will pursue a broader review of Delegated Regulation 241/2014, with a view to delivering simplification and efficiency gains.

The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) have published a cyber resilience toolkit for financial market infrastructures (FMIs) and a discussion paper on the challenges and risks of FMIs' reliance on third-party service providers. The toolkit provides a set of voluntary, non-binding practical tools intended to help FMIs strengthen their cyber resilience frameworks and implement operational resilience-related components of the CPMI-IOSCO Principles for Financial Market Infrastructures. The toolkit is intended to complement the 2016 guidance on cyber resilience for FMIs. In parallel, the discussion paper identifies and examines key challenges related to the provision of third-party services to FMIs, especially for the delivery of critical services. It sets out several questions for stakeholders on the identified risks and possible areas for further engagement. The deadline for comments on both the toolkit and the discussion paper is 1 December.

The European Commission (EC) has adopted a Delegated Regulation amending the regulatory technical standards (RTS) laid down in Commission Delegated Regulation (EU) 2018/1108 under the Fourth Anti-Money Laundering Directive (Directive (EU) 2015/849) (MLD4). The amending RTS set out the criteria for the appointment of central contact points for cryptoasset service providers (CASPs) and rules on their functions. The RTS amend Delegated Regulation (EU) 2018/1108 to extend its application to CASPs, reflecting amendments made to MLD4 by the Wire and Cryptoasset Transfer Regulation ((EU) 2023/1113), which extended the scope of MLD4 to cover CASPs. The RTS set out the criteria for determining the circumstances where CASPs should appoint a central contact point, a local representative in a host European Union country when operating across borders, and the functions that the central contact point should perform.

The amending Delegated Regulation is based on the European Banking Authority's (EBA) final draft RTS published in April 2025. The Council of the EU and the European Parliament will scrutinise the Delegated Regulation. If neither object, it will be published in the Official Journal of the European Union and will enter into force 20 days following its publication.

The Department for Business, Innovation, Science and Trade has published a consultation on modernising the UK corporate reporting framework system. It sets out wide-ranging proposals to simplify and modernise the framework, guided by five core principles including: clarity of purpose; flexibility and trust; simplicity and coherence; proportionality; and fitness for the future.

Key proposals include:

• Clarifying that annual reports and accounts are documents primarily intended for investors and creditors.
• Simplifying which companies are required to report different types of information. The government wishes to take a fresh look at the Companies Act 2006 to rationalise the scopes, thresholds and exemptions which determine what disclosures a company must make and is considering how thresholds and exemptions might be changed to take companies out of requirements.
• Creating a lighter regulatory load for small and medium-sized enterprises (SMEs), including allowing certain medium-sized companies to qualify for an audit exemption. The government is consulting on creating a reporting framework for SMEs which would allow certain medium-sized companies to claim a wider package of exemptions, including extending the small company audit exemption to certain medium-sized companies.
• Testing the merits of non-financial reporting requirements for private companies, including the possible creation of a new "very large" company threshold that could be applied to non-financial reporting requirements.
• Streamlining the UK's financial reporting framework by moving detailed requirements out of the Companies Act 2006 and into accounting standards, reducing available standards to four main standards, replacing the "true and fair presumption" for micro-entities with an obligation to prepare accounts that comply with the micro-entities standard, and creating a new accounting standard for not-for-profit entities.
• Replacing the complex rules on distributable profits and capital maintenance with a solvency-based regime for determining the legality of dividend payments.
• Simplifying and streamlining the strategic report requirements by removing prescriptive obligations and enabling companies to explain performance, strategy and governance in a way that reflects the size and nature of their business. The government is also considering which companies should be required to comply with future strategic reporting requirements.
• Simplifying remuneration and corporate governance reporting.
• Embracing digital communications, including making electronic communication with shareholders the default option.
• Introducing a central government "Reporting Gateway" function to examine the merits of future reporting proposals, ensuring they are coherent, proportionate and cost-effective.

The deadline for responses is 30 November. The government aims to publish its consultation response within six months of the consultation closing.

The UK Financial Conduct Authority (FCA) has published a new webpage setting out findings from its Defence, Security, and Resilience (DSR) Lab, a joint initiative with the Ministry of Defence, that brought together around 120 leaders from financial services, government and defence. Participants were taken through a deliberately challenging scenario involving regional Global Navigation Satellite System (GNSS) spoofing, multiple damaged subsea cables and a cyberattack on a cable landing station. The exercise explored how hostile activity, supply chain disruption and dual-use technologies (equipment that has both military and civilian use, like drones) could affect market integrity and the UK's wider security. Unlike traditional firm-level exercises, it focused on opportunities for investment to strengthen national resilience as well as systemic risks across the sector.

Key findings include:

• Although firms generally understand their own vulnerabilities, the exercise showed a gap in how they think about dependencies, and risks at a system level.
• Firms would like greater clarity on national threats and priorities before committing capital.
• International dependencies need to be considered when planning for resilience, given that the UK relies on global technology providers for parts of its financial services infrastructure.
• Firms often rely on the same communications networks, satellite systems, subsea cables and technology providers, but may not realise the extent of those shared dependencies.
• There is an appetite for stronger cross-industry collaboration to address shared risks that cannot be solved by firms acting alone.

The FCA notes the government's defence investment plan, which calls for a whole-of-society approach to preparedness and resilience, recognising that the UK cannot rely on any single sector to protect itself against modern, complex threats. The FCA intends to continue supporting the sector in understanding these risks and building resilience. It plans to investigate how it can support intelligence sharing with the financial sector, whether more focus is needed on back-up, "fail-safe" technologies that can be used when disruption hits, and access to banking and finance frictions. The webpage concludes with a series of questions to help firms consider their exposure to systemic risk and how they can support UK resilience.

Commission Delegated Regulation (EU) 2026/1092 was published in the Official Journal of the European Union (OJ). The Delegated Regulation sets out regulatory technical standards (RTS) on establishing an EU code of conduct for issuer-sponsored research under the Markets in Financial Instruments Directive (MiFID II). It is based on the European Securities and Markets Authority's final report containing draft RTS, which was submitted to the European Commission in October 2025. The resulting RTS were subsequently adopted in May and are discussed in more detail in our previous blog post here. The Delegated Regulation will enter into force on 7 September, three days following its publication in the OJ.

The UK Financial Conduct Authority (FCA) has published its quarterly consultation paper No. 53 inviting feedback on proposed amendments to its Handbook across financial promotion rules, banking conduct of business requirements, the new cryptoasset regime, complaints reporting, money market fund (MMF) reporting and the consumer composite investment (CCI) rules.

Key proposals include:

• Amending the financial promotion rules applicable to fractional shares, by amending the readily realisable security definition to include fractional shares that meet specified conditions.
• Removing an expired reference to the British Bankers' Association/Building Societies Association Code of Conduct for the Advertising of Interest Bearing Accounts in BCOBS 2.3.9G and replacing the reference in BCOBS 2 Annex 1, Note 1, to the latest Annual Equivalent Rate practice note published by UK Finance and the Building Societies Association.
• Making deferral arrangements for parts of the new cryptoasset regime (effective 25 October 2027), including relating to the admission process of qualifying cryptoassets on UK qualifying cryptoasset trading platforms, the execution venue requirements on UK-authorised dealers and arrangers, and the execution policy requirement for these firms.
• Correcting complaints data reporting rules by removing a duplicate data point on claims management fee cap redress in the Consumer Credit Return and clarifying the Handbook Glossary definition of "firm" for the purposes of DISP 1.10 and DISP 1.10A to ensure that payment services and e-money firms are within scope of these requirements.
• Removing the reference in DISP to the two-stage complaints process for the Society of Lloyd's.
• Updating MMF reporting requirements to ensure a proportionate approach that allows for effective monitoring of financial stability risks and is integrated into wider funds reporting requirements.
• Making minor amendments to the CCI rules in the DISC and COBS sourcebooks following feedback to PS25/20.

The deadline for comments is 12 October, and the proposed amendments are set out in draft instruments contained in the appendices to the consultation.

The Joint Money Laundering Steering Group (JMLSG) has published revisions to Part I of its Anti-Money Laundering and Counter-Terrorist Financing Guidance, following its June consultation and to reflect changes introduced by the Money Laundering and Terrorist Financing (Amendment) Regulations 2026 (the Regulations). The amendments update guidance on a number of technical areas:

• An amendment to reflect the changes to Regulation 19, including clarification of the term "unusually" as used in Regulation 19(4), in the context of policies, controls and procedures for risk mitigation management which must provide for the identification and scrutiny of a case where a transaction is unusually complex or unusually large.
• An amendment to reflect the new provisions of Regulation 30ZA in relation to customers of insolvency banks, which enable credit institutions to permit such customers to open an account and transact from it before customer due diligence measures are fully completed.
• Amended guidance at paragraphs 5.3.94A and 5.3.99 in relation to identity verification and authority verification requirements in relation to persons purporting to act on behalf of a customer or dealing with assets under a power of attorney.
• Minor amendment to remove the specification of a bank account or securities holding in relation to the application of simplified customer due diligence in the context of a pooled account (Regulation 37).
• Various amendments to Annex 5-V which provides guidance on pooled client accounts.

The revisions have been submitted to HM Treasury for ministerial approval.

Two European Commission Regulations supplementing the revised operational risk framework under the Capital Requirements Regulation (CRR) have been published in the Official Journal of the European Union (OJ). Commission Delegated Regulation (EU) 2026/1167 sets out regulatory technical standards (RTS) for calculating operational risk capital requirements, including the composition of the business indicator, items to be included or excluded from that indicator, adjustments relating to events such as mergers and acquisitions, and requirements concerning operational loss data and risk classification. For further detail, please see our previous blog which discusses its adoption in May. In parallel, Commission Implementing Regulation (EU) 2026/1166 establishes implementing technical standards mapping business indicator components to corresponding cells in the financial reporting (FINREP) templates under Commission Implementing Regulation (EU) 2024/3117. Together, the measures form part of the CRR3 reforms and provide greater clarity on the calculation and reporting of operational risk requirements. Both Regulations enter into force on 23 September, being 20 days after publication in the OJ.

The UK Financial Conduct Authority (FCA) has published its findings from a multi-firm review examining how firms are using, testing and preparing for frontier AI models with cyber capabilities. The FCA notes that while these models can help firms identify and analyse cyber vulnerabilities more quickly, they can also, if used maliciously, amplify cyber threats to firms' safety and soundness, customers, market integrity and financial stability. The publication does not introduce new rules, guidance or regulatory expectations but summarises observations reported by firms during the FCA's engagement.

The review identified five key themes:

• Vulnerability discovery is accelerating faster than firms' ability to respond, increasing pressure on remediation processes.
• Frontier AI is becoming a test of organisational resilience, not just a tool, with organisational readiness identified as the primary challenge.
• The value of frontier AI depends on the firm's operating environment, including its governance, tooling, controls and human oversight.
• Frontier AI is making cyber and operational resilience more important as it exposes weaknesses in vulnerability management practices, access management controls, dependency mapping and remediation processes.
• Effective governance and human judgement remain critical, with senior leaders needing greater visibility of how AI affects remediation capacity, operational resilience and risk.

The FCA expects firms to consider whether: (i) their use of frontier AI is supported by clear ownership, appropriate guardrails, access to system information and specialist review; (ii) their vulnerability management and change processes are effective if the volume and speed of model-driven discovery increases; and (iii) their people, systems and processes can operate under greater pressure.

Commission Delegated Regulation (EU) 2026/1119 supplementing the Environmental Social and Governance Ratings Regulation (EU) 2024/3005 (ESG Ratings Regulation) has been published in the Official Journal of the European Union (OJ). The Delegated Regulation specifies regulatory technical standards (RTS) on the information to be included in the application for authorisation as an ESG rating provider, and in the application for recognition of an ESG rating provider. The Delegated Regulation is based on the European Securities and Markets Authority's final technical standards on the transparency and integrity of ESG rating activities, which included final draft RTS on authorisation and recognition. We cover the RTS in more detail in our previous blog, which discusses its initial adoption in October 2025. The Delegated Regulation enters into force on 2 September and has applied since 2 July.

The Financial Stability Board (FSB) has published a letter (dated 28 August) from its Chair, Andrew Bailey, to G20 Finance Ministers and Central Bank Governors, on the current risks to financial stability. While the financial system has continued to absorb the supply shock from the conflict in the Middle East, global markets remain vulnerable to a disorderly correction amid sovereign debt market fragilities, vulnerabilities in private credit and stretched asset valuations, particularly those linked to AI investments. The letter highlights concern that increasing leverage in equity markets, combined with high valuations, market concentration and AI-related cross-investment, could amplify future market stress. Mr Bailey also identifies frontier AI models as an emerging financial stability risk, particularly due to their potential impact on cyber resilience, and calls on authorities to support the safe and responsible release and deployment of such models. He further stresses the importance of robust response and recovery capabilities within financial institutions and resilience among critical third-party technology and service providers. He concludes that the FSB remains focused on identifying emerging vulnerabilities, strengthening resilience and ensuring that innovation is consistent with financial stability.

The UK Financial Conduct Authority (FCA) has published Primary Market Bulletin 65 covering a range of developments relevant to listed issuers, sponsors and their advisers. The FCA warns of a growing trend of potentially misleading statements in regulatory announcements, noting that some issuers are releasing announcements containing language that is vague, exaggerated and flamboyant, or that resembles marketing material rather than regulated information. The FCA reminds issuers that regulatory announcements must comply with the requirements of the UK Market Abuse Regulation (UK MAR), the Disclosure Guidance and Transparency Rules, and the UK Listing Rules, including the requirement that issuers "shall not combine the disclosure of inside information to the public with the marketing of [their] activities".

The bulletin also sets out findings from the FCA's review of sponsor specialist due diligence for new admissions to the equity shares (commercial companies) (ESCC) category. The FCA notes an encouraging shift away from a uniform, "off the shelf" approach to expert reporting, with sponsors increasingly adopting more tailored and proportionate approaches, particularly in relation to long-form financial due diligence reports.

On delayed disclosure of inside information (DDII), the FCA reports that its review of DDII notifications under Article 17(4) of UK MAR did not identify widespread failings but did reveal some inconsistent practices, particularly the blanket classification of information as inside information. The FCA will continue to monitor DDII notifications and may provide further updates where appropriate.

The bulletin also outlines the FCA's emergency intervention powers under the Short Selling Regulations 2025, which came into force on 13 July. These powers include requiring notification of net short positions at lower thresholds, prohibiting or imposing conditions on short selling, and restricting short selling following a significant price fall. Finally, the bulletin refers to the new inside information declaration form, which must be included with all new equity case submissions through the Electronic Submission System portal from 21 September. This requirement was initially announced on 7 August.

HM Treasury has announced that the UK government intends to give the Bank of England (BoE) a new secondary objective to support innovation in payment systems and emerging forms of digital money. The secondary payments innovation objective will sit below the BoE's primary financial stability objective and is intended to ensure UK payments regulation keeps pace with technological change and create conditions for innovation. The BoE already has a secondary innovation objective when regulating central counterparties and central securities depositories, introduced through the Financial Services and Markets Act 2023. This reform will extend the same approach to systemic payment systems, including those using digital settlement assets such as stablecoins.

Key features of the announcement include:

• The BoE will report annually to Parliament on how it is advancing the innovation objective.
• Financial stability will remain the BoE's primary objective; the new secondary objective will not require the BoE to support innovation where doing so would undermine financial stability.
• The government expects to implement the change through amendments to the Financial Services and Markets Bill, which will next be debated in the House of Lords on 7 and 9 September.

The European Banking Authority (EBA) has launched a consultation on draft regulatory technical standards (RTS) specifying the operational risk management framework that institutions must have in place as set out in Article 323 of the Capital Requirements Regulation (CRR), as amended by CRR3. The draft RTS specify the three main components of the framework:

• Governance arrangements.
• The operational risk management process.
• The operational risk assessment system.

The draft RTS clarify the roles and responsibilities of the management body, senior management and the independent operational risk management function. They also set requirements for operational risk data and taxonomy, the business indicator component, reporting, validation and audit. Requirements relating to ICT risk are addressed through the Digital Operational Resilience Act (DORA).

Institutions with a business indicator below EUR 750 million will benefit from a lower frequency of reviews and reporting, a lesser level of granularity for their operational risk data, loss thresholds, and operational risk taxonomy. The deadline for comments is 31 December. The EBA will also hold a public hearing on 29 September (the deadline for registration for this is 25 September).

The European Banking Authority (EBA) has launched a consultation on three separate draft regulatory technical standards (RTS) relating to the reclassification of investment firms under Directive EU2013/36/EU (CRD IV), when they exceed the EUR 30 billion total assets threshold. Investment firms whose total assets exceed EUR 30 billion are required to obtain credit institution authorisation under CRD IV rather than operating under a MiFID investment firm licence.

Following amendments in 2024 to the CRD IV, which clarified the scope of entities to be included in the calculation of the total assets, the EBA has revised its draft RTS on the methodology for calculating the thresholds and on the related reporting requirements for investment firms to be provided to competent authorities. In addition, the EBA is consulting, for the first time, on draft RTS specifying the factors competent authorities must consider when assessing whether to grant a waiver from the requirement to hold a credit institution authorisation. Where a waiver is granted, the firm may continue to operate under an investment firm authorisation. The deadline for comments is 25 November and the EBA will hold a virtual public hearing on 30 September (the deadline for registration for this is 25 September).

The European Commission (EC) has published a call for advice (dated 30 July) to the European Securities and Markets Authority (ESMA) requesting technical advice to assist in developing level 2 measures implementing the retail investment strategy (RIS) package. The package takes the form of a directive containing targeted amendments to a number of EU directives in the area of financial services, including the Markets in Financial Instruments Directive (MiFID II), the Solvency II Directive, the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive and the Alternative Investment Fund Managers Directive (AIFMD) (the Omnibus Directive), and a regulation amending the Packaged Retail And Insurance-Based Investment Products (PRIIPs) Regulation.

A provisional agreement was reached on the RIS package on 18 December 2025 and approved by the Council of the European Union on 5 June and by the European Parliament on 23 June. The adopted legislative texts are still subject to lawyer-linguists' review, but the EC does not expect any substantive changes. The completion of the lawyer linguists work is expected at the latest in September. Final votes by the Council and the Parliament are expected in Q4, which means the publication of the RIS package in the Official Journal of the EU should occur at the latest in January 2027.

Member States will have 24 months to transpose the Omnibus Directive from the date it enters into force. They will have to apply the provisions of the legal text as from July 2029, assuming that the Omnibus Directive is published in January 2027 and that a 30-month implementation period will apply following the date of entry into force. Level 2 measures will also need to be transposed into national laws and regulations by Member States.

The EC is seeking ESMA's technical advice on certain delegated acts to supplement or specify specific provisions of MiFID II, UCITS Directive and AIFMD. To simplify the adoption of the proposed Level 2 measures, ESMA is requested to group the mandates in two delegated acts, a delegated regulation and a delegated directive, for each of the sectoral legislative frameworks. ESMA must submit its advice to the EC by 1 October 2027.

The UK Financial Conduct Authority (FCA) has published a new webpage with examples of good and poor practice identified from its review of motor finance firms' implementation plans for the motor finance redress scheme. After the scheme rules were published, the FCA asked in-scope firms to submit implementation plans, explaining how they would deliver fair, consistent and timely outcomes for consumers. Overall, most firms demonstrated a good understanding of the scheme's requirements, but many plans remained high level without sufficient detail on delivery. The FCA assessed firms' plans against key areas including operational readiness, population identification, group-based decision making, redress calculation and payment, quality assurance and oversight, and multiple representative issues.

The FCA identified several recurring weaknesses across firms' plans, including:

• Plans that repeated scheme requirements without explaining how the firm would deliver them.
• Limited detail on systems, workflows, staffing models or procedures needed to process cases at scale.
• Population figures provided without explanation of methodology, assumptions or validation.
• References to calculators without explaining how they work or how they have been validated.
• Governance structures described without clear quality assurance arrangements.
• Limited processes for identifying duplicate or unclear representation.

The FCA expects all firms to review these examples and make any necessary changes to their own plans, controls and oversight arrangements, and to keep named motor finance supervisors updated on material developments. The FCA stated that it will continue to engage with firms where concerns remain, and that some firms may receive individual feedback or be asked to provide further detail where their plans do not demonstrate sufficient readiness.

The Council of the European Union has published a note (dated 20 July) containing a letter from the European Commission (EC) to the European Banking Authority (EBA) regarding the final draft regulatory technical standards (RTS) developed by the EBA amending Commission Delegated Regulation (EU) No 241/2014. The final draft RTS concern the timing of applications for prior permission to reduce own funds and eligible liabilities instruments under Articles 78 and 78a of the Capital Requirements Regulation (Regulation 575/2013). The proposed amendments would have shortened the timeframe for competent and resolution authorities to process an institution's application to reduce own funds and eligible liabilities instruments from four to three months.

However, the EC explains in the letter that it has decided that it will not endorse the draft RTS in their current form. The EC states that it would not be proportionate to revise the existing RTS at this stage only for this issue, in particular, as a number of competent and resolution authorities have already publicly stated their intention to provide, in certain circumstances and under certain conditions, such approvals within significantly shorter timeframes than the currently proposed three months. While the EC acknowledges the EBA's intent to contribute to the broader simplification agenda, it notes the EBA has already launched a broader, more far-reaching review of the prior permission regime, which the EC considers more appropriate towards genuine simplification. The EC highlights that an incremental amendment of such limited scope would in all likelihood necessitate reopening the same Level 2 act within a short period of time. The EC urges the EBA to consolidate the proposed adjustment and any further simplification measures into its ongoing comprehensive review so that the framework may be revised once, coherently, and with lasting effects. The EC confirms that the EBA may, within six weeks (by 31 August), resubmit a revised draft of the RTS in the form of a formal opinion; failing that, the draft RTS will be considered formally rejected by the EC.

The European Securities and Markets Authority (ESMA) has published a consultation paper on draft regulatory and implementing technical standards under Article 7d of the European Market Infrastructure Regulation (EMIR). The Article 7d reporting regime was introduced under EMIR 3 and imposes an annual reporting obligation on clearing members and clients with exposures to third-country central counterparties which are recognised under Article 25 of EMIR. The reporting requirement covers information on the types of instrument cleared, average values cleared, margins collected, default fund contributions, and the largest payment obligation.

The Article 7d reporting requirement has attracted considerable attention. Market participants questioned the need for a further requirement when existing reporting regimes covered the same or comparable data points. Examples include the reporting requirements set out in Article 9 EMIR, the Securities Financing Transactions Regulation and the Markets in Financial Instruments Regulation. Furthermore, the drafting of the Level 1 text raised various questions of interpretation as to the scope of the requirement, which required ESMA to seek clarification from the European Commission.

The consultation seeks to address these concerns. Notably, ESMA confirmed it had received input from supervisors across jurisdictions indicating that existing Article 9 reporting already provides sufficient information to meet supervisory objectives. More broadly, as an overarching guiding principle, ESMA has sought to ensure that firms should not be required to report information already available to ESMA or competent authorities under existing regimes, with new reporting requirements limited to areas where gaps have been identified.

Key proposals relate to:

• The scope of entities subject to reporting, with confirmation that clients of undertakings with a contractual relationship with a clearing member enabling them to clear transactions through a central counterparty (known as indirect clients) are outside scope of the Article 7d reporting obligations.
• The scope of products included in the reporting obligation, which includes security financing transactions, non-derivative crypto assets and spot contracts.
• High-level classification of instruments based on categories for which tier 1 central counterparties have been recognised.
• The calculation of average values cleared.
• For margin reporting, ESMA proposes to focus on initial margin rather than variation margin but seeks input on whether the inclusion of variation margin would provide meaningful additional insight.
• On the level of consolidated reporting for groups subject to consolidated supervision, ESMA is proposing to require consolidated reporting with a breakdown between EU and non-EU entities, so that data is aggregated at group level but split into two categories reflecting the location of group entities.
• Reporting in CSV format, as ESMA considers XML disproportionately complex.

The first reporting deadline will be the last business day of January which falls at least six months after the entry into force of the relevant regulation. ESMA had previously made a public statement in December 2025 that the first reporting under Article 7d for 2025 data would be expected to be submitted with the 2026 reporting cycle following the implementation of Level 2 measures. The draft regulatory technical standards align with this; the first submission should include separate reports covering each calendar year from 2025 onwards. ESMA provides two examples to illustrate how this would work in practice:

• If the regulation comes into force in May 2027, the first reports would need to be made by the last business day of January 2028 and would need to cover data for 2025, 2026 and 2027.
• If the regulation comes into force in December 2027, the first reports would need to be made by the last business day of January 2029 and would need to cover data for 2025, 2026, 2027 and 2028.

The deadline for responses is 12 October, with the final report expected in Q4.

The UK Financial Conduct Authority (FCA) has published its latest wealth management survey report for 2026, focusing on discretionary portfolio management. The report shares data and insights to help firms understand the market, compare their approach and raise standards. Drawing on survey data from around 400 wealth management firms, as well as regulatory returns and other FCA and public data sources, the FCA highlights both progress and persistent weaknesses across the sector.

Key findings are set out below in the following areas:

• AI adoption—13% of firms currently use AI tools and 45% are using or considering AI, but the FCA warns that firms must use these tools responsibly and understand associated risks around fraud, cyber security and client harm.
• Outsourcing—92% of firms outsource part of their business, with the FCA emphasising that firms remain responsible for the services they provide and must ensure strong oversight, so clients receive consistent outcomes.
• Financial crime controls—some firms still do not refresh Know Your Client checks for higher-risk clients after a trigger event or at least annually; 26% do not collect expected transaction frequency; around 6% do not screen for politically exposed persons; and around 7% do not carry out sanctions screening.
• Fair value—the FCA's Financial Lives 2024 survey found that 17% of clients using a named wealth management firm were concerned that fees were high, hidden or complex, indicating pricing is not always clear or consistently applied.
• Consumer vulnerability—83% of firms now identify at least one client with characteristics of vulnerability (up from 68% in the first survey), yet practices remain inconsistent and firms are urged not to treat vulnerability as a one-off assessment.

The FCA confirmed it will not repeat the full survey this year but intends to issue a shorter version in 2027, focused on portfolio management activity. The FCA will continue to look for smarter ways to use data and engage with the sector.

Commission Delegated Regulation (EU) 2026/1000 has been published in the Official Journal of the European Union (OJ). The Delegated Regulation specifies the method for the determination of fees charged by the European Banking Authority for the validation of pro forma initial margin models, and the modalities of the payment of those fees, under the European Market Infrastructure Regulation ((EU) No 648/2012) (EMIR). It was first adopted in May, which we cover in more detail in our blog here. The Delegated Regulation will enter into force on 6 September, being the 20th day following publication in the OJ.

The European Securities and Markets Authority (ESMA) has announced that its new weekly commodity derivatives position reporting framework under the Markets in Financial Instruments Directive (MiFID II) will go live on 3 September. From that date, market participants subject to the reporting obligation will be required to submit weekly position reports in accordance with updated reporting requirements, technical specifications and validation rules under XML schema version 2.0. ESMA published an earlier version of the reporting instructions in September 2025 with a go-live date intended for 1 April. However, ESMA decided to postpone the rollout following the identification of issues during the final testing phase.

ESMA has now published updated reporting instructions and the accompanying XML schema to support implementation. They apply to market operators and investment firms operating trading venues on which commodity derivatives or emission allowance derivatives are traded, and who will implement system interfaces for the submission of commodity position data in order to fulfil their MiFID II obligation.

The UK Financial Conduct Authority (FCA) has published policy statement PS26/17 confirming its final rules and guidance which make amendments to the liquidity risk management framework for authorised fund managers (AFMs) of UK Undertakings for Collective Investment in Transferable Securities (UCITS) schemes and non-UCITS retail schemes (NURS). The measures follow the December consultation and are intended to strengthen investor protection and promote effective liquidity risk management.

Key changes include:

• Requiring AFMs to have anti-dilution tools available for use, to better protect investors from the risk of their holdings being diluted by the costs incurred by other investors entering and exiting the fund.
• Strengthening the rules governing how an AFM assesses and monitors the ongoing liquidity risk of transferable securities.
• Introducing new Handbook guidance on liquidity risk stress testing, alongside: (i) an updated UK version of the European Securities and Markets Authority's liquidity stress testing guidelines; and (ii) a separate annex on good liquidity risk management practices for UCITS schemes and NURS.
• Removing the "listed asset presumption". An AFM will no longer be able to presume that because a transferable security is admitted to trading on an eligible market, its liquidity would not compromise the AFM's ability to redeem units.

Following consultation feedback, the FCA has also confirmed that the existing derogation from the eligible market test for recently issued securities will be retained but shortened from one year to 20 business days.

The final rules and guidance do not propose any changes to the scope of the rules with respect to money market funds (MMFs). Where new guidance has been added, this will not apply to MMFs. The FCA anticipates that future work on UK MMF regulatory reform will consider how changes to the rules and guidance will apply to MMFs.

The new rules and guidance will come into force on 1 February 2027, with transitional provisions for some rules applying until 1 August 2027. This is to give firms additional time to update fund prospectuses and comply with the shorter derogation period for the eligible market test for recently issued securities. The FCA has also confirmed that it will consult separately on wider liquidity proposals for authorised retail funds that invest in inherently illiquid assets, in particular daily-dealt property funds.

Commission Implementing Regulation (EU) 2026/1872 has been published in the Official Journal of the European Union (OJ). The Regulation amends the implementing technical standards (ITS) set out in Implementing Regulation (EU) 2016/2070 governing the European Banking Authority's (EBA) supervisory benchmarking exercise of credit and market risk under Article 78(2) of Directive 2013/36/EU (CRD IV). Based on the EBA's final draft ITS published in August 2025, the Regulation makes several changes including:

• Updating benchmark portfolios, reporting templates and reporting instructions to reflect recent changes introduced by CRD VI, including ESG risk requirements and revised supervisory benchmarking requirements.
• Taking into account the delayed application of the Fundamental Review of the Trading Book market risk framework until 1 January 2027, temporarily limiting the scope of the benchmarking exercise to institutions that are permitted to use the Internal Model Approach (IMA).
• Restricting data collection for institutions that use the IMA and fall within the scope of the market risk exercise to Alternative Standardised Approach elements until 1 January 2027.
• Aligning the exposure classes used in determining the benchmarking portfolios with the approach taken in the credit risk internal ratings-based (IRB) templates set out in Implementing Regulation (EU) 2024/3117.

The Implementing Regulation enters into force on 1 September, 20 days following its publication in the OJ.

The UK Financial Ombudsman Service (FOS) has published its policy statement on the next phase of its service reforms to streamline and modernise the complaints process. Following its joint consultation with the UK Financial Conduct Authority (FCA), the FOS has confirmed that it will introduce changes to its operations to allow it to focus its resources on the cases it was set up to resolve as a quick and informal alternative to the courts. The reforms include:

• An amendment to DISP 3.6.4R to provide greater clarity that FOS decisions are based on the standards applicable at the time of the act or omission complained about and will not be applied retrospectively, providing a foundation for proposed legislative changes to the "fair and reasonable" remit currently progressing through Parliament. Although the rule change will take effect from 1 October, it will apply to all current and future complaints given the change is clarificatory only.
• New powers, which will come into effect on 1 October, to dismiss complaints that are better suited to the courts, law enforcement, other dispute resolution processes or where no financial loss or material distress has been suffered.
• The introduction of a new registration stage from next year to ensure complaints are within scope and ready for investigation before allocation to a caseworker, with further consultation on differential case fees planned for later this year.

The final rules implementing the amendments to DISP concerning dismissal of cases and the fair and reasonable test are set out in the Redress Reforms (No 2) Instrument 2026 which comes into force on 1 October. Later this year, the FOS will also publish the first of its joint thematic reviews with the FCA to provide more insight on the types of complaints it sees and its approach to resolving them. The reforms are part of wider steps that the FOS has taken to modernise its service including: (i) an updated memorandum of understanding with the FCA to ensure its decisions are aligned with regulatory rules; (ii) charges for professional representatives to refer cases to ensure fairer costs and better evidenced cases; and (iii) changes to the interest rate applied to some of the awards that it makes to better reflect present economic conditions.

The UK Financial Conduct Authority (FCA) has published the findings from its review of its early and high growth oversight pilot. Between July 2025 and March 2026, the FCA engaged with 15 firms across asset management, wealth management and payments as part of a high-growth pilot. This was to identify rapidly growing firms earlier and support them as they establish and evolve their business. The FCA assessed whether their governance, risk management and control frameworks were developing in line with their growth. The FCA has set out its findings, including examples of good and poor practice:

• Governance and senior management oversight—Firms with stronger arrangements ensured governance, risk management and control frameworks kept pace with business growth. They had clear board and committee structures, with defined roles and responsibilities, regular oversight of risk and compliance matters, and high-quality management information for better decision-making. However, in some firms, governance arrangements had not kept pace with business growth. Board and committee structures including the scope, frequency and format of meetings, were not always effective and some firms lacked sufficient independent challenge, with responsibilities concentrated among a small number of individuals.
• Risk management frameworks—Stronger firms had more mature risk management approaches. Some used risk-focused committees to review enterprise-wide risks and escalate issues to the board, supported by clear risk appetites and key risk indicators. However, some firms relied heavily on key individuals, with limited contingency, succession planning, or broader knowledge transfer arrangements. Some firms also failed to sufficiently consider whether their risk management resources remained appropriate for the scale and complexity of the business.
• Resourcing, capability and scalability—As their business evolved, stronger firms invested in capability by recruiting and training staff, and in scalability through improved technology. They also demonstrated forward-looking regulatory judgement, preparing early for upcoming policy changes and legal requirements. However, the FCA identified some weaknesses in firms' capability and control frameworks where business models or customer populations had evolved but internal policies and procedures had not.
• Systems, controls and management information—Stronger firms had proactive cyber and operational resilience arrangements. This included using recognised security standards, penetration testing, third-party oversight and structured governance over the use of emerging technologies such as AI. Weaknesses included insufficient conflict of interest arrangements and management information that had not been updated.
• Financial resilience—Stronger firms proactively monitored key financial risks, including liquidity and counterparty exposures. Some firms used stress testing to check that their cost base was resilient, and that they could remain viable during periods of stress while continuing to meet regulatory capital requirements. In order to improve, the FCA highlights that some firms need to strengthen their financial resilience planning. In particular, wind-down plans are not always current, practical or proportionate to the business.

The FCA has provided individual feedback to all firms involved in the pilot. The FCA encourages firms experiencing growth to consider these findings and assess whether their arrangements remain appropriate for their size, scale, complexity and risk profile. If they find gaps, firms should take timely and appropriate action.

The UK Financial Conduct Authority (FCA) has published a statement announcing that it is applying increased scrutiny to Annex 1 firms. Annex 1 firms include unregulated lenders, safe custody providers, money brokers and financial leasing companies. This is following concerns about a number of risks the FCA has identified in the sector, particularly the potential for Annex 1 firms to facilitate financial crime. The FCA notes that some firms rely too heavily on the financial crime controls of their parent company, which are not tailored to their own firms' risks, governance and operations, and that firms cannot rely on off-the-shelf procedures designed for a different company. The FCA also highlights risks to consumers and markets arising from unregulated lending conducted through complex structures, including special purpose vehicles. In response, the FCA states that it is closely scrutinising applications to register as an Annex 1 firm. In addition, firms need to clearly demonstrate their ability to comply with the Money Laundering Regulations, with registration applications likely to take longer than usual. The FCA has also sent information requests to around 900 Annex 1 firms to improve its understanding of their activities, business models and risks. The FCA will then use this information, together with other intelligence, to identify and disrupt financial crime risks in the sector.

The UK Financial Conduct Authority (FCA) has updated its "submit a prospectus or circular" webpage to include information on the inside information declaration form. For equity cases, the issuer must submit a declaration form with its first submission, stating whether its submission contains inside information. If it does, the issuer must explain what that information is. The FCA needs this information so it can apply the appropriate internal controls when reviewing a submission. From 21 September, all first submissions of equity documents, including guidance requests, must include this form. The FCA will not allocate the case for review until it receives a completed form. The inside declaration form can be found here.

The European Banking Authority (EBA) has launched a consultation on a new reporting framework to support the validation and ongoing monitoring of the ISDA Standard Initial Margin Model (SIMM). This follows the EBA's assumption of responsibility as the central validator of pro forma initial margin models under the European Market Infrastructure Regulation (EMIR) from 1 March. To support this role, the EBA proposes a standardised set of regular reporting requirements for counterparties seeking validation to use ISDA SIMM. The information submitted would enable the EBA to validate and monitor model performance on an ongoing basis and calculate annual validation fees. The framework is designed to be proportionate, with entities that do not have significant over-the-counter trading activity required to provide only a limited subset of information on an annual basis.

The deadline for responses is 2 November. Subject to feedback, the EBA intends to adopt a decision establishing the reporting framework by the end of the year, with the first reporting reference date expected to be December 2027 and the first data collection taking place in the first quarter of 2028. The new requirements will be incorporated into version 4.4 (Phase 2) of the EBA technical package, which is expected to be finalised in March 2027. The EBA will collect the information directly from reporting entities, with operational arrangements to be communicated at a later stage. The proposed templates and instructions can be found in the press release.

The UK Financial Conduct Authority (FCA) has published final policy statement PS26/16, on changes to its rules on information sharing during UK equity initial public offerings (IPOs). Following feedback to the April consultation, the FCA found that some of the 2018 reforms had not succeeded in encouraging the production of unconnected research and had instead created additional costs and administrative burdens for issuers, potentially placing the UK at a competitive disadvantage relative to other listing venues.

The FCA has finalised the proposals as consulted on, including amending its Conduct of Business sourcebook (COBs) to: (i) remove the mandatory seven day waiting period between the publication of an approved registration document or prospectus and connected research; and (ii) repeal the related requirements mandating that syndicate banks intending to publish connected IPO research share the same information with a range of unconnected analysts, as they do with their own research analysts. The changes take effect immediately, while noting that firms and issuers remain free to engage with unconnected analysts on a voluntary and commercial basis.

The FCA also implements a technical correction to COBS 12.2.21R to address an inconsistency resulting from earlier changes made to the FCA rules when the UK MiFID Organisational Regulation (on shored Regulation 2017/565) was revoked and its requirements transferred into FCA rules.

The UK Financial Conduct Authority (FCA) has published a new webpage on climate adaptation and resilience, highlighting the growing impact of physical climate risks on regulated firms. The FCA notes that these risks require financial services firms to consider both climate adaptation, namely taking action to prepare for the effects of climate change, and resilience, meaning the ability to anticipate, respond to and recover from those effects. The FCA has a direct interest in how firms and markets adapt to these risks as they can impact: (i) consumer protection, where consumers' ability to access and afford products on fair terms and at fair value may be impacted; (ii) market integrity, where markets may struggle to price risk accurately; and (iii) competition, where access to financial services may become uneven. The FCA encourages firms to consider how acute and chronic climate risks may affect their operations, risk management and service delivery. It also sets out ways in which firms can engage with the FCA and access support.

ESMA's Securities and Markets Stakeholder Group (SMSG) has published an own initiative report on the future of EU financial markets supervision in the context of the ongoing Level 1 discussions on the European Commission's proposed Market Integration and Supervision Package (MISP). The report supports the objective of strengthening EU-level supervision and recognises the case for expanding ESMA's direct supervisory and supervisory convergence powers to address market fragmentation, cross-border activity and regulatory arbitrage. However, it stresses that any reforms should be proportionate, evidence-based and accompanied by a clear allocation of responsibilities between ESMA and national competent authorities to avoid duplication and inefficiencies. The SMSG highlights the importance of maintaining investor protection while supporting the competitiveness, attractiveness and growth of EU capital markets, including through a proposed "Competitiveness and Attractiveness Check", and key performance indicators as part of the accountability process of ESMA's chair. However, the report emphasises that retail investors must remain at the centre of ESMA's strategic priorities and also proposes retail investor impact assessments for ESMA measures so that investor protection considerations are not subordinated in practice to competitiveness arguments.