On 2 July, the European Securities and Markets Authority (ESMA) published its final report on the simplification of financial transaction reporting under the Markets in Financial Instruments Regulation (MiFIR), the European Market Infrastructure Regulation (EMIR) and the Securities Financing Transactions Regulation (SFTR), together with a factsheet. This follows the interim report published in May which provided a summary of feedback to its June 2025 call for evidence on how to simplify and streamline reporting. 

ESMA recommends a phased reform programme combining short-term burden reduction with a long-term structural reform. At the centre of this strategy is the development of a long-term “report once” model, under which firms would submit data through a single, modular reporting framework capable of serving multiple regulatory and supervisory purposes. This aligns with the “scenario 2a” approach (which evolved from “option 2a” in ESMA’s June 2025 call for evidence). On dual-sided reporting, the final report confirms that a full transition to single-sided reporting was not retained because those data points which are currently reported are used to assess data quality.   

In the shorter term, ESMA proposes a series of simplification measures to provide more immediate burden reduction including streamlining intragroup exemptions, reducing or removing certain reporting fields and reconciliation requirements, simplifying error and omission notifications, and reviewing dual-sided reporting requirements, among other measures mentioned in section 5.2 of the report. ESMA will now engage with EU institutions on the policy recommendations, with implementation requiring legislative amendments and phased development of common reporting standards and infrastructure.

The Digital Regulation Cooperation Forum (DRCF) has issued a call for input under its Thematic Innovation Hub on the theme of "authentication and trust", exploring how regulators can help innovators achieve public trust in new technologies and systems. The Hub enables regulators to better understand emerging risks and opportunities and to engage earlier with innovators developing complex new technologies.  The call focuses on the opportunities and challenges associated with two key sub-themes: (i) digital verification, including where these services may support or intersect with open finance and wider smart data frameworks. The DRCF makes clear that this term refers solely to private-sector use cases and focuses exclusively on the verification of identity attributes, rather than the government's ongoing work on digital identity; and (ii) synthetic media and deepfakes, including AI-generated content that may pose risks to authentication, consumer trust and intellectual property rights. Responses are intended to merely inform the DRCF's future cross-regulatory work, and the DRCF does not intend to provide advice or guidance in response to questions raised through the call for input. The deadline for input is 14 August. The DRCF may engage further with respondents through webinars and/or roundtables.

The Financial Services and Markets Act 2023 (Commencement No. 15 and Saving and Transitional Provisions) Regulations 2026 were made and published. The Regulations form part of the phased implementation of the Financial Services and Markets Act 2023 (FSMA 2023) with respect to the revocation of assimilated law (the body of EU law retained at the point of Brexit).

In particular, from 1 January 2027, the Regulations revoke Articles 81(1)(a)(iii), 82(a)(iii), 107(3) and (4), 114(7), 115(4), 116(5), 382(4)(b), 391 and 497 of the Capital Requirements Regulation (Regulation 575/2013) (CRR), that relate to existing equivalence regimes which are being replaced by the new UK overseas prudential requirements regime. Related legislation, specifically Regulation 11(5)(e) of the Gibraltar (Miscellaneous Amendments) (EU Exit) Regulations 2019 and Implementing Decision 2014/908, which contains equivalence decisions relating to Articles 107(4), 114(7), 115(4), 116(5) and 142(2) of the UK CRR are also being revoked. The Regulations also amend earlier commencement regulations to remove the CRR Equivalence Directions 2020 from an existing saving provision and introduce saving and transitional provisions to preserve the treatment of central counterparties (CCPs) as qualifying CCPs (QCCPs) under Article 497 the CRR. This is to ensure continuity of treatment for recognised CCPs and those seeking recognition under the European Market Infrastructure Regulation, during the transition to the new regime.

The Bank of England (BoE) has published the Retail Payments Infrastructure Board (RPIB) consultation on the design of the UK's future "next‑generation" retail payments infrastructure, building on the government's National Payments Vision and the Payments Vision Delivery Committee (PVDC) strategy.

The consultation focuses on the core clearing and messaging infrastructure needed for the design's blueprint and does not intend to prescribe user-facing products or services. The consultation is structured around three areas, each of which will be considered alongside each other: (i) the future payment journeys the infrastructure should enable and support, including new payment methods such as account-to-account payments at the point of sale and enhanced cross-border payments; (ii) the design principles that should guide its development; and (iii) the role of the core infrastructure within the wider payments ecosystem. The BoE notes that success will also depend on progress in two related areas: (i) ecosystem roles and responsibilities for participants; and (ii) the development of successful products and services, including priority use cases identified in the PVDC strategy (such as account-to-account payments at the point of sale).

The design process is intended to be closely coordinated with wider reforms by HM Treasury and the UK Financial Conduct Authority, to modernise payments regulation. The consultation also includes an indicative roadmap, setting out how design and implementation could be sequenced.

The BoE further highlights that the new infrastructure should support interoperability across different forms of digital money (including the potential future of the digital pound). The deadline for comments is 11 September. Feedback will help the RPIB identify areas where further analysis, testing or industry engagement is needed, including through new engagement forums. Thereafter, the RPIB will publish a summary of responses and outline next steps in the high-level design phase, which will be taken forward by the new delivery company later this year.

The Council of the EU has announced that it has agreed its negotiating mandate on proposed reforms to the Sustainable Finance Disclosure Regulation (EU) 2019/2088 (SFDR) — known as the SFDR 2.0 proposal, adopted in November 2025. The SFDR requires market participants to disclose how they integrate social, environmental and governance sustainability risks and adverse impacts into their investment offers. The reforms aim to simplify the sustainability-related transparency requirements, reduce administrative burdens, and improve the comparability of financial products for investors.

Overall, the Council supports the proposed changes which include the introduction of three new product categories—"sustainable", "transition", and "ESG basics", to replace the current framework and address concerns around existing concepts that have led to greenwashing. However, its negotiating mandate also introduces the following amendments:

• For products classified as "sustainable" or "transition", firms disclosing principal adverse impacts will have to use at least three prescribed indicators (to be set by the European Commission) to support claims and improve cross-product comparability.
• Investments in fossil fuel companies may qualify as transition investments where 20% of capital expenditure is aligned with EU taxonomy (green classification) rules and the company has a clear, time-bound emissions reduction strategy; such investments will be subject to a fourth mandatory adverse impact indicator.
• General-purpose issuances by EU public sector bodies may be included in the "transition" category under certain conditions.
• Alternative investment funds marketed exclusively to professional investors may be exempt from applying the categorisation provisions.

The Council's mandate will form the basis for negotiations with the European Parliament once it has adopted its own respective position.

The UK Financial Conduct Authority (FCA) has published an updated webpage providing information for firms on motor finance complaints in the context of the ongoing legal challenge to the redress scheme. The FCA notes that there remains uncertainty regarding the scheme's requirements while the legal proceedings are ongoing. The FCA is engaging with the Tribunal and the parties involved in the legal challenge on the possibility of suspending certain elements of the scheme. Firms are reminded to continue carrying out work that can be undertaken now and will be required in all circumstances.

But otherwise, it will take a pragmatic approach and, for the time being, will not require firms to communicate with customers or make payments in accordance with the scheme timetable. Neither will it enforce compliance with the requirement to submit monthly reports. The FCA will keep the position under review as the Tribunal timetable becomes clearer and will engage with lenders and consumer groups on whether further customer communications, scheme preparation measures or contingency planning guidance may be appropriate.

The Financial Action Task force (FATF) has launched a consultation on draft guidance to support the implementation of its revised Recommendation 16 (Wire transfers) on payment transparency. The Recommendation is commonly referred to as the "Travel Rule" and was updated in June 2025. The proposed guidance aims to reflect developments in the payments landscape and to strengthen the security of cross-border payments by increasing the transparency of information accompanying transfers and introducing measures to address fraud and errors. Feedback is sought on a range of issues, including:

• Detecting and preventing misdirected payments, including by leveraging the three options for alignment checks foreseen in the revised Standard.
• Implementation that supports financial inclusion, including in lower-capacity jurisdictions.
• How Recommendation 16 applies to newer payment methods, such as digital wallets and mobile money.
• Implementing Recommendation 16 and meeting data protection and privacy requirements together.

The deadline for responses is 21 August, with the final guidance intended to assist jurisdictions and firms in meeting the revised standards by the end of 2030. The full list of consultation questions is set out in the explanatory memorandum to the draft guidance.

The European Securities and Markets Authority (ESMA) has issued a public statement clarifying its expectations ahead of the end of the transitional period on 1 July for authorisation under the Markets in Crypto-Assets Regulation (MiCAR). ESMA calls on crypto-asset service providers (CASPs) that are not MiCAR-authorised to cease operations and implement an orderly wind down of their EU activities while safeguarding client interests. ESMA expects unauthorised CASPs to:

• Immediately stop onboarding new EU clients, opening new client relationships or accounts, and carrying out marketing or solicitation activities.
• Limit the provision of services to those necessary to sell or transfer crypto-assets, reallocate assets, or close positions, and custody arrangements for a period strictly required to support an orderly exit.

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The U.S. Office of Foreign Assets Control (OFAC) and the UK Office of Financial Sanctions Implementation (OFSI) have published joint guidance providing a comparative overview of their respective economic sanctions frameworks. The guidance highlights key similarities and differences across terminology and structure in areas such as sanctions lists, licensing, recordkeeping and reporting requirements. The aim of the guidance is to help private sector firms understand and comply with their obligations under both regimes. The OFSI published a blog, on the same day, to announce the publication and detail its shared objectives with OFAC.

The European Banking Authority (EBA) has published its final report with draft implementing technical standards (ITS) amending the Pillar 3 disclosure framework to finalise the implementation of the disclosure requirements introduced under the revised Capital Requirements Regulation (CRR3). This follows the May 2025 consultation. The ITS revise disclosures on environmental, social and governance (ESG)-related risks and introduce new requirements on equity exposures and aggregate exposures to shadow banking entities. The intention is to improve clarity, consistency and usability within the EU's broader simplification agenda. The final draft ITS are closely linked to the ESG supervisory reporting framework set out in the related consultation paper and are advised to be read together.

In relation to ESG disclosures, and in line with the CRR3 mandate, the ITS extend the scope of application beyond large listed institutions to include large non-listed institutions, other institutions, small and non-complex institutions (SNCIs) and large subsidiaries. The framework introduces a more proportionate and streamlined approach, with differentiated disclosure requirements based on institutions size and complexity. In particular, SNCIs are required to disclose only essential information (including on physical and transition risks and exposures to fossil fuel sectors), while the requirements for larger institutions are clarified and streamlined rather than expanded.

The ITS also take into account existing supervisory guidance and seek to enhance consistency across frameworks, including through alignment of terminology and instructions which can be found in the press-release.

The draft ITS will be submitted to the European Commission for adoption. They are expected to apply from a reference date of 31 December 2026, with a later application date of 31 December 2027 for SNCIs. The instructions to the templates will not be published in the Official Journal, but will be published on the EBA website, and disclosures should be provided in accordance with those instructions. They will be available in all languages and shall remain directly applicable in all Member States as part of the ITS.

The Bank of England (BoE) has published a final policy statement setting out its regulatory framework for sterling-denominated systemic stablecoins, alongside a consultation on the draft code of practice for issuers. This follows the November 2025 consultation.

Under the regime, which will be established through amendments made by the Financial Services and Markets Act 2023 to the Banking Act 2009, the UK Financial Conduct Authority (FCA) will regulate the issuance, custody and admission to trading of UK-issued qualifying stablecoins and, in due course, their use in payments, while systemic stablecoins recognised by HM Treasury will be regulated jointly by the BoE and the FCA.

Following consultation feedback, the BoE has made several changes to the final policy. Key changes include:

• Revising the backing asset composition from a 60/40 to a 70/30 split between short‑term UK government debt and unremunerated central bank deposits (overnight repo and reverse repo transactions using eligible government securities with a residual maturity of six months will be permitted).
• Replacing proposed holding limits with a temporary GBP40 billion issuance "guardrail", which the BoE considers significantly less complex to implement.

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The Bank of England (BoE), together with Bafin, the Bundesbank, the Commodity Futures Trading Commission and the European Securities and Markets Authority (ESMA), have published a summary report with key findings from the 2025 CCP Global International Default Simulation (CIDS) exercise. The "fire drill" exercise involved 38 central counterparties (CCPs), together with their members, involving the simulation of the default of a hypothetical common clearing member across a wide range of asset classes. This included commodities, equities, interest rate swaps, credit default swaps and foreign exchange. It was the largest CIDS exercise to date and was coordinated by CCP Global, an industry body representing CCPs globally.

The exercise demonstrated that CCPs and clearing members are broadly capable of executing default management procedures concurrently across multiple CCPs. However operational pressures—particularly resource constraints, competing priorities, and limited availability of experienced personnel—were evident. Feedback also highlighted the need for greater standardisation of communication, auction processes and file formats across CCPs, as well as improved use of portal-based systems to reduce operational risks.

In a press-release published on the same day, ESMA listed the areas from the findings where further progress is expected ahead of the next iteration, including:

• Encouraging industry-led progress to reduce fragmentation in procedures and communication conventions employed by CCPs, and promote greater use of portal-based solutions.

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The Bank of England (BoE) has announced the scenario phase of its second system wide exploratory scenario (SWES), this time focused on private markets. The BoE has issued participants with a hypothetical stress scenario that details a severe, but plausible, global macro-economic recession over a five-year period. The severity of this shock has been calibrated to represent a tail-risk outcome for the global economy and is broadly consistent with the severity of other stress tests run, such as the bank capital stress test. The exercise aims to assess whether vulnerabilities in private markets could have systemic implications and under what conditions. Conducted in two rounds, participants will model the impact of the scenario and their behavioural responses.

The exercise will examine vulnerabilities including leverage, valuation opacity, liquidity pressures, interconnectedness and deteriorating credit quality, as well as systemic transmission channels through which stress could spread to markets, institutions and the real economy. Following round 1, the BoE will provide aggregated feedback, allowing firms to update their responses. Initial findings will be published in the July Financial Stability Report, with interim results expected later in the year and a final report expected in 2027. A new webpage detailing the hypothetical scenarios to be used in the SWES was published on the same day.

The UK Prudential Regulation Authority (PRA) has published consultation paper CP9/26, setting out proposed adjustments to the Basel 3.1 internal model approach (IMA) for market risk. The Basel 3.1 standards introduce a comprehensive set of amendments to the market risk framework, commonly referred to as the fundamental review of the trading book (FRTB), with implementation deferred to 1 January 2028. As part of its ongoing monitoring of FRTB implementation, the PRA has identified several areas where targeted adjustments could improve the proportionality and operational effectiveness of the framework, while maintaining robust prudential standards.

Key proposals include:

• Extending the profit and loss attribution test monitoring period from one year to three years.
• Adjusting elements of the risk factor eligibility test (RFET).
• Introducing targeted adjustments and operational simplifications to the non modellable risk factors framework, a new feature of the Basel standards linked to the RFET.
• Reducing barriers to gradual IMA approval by adjusting calculations for firms who use a mix of the IMA and standardised approaches, preventing a scenario where capital requirements could rise as firms move gradually on to IMA.
• Implementing operational simplifications to the treatment of collective investment undertakings.
• Making other minor adjustments and clarifications to the IMA framework.
• Updating reporting and disclosure requirements to align with the proposals above.

The deadline for responses is 18 September. The PRA proposes that the implementation date for the IMA, including the changes resulting from this consultation, will remain 1 January 2028. No other changes are being proposed and all other rules come into force in January 2027, as previously planned.

HM Treasury (HMT) has published its consultation response on the reform of the UK's anti-money laundering and counter-terrorist financing (AML/CTF) supervisory regime for professional services firms. This follows the decision announced last October that the UK Financial Conduct Authority (FCA) will be the sole AML supervisor for legal service providers, accountancy service providers and trust and company service providers under the Money Laundering Regulations 2017 (MLRs). A consultation, published in November 2025, set out the proposed key responsibilities and duties for the FCA's expanded role, along with the legislative changes needed to implement these reforms.

The consultation response includes the policy decisions on these proposals, including:

• Registration and gatekeeping. Making the FCA responsible for registering professional services firms carrying out AML/CTF regulated activity and for maintaining a public register of those firms. The FCA will also be given an explicit power to cancel a firm's registration where it is no longer carrying out regulated activity. In addition, the application of regulation 58 "fit and proper" requirements, enabling supervisors to assess the integrity, competence and compliance history of firms and their beneficial owners, officers and managers, will be extended across legal and accountancy service providers, aligning these sectors with trust and company service providers, which are already within scope.

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The European Banking Authority (EBA) has published a report proposing targeted simplifications to the EU bank capital framework, following a holistic review of the microprudential, macroprudential and resolution capital regime in the EU ("stacking order"). The report forms part of the EBA's broader priority of simplifying and enhancing the efficiency of the regulatory and supervisory framework under its 2026 work programme and follows its earlier report in October 2025 on the efficiency of the regulatory and supervisory framework.

The EBA does not advocate a fundamental redesign but instead recommends potential adjustments to reduce complexity and improve consistency, predictability and effectiveness while preserving the acquired resilience of the European banking system. Recommendations in the report follow four guiding principles: preserving overall resilience and capital neutrality; adhering to international standards; ensuring proportionality; and enhancing the efficiency and depth of the Single Market.

Key recommendations include:

• Microprudential stack. Preserving most elements of the current microprudential toolkit, including Pillar 1, Pillar 2 requirements and Pillar 2 guidance while clarifying and strengthening their respective roles. The report also recommends streamlining the leverage ratio stack by converting its Pillar 2 requirement into a buffer and removing its Pillar 2 guidance. In addition, the EBA suggests removing macroprudential considerations from the microprudential stack.

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HM Treasury has published the terms of reference for the newly appointed Wholesale Digital Markets Champion, Chris Woolard CBE, setting out how Mr Woolard will work in partnership with industry and government to accelerate the digitalisation of UK wholesale financial markets. Mr Woolard will also provide leadership to co-ordinate the sector's wider implementation of digital as outlined in the Wholesale Financial Markets Digital Strategy published as part of the Leeds Reforms.

The Champion's key responsibilities include: (i) establishing a cross-industry taskforce, with representatives from across the market ecosystem, to provide input and support; (ii) delivering a report (by July 2027) to the Chancellor, developed with the sector, covering how UK wholesale markets can best adopt tokenisation and other related technologies, as well as how the sector and government can ensure DLT interoperability; (iii) promoting the delivery of the strategy across the sector; and (iv) coordinating with the Chairs of other related reform workstreams (including delivering T+1 settlement and removing paper shares). Mr Woolard will provide an initial forward plan, including plans to establish the industry taskforce by July. Mr Woolard has been appointed for 18 months.

The Commission Implementing Regulation (EU) 2026/1288 was published in the Official Journal of the European Union (OJ). The Implementing Regulation provides for a stand-alone suspension of the derivatives trading obligation (DTO) set out in Article 28 of the Markets in Financial Instruments Regulation (EU) No 600/2014 (MiFIR) for certain EU financial counterparties. Under Article 32a MiFIR (introduced by Regulation (EU) 2024/791 - MiFIR II), the European Commission (EC) may suspend the DTO by making an implementing act following a request from a national competent authority for certain investment firms acting as market makers with non-EEA counterparties when certain conditions are met. The effect of this Implementing Regulation is that certain named firms will be permitted to execute derivatives within the scope of the DTO on UK trading venues. The Implementing Regulation will enter into force on 18 June, the third day following its publication in the OJ. The EC will review whether the grounds for the suspension of the DTO continue to apply every five years from 18 June.

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/19, proposing targeted amendments to its Decision Procedure and Penalties Manual (DEPP) to ensure that its penalty framework and decision-making processes remain up-to-date, transparent and effective. The proposals also reflect the introduction of the market abuse regime for cryptoassets.

Key proposals include:

• Market abuse. Increasing the minimum initial disciplinary penalty level for serious market abuse committed by individuals from GBP100,000 to GBP150,000 to account for inflation.
• Deterrence. Making clear that the FCA has the ability to increase penalties for wealthier individuals for deterrence, having regard to income and assets.
• Relevant income. Clarifying how to treat deferred income, including bonuses, pay and shares, in line with recent Upper Tribunal decisions.

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The European Commission (EC) has launched a consultation on the development of guidelines to support the effective implementation of the Corporate Sustainability Due Diligence Directive (EU) 2024/1760 (CS3D). The EC will issue guidelines that provide practical orientation to companies on how to fulfil their due diligence obligations, to Member State authorities on how to implement and enforce CS3D, and to stakeholders on how to pursue their rights. The guidelines will also be relevant for companies and other stakeholders in non-EU countries that are linked to the supply chains of companies with obligations under CS3D. The deadline for comments is 24 July.

The European Banking Authority (EBA) has launched a consultation on the methodology, templates and template guidance for the 2027 EU wide stress test, assessing the resilience of EU banks and the wider banking system. The exercise introduces significant simplifications to improve efficiency and risk sensitivity, while preserving the robustness and comparability of results. Key changes include a substantial reduction in data requirements and closer alignment of information with harmonised supervisory reporting. For the first time, the exercise will also integrate both transition and physical climate risk assessments. The consultation has been launched earlier than in previous cycles to support banks’ preparedness and the EBA also plans to hold a series of workshops for further guidance. The results of the stress test will continue to inform the Supervisory Review and Evaluation Process.

Companies House has published its third progress report on the implementation of reforms under Parts 1 to 3 of the Economic Crime and Corporate Transparency Act 2023. The report highlights progress in strengthening the integrity of the UK companies register and tackling economic crime, supported by increased data-sharing with HM Revenue & Customs and the Insolvency Service. This includes contributions to a National Crime Agency-led operation targeting high-street criminality and money laundering.

The report also reflects progress in introducing mandatory identity verification (IDV) for directors and people with significant control, aimed at strengthening transparency and deterring those who use UK corporate structures to facilitate crime. Looking ahead, further measures are planned, including further IDV roll-out, enhanced transparency of the Register of Overseas Entities and a more intelligence-led enforcement approach. Annual progress reports will continue until 2030.

The UK Financial Conduct Authority (FCA) has published a document to help firms understand and prepare for the motor finance redress scheme. The document reflects common queries received by the FCA and is intended to address issues of wider relevance. It should be read in the context of the ongoing legal challenge to the scheme. The FCA notes that it may update the document or take further action in relation to the scheme's rules or guidance as that challenge progresses, and firms should monitor FCA announcements closely.

The UK Financial Conduct Authority (FCA) has published a letter (dated 1 June) to the House of Lords Financial Services Regulation Committee. The letter sets out the FCA's findings from its "lessons learned" exercise of its consultation on publicising enforcement investigations. The FCA acknowledges that its original proposals were poorly communicated and came as a surprise to industry due to insufficient early engagement and supporting data. The FCA confirmed it has since reinforced its commitment to more predictable and transparent consultation practices. The letter also summarises the operation of the updated enforcement guide introduced in June 2025, following final rules in PS25/5.

The UK Financial Conduct Authority (FCA) has published its first external publication of the emerging technology horizon scan 2026. It is intended to inform debate and support industry collaboration, rather than to provide formal regulatory guidance or predictions.

The report identifies key trends:

• Technological convergence is accelerating, changing the way financial systems operate and serve consumers, creating new opportunities and risks.
• Personalised intelligence could help consumers navigate their lives. Where AI becomes the primary interface between consumers and firms, this could improve financial decision-making and access to tailored products. However, it also highlights issues around autonomy, digital exclusion and customer protection.
• Synthetic crime is rapidly evolving and will impact how the FCA tackles financial crime. Synthetic media is also making it increasingly difficult to distinguish between real and manipulated content. This may erode trust and expose consumers and firms to new forms of fraud and deception.
• Programmable finance could support growth. Distributed ledger technology, tokenisation, central bank digital currencies, stablecoins and smart contracts are becoming mainstream, and these developments can increase speed and efficiency.

The Financial Stability Board (FSB) has published a consultation report on sound practices for responsible adoption of AI. The report sets out 12 sound practices aimed at supporting financial institutions in managing AI-related risks while enabling innovation. The proposed practices are structured around three core areas: (i) organisation-wide AI governance (practices 1–4); (ii) risk management and mitigation across the lifecycle of AI development and deployment (practices 5–10); and (iii) management of AI-related cyber, information and communication technology, and third-party risks (practices 11–12).

The practices are intended to complement existing international standards and promote cross-border coordination and information-sharing, rather than impose prescriptive requirements or create new regulatory obligations. Financial institutions' boards and senior management are encouraged to consider these practices when shaping strategy, technology adoption and risk management. The deadline for feedback is 22 July, with a final report expected in October.

The Money Laundering and Terrorist Financing (Amendment) Regulations 2026 have been made and laid before Parliament, alongside an explanatory memorandum. The Regulations make amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) to implement the government's consultation response to its 2024 consultation on improving the effectiveness of the MLRs. The amendments aim to strengthen the UK's anti-money laundering and counter-terrorist financing regime and ensure continued compliance with Financial Action Task Force standards.

Key changes include:

• Refining due diligence requirements so that enhanced measures focus on higher risk transactions and jurisdictions.
• Converting thresholds from EUR to GBP.
• New provisions governing pooled client accounts.
• Bringing the service of selling an off-the-shelf firm within scope of trust or company service provider services.
• Strengthening the regime for cryptoasset businesses.
• Changes to the scope of trust registration requirements.
• Improving information-sharing between supervisory authorities and other regulatory bodies.

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The UK Financial Conduct Authority (FCA) has published consultation paper CP26/18 as part of its mortgage rule review, proposing targeted reforms to improve access to mortgage lending for first-time buyers and underserved consumers. The proposals follow the June 2025 discussion paper on the future of the mortgage market and the FCA's feedback statement.

The proposals seek to:

• Widen access to interest-only and part interest-only lending.
• Make it easier to raise mortgage finance in later life.
• Lower barriers for firms that want to lend to consumers with irregular income.
• Encourage lenders to take a more individualised approach when assessing the creditworthiness of customers with impairment in their credit history, rather than declining them based on a definition designed for debt consolidation and reporting purposes.
• Lower barriers for firms that want to lend in a foreign currency or to consumers with a foreign income.
• Increase flexibility for borrowers who want bridging finance, which can help break a lengthy sales chain or fund a renovation.
• Increase the scope for firms to offer mortgages with different features and therefore, different risks.

The FCA's proposals take into account the potential for adverse outcomes for some consumers, and also consider the risk that consumers may need to rent for longer if they cannot purchase a home. The deadline for comments is 28 July. Feedback will be considered and a final policy statement is expected in the second half of the year.

The UK Financial Conduct Authority (FCA) has published a response letter (dated 8 June) to a letter from the House of Commons Treasury Committee sent in May, setting out the status of the motor finance redress scheme and the implications of ongoing legal challenges.

The FCA's view is that the scheme remains the quickest and most effective way to deliver redress to affected agreements but confirms that challenges brought by certain lenders and a claims entity will delay implementation. The FCA emphasises that firms must continue preparing operationally and financially, including identifying in-scope agreements and holding adequate capital, while warning of supervisory and enforcement action where preparedness is insufficient. The letter highlights significant concerns about misconduct in the claims management sector, including misleading marketing, multiple representation and potential fraud risks exacerbated by delays, and notes ongoing regulatory intervention and cross-authority cooperation to address these issues. The FCA also welcomes ideas from firms and consumer organisations on how, despite the legal challenges, firms who want to can start paying fair redress now.

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HM Treasury (HMT) has published a speech delivered by chancellor Rachel Reeves at the AI Adoption Summit. The speech sets out how the government is implementing its strategy to accelerate AI adoption and outlines next steps. In particular, the chancellor confirmed the upcoming publication of a financial services AI adoption plan on 14 July, when she delivers her Mansion House speech.

During the speech, the chancellor confirmed the launch of the Advisory AI Growth Lab, a forum which will bring together regulators to provide practical guidance on how current rules apply to emerging AI applications, with an initial focus on legal services. She also announced the introduction of the AI Economics Institute, a research organisation of HM Treasury and the Department for Science, Innovation and Technology. Later this month, the National Cyber Action Plan is due to be published. The chancellor further confirmed that legislation would be brought forward in the autumn to better provide for and enable the safe testing of innovative products and services.

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The European Parliament has announced that it has reached a provisional agreement with the Council of the EU on a package of measures to simplify regulatory requirements for a new category of undertakings named small "mid-cap" companies (SMCs). The undertakings fall between small and medium-sized enterprises (SMEs) and large companies, and the measures form part of the European Commission's Omnibus IV legislative proposal, adopted in May 2025. The agreement is intended to support scaling businesses and avoid "cliff-edge" increases in regulatory obligations when firms outgrow SME status, by extending to SMCs a range of exemptions and lighter requirements currently available to SMEs.

The press release states that SMCs are broadly defined in principle as companies with fewer than 1,000 employees and either up to EUR200 million in turnover or EUR172m in total assets. The simplified regime will apply across several EU frameworks, including the General Data Protection Regulation, where lighter record-keeping obligations will apply for low-risk processing data and capital markets rules (including the Markets in Financial Instruments Directive II and the Prospectus Regulation), enabling easier access to SME growth markets and simplified disclosure requirements. Additional simplifications are introduced in other areas. The measures remain subject to formal adoption by both institutions before publication in the Official Journal of the European Union and entry into force. Member states will have 15 months to introduce the Directive into their national legislation.

The European Banking Authority (EBA) has published a discussion paper on extending its Pillar 3 data hub to small and non-complex institutions (SNCIs). The hub provides public access to prudential information from all European Economic Area credit institutions in a single location. It was launched in January for large and other institutions and the EBA is now progressing its extension to SNCIs. For these institutions, the EBA is mandated to prepare and publish the Pillar 3 disclosures based on supervisory reporting data submitted to competent authorities. The discussion paper proposes a simplified process detailing the methodology for calculating Pillar 3 disclosures. It also outlines the next steps and the expected timeline for the first publication. The deadline for feedback is 20 July and a public hearing is scheduled for 1 July. Responses will inform the finalisation of the SNCI process and the calculation methodology.

The UK Financial Conduct Authority (FCA) has published a statement with an update on reforming the UK Money Market Fund Regulation (MMFR), following the government's announcement to repeal and replace the existing regime. Following its 2023 consultation and further market engagement, the FCA confirms that requirements will largely move into FCA rules and guidance, while also introducing a new resilience requirement requiring all MMFs to hold sufficient liquidity to withstand market stress.

The FCA will retain current minimum weekly liquid asset (WLA) requirements. However, it expects stable net asset value (NAV) MMFs to hold at least 40% WLA and variable NAV MMFs at least 20% to meet the new resilience requirement. Being lower than these levels temporarily should only occur to meet redemptions or in exceptional circumstances for reasons beyond the manager's control. Daily liquid asset requirements will remain unchanged, and no additional guidance is proposed. The FCA also intends to proceed with other reforms consulted on, including removing links between liquidity thresholds ("delinking") and introducing enhanced "know your customer" requirements to strengthen investor protection.

The government expects legislation to repeal the MMFR to be introduced by the end of the year, with the FCA aiming to align its new rules to this timetable. Interim final guidance on WLA levels will be published, and a policy statement with further detail will follow.

The UK Financial Ombudsman Service (FOS) has published its response to the UK Financial Conduct Authority's (FCA) consultation on simplifying pensions and investment advice rules. The FOS broadly supports the proposed shift from prescriptive requirements to greater reliance on a more principles-based framework and does not expect this shift to undermine its ability to determine complaints. However, it notes that greater reliance on high-level principles may increase the scope for differing views on how these principles should be applied, making clear regulatory guidance increasingly important. The FOS is also concerned that limited firm engagement on price and value assessments under the consumer duty could make complaint resolution more contentious, and it calls for further FCA guidance, including case studies and examples of good and poor practice.

The FOS further acknowledges that complaints may become more nuanced and consistency will be harder to demonstrate. However, it seeks to address this through close collaboration with the FCA and clear FCA guidance. Overall, it does not expect the reforms to have a material impact on its complaint-handling role or outcomes. The FOS will continue to monitor complaints in this area and share insights with the FCA.

HM Treasury has published a call for evidence for the independent review into access to banking services, assessing the impact of the decline in face-to-face services across the UK. The review will consider: (i) which services are important or essential for customers to be able to access; (ii) which groups of customers may need access to in-person banking services; and (iii) whether the decline in access is causing detriment to customers, and the materiality of the detriment caused. It will focus on those who require access (such as vulnerable customers), rather than those who simply desire or prefer in-person banking services. It will also consider the needs of both individual retail customers and organisations, including small businesses, non-profit and community groups.

The review is limited to banking services that currently lack statutory protections and excludes cash withdrawal and deposit services, which are already covered by legislation. The deadline for comments is 20 July and the evidence gathered will help inform the chair's recommendations to government.

The UK Financial Conduct Authority has entered into a Memorandum of Understanding with the UK Office of Financial Sanctions Implementation. The MoU replaces an earlier MoU dated 21 November 2023 and sets out cooperation arrangements and exchange of information between the two regulators. The regulators commit to reviewing the effectiveness and efficiency of the MoU every two years.

The UK Financial Conduct Authority (FCA) has published quarterly consultation paper No. 52, inviting feedback on proposed amendments to its Handbook.

Proposed changes include:

• Simplifying product-level climate and sustainability disclosure requirements for asset managers, life insurers and pension providers, while maintaining the original policy intent under PS21/24.
• Aligning FCA fees to set regulated income as the tariff base for cryptoasset firms and inserting new fee categories to account for new regulated crypto activities.
• Consequential amendments to reflect the revocation of UK Capital Requirements Regulation provisions.
• Allowing certain authorised funds to hold cryptoasset exchange traded notes subject to a limit of 10% of scheme property.
• Deleting the requirement for approvers of qualifying cryptoasset financial promotions to submit notifications following certain approvals.
• Updating section M of the Retail Mediation Activities Return (RMA-M) and related guidance.

The deadline for comments is 13 July.

The European Commission (EC) has adopted a Delegated Regulation proposing 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. The Delegated Regulation sets out amendments 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. It reflects feedback from the November 2025 consultation and the most recent April consultation, as well as input from member state experts. The Delegated Regulation will now be reviewed by the European Parliament and the Council of the EU, with a three-month scrutiny period (extendable by a further three months). If no objection is raised, the measures will enter into application on 1 January 2027, for a period of three years. The EC has published Q&As alongside the adopted Delegated Regulation.

The Cross Market Operational Resilience Group (CMORG) has published guidance on frontier AI and cyber resilience for financial institutions. The guidance highlights that advanced AI systems are accelerating the speed, scale and sophistication of cyber-attacks, significantly compressing the time between vulnerability discovery and exploitation. This creates an immediate challenge for firms to adapt now to maintain resilience.

CMORG indicates that remediation timelines may need to compress from weeks to days, and in some cases hours, requiring firms to operate with greater urgency, coordination and discipline. Financial institutions are advised to place stronger emphasis on rapid patch deployment, balanced against potential impacts such as service availability. An effective response will also require coordinated action across governance and leadership, operating models, technology architecture, detection and response capabilities, and the management of supply chain and ecosystem risk.

Given the pace of development in frontier AI, this guidance is expected to evolve over time. It is intended to provide a practical and actionable baseline for firms to assess their current capabilities and accelerate their response.

The Financial Services and Markets Act 2023 (FSMA 2023) (Commencement No. 14) Regulations 2026 have been made and published. The Regulations use powers under FSMA 2023 to revoke assimilated law relating to short selling in anticipation of the new UK regime coming into force on 13 July under the Short Selling Regulations 2025 and the FCA rules published in April.

The Regulations will revoke on 13 July:

• Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps ("the Short Selling Regulation").
• The Financial Services and Markets Act 2000 (Short Selling) Regulations 2012.
• Instruments made under the Short Selling Regulation, as assimilated into UK law.
• The Short Selling (Notification Thresholds) Regulations 2021.
• The Short Selling (Notification Threshold) Regulations 2023.

Commission Delegated Regulation (EU) 2026/440 amending Delegated Regulation (EU) 2015/63 on ex ante contributions to resolution financing arrangements, was published in the Official Journal of the European Union (OJ). It amends the framework to align with recent changes to the Bank Recovery and Resolution Directive (BRRD), the Investment Firms Regulation (IFR) and the Investment Firms Directive (IFD) and to reduce administrative burden and improve proportionality The amendments include:

• Updates to the definition of "investment firms" and "competent authority".
• A simplified contribution methodology for certain Class 2 investment firms (with an option to apply risk‑adjusted calculations where this results in a lower contribution).
• Removal of the risk indicator based on own funds and eligible liabilities held in excess of the minimum requirement for own funds and eligible liabilities (MREL).
• Removal of the denominator from the interbank loans and deposits indicator.
• A limitation period for requesting restatements and revisions of data submitted to resolution authorities.

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The EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) has launched a consultation on draft guidelines on ongoing monitoring of business relationships under Article 26(5) of Regulation 2024/1624. The guidelines aim to ensure a proportionate, risk based and effective application of monitoring obligations across all obliged entities and set out key principles including:

• Expectations for updating customer information through periodic and event driven reviews.
• The sources of information that may be used alongside non exhaustive lists of factors to assess during periodic customer information reviews and event trigger reviews.
• How monitoring frameworks should be designed and implemented to detect unusual or suspicious activity, using appropriate manual or automated controls.

They further reflect the need for clear governance, adequate documentation, appropriate staff training, and the responsible use of advanced analytical tools, supported by effective human oversight, where appropriate. The deadline for comments is 3 September, with a public hearing scheduled for 2 July. Final guidelines are expected in Q4.

The European Supervisory Authorities (the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority) have published their first annual report on major ICT-related incidents under the Digital Operational Resilience Act (DORA). The report covers 2025 and records 3,383 major incidents across all financial sectors. The ESAs emphasise that this figure does not indicate structural weakness as the direct impact on clients and transactions was generally limited.

The report also highlights that ICT risks are increasingly borderless, with around one third of incidents having a cross-border impact. System failures and external events were the main drivers. Nearly one third of incidents originated from third-party failures, with the ESAs highlighting the critical role of outsourced services and the need for robust third-party risk management and oversight. By contrast, the relatively low number of cybersecurity-related incidents suggested that existing safeguards and detection mechanisms were broadly effective. While the sector has demonstrated resilience to ICT-related threats, the ESAs stress that firms must maintain high cybersecurity standards, particularly to keep pace with the potential use of highly capable AI-driven tools.

The House of Lords (Financial Services Regulation) Committee has published a report following its inquiry into the growth and proposed regulation of stablecoins in the UK. Among other things, the report examines the Bank of England (BoE) and UK Financial Conduct Authority's (FCA) proposed regulatory regimes for systemic and non systemic stablecoins and assesses whether they are measured and proportionate. The Committee finds that the UK is lagging behind the U.S. and EU in developing its regulatory framework and urges regulators to adhere to existing timelines to avoid delay.

While broadly supportive of the proposals, the report highlights aspects which require re-consideration. It notes there are several elements which diverge from international approaches, particularly proposals relating to unremunerated backing assets requirements, the stablecoin holding limits and the restrictions on commercial bank issuance. The report calls for: further BoE analysis on the impact of holding limits on high-value cases; greater clarity from HM Treasury (HMT) on how it will determine whether stablecoins are systemic; and re-consideration by the FCA of the proposed k-factor requirement for stablecoin issuers. It also notes HMT's intention to bring stablecoins into the payments regulatory perimeter but highlights the lack of detail on scope.

The Committee further calls on HMT and the UK regulators to assess whether existing legal frameworks adequately address risks from unhosted and unregulated wallets, and to be prepared to legislate where necessary. It urges the government and UK regulators to consider its recommendations on how the proposed regulations may need to be re-adjusted to bring certainty and confidence.

The European Securities and Markets Authority (ESMA) has published a letter addressed to the European Commission (EC) de-prioritising certain 2026 deliverables under its annual work programme. Due to the increased workload arising from the market integration and supervision package (MISP) proposal and the broader political focus towards simplification and burden reduction, ESMA confirms that a small number of planned policy deliverables (set out in Table A of Annex I in the work programme) may become obsolete or altered depending on the final outcome of the legislative negotiations of the MISP package. To avoid duplication or inconsistency, ESMA has also decided to postpone related consultations until after the package is adopted. For more information on MISP and its potential implications for market participants, you may wish to watch our webinar.

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UK Payments Initiative Ltd (UKPI) has announced the launch of a new industry-led payment scheme designed to support scalable account‑to‑account payments using open banking. The scheme supports the ambitions set out in the UK government's National Payments Vision. It introduces a framework for variable recurring payments, enabling consumers to authorise recurring or flexible payments directly from their bank accounts without sharing card details or relying on traditional direct debit, within their own agreed limits. This gives consumers greater control over who can collect money, how much can be taken and how long that permission lasts.

The UKPI scheme establishes a common rulebook, commercial model and operational standards, developed collaboratively by UK banks and fintech firms. Initially, the payments will be available for use cases such as payments to government, utilities, charities and financial services. The framework incorporates consumer protection measures, including safeguards and dispute processes to support trust across participants. The rulebook has been finalised and the scheme is now moving into market rollout following successful live proving. The UK Financial Conduct Authority published a statement on the same day signalling its support for the UKPI's launch.

The Basel Committee on Banking Supervision (BCBS) has published a report outlining observed practices in banks' information and communication technology (ICT) risk. The report aims to compare regulatory, supervisory and industry practices across jurisdictions relevant to addressing non-malicious ICT incidents in global systemically important banks, domestic systemically important banks and other banks of interest (e.g., digital-only banks) that affect the delivery of critical operations. It complements the BCBS's earlier cyber resilience work.

Drawing on a survey of 16 jurisdictions and industry engagement, the BCBS identifies key findings, including that non malicious ICT incidents have varied across jurisdictions in recent years and are most driven by change control gaps, weaknesses in system design, capacity and performance issues, and failures linked to external dependencies. The report highlights core practices adopted by banks relating to governance, business continuity, change management, technology solutions and third-party risk management. It is intended to serve as a reference point for firms and supervisors in strengthening their ICT risk management practices for their specific circumstances. The BCBS will continue to monitor developments related to the digitalisation of finance and financial technology from a prudential perspective, including developments in AI models and the implications for banks' cybersecurity.

The Commission Delegated Directive (EU) 2026/374 amending Delegated Directive (EU) 2017/593 under the Markets in Financial Instruments Directive (MiFID II) has been published in the Official Journal of the European Union (OJ). The Directive updates the rules on the provision of third-party execution and research services to investment firms that provide portfolio management or other investment or ancillary services. The amendments reflect changes introduced by Directive (EU) 2024/2811, allowing investment firms greater flexibility to pay for research and execution services either jointly or separately.

The Delegated Directive introduces enhanced requirements where firms operate research payment accounts, including obligations on budgeting, controls, and audit trails, and reinforces that research charges must be based on a pre-set budget and not linked to transaction volumes. It also imposes a strengthened obligation on firms to assess the quality, value and usability of third-party research on at least an annual basis against robust criteria, and to take remedial action where deficiencies are identified. The Directive will enter into force on 22 June, being the 20th day following publication in the OJ. Member states must transpose the Directive by 5 June, with application from 6 June.

The UK Financial Conduct Authority (FCA) has published Q&A responses from its 2026 webinar on the UK anti money laundering (AML) framework for cryptoasset firms. They clarify how the current Money Laundering Regulations 2017 (MLRs) will operate alongside the forthcoming cryptoasset regime under the Financial Services and Markets Act 2000 (Cryptoassets Regulations) 2026, which commences on 25 October 2027.

Topics addressed include:

• Applications under the Financial Services and Markets Act 2000 (FSMA) regime.
• MLR registration will remain the route for firms providing in scope cryptoasset services until the new regime commences, but firms will need to obtain FSMA authorisation to continue operating under the new regime, with no automatic conversion. Current FSMA authorised firms must apply to vary their permissions if they wish to undertake the new cryptoasset regulated activities when the regime commences. Applications for the new regime will open on 30 September until 28 February 2027. Firms should consider the impact of when they submit their application. Firms are encouraged to prioritise securing FSMA authorisation over MLR-registration (with more guidance set out in an earlier webpage) and undertake early gap analyses against threshold conditions and proposed rules.

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The International Organization of Securities Commissions (IOSCO) has published its final report on valuing collective investment schemes (CIS), following the November 2025 consultation. The report updates and consolidates IOSCO's earlier principles on the valuation of CIS (2013) and the valuation of hedge fund portfolios (2007) into a single set of recommendations to enhance the reliability, consistency and transparency of fund valuation practices across jurisdictions. Specifically, the report reflects feedback from market participants, recent market developments including the increased exposure to illiquid and private assets and heightened retail participation, and periods of market stress and volatility.

The recommendations focus on: (i) governance and oversight arrangements (including under stressed market conditions); (ii) management of conflicts of interest; (iii) the application of sound and consistently applied valuation methodologies; (iv) appropriate use and oversight of third party valuation providers, and (v) transparency, disclosure and record keeping. These are set out in more detail in chapter 3 of the report. IOSCO states the recommendations are intended to be proportionate and adaptable across jurisdictions while promoting a more harmonised and globally consistent valuation framework.