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 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) concerning the final draft regulatory technical standards (RTS) developed by the EBA amending Commission Delegated Regulation (EU) No 241/2014 on 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 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 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.

The Commission Delegated Regulation (EU) 2026/1000 was 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 a 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 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 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.

The 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 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 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 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.

The European Banking Authority (EBA) has published a no-action letter on the application of the boundary between the trading book and banking book under the Fundamental Review of the Trading Book (FRTB) framework. It also published technical clarifications on issues arising from the European Commission's (EC) third Delegated Act modifying the calculation of own funds requirements for market risk under the FRTB.

The Delegated Act, adopted on 4 June, seeks to introduce targeted operational relief measures, and define targeted multipliers, that modify the implementation of the FRTB framework in the EU from 1 January 2027 to 31 December 2029, in light of delays of the implementation of that framework in other jurisdictions.

In its no-action letter, the EBA recommends that competent authorities do not prioritise supervisory or enforcement action relating to: (i) the provisions governing the boundary between the banking book and the trading book and internal risk transfers between these books; and (ii) related reporting requirements. This is intended to avoid firms having to operate parallel trading book boundary regimes for different purposes and allow institutions not using the multiplier in the Delegated Act to also base the calculation of their own funds requirements for market risk on the CRR2 boundary framework. The EBA advocates for a legislative proposal from the EC to provide the necessary legal certainty as concerns the application, temporary suspension of application or modification, as applicable, of Articles 104, 104a, 106(2) to (7), 204a and 325j(5) of Regulation (EU) No 575/2013 from 1 January 2027 to 31 December 2029, and to revise the start date for the reporting of information on the composition of the trading book and reclassifications between books based on the FRTB boundary framework, to align with the start date for the application of the FRTB boundary for the purposes of the calculation of the own funds requirements for market risk. The EC's Communication of 17 July confirmed its intention to proceed with a legislative proposal in the first quarter of 2027.

The EBA also sets out technical considerations on material implementation issues for the application of the market risk framework as modified by the Delegated Act which includes, amongst others, eligibility to use the overall multiplier and notifications to national competent authorities for use of the multiplier, application of the overall multiplier of Article 495v in conjunction with the output floor, and reporting and disclosure requirements.

The EBA's no-action letter and technical considerations will become relevant if and once the Delegated Act enters into force.

The UK Financial Conduct Authority (FCA) has published policy statement PS26/15, which sets out final reforms to improve the UK transaction reporting regime under the Markets in Financial Instruments Regulation (MiFIR). This follows the November consultation and HM Treasury previously confirming that assimilated law (law inherited from the EU at the point of Brexit) in this area will be repealed, enabling the FCA to deliver a more streamlined framework. The FCA has largely finalised the proposals as consulted on, with a few targeted adjustments.

Key changes to the regime include:

• Reducing the number of transaction reporting fields from 65 to 52.
• Removing reporting obligations for seven million financial instruments which are only tradeable on EU trading venues (up from the figure of six million initially consulted on).
• Removing foreign exchange (FX) derivatives from the scope of reporting requirements.
• Reducing the default back reporting period from five to three years.
• Exempting most corporate actions from reporting obligations.
• Requiring trading venues to populate fewer fields in their transaction reports.
• Creating a new framework for conditional single-sided reporting.

The final rules are set out in the Markets in Financial Instruments (Record Keeping, Transaction Reporting and Financial Instrument Reference Data) Instrument 2026, which introduces three new chapters in the FCA's Market Conduct sourcebook. Firms will have until 3 April 2028 to implement the changes. The FCA intends to publish draft schemas, validation rules and updated reporting guidance, which will form part of a new transaction reporting user pack, in October this year and will adopt a flexible supervisory approach during the implementation period. It also plans to consult on transitional provisions and consequential amendments to the FCA Handbook. The FCA states that affected firms should begin planning now by reviewing their reporting logic, assessing the impact of changes to reporting scope and data fields, and preparing for the revised schema, validation rules and guidance.

In addition to the above, chapter 2 of the policy statement sets out the FCA's longer-term ambition to harmonise transaction and post-trade reporting requirements across the UK MiFIR, UK European Market Infrastructure Regulation (EMIR) and Securities Financing Transactions Regulation (SFTR) regimes.

The European Supervisory Authorities (ESAs, comprising the European Banking Authority, the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority) have published a joint final report with draft regulatory technical standards (RTS) amending Commission Delegated Regulation (EU) 2016/2251. This Delegated Regulation sets out the margin requirements on risk mitigation techniques for uncleared over-the-counter (OTC) derivatives under the European Market Infrastructure Regulation (EMIR).

The proposed amendments would extend the existing exemption from initial margin requirements to existing uncleared OTC derivative contracts where one counterparty falls below the EUR 8 billion aggregate average notional amount (AANA) threshold. Under the current framework, counterparties below the threshold are exempt from exchanging initial margin only for new contracts, while existing contracts remain subject to the requirement. Under the proposed RTS, counterparties could cease exchanging initial margins for all uncleared OTC derivative contracts and release existing initial margin as early as 1 June of the relevant year in which the counterparty falls below the threshold.

The amending RTS also remove outdated transitional provisions relating to single-stock options and equity index options, reflecting the permanent exemption of those products from margin requirements introduced under EMIR 3. The final report has been submitted to the European Commission for endorsement and, if adopted, the amending RTS will be subject to scrutiny by the European Parliament and Council before publication in the Official Journal of the European Union.

The UK Financial Conduct Authority (FCA) has published Handbook Notice 143, outlining amendments to its Handbook made through various instruments made at its June and July board meetings including:

• Numerous instruments relating to the UK's upcoming regulatory framework for cryptoassets which come into force on 25 October 2027 and, amongst other things, insert three new sourcebooks into the Handbook, two new chapters in the client assets sourcebook and new sections in the conduct of business sourcebook and supervision manual.
• Definition of Capital for Investment Firms Instrument 2026, which entered into force on 31 July. This instrument makes a minor technical amendment to MIFIDPRU 3.6A.1R to correct an unintended consequence following PS25/14, ensuring that the prohibition on non-cash distributions on own funds instruments operates as originally intended.
• Enforcement (Digital Markets, Competition and Consumers Act 2024) (Supplementary Amendments) Instrument 2026, which entered into force on 30 July and Enforcement Guide (Amendment) Instrument 2026, which entered into force on 31 July. Following consultation in chapter 9 of CP26/8, these instruments make supplementary amendments to the Glossary, ICOBS, CONC, UNFCOG, ENFG and DEPP sourcebooks to reflect changes in consumer protection legislation, describe the FCA's general approach to the use of its powers under the Digital Markets, Competition and Consumers Act 2024, and make clarificatory changes to its description of the use of non-FSMA and FSMA powers in the context of market abuse.
• Prospectus Rules: Admission to Trading on a Regulated Market (Clarificatory Amendments) Instrument 2026. This gives proper effect to aspects of the Public Offers and Admissions to Trading regime, which came into force on 19 January.
• Data Reporting Services (Amendment) Instrument 2026 and Technical Standards (Data Reporting Services) Instrument 2026. Following consultation in CP25/31, these instruments amend the Glossary, MAR 9, DEPP and ENFG sourcebooks, and make changes to Commission Delegated Regulation (EU) 2017/577, to establish the main regulatory obligations of the equity consolidated tape provider (CTP) and key regulatory requirements for the operation of the UK equity consolidated tape. It also establishes obligations for trading venues and approved publication arrangements to provide information to the CTP.

Feedback to the various consultations behind this Handbook Notice is set out in chapter 3 of the notice.

The Single Resolution Board (SRB) has published its fourth annual assessment of banks' resolvability across the Banking Union. The report finds continued progress across all resolvability dimensions, with banks strengthening key capabilities in liquidity and funding in resolution, management information systems, data provision, and separability. Having completed the implementation phase of its Expectations for Banks framework, in 2025 the SRB's focus shifted towards the full operationalisation and testing of resolvability capabilities. While most banks are close to meeting expectations, some gaps remain, particularly in areas subject to recently enhanced guidance, such as valuation, separability and communication. The report also highlights improvements to the SRB's assessment methodology to improve the consistency, transparency and comparability of assessments. Looking ahead, the SRB will continue to focus on the capacity to operationalise resolvability capabilities and testing, including through a new multi-annual testing framework for 2026-2028. Priorities for 2026 include the effective implementation of updated operational guidance including on valuation, separability and transferability, and business reorganisation.

The European Central Bank (ECB) has published the results of its 2026 thematic reverse stress test on geopolitical risks which involved 110 directly supervised banks in the euro area. The exercise, which forms part of the ECB's supervisory priorities for 2026-28, aimed to strengthen banks' risk management and stress-testing capabilities in light of heightened geopolitical risks. Banks were required to design severe but plausible geopolitical scenarios that would result in a 300-basis point depletion of their Common Equity Tier 1 (CET1) ratio. Unlike traditional stress tests, which apply a common scenario across all firms, the exercise required each bank to develop a scenario tailored to its own risk profile.

The ECB found that most banks were able to produce meaningful reverse stress test simulations. However, it identified several areas for improvement in banks' Internal Capital Adequacy Assessment Process (ICAAP) and Internal Liquidity Adequacy Assessment Process stress-testing frameworks, including:

• Granularity and scenario sensitivity: ICAAP frameworks need to have an appropriate level of granularity in the risk assessment, and should better capture vulnerable sectors, relevant risk events and emerging risks.
• Importance of multiple scenarios: the exercise confirmed the importance of banks considering a broader range of scenario outcomes when assessing resilience.
• Consistency between scenario narrative and transmission channels: some banks did not adequately link stress scenarios to their most important and geopolitically vulnerable portfolios in the exercise—the ECB emphasises the importance of clearly translating shocks into solvency and liquidity positions, as well as operational resilience.
• Dynamic balance sheet projections: some banks appeared overly optimistic in their assumptions regarding balance sheet expansions in geopolitical stress scenarios.
• Realism of mitigating actions: banks should have well-articulated and prepared but also realistic action plans to mitigate and guard against the effects of negative geopolitical shocks.
• Solvency-liquidity nexus: many frameworks did not adequately capture the relationship between solvency and liquidity stress.

The ECB states that the results will inform ongoing supervisory dialogue and qualitative assessments under the Supervisory Review and Evaluation Process and could therefore affect Pillar 2 requirements, but will not result in changes to banks' Pillar 2 guidance (P2G) or the leverage ratio P2G.

The UK Financial Conduct Authority (FCA) has published CP26/31, setting out its final policy framework for a UK equity consolidated tape (CT) following its November 2025 consultation. Alongside this paper, the FCA also published a separate consultation on equity market transparency and market structure developments.

Consistent with its proposals, the FCA confirms that the equity CT will include both post-trade data and first-level attributed pre-trade data (i.e. best bid and offer). The FCA considers that including pre-trade data will support a broader range of market uses and deliver greater long-term benefits than a post-trade-only model. Responding to consultation feedback, the FCA has also decided to introduce a high-level requirement for the future consolidated tape provider (CTP) to share a proportion of its revenue with data contributors. The final rules and technical standards are set out in the instruments in Appendix 1–3 of the paper and took effect on 31 July.

Alongside the policy statement, the FCA is consulting on whether systematic internaliser (SI) quotes should be included in the equity CT, with responses due by 16 October. In addition, chapter 11 contains a call for input seeking views on key contractual requirements for the future equity CTP, including the mechanism for implementing revenue-sharing arrangements and the CTP's operating hours. Responses to the call for input are due by 18 September.

While the equity CT is being developed, the FCA also launched, on the same day, a market activity reporter for shares, which provides daily visibility of overall UK equity market activity and trading volumes across the market.

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/30 on equity market transparency and market structure developments, building upon the discussion chapter in CP25/20 on whether reforms would be warranted. Alongside the consultation, the FCA published final rules on the framework for a UK equity consolidated tape and the next steps for its delivery.

In this consultation, the FCA proposes targeted reforms to strengthen post-trade transparency and refine the systematic internaliser (SI) regime, against a backdrop of increasing fragmentation in UK equity trading and the planned introduction of a UK equity consolidated tape. Key proposals include:

• Extending the current exclusion from post-trade transparency for non-price forming over the counter transactions to equivalent transactions reported to trading venues, and clarifying and strengthening the rules on back-reporting.
• Reformulating the reference price waiver to enable trading venues to integrate midpoint dark orders within transparent limit order books.
• Requiring equity SIs to publish quotes showing the price and volume at which they are prepared to buy and sell up to and including standard market size.

While the FCA considers UK equity markets to remain liquid, resilient and effective, it notes the continuing shift away from central limit order books towards alternative execution mechanisms. It therefore proposes a monitoring framework on future market structure developments using both quantitative and qualitative indicators. Chapter 3 sets out potential intervention measures should monitoring indicate challenges to market integrity, and the FCA invites feedback on the avenues that could be pursued. The FCA also proposes guidance on trading venue outage protocols to support market resilience and includes a separate chapter on retail equity trading.

The proposals entail changes to the FCA Glossary, Market Conduct (MAR) and Recognised Investment Exchanges sourcebooks, including transferring provisions from the UK Markets in Financial Instruments Regulation (600/2014), UK MiFID RTS 1 and UK MiFID RTS 7 into MAR, and revoking UK MiFID RTS 8 in its entirety. The deadline for responses is 16 October with a final policy statement expected in H1 2027.

The European Supervisory Authorities (ESAs, comprising the European Banking Authority, the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority) have published a joint statement toward a consistent and risk-based approach for information and communication technology (ICT) risks from frontier AI models. The statement builds on the European Commission's action plan on cybersecurity and AI, the ESRB's warning on systemic cyber risks from frontier AI models, and the ECB's letter to significant institutions on AI-related cybersecurity threats.

While noting that existing frameworks, including the Digital Operational Resilience Act and the EU AI Act, provide a strong foundation for managing these risks, the ESAs emphasise that the speed at which vulnerabilities can be identified and exploited requires financial institutions to take a proactive approach. The ESAs encourage firms to strengthen their ICT risk management processes through three key risk mitigation strategies: prevention; detection, moving to continuous vulnerability monitoring; and management.

Examples of risk mitigation strategies and actions are set out in the accompanying annex. The ESAs state that in all cases and without delay, financial entities should establish governance structures that support effective management of frontier AI-related risk, with clear accountability frameworks, timely response plans and sufficient internal investment dedicated to strengthening cyber resilience. Separately, the ESAs as lead overseers have initiated targeted engagement with relevant critical third-party providers to understand how they identify and manage these risks.

The UK Payment Systems Regulator (PSR) has published consultation paper CP26/2 on proposed amendments to specific direction 17 (SD17), which underpins broad participation in the confirmation of payee (CoP) service. CoP helps prevent misdirected payments by checking whether the name on a payee's account matches the details provided by the payer. SD17 requires directed payment service providers (PSPs) to have systems capable of both sending and responding to CoP requests. The PSR considers CoP to be an important safeguard against misdirected payments and certain types of authorised push payment fraud. The consultation proposes removing SD17's current expiry date of 1 November 2026 so that the direction remains in force indefinitely. It also seeks views on expanding the scope of SD17 to bring all PSPs currently offering CoP, including those participating voluntarily, within the same regulatory framework. The PSR also published a draft version of the updated direction showing the proposed amendments. The deadline for responses is 20 August.

Two Delegated Regulations supplementing the Environmental, Social and Governance (ESG) Ratings Regulation (EU) 2024/3005 on the transparency and integrity of ESG rating activities were published in the Official Journal of the European Union (OJ).

• Commission Delegated Regulation (EU) 2026/904 sets out the regulatory technical standards (RTS) with regard to rules of procedure on fines and periodic penalty payments imposed on ESG rating providers by the European Securities and Markets Authority (ESMA).
• Commission Delegated Regulation (EU) 2026/910 sets out the RTS with regard to the fees charged by ESMA to ESG rating providers.

Both Regulations were adopted by the European Commission in April and will enter into force on 19 August, being the 20th day following their publication in the OJ.

The UK Payment Systems Regulator (PSR) has published policy statement PS26/1 on two final specific directions in relation to: (i) information, transparency and complexity (ITC); and (ii) pricing governance. The directions are a consequence of the PSR's market review of card schemes and processing fees, which found (as set out in the PSR's final report) there to be weak competitive restraints, rising fees, and insufficient transparency around cost and pricing for acquirers and merchants.

In April 2025, the PSR consulted on potential remedies to address these findings, including proposed remedies in respect of (i) ITC, to ensure that acquirers and merchants have sufficient information to understand fees being charged; and (ii) pricing governance, to impose requirements in relation to pricing decisions including three pricing principles. The final directions confirm that certain changes have been made to the draft directions, which were consulted on in December 2025.

Key changes in relation to the ITC direction are:

• The PSR has increased the materiality threshold for certain requirements relating to new and modified fees from GBP100,000 (net revenues) to GBP250,000 (gross revenues).
• The PSR has refined the requirement to provide information for fee reconciliation (and in particular no longer requires transaction-level identifiers).
• Other minor changes.

Key changes in relation to the pricing governance direction are:

• Refinements to the compliance requirements for clarification, practicality and proportionality.
• Increased materiality threshold to exclude acquirer fee decisions in relation to fees expected to generate less than GBP250,000 of total gross annual fee revenue.
• Other minor changes.

In terms of the implementation timeline, the ITC remedy has an implementation period of 12 months meaning schemes will have to comply from July 2027. The pricing governance direction requires schemes to implement the remedy to ensure fee decisions are compliant from November this year.

The Single Resolution Board (SRB) has published updated operational guidance on business reorganisation plan analysis reports (BRP ARs), together with a complementary quantitative template. The updated guidance follows the February consultation, with the SRB also publishing a feedback statement. Institutions are required to prepare and submit a business reorganisation plan within one month following the implementation of the bail-in tool. To support resolution readiness, banks are also expected to prepare a BRP AR during the resolution planning phase.

The guidance sets out the SRB's expectations on the governance arrangements supporting the preparation of business reorganisation plans, the relevant descriptions of the targeted business model post reorganisation, the criteria for identifying valid business reorganisation measures and the approach to follow to demonstrate post-open bank bail-in long-term viability. The SRB states that the documents do not introduce new requirements but instead consolidate existing expectations, address shortcomings identified in previous submissions and reflect lessons learned from industry best practice.

The UK Prudential Regulation Authority (PRA) has published policy statement LIAF02/26, finalising a series of amendments to its Rulebook and policy materials that it considers low impact. This follows its April consultation (LIAC01/26).

Following consultation responses on proposals 1 and 3, the PRA is:

• Amending the Groups Part of the PRA Rulebook to clarify that proportional consolidation applies where a participation arises through voting rights, not only share of capital, with related updates to SS15/13 – Groups setting out how firms should determine the proportion to consolidate where voting rights and share of capital differ. Under the PRA Rulebook: CRR firms: Group Instrument 2026, the Annex A rule amendments take effect on 30 July, the Annex B amendments on 1 January 2027, and the SS15/13 from 1 January 2027, although firms may refer to them for guidance in the meantime.
• Amending the Countercyclical Capital Buffer Rates UK Technical Standard to replace cross-references to the Capital Requirements Regulation with references to the PRA Rulebook, including aligning the 'trading book exposures' definition with the Capital Buffers Part of the PRA Rulebook, effective 1 January 2027.

On proposals 2,4 and 5, the PRA has finalised these proposals as consulted on. They cover: (i) consequential amendments to certain PRA rules relating to the Capital Requirements Regulations 2013; (ii) amendment to the frequency of the other systemically important institution (O-SII) designation exercise in statement of policy (SoP)1/16; and (iii) amendments to the definition of firms in scope of the O-SII buffer in SoP1/16 and SoP4/16. For proposal 6, the PRA has made minor amendments to its proposed updates to SoP1/20, which are intended to improve clarity and do not alter the substance of the policy.

The PRA is also making minor corrections without further consultation, including: updating the "netting set" definition in the Glossary Part to correct a cross-reference error, effective 1 January 2027; correcting the General Notification and Regulatory Reporting Parts to confirm that third-country branches are excluded from material third-party notification requirements and that UK branches of overseas banks are included in operational incident reporting requirements, effective 18 March 2027; and correcting the Credit Risk: Standardised Approach and Internal Ratings Based (CRR) Parts and SS10/13, including clarifications to Articles 120(4), 121(2), 121(5) and 151(5) and to the "residential real estate" references in SS10/13, effective 1 January 2027.

The UK Prudential Regulation Authority (PRA) has published consultation paper LIAC02/26, proposing a series of low-impact amendments to its Rulebook and policy materials. The proposals include:

• Amendments to Supervisory Statement SS25/15 and the associated IM.03 reporting instructions to remove Lloyd's syndicates from the scope of internal model output reporting. These changes are proposed to take effect on 31 December. The PRA also makes other consequential changes.
• Amendments to the Liquidity (CRR) Part and the Liquidity Coverage Ratio (CRR) Part of the PRA Rulebook, comprising: clarification that firms are responsible for assessing third-country equivalence for non-UK covered bonds to be eligible as level 2A liquid assets; consequential changes following the expected implementation of HM Treasury's Overseas Prudential Requirements Regime (including a related update to SS24/15); and consequential changes following implementation of Basel 3.1 standards and the restatement of CRR requirements, including updated cross-references and treatment of retail and real estate exposures. These changes are proposed to take effect on 1 January 2027.

The deadline for comments is 11 September.

Two Delegated Regulations supplementing the Environmental, Social and Governance (ESG) Ratings Regulation (EU) 2024/3005 on the transparency and integrity of ESG rating activities were published in the Official Journal of the European Union (OJ).

• Commission Delegated Regulation (EU) 2026/871 sets out the regulatory technical standards (RTS) specifying the elements of ESG rating products to be disclosed to the public and to users of ESG ratings, rated items and issuers of rated items.
• Commission Delegated Regulation (EU) 2026/872 sets out the RTS specifying the measures and safeguards to be implemented by ESG rating providers to separate their ESG rating activities from their other activities.

Both Regulations are based on the final draft RTS published by the European Securities and Markets Authority in October 2025. They were subsequently adopted by the European Commission in April. We cover the RTS in more detail here. The Regulations will enter into force on 17 August, being the 20th day following publication in the OJ. However, they have applied from 2 July to align with the date of application of the ESG Ratings Regulation.

The Commission Implementing Regulation (EU) 2026/1757 was published in the Official Journal of the European Union (OJ). This sets out implementing technical standards (ITS) specifying the supervisory reporting requirements applicable to third-country branches (TCBs) established in the EU under the revised Capital Requirements Directive (CRD VI) framework. The ITS introduce a common reporting framework for competent authorities and distinguish between Class 1 and Class 2 TCBs, with the former subject to more extensive and frequent reporting requirements. The Regulation prescribes reporting templates, reference dates and remittance deadlines covering, among other things, branches' financial and regulatory information, liquidity coverage, capital endowment requirements, intra-group exposures and concentrations, as well as information relating to the branch's head undertaking. The European Banking Authority is required to develop and maintain the associated IT reporting solutions and instructions. The Regulation enters into force on 16 August, being the 20th day following publication in the OJ. It will apply from 28 March 2027, aligning with the commencement of the underlying CRD VI TCB regime.

The UK Financial Conduct Authority (FCA) has published findings from its review of firms' approaches to monitoring consumer outcomes under the consumer duty, identifying good and poor practices. The FCA aims to help firms understand what is happening across the customer journey, identify poor outcomes or emerging risks, and take appropriate action.

In relation to strategy and frameworks, the FCA identified several areas for improvement. These included high-level frameworks that do not clearly define good and poor outcomes across key customer journeys or explain the thresholds used to assess them, as well as weak links between operational metrics (such as conversion rates or review completion) and actual customer outcomes. The FCA also found limited evidence of firms assessing whether outcomes differ across customer groups, including customers in vulnerable circumstances.

On data, management information (MI) and testing, some firms relied on a narrow or reactive set of indicators and could not consistently demonstrate how they used MI to anticipate issues, monitor outcomes or assess the impact of changes. Firms often relied heavily on lagging indicators and lacked clear thresholds or forward-looking metrics. Although many firms had set specific thresholds, they did not always explain how these were used to identify good or poor outcomes. The FCA also found that, while some firms identified friction in customer support journeys and agreed remedial actions, certain issues remained unresolved.

In relation to governance, oversight and culture, the FCA found that although firms generally described clear governance structures, practices were not consistent across the firms reviewed. In particular, it was not always evident how governance arrangements operated end-to-end, from identifying issues to testing whether remedial actions had improved outcomes. While boards typically receive regular updates on customer outcomes and are described as central to oversight, it was not clear how this information was used. Similarly, firms were often able to demonstrate that they identified issues and took action but provided less detail on the root causes of those issues or whether the actions taken successfully addressed them.

The FCA states that firms should use these findings to review their own approach to outcomes monitoring and consider whether the information they collect gives them a clear enough view of customer outcomes.

The UK Financial Ombudsman Service (FOS) has published its consultation response to HM Treasury's (HMT) call for evidence on the independent review into access to banking services. Drawing on its complaints data, the FOS highlighted the continued importance of in-person banking services, particularly for vulnerable customers, those requiring support with complex or sensitive issues, and certain groups that may face barriers to using digital channels. The FOS notes that reduced access to face-to-face banking can create difficulties for consumers who need tailored support, reasonable adjustments, assistance resolving urgent account issues, or protection from fraud and financial abuse.

It also observed that some micro-enterprises and small businesses continue to rely on physical access to bank branches, particularly for cash-related services. While recognising that branch closures may be a legitimate commercial decision, the FOS states that firms are expected to comply with the FCA's requirements when implementing branch and ATM closures. Where the firm has not met its obligations, the FOS would consider whether the firm should compensate the consumer for any distress or inconvenience they have experienced as a result. The FOS will continue to monitor complaint trends and share relevant insights, including where it sees evidence of increased consumer detriment or changes in complaint volumes or themes.

The Commission Delegated Regulation (EU) 2026/825 supplementing the Markets in Financial Instruments Directive 2014/65/EU (MiFID II) was published in the Official Journal of the European Union (OJ). The Delegated Regulation sets out regulatory technical standards (RTS) specifying the criteria to be taken into account by investment firms when establishing and assessing the effectiveness of their order execution policies. The Delegated Regulation is based on the final draft RTS published by the European Securities and Markets Authority in April 2025. The European Commission subsequently adopted the Delegated Regulation in April of this year. The RTS is covered in more detail in our blog post titled "EC adopts Delegated Regulation setting RTS on order execution policy".

The Delegated Regulation will repeal Delegated Regulation (EU) 2017/575, which sets out data to be published by execution venues on the quality of execution of transactions on their venues, and Delegated Regulation (EU) 2017/576, which sets out obligations for investment firms to publish information on the identity of execution venues and the quality of execution obtained.

The Delegated Regulation enters into force on 12 August, 20 days after its publication in the OJ, and will apply from 12 February 2028.

The European Banking Authority (EBA) has published four consultation papers under the revised Deposit Guarantee Schemes Directive (EU) 2026/804 (DGSD3), aimed at strengthening depositor protection, preserving financial stability and further harmonising depositor protection standards across the EU.

The four consultation papers include:

• Draft implementing technical standards (ITS) on depositor information, setting out harmonised content and formats for depositor information sheets provided at account opening and on a regular basis. They also establish requirements for communications to depositors in specific situations, such as bank mergers or failures.
• Draft ITS on information exchange, introducing standardised procedures, templates and minimum requirements for information exchange in bank failure scenarios. They also enhance reporting from deposit guarantee schemes (DGSs) to the EBA on covered deposits and available financial means, define information to be reported by authorities on bank failures, and improve transparency on the use of DGS funds.
• Draft regulatory technical standards (RTS) on the treatment of client funds, establishing rules to ensure DGSs receive the data needed to identify and reimburse clients whose funds are held in intermediary accounts, clarifying: (i) when reimbursement should be made directly to clients or via the account holder; and (ii) how to prevent duplicate payouts.
• Draft guidelines on the investment of available financial means, setting out how DGSs should invest their funds to ensure diversification, low risk and sufficient liquidity.

The deadline for comments on all of the four consultation papers is 23 October, with a public hearing scheduled for 24 September.

The Commission Delegated Regulation (EU) 2026/849 supplementing the Capital Requirements Regulation (EU) No 575/2013 (CRR), as amended by the CRR3, was published in the Official Journal of the European Union (OJ). The Delegated Regulation sets out regulatory technical standards (RTS) specifying what constitutes an equivalent legal mechanism that ensures that a residential property under construction is completed within a reasonable timeframe. It is based on final draft RTS published by the European Banking Authority in August 2025 and was subsequently adopted by the European Commission in April this year. The RTS is covered in more detail in our blog post titled "EC adopts Delegated Regulation on equivalent mechanism for unfinished property under CRR3". The Delegated Regulation enters into force on 12 August, 20 days after its publication in the OJ.

The UK Competition and Markets Authority (CMA) has published updated guidance on the unfair contract terms provisions in Part 2 of the Consumer Rights Act 2015 (CRA), which protect consumers from unfair contract terms and notices used between businesses and consumers. This follows the consultation in January, which focussed on simplification, presentation, style and readability. The CMA confirmed in its consultation that it would not be substantively revising its interpretation of the law, though it did set out developments in case law. The provisions apply to contracts entered into, and relevant notices issued, on or after 1 October 2015 across the UK. The guidance was published alongside a technical note and an updated webpage reflecting the changes.

The guidance is intended to help businesses comply with unfair contract terms law and assist advisers, enforcers and consumers in understanding which contract terms and notices may be unlawful or unfair. It also states that the CMA will have regard to the guidance when exercising its direct consumer enforcement powers under the Digital Markets, Competition and Consumers Act 2024, although any assessment of whether a term or notice is unlawful will continue to be made on a case-by-case basis. The accompanying technical note explains the legislative background to the regime and its interaction with other consumer protection legislation, while the updated webpage provides businesses with practical guidance on drafting fair and transparent consumer contracts.

The UK Financial Conduct Authority (FCA) has published the findings from its review of financial crime systems and controls across asset management and alternative firms. In 2025/26, the FCA engaged with 242 asset management and alternatives firms to gather firms' own assessments of the financial crime risks they face and to understand their control frameworks. The FCA has summarised its main findings, including examples of good and poor practice. It also reminds firms of the FCA's expectations. The FCA's findings centre on how well firms: (i) understand their inherent financial crime risk; and (ii) identify, mitigate and manage financial crime risk (control risks). The review covered a range of business models, and the FCA notes that not all findings will be applicable to all firms given the diversity of the sector. The review is part of the FCA's wider financial crime supervisory work in support of its 2025–30 strategy and supervisory priorities for the sector.

The FCA found that:

• Inherent risks—some firms were exposed to heightened financial crime risks, especially those firms active in private markets, due to factors such as complex ownership structures, higher-risk customers and international fund flows. The FCA expects firms that face higher financial crime risks to have established frameworks and appropriate controls to mitigate these risks, as referenced in the Money Laundering Regulations 2017 (MLRs) and Senior Management Arrangements, Systems and Controls (SYSC) section of the FCA's Handbook.
• Control risks—most firms showed they understood legal and regulatory requirements through their control framework, but others appeared to underestimate their inherent financial crime risks, resulting in an informal approach to evaluating and managing them. The FCA sets out examples of good and bad practice relating to business-wide risk assessments, customer risk assessments, customer due diligence and enhanced due diligence, ongoing monitoring, screening, governance and training. In some instances, the FCA states that the findings were concerning and will require firms to review their financial crime frameworks to ensure they are adequately identifying, managing and mitigating the risks to which they are exposed.

The FCA encourages firms to consider its findings in the context of their own business model and activities and continue to address any gaps in their financial crime control frameworks. The FCA will continue to monitor firms through its supervisory work to make sure they are considering the points raised in this review to drive improvements.

The UK Financial Conduct Authority (FCA) has published its fourth annual report of the Wider Implications Framework (WIF) for the 2025/26 period, covering 1 April 2025 to 31 March 2026, together with the June 2026 meeting minutes. The report summarises coordinated efforts and actions taken by the FCA, Financial Ombudsman Service, Financial Services Compensation Scheme, Money and Pensions Service and The Pensions Regulator to address issues that could have wider implications across the financial services industry. The report highlights joint work conducted on the advice and guidance boundary review, continuing work on motor finance commission and further embedding of the consumer duty.

Looking ahead, the report confirms that the WIF will be streamlined, with annual executive-level meetings setting strategic priorities for the year ahead and greater reliance on working-level engagement, with reporting against executives and chair objectives. WIF directors will consider the report twice a year, with the executives and the chairs maintaining oversight. The WIF CEOs and executives agreed these changes in April, with implementation underway ahead of the new WIF cycle in November. It has provided an updated terms of reference to reflect these changes.

The Financial Action Task Force (FATF) has published a targeted report on the regulatory challenges posed by decentralised finance (DeFi). The report highlights the rapid growth of DeFi and its increasing exploitation by illicit actors, including fraudsters, ransomware operators, professional money laundering networks and proliferation financing actors. The report found that approximately 93% of surveyed reporting jurisdictions have not yet implemented the FATF Standards in relation to qualifying DeFi arrangements and that only two jurisdictions have licensed or registered a DeFi arrangement in practice. FATF reiterates that DeFi arrangements fall within scope of the FATF Standard covering virtual assets—Recommendation 15—where a natural or legal person exercises control or sufficient influence over the arrangement.

The report emphasises that effective implementation of the FATF Standards in the DeFi context requires a functional and risk-based approach. It identifies a list of on-chain and off-chain indicators of control and sets out recommendations to help jurisdictions, as well as financial institutions, virtual asset service providers, and DeFi arrangements aimed at protecting the integrity of the financial system, while also preventing and mitigating the criminal abuse of the DeFi ecosystem. It also includes case studies of good practice. The report emphasises that jurisdictions with more significant DeFi activity should allocate more resources to understanding, supervising and developing approaches to mitigate the illicit finance risks associated with DeFi arrangements.

The EU Anti-Money Laundering Authority (AMLA) has published a final report containing final draft implementing technical standards (ITS) that set out AMLA's cooperation with national financial supervisors to select and directly supervise some of the most significant cross-border financial institutions in the EU. The final draft ITS cover how entities are selected, how supervision passes between national and EU level, and how AMLA and national supervisors will work side by side.

From 2028, AMLA will directly supervise some of the most impactful, cross-border financial institutions at group level. Until now, this supervision has rested with national supervisors. The new ITS will ensure consistent and uninterrupted supervision as responsibility moves between national and EU level.

The final draft ITS set out a clear, step-by-step process for identifying which firms AMLA will supervise: national supervisors gather and quality-check the data, and AMLA carries out the risk assessment and makes the selection, with the results published on its website. When an entity moves to or from AMLA's supervision, the transferring authority hands over the firm's full supervisory history to the receiving authority, preventing disruptions.

The final draft ITS were developed in close cooperation with national supervisors. They are designed for proportionality: entities are asked for detailed data only once they have been identified as eligible. Where supervisors can already establish that a firm does not qualify, it is exempted from reporting altogether. Once adopted by the European Commission, the ITS will apply to the data collection and selection process leading up to the start of direct supervision in 2028.

The House of Lords European Affairs Committee has published a letter sent to the Foreign Secretary confirming that the Committee has commenced its formal parliamentary scrutiny of the UK/EU Gibraltar agreement, which was laid before Parliament on 14 July. The agreement seeks to provide economic and trade certainty for people and businesses in Gibraltar following Brexit. The letter confirms that the Committee has started its formal parliamentary scrutiny under the terms imposed by the Constitutional Reform and Governance Act 2010, under which the Committee has 21 sitting days to complete its review. The Committee expects to hold a public evidence session with the relevant government minister in September as part of its examination of the agreement.

The European Securities and Markets Authority (ESMA) has published a follow-up report to its 2022 peer review on the supervision of cross-border activities of investment firms. The original peer review identified shortcomings in the authorisation, supervision and enforcement of these activities across six national competent authorities (NCAs). In response, ESMA issued recommendations to strengthen the cross-border supervisory framework through risk-based, proportionate and effective supervision aligned with the scale, nature and complexity of cross-border activities. This follow-up report assesses the progress made by the NCAs in these jurisdictions in implementing the recommendations.

Overall, the follow-up report shows that the peer review has successfully driven improvements within the EU Single Market. Specifically, the report highlights notable progress in three key areas: (i) stronger authorisation controls, where NCAs have enhanced assessments of firms' cross-border plans; (ii) data-driven and risk-based supervision, where NCAs are increasingly using data to monitor cross-border activities, tailoring supervisory action based on identified risks; and (iii) enhanced cooperation and enforcement, where NCAs have undertaken more targeted supervisory actions, reported enforcement cases where relevant and strengthened cooperation.

While the report acknowledges progress, some risks remain and it encourages NCAs with significant outbound cross-border activities to ensure that their supervisory and enforcement approaches match the scale and complexity of these activities and keep pace with evolving risks. ESMA encourages all NCAs, and in particular those where outgoing cross-border activities are significantly growing, to reflect on the report's conclusions.

The European Securities and Markets Authority (ESMA) has published a statement highlighting key deadlines and action points for firms to take when preparing for the transition to a T+1 settlement cycle, which takes effect on 11 October 2027. ESMA states that while readiness surveys conducted by the EU T+1 Industry Committee show an overall good and increasing level of awareness and commitment to the transition, implementation levels remain uneven across EU financial markets, sectors and firms.

While the rules have been known since mid-October last year, ESMA proposed amendments to Commission Delegated Regulation (EU) 2018/1229 to set new requirements, which are particularly relevant for the transition to T+1. ESMA states that firms should consider these in combination with the recommendations of the EU T+1 Industry Committee and accelerate the technical work needed to prepare for the transition to T+1 settlement. The statement also highlights the following key compliance deadlines:

• First deadline: 7 December—for the requirements to improve the first post-trade step, the exchange of allocations and confirmations, in terms of timing and through the default use of international communication standards.
• Final deadline: 11 October 2027—for the requirements to optimise the settlement layer, including sending instructions early enough to securities settlement systems, and the generalisation of certain functionalities in central securities depositories (CSDs), such as auto-partial settlement, hold and release, and auto-collateralisation.

ESMA and the national competent authorities are in the last stages of reviewing the Level 3 guidelines on allocations and confirmations. ESMA considers that the guidelines and the Committee's recommendations will give firms a clear basis for finalising their implementation of electronic, standardised and timely allocation and confirmation processes.

ESMA states that different implementation strategies are possible and firms should undertake thorough analysis and planning, prioritise automation and standardisation, consider new partnerships where relevant, and ensure timely data quality (including correct reference data and standard settlement instructions).

ESMA also reiterates that no-one can be ready in isolation. Firms should assess the readiness of their entire ecosystem, up and down the trading and settlement chain—clients, brokers, custodians, CSD participants, CSDs, central counterparties, trading venues, vendors and outsourcing providers—to enable early testing, identify defects and reduce disruption risk at go-live on 11 October 2027. The regulator warns that insufficient preparedness could trigger significant operational and reputational risks, including flawed interdependencies with financial market infrastructures and IT providers, inability to meet client demands, and higher IT and training costs from last-minute remediation.