The European Commission (EC) has adopted a Delegated Regulation supplementing the Capital Requirements Regulation (EU) No 575/2013 (CRR), as amended by the CRR3. It sets out regulatory technical standards (RTS) specifying what constitutes an equivalent legal mechanism to ensure that a residential property under construction is completed within a reasonable timeframe. The Delegated Regulation is based on the European Banking Authority's final draft RTS published in August 2025. Article 124 of the CRR sets out the requirements for assigning risk weights to exposures secured by mortgages on immovable property, including conditions under which exposures to properties under construction may qualify for preferential treatment. The EC has the power under Article 124(14) to specify what constitutes an equivalent legal mechanism to ensure that the property under construction is completed within a reasonable timeframe.

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The International Organization of Securities Commissions (IOSCO) and the Committee on Payments and Market Infrastructures (CPMI) have published a joint report setting out their findings of their level 2 assessment of the UK's implementation of the principles for financial market infrastructures (PFMI). These principles set expectations for the design and operation of key FMIs in order to enhance their safety and efficiency and, more broadly, limit systemic risk and foster transparency and financial stability. The report sets out the conclusions and recommendations of whether, and to what degree, the UK legal, regulatory and oversight frameworks applied to systemically important payment systems (PSs), central securities depositories (CSDs) and securities settlement systems (SSSs), as of 30 September 2023.

The report finds that the UK legal, regulatory and oversight frameworks for PSs are complete and consistent with all principles under the PFMI, while the UK legal, regulatory and oversight frameworks for CSDs and SSSs are complete and consistent in most aspects, with some areas for improvement where implementation was broadly or partly consistent or not consistent. For UK CSDs and SSSs that provide banking-type ancillary services, the framework was consistent with 15 principles, broadly consistent with five principles (that is, principles 9, 11, 15, 16 and 23) and not consistent with principle 10. For other UK CSDs and SSSs, additional gaps relating to principles 4 and 7 were found, where implementation was partly consistent.

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The EU Authority for Anti‑Money Laundering and Countering the Financing of Terrorism (AMLA) has launched two consultations on draft measures setting out requirements for business‑wide risk assessments (BWRAs) and group‑wide anti-money laundering and countering the financing of terrorism (AML/CFT) frameworks under the EU Anti‑Money Laundering Regulation (AMLR).

The first consultation specifies draft regulatory technical standards (RTS) under Articles 16(4) and 17(3) of the AMLR, setting minimum standards for the design and implementation of group‑wide AML/CFT frameworks. They address organisational aspects of group wide AML/CFT requirements, provisions on information sharing within groups, criteria for identifying the parent undertaking in the Union where multiple obliged entities are linked to a third country head office, and the extension of group wide requirements to structures other than groups (which is particularly relevant to the non financial sector). The draft RTS also cover additional measures and requirements where branches or subsidiaries operate in third countries. AMLA proposes a single set of RTS to cover both Article 16(4) and Article 17(3) mandates. The deadline for comments is 15 June, with a public hearing scheduled for 20 May. Feedback will be considered with the final draft RTS due to be submitted by 30 September.

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The UK Financial Conduct Authority (FCA) has published a blog post discussing the findings from firms' year 2 consumer duty board reports and what firms can do now to help them prepare for the next round of reporting in Q3. Under the consumer duty, firms must report annually on what their monitoring found about customer outcomes, and what actions they will take as a result. The FCA notes that while firms have improved, further progress is needed ahead of the third reporting cycle.

The FCA observed stronger governance and board oversight, including more formal board review and approval of reports, better action plans and ownership, and wider use of quantitative and qualitative data to demonstrate customer outcomes. There is also more evidence of firms improving how they identify and monitor outcomes for vulnerable customers. However, the FCA notes that the quality and depth of analysis was variable.

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The UK Financial Conduct Authority (FCA) has published consultation paper CP26/13, proposing changes to the Perimeter Guidance Manual (PERG) within the FCA Handbook to clarify the scope of the new regulated cryptoasset activities and when permissions will be required. In addition, the consultation paper aims to provide clarity for firms transitioning from the FCA's current cryptoasset regime (under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017) (MLRs) to the new cryptoasset activities under the Financial Services and Markets Act 2000 (FSMA).

The proposed new chapter in PERG will contain guidance on how to determine whether an activity is within the perimeter, and guidance on the new specified investments and new regulated cryptoasset activities, including which permissions may be required for certain business models and how specific exclusions operate and other related issues. The FCA also clarifies that, as outlined by HM Treasury in the explanatory memorandum accompanying the Cryptoasset Regulations 2026, FSMA authorised cryptoasset firms will not need to register as "cryptoasset exchange providers" or "custodian wallet providers" under the MLRs but instead will only need to notify the FCA. However, these firms will still need to comply with the MLRs. The proposed guidance in full is set out in the draft Perimeter Guidance (Regulated Cryptoasset Activities) Instrument 2026, in Appendix 1 of the consultation paper.

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The UK Office of Financial Sanctions Implementation (OFSI) has published its strategy for 2026–2029. The strategy is based around the "Promote, Enable, Respond and Change" (PERC) framework:

• Promote: To shape expectations and set the standard, OFSI will run targeted campaigns for priority sectors; publish clear guidance products and assessments showing what non-compliance is and how to avoid it; and work with domestic and international regulators to promote consistency. "Promote" key performance indicators (KPIs) include sector-specific engagement campaigns and delivering joint or co-branded public output (such as joint guidance, public statements, case studies or advisories) with international partners on a quarterly basis.
• Enable: OFSI will remove friction for legitimate activity and support sanctions compliance behaviour that is fast, predictable and scalable by encouraging early engagement from firms to address risks or uncertainties, providing direct, practical compliance advice on complex scenarios, and maintaining an effective and regularly updated licensing offer with high, publicised service standards. Engagement will be modern and digital by default, including online services, reporting and forms, supported by enhanced data use, data sharing and AI enabled workflows. The "enable" KPI is to close 50% of licensing cases within six months.

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The European Central Bank (ECB) has published its Governing Council's response to the European Commission's targeted consultation on the competitiveness of the EU banking sector. The response builds on the ECB's High-Level Task Force (HLTF) simplification proposals, endorsed by the ECB in December 2025. The response and proposals are endorsed by all euro area central banks.

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The European Commission has adopted a Delegated Regulation supplementing Directive 2014/65/EU (MiFID II), with regard to 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 ESMA's final draft RTS published in April 2025. The RTS specify rules on, among other things: (i) selecting execution venues; (ii) monitoring investment firms' execution policies; (iii) order routing; (iv) the handling of specific client instructions and related investor protection safeguards; (v) the periodic assessment of investment firms' order execution policies; and (vi) how to identify classes and subclasses of financial instruments for which the investment firms execute orders on behalf of clients.

When the Delegated Regulation enters into force, it 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 will enter into force on the 20th day following its publication in the Official Journal of the European Union. It will apply 18 months after entry into force, allowing firms time to update their order execution policies, procedures and systems.

The UK Financial Conduct Authority (FCA) has published its open finance roadmap, setting out its vision for open finance in the UK from now until 2030. The FCA explains that the roadmap draws on lessons from open banking and international experience and takes a phased evidence-led and collaborative approach.

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The UK government, through the UK Office of Financial Sanctions Implementation (OFSI), has updated its webpage, extending the deadline for responses to its call for evidence on the application of the ownership and control test under the UK Financial Sanctions Regulations. The deadline for responses has been extended from 11:59pm on 13 April to 11:59pm on 20 April.

The European Securities and Markets Authority (ESMA) has published the reporting templates and instructions for the active account requirement (AAR) under the revised European Market Infrastructure Regulation (EMIR 3). The new templates set out in detail how entities subject to the AAR should report the required information to their competent authorities. They cover counterparty information, activities and risk exposures, the representative obligation and declaration on operational conditions. The instructions are designed to ensure a consistent, structured and standardised collection of supervisory data. The first AAR reporting submission is expected on 31 July, covering the period from 25 June 2025 (when the AAR became applicable) to 30 June 2026. After the first reporting submission, reporting will take place every six months, with submissions due on 31 January and 31 July each year, each covering a twelve month reference period.

The European Banking Authority (EBA) has announced a series of measures, including publishing two consultation papers, to simplify the supervisory reporting framework under the EU Capital Requirements Regulation (CRR). The aim is to deliver a simpler, smarter and more proportionate framework. The deadline for comments on both consultation papers is 10 July, except for IFRS 18-related changes in FINREP in the first consultation, where the deadline is 10 May. 

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The European Banking Authority (EBA) has published a decision dated 1 April, harmonising how national competent authorities (NCAs) report data under the SEPA Regulation (EU) No 260/2012. Under Article 15(3) of the SEPA Regulation, payment service providers (PSPs) are required to report annually on charges for credit transfers and payment accounts, as well as the shares of transactions rejected due to EU sanctions. Under Article 15(4) of the SEPA Regulation, NCAs must currently share that information with both the European Commission (EC) and the EBA. To avoid double reporting, the decision provides that NCAs will now report this information only to the EBA, via a single reporting channel, on an annual basis by 9 October of each year. The EBA will then make this information available to the EC via its data collection ecosystem, the European Centralised Infrastructure of Data (EUCLID), as soon as possible after receiving it from the NCAs. The decision also clarifies that where NCAs already hold some of the required data, they are responsible for ensuring its accuracy and completeness, without re collecting it from PSPs. In addition, the Annex to the EBA's EUCLID Decision is amended to reflect this new reporting requirement. The decision takes effect immediately.

The final report from the Risk Warnings Review was published. The report was commissioned by HM Treasury as part of the Leeds Reforms and sets out recommendations to improve the communication of investment risk to retail consumers.

The report advises moving away from the widespread use of standardised risk warnings which may be misunderstood by less experienced investors and disregarded by more experienced investors. Instead, it recommends rebalancing risk communications towards clearer, more contextual explanations of how investments can rise and fall, presented alongside potential benefits and relevant time horizons, which are seen as more likely to encourage positive actions.

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The UK Financial Conduct Authority (FCA) has published findings from authorisation applications received from firms seeking to operate in the asset management sector, setting out examples of good and poor practice for firms.

Key findings include:

• Office location: The FCA expects day-to-day management decisions to be taken in the UK. The FCA noted concerns where key decision makers were unable to do so without overseas approval, or were managed by offshore senior managers.
• Outsourcing: Firms are expected to show accountability for compliance with relevant rules when outsourcing activities to third parties. Some firms demonstrated this using service level agreements to oversee and monitor activities.
• Business models: Firms are expected to assess the full risk of their activities to consumers, including compliance with the consumer duty when dealing with retail clients. Some firms failed evidence this, with some business models posing an unacceptably high level of risk, particularly to retail clients.
• Conflicts of interest: There were mixed findings around firms' ability to demonstrate conflicts identification and management through maintaining registers and documenting reviews.

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The European Banking Authority (EBA) has announced that it will regularly publish a list of known issues relating to the data point model (DPM) framework, with the aim of enhancing transparency and supporting reporting institutions. The list will serve as a single reference point for recurring technical issues. This is part of the EBA's broader simplification efforts to support the implementation of reporting requirements and reduce unnecessary operational burden, while maintaining data quality and supervisory objectives. The list published on 9 April covers issues relating to pillar 3 disclosures and resolution planning reporting.

The European Banking Authority (EBA) has launched a consultation on revised guidelines on limits on exposures to shadow banking entities (SBEs) carrying out banking activities outside a regulated framework, under Article 395(2) and (2a) of the Capital Requirements Regulation (CRR). The proposed revisions update the 2015 Guidelines to align with the harmonised CRR framework introduced by Commission Delegated Regulation (EU) 2023/2779, which now provides binding and maximum harmonised criteria for identifying SBEs. Accordingly, definitions and scoping elements previously contained in the guidelines have been removed, including the 0.25% materiality threshold, to ensure consistency with CRR reporting and disclosure requirements.

The guidelines retain their core purpose of setting supervisory expectations on how institutions should manage and monitor their exposures to SBEs to ensure that risks arising from such exposures are properly identified, measured, limited and controlled. They preserve existing governance requirements and the primary and fallback methods for setting exposure limits. No new quantitative limits are to be introduced at this stage. Input gathered through the consultation will inform the finalisation of the guidelines and broader EBA policy work, including a report on the contribution of SBEs to the capital markets union and an assessment of institutions' exposures and limits, expected by December 2027. The deadline for comments is 9 July, with a virtual public hearing scheduled for 25 June.

The Network for Greening the Financial System (NGFS) has released a new package of materials aimed at supporting central banks and supervisors in assessing and managing nature‑related financial risks. The package builds on the NGFS' 2024 Conceptual Framework and comprises three complementary notes covering: (i) nature‑related data, including guidance on identifying and prioritising relevant data sources and metrics, and the use of case studies and AI to improve data quality and availability; (ii) modelling tools for nature scenarios, highlighting current limitations in capturing interactions between nature, climate and the economy and setting out core design principles for future NGFS scenarios; and (iii) supervisory practices, proposing a pragmatic four‑step approach that builds on existing climate supervision and addresses current limitations. It offers a pathway towards a more integrated climate-nature prudential framework.

The European Central Bank (ECB) and the European Systemic Risk Board (ESRB) have published a joint report on the usability of capital buffers. The report analyses how prudential and resolution frameworks interact, and how this interaction may limit buffer usability.

Key takeaways include:

• Prudential and resolution frameworks are distinct but complementary. Their interaction is complicated. In particular, the report notes that the way common equity tier capital may be used to satisfy multiple requirements may limit its ability to absorb losses.
• In addition to the double-counting of capital, resolution frameworks can impact buffer usability when authorities use their discretionary powers to apply restrictions relating to the maximum distributable amount related to MREL.
• To evaluate the macroprudential impact of the relationship between the frameworks, a consistent methodology is needed. In line with this, the report defines the following key concepts: buffer usability; releasability; capital headroom; and loss-absorption capacity. It also provides a methodology for quantifying and evaluating these concepts. In addition, the report has developed the analytical framework, and updated the buffer usability simulation tool which has been used by national authorities in recent years.

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The UK Financial Conduct Authority (FCA) has published findings of a multi‑firm review of customer due diligence (CDD), enhanced due diligence (EDD) and ongoing monitoring controls, setting out examples of good and poor practice for firms. The FCA assessed CDD systems and controls through a questionnaire, a desk-based review of policies and procedures, customer file reviews and interviews with staff at firms.

Key findings include:

• Policies and procedures: Stronger firms demonstrated clear distinctions between standard CDD and EDD, applying risk based approaches to higher risk customers, including politically exposed persons. However, weaknesses included unclear guidance on additional EDD measures, review frequency and how staff should identify and verify customers who cannot provide standard forms of identification. In some cases, firms failed to follow their own policies and procedures, including in relation to periodic customer reviews.

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The European Commission (EC) has adopted two Delegated Regulations under the Market Abuse Regulation No 596/2014 (MAR) to reflect amendments introduced by the Listing Act (Regulation (EU) 2024/2809).

The first Delegated Regulation sets out requirements on the disclosure of inside information in protracted processes, including the conditions and arrangements for the delay of disclosure. Under Article 17(1) of MAR, issuers must disclose inside information as soon as possible, although Article 17(4) permits delayed disclosure in certain circumstances. The Listing Act amended this regime by excluding intermediate steps in protracted processes from disclosure, provided confidentiality is maintained, and by clarifying when disclosure may be delayed. The Delegated Regulation sets out non exhaustive lists of: (i) final events or circumstances that trigger disclosure along with the timing of such disclosure; and (ii) situations where there is a contrast between inside information whose disclosure is intended to be delayed, and the most recent public announcement or communication by the issuer or emission allowance market participant on the same subject. The Regulation will enter into force on the third day following its publication in the Official Journal of the European Union (OJ).

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The UK Financial Conduct Authority (FCA) has published Primary Market Bulletin 62. The bulletin highlights concerns about potentially manipulative investment approaches affecting micro-cap and small-cap issuers' share prices, specifically an increase in: (i) fake investor approaches, where parties pose as genuine investors and leak news of a supposed takeover or push disclosure of the approach to the market to inflate share prices; and (ii) equity fundraisings linked to pump and dump schemes, often involving the issuance of large numbers of warrant instruments. Warrants are then exercised and the shares sold at the increased share price. The FCA emphasises the importance of robust due diligence by quoted companies and their advisers before engaging with investment proposals, including verifying investor identities, assessing whether proposals are genuine and reviewing investors' track records for similar transactions.

The FCA also provides feedback from its recent reviews of sponsors' work on the modified transfers process under the UK Listing Rules, sharing observations on due diligence, sponsor judgement and compliance with eligibility requirements. The FCA states it is encouraged to see the modified transfers process being used and sponsors applying their expertise and judgement.

In addition, the FCA notes the deadline of 20 April for responding to its consultation on proposed clarificatory amendments to the Prospectus sourcebook (PRM), in chapter 5 of the FCA's Quarterly Consultation Paper No. 51.

The UK Financial Conduct Authority (FCA) and the Bank of England (BoE) have opened the application window for prospective members of a new UK transaction and post-trade reporting taskforce. The purpose of the taskforce is to inform the UK's long‑term approach to harmonising transaction and post‑trade reporting requirements across regimes including the UK Markets in Financial Instruments Regulation (UK MiFIR), the UK European Market Infrastructure Regulation (UK EMIR) and the UK Securities Financing Transactions Regulation (UK SFTR). It is intended that the taskforce will run for 18 months, after which the position will be reviewed. Further detail is set out in the terms of reference for the taskforce.

The taskforce will comprise three working groups: a main policy group which will focus on opportunities for harmonisation and simplification, a strategy group which will provide insight from industry experience, and an architecture group, which will explore opportunities to leverage modern technologies. The FCA and the BoE will co-chair the working groups, which are expected to meet every two months or more often if needed. The deadline for applications is 23 April.

The UK Financial Conduct Authority (FCA) has published an updated webpage with newly issued directions, setting out the process for firms to register for the temporary permission regime (TPR) for deferred payment credit (DPC), formerly known as buy now, pay later. The directions came into force the same day.

DPC will be regulated by the FCA from 15 July ("regulation day"). Firms which were carrying on DPC activity on 15 July 2025 may continue operating under the TPR while their authorisation applications are considered. To enter the TPR, firms must notify the FCA using the prescribed form during the notification window, which runs from 15 May to 1 July, and pay the registration fee of GBP280. Firms granted temporary permission will be able to submit their substantive authorisation applications from 8 July.

Firms that were not carrying on DPC activity on 15 July 2025, or do not intend to continue after regulation day, do not need to register. Firms without authorisation or temporary permission may also continue to service DPC agreements that were taken out before regulation day as these agreements will remain exempt.

The UK Financial Ombudsman Service (FOS) has published its response (dated February) to the FCA's Mills Review on the long‑term impact of AI on retail financial services. The response focuses on two areas: the increasing use of AI by consumers and professional representatives in complaint submissions; and financial firms' use of AI.

The FOS observes an increase in consumers using AI, noting that AI can help consumers organise complaints, overcome language barriers and present clearer cases—especially consumers who are vulnerable and have difficulty expressing themselves in writing. However, there are also concerns where generative AI is used excessively or inaccurately, leading to lengthy, incoherent submissions and "hallucinations". The FOS reports early indications from a small sample analysis that AI may have contributed to around 35% of responses to initial assessments, which can lead to a disproportionate amount of time spent on verifying accuracy. The FOS welcomes the FCA's focus on AI in retail financial services and calls for consistent guidance to firms and consumers as AI use evolves in the complaint process, offering to provide its own insights to support this work.

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The Bank of England (BoE) has published a joint letter from the BoE and the UK Prudential Regulation Authority (PRA) to the chancellor of the exchequer and relevant secretaries of state, setting out their approach to enabling the safe and responsible adoption of AI in the UK financial sector. The letter responds to a request of 28 January to publish a plan explaining how the authorities will help enable safe AI driven innovation as well as to report annually on how their supervisory and regulatory approach supports AI driven innovation and growth.

Planned work for this year includes:

• Embedding AI as a supervisory priority for 2026, with increased focus on AI‑related risks and practices through supervisory dialogue with firms.
• Conducting the next edition of the biennial survey of AI adoption across Bank‑ and FCA‑regulated firms.
• A report from the AI consortium on its work, including on generative AI and emerging trends such as the rise of agentic AI.

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The UK Financial Ombudsman Service (FOS) has announced that the UK Financial Conduct Authority (FCA) has confirmed increases to FOS' award limits for the 2026/27 financial year, in line with inflation measured by the Consumer Prices Index. From 1 April, the maximum award the FOS can require a firm to pay will increase to GBP455,000 for complaints relating to acts or omissions occurring on or after 1 April 2019 (an increase of GBP10,000 on the previous year), and to GBP205,000 for complaints relating to acts or omissions before that date (a rise of GBP5,000 over the previous year). The different limits set annually continue to apply depending on when the relevant complaint was brought to the FOS, with more information available on the FOS webpage on understanding compensation.

The Digital Regulation Cooperation Forum (DRCF, comprising the UK Competition and Markets Authority, the UK Financial Conduct Authority, Information Commissioner's Office and Ofcom) have published a paper on the future of agentic AI and exploring how UK regulatory frameworks can help realise the opportunities of this technology in a responsible and safe way. The DRCF defines agentic AI as an agent that acts on behalf of users. Unlike standard generative AI, which responds to queries and creates outputs, agentic systems can assess goals, plan workflows and execute actions autonomously to impact real-world environments and interact with people or other agents.

While recognising that agentic AI could deliver significant benefits to consumers, the paper highlights that it can also amplify existing risks and introduce new ones, particularly in relation to data protection, consumer protection, online safety and cybersecurity. It considers potential future developments and sets out early views on cross regulatory implications across four key areas: (i) governance; (ii) data protection and cybersecurity; (iii) consumer rights and interests; and (iv) market dynamics and competition. The DRCF emphasises that agentic AI does not fall outside existing legal frameworks and that obligations on transparency, fairness, accountability and consumer outcomes continue to apply. The DRCF emphasises that organisational responsibility for legal compliance remains unchanged notwithstanding the autonomy of agentic AI, and that regulators will continue to work collectively and individually to support a clear and coherent regulatory approach enabling safe and responsible adoption.

The UK Financial Conduct Authority (FCA) and UK Prudential Regulation Authority (PRA) has published consultation papers (CP26/12 / CP6/26), proposing changes to the loan to income (LTI) flow limit rule in mortgage lending. The regulators propose to remove the firm level 15% cap on high LTI lending (mortgages with an LTI ratio of 4.5 or above), while retaining the 15% limit in aggregate across the market, giving individual lenders greater flexibility to set their own high LTI strategies. This follows interim measures introduced in July 2025, under which PRA firms were permitted, via a modification by consent, to disapply the firm level cap, while FCA firms could seek individual guidance to lend above 15%, pending completion of the policy review.

The PRA proposes new rules in the Housing Part of the PRA Rulebook and a new supervisory statement, while the FCA will issue new general guidance replacing FG25/4. The regulators would publish quarterly data on aggregate high LTI lending and may expect firms to gradually reduce flows if the aggregate limit is exceeded; the consultation also clarifies scope, excluding further advances and retirement interest only mortgages. The deadline for responses is 1 July. Implementation is expected in the second half of this year with interim measures to remain in force up to the implementation date for the changes resulting from this consultation, with a backstop date of 31 December.

The European Securities and Markets Authority (ESMA) has published new Q&As on the onboarding of data contributors to the EU's consolidated tapes (CTs) and on the operational rules for consolidated tape providers (CTPs), as part of preparations for their launch. This follows ESMA's earlier selection of the first CTPs, including the appointment of fairCT as the CTP for bonds in July 2025 and EuroCTP as the CTP for equities. The authorisation processes are currently ongoing for both, while the selection process for the derivatives CTP remains underway, with an announcement expected by July. ESMA expects data contributors to engage with the selected CTPs ahead of formal authorisation to ensure operational readiness, including agreeing data transmission protocols and completing connectivity and end to end testing. CTPs are expected to put appropriate safeguards in place to protect the confidentiality and integrity of information received during the preparatory phase.

The Bank of England (BoE) has published the record of the Financial Policy Committee's (FPC) meeting held on 27 March to identify risks to financial stability and agree policy actions aimed at safeguarding the resilience of the UK financial system. The FPC assesses that the conflict in the Middle East has triggered a substantial negative supply shock, leading to significant market moves (including higher and more volatile energy prices and higher government bond yields). While the financial system has been resilient so far, the shock is expected to weigh on growth, increase inflation and tighten financial conditions. The FPC highlights that these developments could interact with existing vulnerabilities it has previously identified in sovereign debt markets, risky asset valuations and risky credit markets (notably private credit), increasing the likelihood that multiple vulnerabilities could crystallise at the same time and amplify risks to financial stability. The FPC emphasises the need for timely and active risk management by market participants, including stress testing and liquidity preparedness that incorporate scenarios involving further sudden and significant price adjustments.

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The Bank of England (BoE) has published a feedback statement to its September 2025 discussion paper which sought views on proposed reforms to enhancing the resilience of the gilt repo market. Respondents were supportive of the objective of strengthening market resilience and broadly agreed with the BoE's assessment of market dynamics, but raised a range of concerns about the proportionality and potential negative spillovers of market wide measures.

Respondents acknowledged that greater use of central clearing could reduce systemic risks, however based on the current structure of the gilt repo market, many firms emphasised that access barriers, operational constraints and cost considerations mean central clearing is currently unfeasible or uneconomical for a large proportion of market participants. Therefore, firms would welcome innovation in this space through the introduction of cross product margining and new access models. Respondents also highlighted the potential concentration of risk arising from increased reliance on a single central counterparty, although the BoE considers much of this risk to be mitigated by existing supervisory and regulatory frameworks for central counterparties and will investigate further. Some respondents warned that the costs, and operational and legal complexities, of introducing a clearing mandate could reduce market participation and liquidity in both gilt cash and repo markets in normal conditions.

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The UK Financial Conduct Authority (FCA) and UK Prudential Regulation Authority (PRA) have published policy statements (PS26/4/PS8/26), finalising the Financial Services Compensation Scheme (FSCS) Management Expenses Levy Limit (MELL) for 2026/27 following the January consultation. The regulators largely maintain the approach as consulted on, setting the MELL at GBP113 million. This comprises a GBP108m management expenses budget to cover the FSCS' ongoing operating costs and a GBP5m unlevied reserve, allowing the FSCS to meet unforeseen expenses without the need for further consultation.

In the January consultation, it was reported that the FSCS projected its management expenses to be GBP103.6m for the current financial year, in line with its budget. The FSCS has since revised its forecast and now expects a GBP2.5m underspend from the 2025/26 budget. Where actual expenses are lower than the budget when reconciled at year end, these funds will be used to offset the levy for the relevant classes in 2026/27. The MELL will apply from 1 April until 31 March 2027.

The UK Financial Ombudsman Service (FOS) has published its final plans and budget for 2026/27, setting out its priorities for the next 12 months. The FOS expects to receive 199,000 new complaints in 2026/27 (down from nearly 306,000 in 2024/25 and around 210,000 in 2025/26), a decline which it attributes to fewer motor finance commission cases and fewer complaints from professional representatives. It does expect an increase in credit card and consumer credit complaints, however, because of cost of living pressures. It plans to resolve 266,500 cases over the year (covering both new and existing cases).

On its funding, the FOS states that while case fees and levies were held flat for two years at significantly reduced levels, increases are now needed due to inflationary challenges, reduced reserves and the cost of implementing reforms. Therefore, as consulted on in its November plans and budget consultation, from 1 April it will set the compulsory levy at GBP86 million, charge respondent firms GBP680 per case and introduce charges for professional representatives—GBP80 for cases they refer that are found in favour of the consumer and GBP260 where the case is found in favour of the firm (in which case the firm's case fee reduces to GBP500).

The European Central Bank (ECB) has published its comprehensive payments strategy, setting out a consolidated, forward‑looking approach for the development of European payments across wholesale, business‑to‑business, retail and cross‑border use cases. The strategy has four strategic aims: (i) ensuring the effectiveness of monetary policy, financial stability and the smooth functioning of payment systems by maintaining the role of central bank money as the anchor of a two-tier monetary system; (ii) achieving strategic autonomy and increased resilience for European payments; (iii) fostering an integrated, competitive and innovative payments ecosystem; and (iv) supporting the international role of the euro.

These involve:

• Developing a European market for tokenised settlement assets by leveraging the innovative potential of tokenisation while maintaining central bank money as the anchor for settlement, complemented by private settlement assets. These private settlement assets include tokenised deposits and stablecoins that are EU-governed, euro-denominated and properly designed and regulated.
• Improving existing infrastructure and investing in distributed ledger technology (DLT)-based solutions for wholesale payments by continuing to support and invest in its RTGS settlement system T2 (including exploring the extension of its operating hours), while developing central bank money for the settlement of DLT-based wholesale payments and securities transactions through its Pontes and Appia initiatives.

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The European Supervisory Authorities (ESAs, comprising the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority) published official translations of their joint final guidelines on integrating environmental, social and governance (ESG) risks into financial stress tests for banks and insurers under the Capital Requirements Directive and the Solvency II Directive. First published in January, the guidelines aim to harmonise how competent authorities across the EU consistently incorporate ESG risks into their supervisory frameworks. They set expectations on long term considerations and common standards for ESG stress testing methodologies, including undertaking risk based materiality assessments across both short term (up to five years) and long term (at least ten years) horizons. The joint guidelines will apply from 1 January 2027. Competent authorities must now notify the respective ESA by 31 May on whether they comply or intend to comply with the guidelines, or where relevant, provide their reasons for non-compliance.

The UK Financial Conduct Authority (FCA) has published policy statement PS26/3 on the motor finance redress scheme, following the UK Supreme Court ruling on 1 August 2025. This follows the October 2025 consultation, which we cover in more detail in our blogpost titled "FCA consultation on motor finance redress scheme". Following feedback, the FCA will proceed with the scheme although with several material changes, including:

• Splitting the originally proposed single scheme into two separate schemes, covering agreements from 6 April 2007 to 31 March 2014 and from 1 April 2014 to 1 November 2024, to mitigate the risk of a legal challenge delaying redress for later-period consumers. This means if the earlier period is subject to a legal challenge, redress for consumers with agreements from April 2014 shouldn't be delayed.
• Tightening eligibility criteria so only consumers treated unfairly are compensated. Inadequate disclosure of one or more of the following will give rise to a presumption of unfairness: (i) discretionary commission arrangements (DCAs), where the broker could adjust the interest rate offered to a customer to obtain a higher commission; (ii) a high commission arrangement; and (iii) certain contractual ties that gave a firm exclusivity or a right of first refusal, except where the lender can prove there were visible links between the lender, manufacturer and franchised dealer.

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The European Central Bank (ECB) has announced changes to streamline the supervision of banks' internal models for credit risk, aimed at making the approval process for material model changes faster and more predictable while maintaining prudential safeguards. From 1 October, banks will be permitted to implement material changes to their internal models for credit risk shortly after submitting a complete application package. This will allow banks to implement model changes quickly, without having to maintain old and new models in parallel while awaiting supervisory review. This is subject to confirmation by the bank's internal control function that the revised model complies with regulatory requirements and that the bank is ready to implement the change. Where changes lead to lower risk weights, expedited approval will still apply, but any capital benefit will be capped by a supervisory floor applied to all approved model changes, and only lifted once the ECB completes a targeted on site review. The ECB will retain the option to apply the standard approval process in higher risk or sensitive cases, with banks waiting for the outcome of a dedicated on site investigation. Material model changes will no longer automatically trigger an on-site investigation. On the same day, the EBA also published final draft regulatory technical standards amending the framework for assessing the materiality of changes to internal ratings based models.

The UK Financial Conduct Authority (FCA) has announced the launch of a joint regulatory taskforce with the UK Solicitors Regulation Authority, Information Commissioner's Office and Advertising Standards Authority to tackle poor practices in motor finance claims handling by some claims management companies and law firms. The taskforce will share intelligence and take coordinated enforcement action to mitigate harm to consumers, including by tackling unsolicited and misleading advertising, meritless claims, multiple representation and unfair exit fees. The announcement comes as the FCA published its final policy statement on the motor finance redress scheme. 

The European Banking Authority (EBA) has published a final report with final draft regulatory technical standards (RTS) amending the framework for assessing the materiality of changes to internal ratings based models under the Capital Requirements Regulation (CRR). The aim is to streamline supervisory approvals and reduce undue delays in model implementation. The EBA notes that the high volume of model changes classified as "material" has strained supervisory resources under the current approval processes, creating uncertainty for institutions and hampering effective model use and timely model improvements.

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The UK Financial Conduct Authority (FCA) and the Information Commissioner's Office (ICO) have published a joint statement clarifying regulatory expectations on the use and sharing of vulnerability related data. The statement explains how firms should approach this in delivering good outcomes for retail consumers under the consumer duty, while complying with UK data protection law.

Firms are expected to understand and identify indicators of vulnerability within their customer base, design products, communications and support that respond appropriately to those needs, and put in place systems that allow consumers to disclose relevant circumstances so that support can be delivered consistently and fairly. Firms are also expected to apply and demonstrate compliance with the UK GDPR principles when processing customers' personal information.

In relation to sharing data across distribution chains, manufacturers (such as lenders and payment networks) and distributors (such as intermediaries and financial advisers) are expected to work collaboratively and share relevant vulnerability‑related information, where necessary to avoid foreseeable harm. They are also expected to apply ICO's data sharing code of practice on how to share personal information in compliance with data protection law.

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A Corrigendum to Regulation (EU) 2025/1355 of the European Central Bank on oversight requirements for systemically important payment systems, was published in the Official Journal of the European Union. The Corrigendum makes a purely technical correction to recital 2, replacing a typographical error. The correction does not introduce any substantive changes to the regulatory framework or to the oversight requirements applicable to systemically important payment systems.

The UK Financial Conduct Authority (FCA) has published a new webpage highlighting good and poor practice observed in firms' annual operational resilience self‑assessments following the end of the transition period on 31 March 2025, relating to the application of the FCA's rules. The FCA encourages firms to use these observations to help review and evolve their approaches.

The FCA's findings are categorised under six headings:

• Important business services and impact tolerance: While good practice was observed in relation to methodologies and rationale for defining important business services and setting impact tolerances, documenting review cycles, and scenario testing to inform impact tolerance calibration, the FCA would like to see firms able to identify when harm would occur to consumers and when it would impact the market.
• Mapping resources: Firms have matured their approaches to mapping. Good practice includes clear ownership and accountability of mapping data and diversifying where key staff are based. The FCA emphasises the need for comprehensive mapping of people, processes, technology, facilities, information and third party dependencies, noting that firms often focus too narrowly on technology and insufficiently address third party vulnerabilities.

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The Digital Regulation Cooperation Forum (DRCF) has published an insights paper (dated 26 March) on smart data frameworks, providing an international review and comparative analysis to inform the UK's implementation of cross sector smart data schemes under the Data (Use and Access) Act 2025 (DUAA). The paper notes a global shift away from single sector models, such as open banking, towards economy wide frameworks, while highlighting significant divergence in how jurisdictions have implemented them. The DRCF identifies three main approaches: (i) regulator mandated models, which provide legal certainty and consistent standards, but risk high compliance costs and reduced flexibility; (ii) market facilitated models, which support innovation, but often suffer from uneven adoption and unclear liability; and (iii) public infrastructure led approaches, which support interoperability but require significant upfront investment and sustained political commitment.

The paper outlines potential insights and considerations for the UK as it implements the DUAA, including:

• Establishing a central smart data governance body to coordinate scheme development across sectors, set baseline technical and security standards, ensure interoperability and provide a clear strategic direction.
• Introducing smart data schemes using a phased approach, prioritising sectors with clear consumer benefits and policy alignment (for example, energy and Net Zero), and tailoring implementation models depending on their digital maturity, market structure and regulatory landscape context.

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The UK Financial Conduct Authority (FCA) has published Handbook Notice No. 139, outlining amendments to the FCA Handbook resulting from the following statutory instruments:

• Redress Reforms Instrument 2026, which partially entered into force on 17 March with the remaining provisions coming into force on 1 June. This clarifies when firms should report emerging issues to the FCA and to improve the operational efficiency of the UK Financial Ombudsman and the Financial Services Compensation Scheme by streamlining processes and reducing the operational costs ultimately met by levy-paying firms.
• Notification of Third Party Arrangements and Operational Incident Reporting Instrument which comes into force on 18 March 2027. This makes changes to the Handbook to enhance incident and third party risk management, strengthen firms' operational resilience and minimise harm.
• Perimeter Guidance Manual (Transfer of MiFID Organisational Regulation) Instrument 2026, which entered into force on 27 March and follows quarterly consultation paper No 49. This instrument updates the Perimeter Guidance manual following the making of the Markets in Financial Instruments (Miscellaneous Amendments) Regulations 2025, which restates the Markets in Financial Instruments Directive Organisational Regulation into the FCA Handbook.

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The European Commission (EC) has announced that it is taking action against several EU member states that have failed to notify it of measures they have adopted to transpose EU directives into their national laws. In particular, it has sent letters of formal notice to:

• Belgium, Bulgaria, Cyprus, Denmark, Estonia, Greece, Spain, France, Italy, Latvia, Luxembourg, Lithuania, Malta, the Netherlands, Poland, Portugal, Romania, Slovenia and Sweden for failing to fully transpose the European Single Access Point (ESAP) Omnibus Directive (Directive 2023/2864).
• Belgium, Bulgaria, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovakia, Finland and Sweden for failing to fully transpose the amending Sixth Capital Requirements Directive (Directive 2024/1619).

The member states concerned now have two months to respond, complete their transposition and notify their measures to the EC. In the absence of a satisfactory response, the EC may decide to issue a reasoned opinion.

Commission Implementing Regulation (EU) 2026/722 amending Implementing Regulation (EU) 2024/3172 was published in the Official Journal of the European Union (OJ). The Regulation amends the implementing technical standards (ITS) on public disclosures under the Capital Requirements Regulation (CRR) to support the introduction of the European Banking Authority's (EBA) Pillar 3 Data Hub and its single access point for disclosures. It requires institutions other than small and non complex institutions to submit Pillar 3 disclosures to the EBA via the Pillar 3 data hub using harmonised, uniform formats that are both human readable and machine readable. For small and non-complex institutions, the relevant IT tools are still being designed given the importance of making them proportionate.

Recognising that institutions may require additional time to comply with the new disclosure formats, the Regulation allows alternative means of disclosure for submissions with a 2025 reference date. In addition, the Regulation extends existing transitional disclosure provisions and defers the repeal of Implementing Regulation (EU) 2021/637 by one year, reflecting the postponement of the market risk own funds requirements to 1 January 2027. The Regulation will apply from 16 April, being the 20th day following publication in the OJ and is directly applicable in all member states.

The European Securities and Markets Authority (ESMA) has published the official translations of its guidelines on stress test scenarios under the Regulation on Money Market Funds (MMF Regulation). The guidelines apply to competent authorities, MMFs and managers of MMFs as defined in the MMF Regulation. They apply in relation to Article 28 of the MMF Regulation and establish common reference parameters for the stress test scenarios to be included in the stress tests conducted by MMFs or managers of MMFs in accordance with that Article. The guidelines apply from 26 May with respect to parts in red, and the other parts of the guidelines already apply from the dates specified in Articles 44 and 47 of the MMF Regulation.

The UK Financial Conduct Authority (FCA) has published a new webpage for cryptoasset firms who are considering applying for registration under the Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs), ahead of the new UK crypto regime which is due to come into force on 25 October 2027. The FCA states that the webpage is not relevant to cryptoasset firms that will still need to be registered with the FCA under the MLRs but will not require authorisation under the new Financial Services and Markets Act 2000 (FSMA) crypto regime, as for these firms, the MLR gateway will continue to operate as normal.

The webpage covers:

• The requirement to be registered under the MLRs: Firms who provide in-scope cryptoasset services in the UK are required to be MLR-registered before trading, until the new FSMA regime starts. Once the FSMA regime applies, firms carrying out regulated cryptoasset activities will require FSMA authorisation, including firms already registered under the MLRs. Applications for FSMA authorisation will open on 30 September. Firms may apply for registration at any time before the new regime begins on 25 October 2027. However, they should only do so if they are confident that they can be registered early enough for it to be worthwhile before the new regime starts.

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The draft Money Laundering and Terrorist Financing (Amendment) Regulations 2026 were laid before UK Parliament, alongside a draft explanatory memorandum. The draft Regulations propose 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 counterterrorist financing (AML/CTF) regime and ensure maintained compliance with Financial Action Task Force standards.

Following feedback to the technical consultation on the draft Regulations in September 2025, the government has made a number of targeted changes, including:

• Pooled client accounts (PCAs): clarifying that banks may continue to apply a simplified, risk-based approach to PCAs where the PCA holder is: (i) subject to the MLRs or equivalent overseas regimes; (ii) the business relationship with the PCA-holder presents a low risk of money laundering and terrorist financing; and (iii) information on the identity of the underlying customers is available on request to the PCA-holder. Additional clarifications are also made.

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