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 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 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 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 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).

official translations of the European Supervisory Authorities (ESAs comprising the European Banking Authority, European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority) 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 were published. First published in January 2025, 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 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 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 which is covered separately in the UK FCA final policy introducing a motor finance redress scheme.

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 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 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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The UK Financial Conduct Authority (FCA) has published consultation paper CP26/11 setting out its proposed fees and levies for 2026/27. The FCA is consulting on rules that enable it to raise regulatory fees and levies in 2026/27 to fund the FCA and UK Financial Ombudsman Service, as well as to collect specific levies on behalf of government departments.

The FCA is proposing to increase minimum and flat rate fees, as well as application fees, by 1%, in line with the increase in the ongoing regulatory activities (ORA) budget, and below the rate of inflation. To keep fee increases to a minimum, it has kept its budgeted headcount flat, which accounts for around two-thirds of the FCA's costs, and it has looked to absorb inflationary increases and cost uplifts by finding efficiencies and by identifying savings in its budget. The FCA highlights that this is the lowest rise in the ORA fees budget since 2017/18 and the lowest AFR increase in a decade, at just 0.7%. For 2026/27, the FCA also confirms that it does not intend to recover its costs associated with certain projects. This includes work on significant exceptional projects such as motor finance work. For costs incurred on these exceptional projects in 2026/27, the FCA will consult on its approach in its 2027 spring fee-rates consultation.

The deadline for comments is 30 April. The FCA plans to publish a policy statement in early July, subject to Board approval in June. Certain fee-payers have been invoiced from February for 'on-account' payments. They will be invoiced for the remaining balance in September. Other firms will be invoiced from July, based on the new fees and levies. Firms can use the FCA's online fee calculator to estimate their fees for 2026/27.

The European Parliament has published a press release announcing that it has adopted the legislative package to reform the crisis management and deposit insurance (CMDI) framework for banks in the EU. The package includes targeted amendments to the Bank Recovery and Resolution Directive (BRRD), the Single Resolution Mechanism Regulation (SRM), and the Deposit Guarantee Schemes Directive (DGSD). The European Parliament has also published the following legislative resolutions: (i) a legislative resolution on the Council position at first reading with a view to the adoption of a Directive amending the DGSD as regards the scope of deposit protection, use of deposit guarantee schemes funds, cross-border co-operation, and transparency; (ii) a legislative resolution on the Council position at first reading with a view to the adoption of a Directive amending the BRRD, as regards early intervention measures, conditions for resolution and funding of resolution action and Directive 2014/24/EU, as regards valuation services in resolution; and (iii) a legislative resolution on the Council position at first reading with a view to the adoption of a Regulation amending the SRM Regulation as regards early intervention measures, conditions for resolution and funding of resolution action.

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The UK Financial Conduct Authority (FCA) has published its annual work programme for 2026/27 setting out its planned activity for the second year of its five-year strategy. The programme is structured around the following four strategic priorities:

• Being a smarter regulator: to improve regulatory efficiency and proportionality, the FCA will continue to invest in digital, data and AI capabilities, reduce administrative burdens by simplifying rules and streamlining data returns (including removing three regular returns in April), and improve the authorisation process by further reducing authorisation timelines and continuing to report against new, shorter voluntary targets. In a press release published on the same day, the FCA announced it is developing a new internal AI-enabled authorisation tool, integrated into its existing systems. The FCA will also use generative AI to review documents received from firms, which, following successful testing, it will begin rolling out more widely across authorisations and supervision.
• Supporting growth: the FCA highlights initiatives to unlock capital investment and liquidity across UK markets, accelerate digital innovation to improve productivity and support firms to start up and grow. This includes: (i) making rules for alternative investment fund managers more proportionate and streamlined; (ii) reforming capital requirements for solo-regulated investment firms to improve liquidity; (iii) simplifying the securitisation framework; (iv) establishing a bonds consolidated tape and progressing one for equities; (v) developing the long-term regulatory framework for open banking and advancing open finance work; (vi) expanding overseas presence; and (vii) supporting UK participants to adopt a trade plus 1 day (T+1) settlement cycle next year.

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The UK Prudential Regulation Authority (PRA) has published policy statement PS9/26 setting out its final rules on amendments to the Minimum Requirement for Own Funds and Eligible Liabilities (MREL) reporting templates. Following feedback to the July 2025 consultation, the PRA has made the final policy in line with the proposals consulted on. The PRA confirms amendments to the data elements in both the MREL resources template (MRL001) and the MREL debt template (MRL003), and the deletion of the MREL resources forecast template (MRL002), as well as consequential amendments to the reporting instructions and to Supervisory Statement 19/13.

The changes are intended to reduce the reporting burden on firms. The revised MRL001 and MRL003 templates will apply from 1 January 2027. In line with the frequency of MREL reporting, firms are expected to submit 2026 Q4 data based on the revised policy in February 2027. The PRA will also shortly publish a reporting taxonomy reflecting the final policy set out in PS9/26.

Until then, bail-in preferred resolution strategy firms are advised to continue using the existing MRL001 and MRL003 templates. Transfer-preferred resolution strategy firms no longer need to submit the MRL001 template with immediate effect. These firms can also stop reporting MRL002 in its entirety with immediate effect but should continue to use the existing MRL003 template until the revised version comes into effect.

The UK Prudential Regulation Authority (PRA) has published policy statement PS10/26 confirming its final amendments to the resolution assessment threshold and the frequency of recovery plan reviews. Following feedback to the July 2025 consultation, the final policy remains unchanged. Minor changes were made post consultation to the Recovery Plans instrument of the PRA's own volition, none of which affect the substance of those rules as consulted upon.

The PRA confirms it will: (i) raise the threshold at which firms come into scope of the Resolution Assessment Part of the PRA Rulebook on reporting and disclosure from GBP50 billion to GBP100 billion in retail deposits, ensuring only the very largest firms are subject to these requirements, commensurate with the risks their failure would pose; and (ii) reduce the required frequency for Small Domestic Deposit Takers (SDDTs) to review their recovery plans from at least annually to at least every two years. However, SDDTs experiencing changes which could have a material effect on their recovery plans are advised to update their plans more frequently than the two-year minimum. The PRA expects that SDDTs which are 'new and growing banks' will likely need to review and update their recovery plans more regularly than the proposed minimum. In addition, the PRA has also published a revised version of its supervisory statement on recovery planning (SS9/17) which is set out in Appendix 4 of the policy statement.

The updated rules and changes to SS9/17 will be implemented from 1 April.

The UK Prudential Regulation Authority (PRA) has published policy statement PS11/26 on disclosure, including resolvability resources, capital distribution constraints (CDCs) and the basis for firms' Pillar 3 disclosures. Having considered the responses to the July 2025 consultation, the PRA has made no changes to the draft policy consulted on but has made minor corrections and clarifications to the draft rules and instructions. These clarifications do not affect the substance of the policy or rules as set out in the consultation paper.

The PRA's final policy includes:

• The introduction of standardised Minimum Requirement for Own Funds and Eligible Liabilities (MREL) disclosure templates, aligned with Basel Committee on Banking Supervision Total Loss Absorbing Capacity (TLAC) formats but adapted for the UK.
• Increased transparency and consistency of firms' disclosure on MREL resources to strengthen market discipline, support confidence in orderly resolution and enhance overall financial stability.
• A new qualitative disclosure requirement for firms subject to capital distribution constraints to allow for more meaningful assessment by market participants of the likely impact of those capital distribution restrictions. As the Systemic Risk Buffer (SRB) has been replaced in the UK by the O-SII buffer since December 2020, the PRA has also removed the SRB disclosure requirement to ensure consistency with the current capital buffer framework.

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The UK Payment Systems Regulator (PSR) has published its annual plan and budget, setting out its key aims, activities and costs for 2026/27. The PSR's work programme for the year ahead will embed many of the changes it set out last year. It will also maintain momentum on major, long-term initiatives while responding to new challenges. Over the next year, the PSR will focus on:

• Delivering the National Payments Vision: The PSR will oversee the delivery of critical payments infrastructure, working closely with the Bank of England, HM Treasury and the UK Financial Conduct Authority (FCA) through the Payments Vision Delivery Committee.
• Continuing action to tackle authorised push payment fraud: This year, the PSR will publish the independent evaluation of the first year of its authorised push payment fraud reimbursement scheme and consider if it needs to take further action.
• Enhancing its approach to supervision and enforcement: The PSR will continue to strengthen its business model and align it with FCA practices. This will enhance the PSR's oversight of the firms it supervises.

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The UK Financial Conduct Authority (FCA) has published consultation paper CP26/10 on simplifying rules relating to providing pensions and investment advice to consumers. With the targeted support rules now in place, the FCA's focus is on completing its outstanding policy work so that the market can develop and deliver a wide range of support for consumers. The consultation delivers on two separate commitments: (i) to consolidate, simplify and reframe the advice rules; and (ii) to review the FCA's existing rules relating to financial advisers' ongoing services. These changes will complement targeted support and enable firms to provide a range of services to meet different consumer needs.

Key proposals include:

• Consolidating the suitability requirements in the Code of Business Sourcebook (COBS) 9 and COBS 9A into one set of common rules and expectations.
• Clarifying the existing flexibility in the FCA's suitability rules to offer different advice services and different recommendations to different clients, by replacing the rule requirement to consider "necessary" information with an expectation that advisers consider "sufficient" information when assessing suitability.
• Clarifying that firms do not always need to assess a customer's knowledge and experience before making a recommendation, where the type of product the firm envisages recommending is one reasonably identified as having a target market that includes clients with no experience in investing.

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The UK Financial Conduct Authority (FCA) has published its regulatory priorities report for the payments sector. These reports replace the FCA's previous portfolio letters and will now be published annually for each industry sector. The report is directed at firms authorised or registered under the Payment Services Regulations 2017 and the Electronic Money Regulations 2011. In the report, the FCA sets out four key priority areas for the next 12 months:

• Preparing for the future to support effective competition, innovation and growth: The FCA will continue policy work on open banking, stablecoins, and modernising payments regulation. It will support industry in establishing a Future Entity for open banking. It will also support HM Treasury (HMT) in introducing legislation to grant the FCA powers to set new rules for the long-term open banking regulatory framework. The FCA will work with HMT to future-proof payments regulation, including consideration of whether changes to or the development of regulation is needed to support agentic AI payments. It will also work with the sector to consider how stablecoins and other tokenised payment instruments can be brought into regulated payments.
• Ensuring firms implement the consumer duty effectively: Firms are expected to assess their products, services and processes against all the relevant rules and guidance, including the consumer duty, on an ongoing basis, and address any compliance gaps immediately. The FCA will take appropriate action against firms that fail to do this. Areas of focus for the FCA include international payment pricing transparency and the treatment of vulnerable consumers.

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The UK Financial Conduct Authority (FCA) has published a statement confirming the timing of its announcement on its planned approach to the motor finance redress scheme, initially consulted on in October 2025. The statement follows an earlier FCA announcement on 4 March, in which it indicated that it was proposing to make several changes to the planned scheme. The FCA states that it intends to set out its approach shortly after markets close on Monday 30 March.

The UK Financial Conduct Authority (FCA) has published a new webpage setting out how firms should prepare for the new rules and guidance to help tackle non‑financial misconduct (NFM), which will come into force on 1 September. The FCA explains that NFM includes behaviour that is not of a clearly financial nature such as bullying, harassment and violence. It notes that if left unchecked, such conduct can harm individuals, firms and confidence in financial services. The changes are implemented through amendments to the FCA Handbook set out in policy statement PS25/23, published in December 2025.

In particular, the FCA is amending the Code of Conduct sourcebook (COCON) by introducing a new rule (COCON 1.1.7FR), which extends the scope of the conduct rules in non-banking firms to cover bullying, harassment or violence against colleagues, where it relates to an individual's role and where there is a sufficient work-related link. The rule will not apply retrospectively and does not extend the FCA's regulatory remit beyond Senior Managers and Certification Regime financial activities.

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The UK Financial Conduct Authority (FCA) has published a new webpage setting out good and poor practice to support firms when designing consumer segments under the new targeted support regime. The FCA emphasises that firms have flexibility in how they comply with the FCA's rules and that these examples are illustrative only; they should not be treated as a template nor as an exhaustive list of the things firms should consider when designing their segments.

Key points to note include:

• Defining common characteristics: firms must judge how to design consumer segments at a sufficiently granular level while not comprehensively considering the consumer's circumstances or characteristics. The complexity of a situation is likely to be relevant to the type and/or number of common characteristics needed to ensure that segments are sufficiently granular to ensure a ready-made suggestion is suitable for an individual in the consumer segment. More complex situations will usually require a higher number, or more detailed set, of common characteristics to define suitable ready-made suggestions. Where a firm cannot define a suitable suggestion without undertaking a comprehensive consideration of a consumer's circumstances or characteristics, it is likely that the consumer will be in a situation that cannot be addressed through targeted support.

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The Basel Committee on Banking Supervision (BCBS) has published a document containing a finalised technical amendment (TA) and a response to a frequently asked question (FAQ) to help promote the consistent global interpretation of the Basel framework. The TA relates to the standardised approach to operational risk. It clarifies the treatment of "rental income from investment properties" under the business indicator, which is used as a key input in calculating operational risk capital requirements. The TA was originally consulted on in June 2025 and, following feedback, it now incorporates similar changes to the treatment of "interest expenses". The BCBS has agreed to implement the final revised standard by 1 April 2029. The amended text has also been incorporated into the consolidated Basel framework.

In addition, the document also includes a finalised response to an FAQ on market risk and consequential amendments to related FAQs. These have also been added to the Basel framework.

The UK Financial Conduct Authority (FCA) has published a statement reminding regulated firms of the risks when dealing with unregulated lenders and other "Annex 1" firms. Annex 1 firms are registered with the FCA solely for anti‑money laundering (AML) purposes and are not subject to the FCA's wider regulatory rulebook. The FCA reminds regulated firms that Annex 1 firms are not authorised under the Financial Services and Markets Act 2000, meaning that the FCA's wider conduct rules do not apply to them and their customers do not have access to the UK Financial Ombudsman Service (FOS).

The FCA therefore expects regulated firms to carry out robust due diligence, in line with legislative requirements, to understand the firm's business. This includes seeking direct confirmation from the Annex 1 firm of its registration status, conducting independent checks of information provided by the Annex 1 firm, and understanding and managing any associated risks, including those identified in the 2025 National Risk Assessment. The FCA also notes that it is aware of some cases where consumers have been encouraged to set up limited companies to access lending, such as unregulated bridging finance, from Annex 1 firms. The FCA emphasises the importance of consumers being aware that FOS protections will not apply if issues arise in these cases.

The European Banking Authority (EBA) has published final draft amending regulatory technical standards (RTS) shortening the timing for the application for prior permission to reduce own funds and eligible liabilities instruments under Articles 77, 78 and 78a of the capital requirements regulation (Regulation 575/2013). The amendments shorten the timeframe for competent and resolution authorities to process an institution's application to reduce own funds and eligible liabilities instruments from four to three months on the basis that authorities now have sufficient experience with these procedures to carry out the assessments more efficiently. In addition, following the exemption introduced by Directive 2024/1174 (the Daisy Chain Directive), which removes the requirement for liquidation entities to obtain prior permission to reduce eligible liabilities instruments, the provisions setting a simplified procedure for these entities have been deleted. The draft regulatory technical standards will be submitted to the EU Commission for endorsement following which they will be subject to scrutiny by the European Parliament and the Council before being published in the Official Journal of the European Union (OJ). They will enter into force 20 days after publication in the OJ.

The UK Financial Conduct Authority (FCA) has published a revised version of its Payment Services and Electronic Money Approach Document, updating its guidance on exemptions from strong customer authentication (SCA), including the contactless payments exemption. Among other things, Chapter 20 of the Approach Document now states that:

• Payment service providers (PSPs) are allowed not to apply SCA at the point of sale where the payer initiates a contactless electronic payment transaction that has been reasonably identified by the payer's PSP as low risk. This exemption is subject to compliance with Article 2 of the SCA regulatory technical standards (SCA-RTS).
• In addition to the factors outlined in Article 2(2) of the SCA-RTS, the PSP may consider additional risk-based factors to help it identify whether a transaction is low risk, such as the payer's normal spending or behavioural pattern or their location.
• The PSP may also reasonably identify a transaction as low risk based on the value of the individual contactless electronic payment transaction, the cumulative value of previous contactless electronic payment transactions and/or the number of consecutive contactless electronic payment transactions since SCA was last applied. Whilst not required to do so, PSPs may place limits on the use of contactless payments to reflect these factors.

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The UK Financial Conduct Authority (FCA) has published its regulatory priorities reports for the wholesale markets and wholesale buy side sectors. These reports replace the FCA's previous portfolio letters and aim to provide a clearer and more consistent articulation of regulatory expectations.

The FCA's priorities for the wholesale markets sector for this year are to:

• Improve the resilience of firms and markets; given the elevated risk environment, the FCA expects firms to raise standards of operational resilience and third-party and technology risk oversight, ensure trading controls are robust, and bolster liquidity management and financial resilience.
• Enhance efficient, competitive and innovative markets; the FCA expects firms to engage with its market reforms and transparency initiatives and prepare for modernised trading and post-trade infrastructure, including T+1 settlement and digitalisation of market processes.

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The International Organization of Securities Commissions (IOSCO) has published a consultation report on good practices concerning over-the-counter (OTC) commodity derivatives markets. Feedback is sought on a proposed set of good practices intended to:

• Strengthen the implementation of Principles 12 (authority to obtain information), 15 (intervention powers in the market), and 16 (unexpected disruptions in the market) of IOSCO's principles for the regulation and supervision of commodity derivatives markets. In particular, the proposals relate to the collection and aggregation of OTC derivatives data, including beneficial ownership, to support effective surveillance, alongside enhanced information-sharing and cooperation between exchanges and regulators, particularly in times of stress.
• Set expectations about timely regulatory intervention to prevent or address disorderly market conditions, particularly where risks in OTC markets may spill over into exchange-traded markets.
• Promote proportionate, risk-based, and market specific approaches to OTC data collection and intervention powers.

The report invites comments generally on the proposed guidance and asks ten specific questions. The deadline for comments is 19 June.

The UK Financial Conduct Authority (FCA) has published a call for input seeking views on how its regulatory framework can better support small- and medium-sized enterprises (SMEs) in accessing finance. The FCA considers this part of its commitment to make sure businesses have better access to capital and its strategic priority of supporting growth. The work is intended to help the FCA design its regulatory approach, prioritise future work and complement the joint initiatives being undertaken by HM Treasury with the Bank of England on access to finance for "high potential growth firms" and by the Department for Business and Trade on demand and supply side barriers for SME finance through their call for input.

The FCA aims to understand how regulation affects SME access across debt, equity, hybrid and alternative finance, including any regulatory barriers, opportunities for improvement and sector specific challenges, particularly in high growth sectors. While focused on regulated products and services, the FCA will also consider impacts on services offered to SMEs which are outside the regulatory perimeter but offered by regulated firms.

The FCA seeks views from both SMEs on their experience of applying for finance, as well as from finance providers and distributors on any regulatory blockers or opportunities they have seen. The deadline for responses is 17 April. The FCA will engage with SME representatives and trade associations in March, hold a stakeholder roundtable in May, and later in 2026 publish a summary of insights from this engagement and research commissioned into the approach in comparable international jurisdictions, together with an update on next steps. Potential outcomes could include a review of the FCA's rules or clarifying specific requirements.

The UK Financial Conduct Authority (FCA), the UK Prudential Regulation Authority (PRA) and the Bank of England (BoE) have published final policy statements setting out a co‑ordinated framework for operational incident and third‑party reporting. This follows consultations published in 2024.

The regulators are collectively replacing sector‑specific incident reporting regimes with a single, unified operational incident reporting framework. Under this, firms will make one reporting submission through FCA Connect, regardless of the regulators involved. Payment service providers (PSPs) will also now report serious operational incidents only through the new consolidated regime. Changes to the reporting process for PSPs are reflected in amendments to the Payment Services and Electronic Money Approach Document. The rules will apply from 18 March 2027.

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HM Treasury has published its response to the 2024 call for evidence on reforming the credit union common bond framework. The review sought to assess whether parts of the common bond requirement should be updated to support sustainable growth and ensure the framework remains fit for purpose. Following feedback, HMT confirms it will legislate, when Parliamentary time allows, to:

• Increase the potential membership cap on the locality bond from 3 million to 10million.
• Permit students to join locality-based credit unions, in addition to those who reside or work in the geographical area.
• Allow credit unions to admit members' relatives into a credit union regardless of whether they live in the same household as the qualifying member, as well as individuals who live in the same household as the qualifying member. This is intended to reflect modern family dynamics and broaden the membership base.
• Allow credit unions to retain members of occupation and employer bonds as fully qualifying members upon retirement, including allowing retirees to join a credit union after retirement has begun. This will also apply to locality bonds where members are eligible based on employment within the locality.

Feedback on wider issues relating to the common bond will be considered at a later date.

The European Commission (EC) has published two draft delegated regulations for feedback, proposing amendments to the technical screening criteria under the EU Taxonomy Regulation, which provides a classification system to identify whether or not an economic activity should be considered as environmentally sustainable. The draft amendments follow the EC's call for evidence in November 2025 and the Omnibus I package, which introduced limited amendments to the technical screening criteria. The proposals are set out in the draft Delegated Regulation amending Delegated Regulation (EU) 2021/2139 and draft Delegated Regulation amending Delegated Regulation (EU) 2023/2486. The revisions aim to simplify and clarify the criteria to make the taxonomy easier to apply, reduce compliance burdens and encourage wider uptake. They also seek to align the framework with updated EU legislation and technological developments, covering most activities under the Climate and Environmental Delegated Acts, including energy, transport, manufacturing, construction, forestry and environmental protection, as well as the "do no significant harm" criteria. The deadline for feedback is 14 April. The EC plans to adopt the delegated regulations by the summer.

The European Commission (EC) has launched a call for evidence on revising the EU state aid rules for banks in difficulty. The initiative proposes to consolidate the six existing crisis-era communications into a single, clearer framework to take account of regulatory and economic developments, particularly arising from the recent reform of the EU's Crisis Management and Deposit Insurance (CMDI) framework. Political agreement on that reform was reached in June 2025, with the changes focusing on smaller and medium-sized banks, expected to apply from Q2 2028.

The EC notes that the current state aid rules, last updated in 2013, no longer fully reflect the post crisis regulatory environment, including the introduction of the Bank Recovery and Resolution Directive and the Single Resolution Mechanism. Neither does it reflect the CMDI's policy preference for addressing bank failures through harmonised EU resolution tools that prioritise shareholders', creditors' and industry-funded loss absorption over taxpayer funding, unless in exceptional circumstances. Misalignment between the two frameworks risks inconsistent outcomes, regulatory arbitrage and increased administrative burden, particularly where overlapping requirements pursue the same objectives. The revision therefore aims to improve coherence with CMDI, reduce duplication and ensure that public support for bank failures is, where justified, channelled primarily through resolution procedures, with national solutions involving state aid becoming the exception. 

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The UK Financial Conduct Authority (FCA) has published its regulatory priorities report for the consumer finance sector. These reports replace the FCA's previous portfolio letters and aim to provide a clearer and more consistent articulation of regulatory expectations. The FCA highlights that the credit sector is one of the UK's most varied markets, fuelling consumption and supporting economic growth. While consumer credit lending continued to grow throughout 2025 and interest rates have eased slightly, household budgets remain under pressure. This reinforces the need for responsible lending and early, effective support for consumers in financial difficulty.

The FCA sets out three priority areas for the next 12 months:

• Access to credit that meets consumers' needs: Firms are expected to lend responsibly, providing well-designed credit that offers fair value and meets consumers'. The FCA encourages firms to consider how to support consumers excluded from credit—whether through innovation, new product design, budgeting tools, eligibility checks for grants and benefits, or appropriate referrals.

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The European Banking Authority (EBA) has launched two consultations on draft guidelines and regulatory technical standards (RTS) on the authorisation of initial margin models under the revised European Market Infrastructure Regulation (EMIR 3). Under EMIR 3, counterparties must obtain prior approval from their competent authority to use internal models used to calculate initial margin for non centrally cleared derivatives. The proposals aim to create an efficient and harmonised authorisation process across the EU for assessing these models.

The draft guidelines set out the minimum information and documentation required for a complete authorisation application, building on the Annex to the EBA’s December 2024 No Action Letter, which will cease to apply once the guidelines enter into force. The EBA expects to gradually roll out the application of the guidelines over a period of 18 months, staggering the application for different groups of counterparties based on the significance of their over-the-counter (OTC) trading activities.

The draft RTS specify the supervisory assessment techniques to be applied by competent authorities when authorising initial margin models. These will apply only to counterparties within groups whose aggregate monthly average notional amount of non-centrally cleared OTC derivatives exceeds EUR750 billion. Where an internal model relies on a pro‑forma model, prior validation by the EBA is required before authorisation by the competent authority. The deadline for comments on the consultations is 17 June, with a public hearing scheduled for 4 May.

The UK Prudential Regulation Authority (PRA) has published consultation paper CP5/26 proposing reforms to modernise the existing prudential liquidity framework, taking into account advances in digital banking, payments and communications, and structural developments in the supply of central bank reserves. The proposals focus on targeted amendments to Pillar 2 and through changes to the Internal Liquidity Adequacy Assessment (ILAA) rules and related supervisory expectations within relevant supervisory statements.

Key proposals include:

• Requiring firms to assess the composition of their liquidity resources, identify barriers to monetising assets and conduct internal stress testing to evaluate their ability to respond to rapid and severe liquidity outflows within the first week of stress. The PRA also seeks to replace the concept of "marketable asset risk" with a broader assessment of monetisation risk.
• Removing the exemption for sovereign bonds and other Level 1 assets from annual testing of monetising non-liquid assets, to provide greater assurance that firms are operationally prepared to raise liquidity quickly in stress.

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The EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) has launched a data collection and testing exercise aimed at testing and calibrating its risk assessment models for credit and financial institutions. The exercise will support the selection, in 2027, of up to 40 entities for AMLA's direct supervision from 2028, and the development of a consistent, EU‑wide methodology for assessing money laundering and terrorist financing risks. Participation is limited to entities already notified by their national competent authorities. AMLA has published a reporting package, including an interpretative note, reporting template and recording and slides from a webinar explaining the requirements and next steps. Participating firms are required to submit data by 22 April.

The UK Financial Conduct Authority (FCA) and the UK Financial Ombudsman Service (FOS) have jointly published CP26/9 on modernising the redress system. It should be read alongside HM Treasury's (HMT) confirmation of its final plans for reform of the FOS, published on the same day.

CP26/9 sets out in Chapter 2 proposed measures possible within the existing framework, including initial implementation of the new registration stage, amendments to the dismissal grounds and proposed updates to the 'fair and reasonable' test. It also serves as a policy statement finalising elements of CP25/22 including the criteria for considering whether an issue is a mass redress event, the introduction of a lead complaints process, guidance clarifying when firms should report emerging issues to the FCA and amendments to COMP and DISP sourcebooks intended to improve the Financial Services Compensation Scheme's operational efficiency.

The amendments to COMP and minor amendments to DISP 1 came into force on 17 March. Other rule changes stemming from CP25/22 come into force on 1 June. The deadline for comments to the proposals in Chapter 2 of CP26/9 is 11 May.

HM Treasury has published its response and final plans for reform of the UK Financial Ombudsman Service (FOS) following its July 2025 consultation. The reforms are intended to restore the FOS to its original role as a simple, impartial dispute resolution body (to prevent it acting as a quasi-regulator), to improve regulatory coherence with the UK Financial Conduct Authority (FCA) and to provide greater certainty and predictability for consumers and firms who use the FOS. Following feedback, the government confirms it will:

• Legislate to align FOS's "fair and reasonable" test (used to determine cases) more closely with FCA rules, such that compliance with relevant FCA requirements will mean that firms have acted fairly and reasonably.
• Introduce a referral mechanism requiring the FOS to seek the FCA's view where it considers there may be ambiguity in what the FCA rules require or in relation to issues which may have wider implications across the financial services industry.

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The UK Financial Conduct Authority (FCA) has published findings from its review into how firms approach and apply the consumer understanding outcome under the consumer duty. The FCA sets out expectations for how firms, regardless of size, should design, test and govern customer communications to ensure retail customers can make informed decisions, with approaches applied proportionately to a firm's scale and resources.

The FCA identified several areas where firms need to improve, including weak evidence of communication testing, inaccessible or overly complex communications, insufficient consideration of diverse customer needs, weak monitoring, and unclear accountability for who is responsible for decisions and how they are made.

The FCA highlights effective approaches to strengthen communications and meet expectations including:

• Using insight to identify where consumers struggle—by analysing insights from multiple sources, such as call listening, complaints, chat transcripts, website analytics and surveys. This evidence should be reviewed regularly and meaningful improvements should be prioritised.
• Testing communications with real customers—by testing both before and after changes whether understanding improves. Firms should use proportionate tools such as surveys, comprehension checks and feedback from frontline interactions.

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The UK Financial Conduct Authority (FCA) has published its regulatory priorities report for the retail banking sector. These reports replace the FCA's previous portfolio letters and aim to provide a clearer and more consistent articulation of regulatory expectations.

In the report, the FCA notes that retail banking is undergoing significant change as customers use branches less and rely more on digital channels. Business models are also diversifying, with increased fintech activity and the continued development of open banking and new payment types.

The FCA sets out four priority areas for the next 12 months:

• Access to cash and essential banking services: As firms pursue digital first transformations, the FCA emphasises that firms must ensure these do not create foreseeable harm, particularly for customers with lower digital capability. Alternative services must be in place before any branch closures. The FCA will continue to monitor firms' approaches under its branch closures or conversions guidance and the consumer duty and will intervene where necessary.
• Good outcomes from products and services: Firms are expected to continue improving the data they use to monitor customer outcomes so they can identify where further action is needed. The FCA will take targeted action where it identifies poor outcomes, including poor value or issues affecting vulnerable customers.

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