The European Commission (EC) has adopted a proposal for a regulation to amend the Sustainable Finance Disclosure Regulation (SFDR). The SFDR, which has been in application since March 2021, sets detailed sustainability disclosure requirements for financial intermediaries and financial products regarding consideration of environmental, social, and governance (ESG) factors. The proposed amendments are aimed at simplifying the framework and making disclosures more retail friendly. An EC review found that the current regime produces lengthy, complex disclosures that hinder investor understanding and comparability.

Key elements of the proposal include: (i) removing entity-level disclosure requirements on principal adverse impacts and reducing product-level requirements; (ii) introducing a new clear categorisation system comprising of three product categories for ESG claims, based on existing market practice and the latest regulatory guidance; and (iii) repealing Commission Delegated Regulation (EU) 2022/1288 supplementing the SFDR, to remove the complex templates and entity-level requirements under it. The EC proposal will now be submitted to the European Parliament and Council of the EU for their deliberation.

The European Insurance and Occupational Pensions Authority (EIOPA) has published a Q&A under the Digital Operational Resilience Act (DORA) on the interpretation of Article 13 of Commission Delegated Regulation (EU) 2024/1774 (comprising the regulatory technical standards on ICT risk management), which supplements DORA. The clarification concerns the Article 13(c) which requires financial entities to implement the use of a separate and dedicated network for the administration of ICT assets. EIOPA confirms that such administration should be interpreted broadly so as to include both manual and automated activities and processes, and cross refers to other DORA articles which are relevant for interpreting this provision.

The draft Central Securities Depositories (Amendment) (Intended Settlement Date) Regulations 2026 has been laid before the UK Parliament, accompanied by a policy note . The draft statutory instrument (SI) amends the UK Central Securities Depositories Regulation to mandate settlement "no later than the first business day after trading," making T+1 the standard settlement period in the UK from 11 October 2027. The SI introduces exemptions for certain securities financing transactions, specifically: securities or commodities lending; securities or commodities borrowing; buy-sell back transactions; sell-buy back transactions and repurchase transactions (to the extent they involve transferable securities). The policy note explains the approach taken and clarifies issues not addressed in the legislation. The deadline for technical comments on the draft SI is 27 February 2026. Subject to feedback, the government intends to lay the final SI well before the implementation date, to allow for Parliamentary scrutiny and provide early certainty for the sector.

The Basel Committee has published a summary of its latest meeting in which members discussed a range of initiatives. The Committee reaffirmed its commitment to full and consistent implementation of Basel III standards and approved final principles for managing third-party risk in banking, which will be released next month. It also agreed to expedite a targeted review of its prudential standard for banks' cryptoasset exposures in response to market developments. Other priorities include examining synthetic risk transfers (SRTs), consulting on machine-readable Pillar 3 disclosures (expected in December) and consolidating guidelines into a more user-friendly format. The Committee also approved assessment reports on the UK implementation of the net stable funding ratio and large exposures framework, which are expected next month, and committed to pursue further analytical work of financial risks from extreme weather events.

The UK Financial Conduct Authority (FCA) has published consultation paper CP25/31 outlining a proposed framework for introducing an equity consolidated tape (CT) in the UK, operated by a consolidated tape provider (CTP). The proposals are linked to broader considerations on the structure and transparency of UK equity markets in CP25/20. The FCA plans a separate consultation on the equity transparency regime in 2026.For the purposes of this consultation, the FCA states an equity CT collates and distributes market data, such as prices and trade volumes, across trading venues and over-the-counter transactions, providing a comprehensive view of equity markets. In the paper, "equity" is defined as including shares, exchange-traded funds, depositary receipts, certificates and similar instruments.  

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The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2025 has been laid before the UK Parliament, accompanied by an explanatory memorandum. This follows the draft version laid in July. The order amends the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO) to reform the ancillary activities exemption (AAE). The AAE allows firms dealing in commodity derivatives, emissions allowances or related derivatives as an ancillary activity to be exempt from seeking investment firm authorisation. The order introduces changes giving the FCA a new rule-making power to set criteria for determining when such trading qualifies for exemption. The current AAE is replaced with a more proportionate regime offering two options: (i) assessing whether the activity is ancillary to the firm's main business at group level; or (ii) checking whether the activity is below an annual monetary threshold determined by the FCA. The order also makes consequential amendments allowing the FCA to direct how firms provide calculation data under both tests and removes references to assimilated law that FCA rules will replace.

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The UK Property (Digital Assets etc) Bill has completed its third reading in the House of Commons with further amendments and now awaits royal assent before becoming law. The Bill gives effect to recommendations of the Law Commission confirming in statute that a thing that is digital or electronic in nature can be recognised as personal property even if it does not fall within the traditional categories of "things in possession" or "things in action". The Bill applies to England, Wales and Northern Ireland.

The European Central Bank (ECB) has published the results of its 2025 supervisory review and evaluation process (SREP) and supervisory priorities for 2026–2028. The review covers 105 banks under ECB supervision and looks at their capital, liquidity, profitability, governance and risk management. Overall, banks maintained robust capital and liquidity positions and strong profitability in the second quarter of 2025.

Looking ahead, the ECB's supervisory priorities for 2026–2028 reflect a comprehensive assessment of emerging risks and vulnerabilities for supervised entities. Each supervisory priority targets a specific set of vulnerabilities in the banking sector for which dedicated strategic objectives have been set and tailored work programmes developed.

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The European Commission (EC) has published a call for evidence on a proposed Delegated Act to amend market risk rules under the Fundamental Review of the Trading Book (FRTB) in Basel III. This follows the November consultation where responses are due by 6 January 2026. Although most Basel III requirements have applied since January, the EC postponed FRTB implementation on several occasions and most recently to 1 January 2027 due to delays and uncertainty regarding FRTB implementation in other major jurisdictions. As a result, the EC is evaluating whether to use the empowerment granted under Article 461a of the Capital Requirements Regulation, to adopt a Delegated Act to mitigate potential negative impacts arising from an unlevel playing field in the international implementation of the FRTB. It would also aim to incorporate those targeted changes already proposed by other jurisdictions that the EC believes can improve the EU framework (e.g. removing excessive rigidity and preventing excessive operational burden on banks). The deadline for responses is 18 December.

The UK Payments System Regulator (PSR) has published a compliance report on Specific Direction 17 which mandated the implementation of its name checking service, Confirmation of Payee (CoP), by UK payment service providers (PSPs) to prevent misdirected and fraudulent payments. PSPs were divided into two groups subject to different implementation timelines: Group 1 PSPs were required to implement CoP by 31 October 2023; and Group 2 PSPs by 31 October 2024. The report shows compliance is strong, with over 320 organisations now offering CoP checks. While most firms have met deadlines, the PSR opened enforcement investigations into a few non-compliant PSPs, including three Group 2 firms that missed the deadline and one ongoing case from Group 1. Directed firms are reminded of their obligations under General Direction 1 to maintain transparency regarding a PSPs ability to comply with PSR requirements, proactively communicate with the PSR if deadlines are missed or expected to be missed, plan regulatory changes early and ensure compliance before launching new services.

The European Supervisory Authorities, referred to as ESAs (comprising the European Banking Authority, European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority) have published the official list of designated critical ICT third-party providers (CTPPs) under the Digital Operational Resilience Act (DORA). This designation followed a structured process involving data collection from financial entities' ICT service registers, a criticality assessment in cooperation with national competent authorities and a notification process to those CTPPs identified as critical, after which they benefitted from their right to be heard by providing a reasoned statement. The final designation decisions were adopted following a careful review of all relevant information. Designated CTPPs, which deliver essential ICT services across the EU financial sector, will now be subject to direct oversight by the ESAs to ensure they have appropriate risk management and governance frameworks in place. The ESAs will continue engaging with CTPPs in the course of upcoming examination activities.

The UK Prudential Regulation Authority (PRA) has published policy statement PS24/25 on depositor protection and feedback to responses it received on its March consultation on the topic. The policy statement sets out final rules relating to the limits for deposit protection available from the Financial Services Compensation Scheme (FSCS).

In particular:

• From 1 December, the deposit protection limit increases from GBP85,000 to GBP120,000.
• From 1 December, the limit applicable to certain temporary high balance claims increases from GBP1 million to GBP1.4m.

In response to feedback, the PRA has made additional amendments to the depositor protection part of the PRA Rulebook (DPP rules). These include amending the requirement for firms to display the FSCS compensation sticker and poster to exclude branches where a firm does not deal with depositors in person, clarifying the scope of "third-party premises" to tighten the requirement and more closely reflect models such as banking hubs, and updates to the information sheet to address points raised about accessibility. Firms are required to update their single customer view systems to reflect the new limit from December 1. Deposit takers will then have up to six months to make changes to disclosure materials, which will need to be completed no later than 11.59pm on 31 May 2026.

The Financial Stability Board (FSB) has published a practices paper outlining how authorities can operationalise transfer tools to ensure the orderly resolution of failing banks without taxpayer losses. Transfer tools, a key element of the FSB's "key attributes of effective resolution regimes", help maintain continuity of critical banking functions by transferring all or part of a failed institution to a private purchaser or bridge entity. The paper covers defining transfer perimeters, arrangements for operational continuity (such as transitional service agreements and management of third-party contracts) and approaches to marketing the transfer perimeter under tight timelines and confidentiality. It also explains mechanisms for loss absorption in line with creditor hierarchy, including write-downs and conversions, and outlines challenges in cross-border execution. Case studies of real resolution cases are also included, illustrating operational issues and practices to enhance readiness for deploying these tools effectively.

The European Securities and Markets Authority (ESMA) has published a peer review report on the supervision of depositary obligations under the Undertakings for Collective Investment in Transferable Securities Directive (UCITS) and Alternative Investment Fund Managers Directive (AIFMD) frameworks. The review assessed five jurisdictions: Czechia, Ireland, Italy, Luxembourg and Sweden, with a focus on compliance with oversight and safekeeping obligations. While all national competent authorities (NCAs) have foundational supervisory frameworks in place, ESMA identified notable divergences in the depth and maturity of supervisory practices across jurisdictions. Czechia and Luxembourg fully met expectations, Ireland and Italy largely met expectations and Sweden only partially met expectations, prompting calls for an overall scale up of supervisory assessments, intrusiveness and intensity.

Key findings highlight the need for more frequent and risk-proportionate supervisory engagement, particularly given the concentration of depositaries and their potential systemic importance. There are also concerns over the depth and intrusiveness of supervisory assessments where depositaries entrust significant tasks to third parties. The report recommends that NCAs strengthen risk-based supervision by increasing the frequency and intrusiveness of engagement with higher-impact entities and ensuring risks are properly identified, assessed and mitigated. Jurisdiction-specific recommendations are detailed in the report's tables. ESMA will follow up on these recommendations and continue discussions on strengthening depositary supervision.

The International Organization of Securities Commissions (IOSCO) has issued a consultation report proposing 13 updated recommendations for valuing collective investment schemes (CIS). The revisions seek to update IOSCO's 2007 principles for the valuation of hedge fund portfolios and its 2013 principles for the valuation of collective investment schemes, in light of market developments, including increased exposure to illiquid and private assets and heightened retail participation. The key updates cover: oversight arrangement; governance under stressed market conditions; management of conflicts of interest; fair value; back testing; use of third-party valuation service providers; stale valuations; and record keeping. IOSCO emphasises that robust valuation practices are critical to ensure accurate net asset value calculations of funds and maintain investor protection and market confidence. The deadline for comments is 2 February 2026, with a final report expected in mid-2026.

The European Commission has adopted two Delegated Regulations: (i) Delegated Regulation supplementing the Alternative Investment Fund Managers Directive (Directive 2011/61/EU) (AIFMD) and; (ii) Delegated Regulation supplementing the Undertakings for Collective Investment in Transferable Securities Directive (Directive 2009/65/EC) (UCITS). These regulations lay down regulatory technical standards (RTS) specifying the characteristics of liquidity management tools (LMTs), following the recent amendments made to AIFMD and UCITS by Directive (EU) 2024/927.

The RTS aim to harmonise the characteristics of LMTs across the EU for open-ended AIFs and UCITS, enhancing investor protection and financial stability. The harmonised list of tools, which are set out in the annexes to the Directives, include: suspension of subscriptions, repurchases and redemptions; redemption gates; extension of notice periods; redemption fees; swing pricing; dual pricing; anti-dilution levy; redemption in kind; and side pockets. Under the amended Directives, managers must select at least two appropriate LMTs from this list for potential use, considering the fund's investment strategy, liquidity profile and redemption policy. The Council of the EU and the European Parliament will scrutinise the Delegated Regulations. If neither object, they will enter into force 20 days after publication in the Official Journal of the European Union and apply from 16 April 2026. The RTS also establish a transitional period of application for existing funds constituted before this date.

The UK Joint Money Laundering Steering Group (JMLSG) has launched a consultation on proposed amendments to Part I of its anti-money laundering and counter-terrorist financing (AML/CFT) guidance for the financial services sector. The consultation proposes amendments to: (i) chapter 3 related to guidance on the standing of the MLRO, and on monitoring the effectiveness of money laundering controls and; (ii) chapter 6 relating to guidance on subject access requests in cases where a suspicious report has been made. The deadline for comments on the proposed revisions is 14 January 2026.

The UK Financial Conduct Authority (FCA) has issued a statement following its September update regarding the legal challenge to its decision to award the bond consolidated tape provider contract. The FCA confirms it has applied to the High Court to lift the suspension on awarding the contract to Etrading Software. If granted, this will allow the FCA to proceed with signing the contract while defending the ongoing legal challenge, which it considers meritless. The FCA emphasises that delivering the tape's benefits promptly is in the public interest and confirms that its formal defence to the legal challenge will be submitted by the end of the week.

The UK Financial Conduct Authority (FCA) has published an updated statement of policy regarding statutory investigations into regulatory failure under the Financial Services Act 2012. The statement of policy sets out the FCA's approach and process for deciding whether to conduct an investigation into possible regulatory failure and give a report of the findings and recommendations to HM Treasury (HMT) for publication. Following its review of the statement of policy to ensure it remains fit for purpose, the FCA has introduced one substantive change: revising the monetary thresholds for assessing the "significance" of consumer detriment in line with inflation. The FCA will continue to review and adjust these thresholds periodically.

The European Parliament (EP) has announced it has adopted its negotiating mandate on the Omnibus I sustainability package which proposes targeted amendments to, amongst other things, the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D), aimed at reducing administrative burdens for businesses. The EU has already published Directive (EU) 2025/794 which implemented the "stop-the-clock" proposal, postponing the application date of aspects of CSRD and CS3D.

It follows the EP's rejection of the mandate proposed by its Legal Affairs Committee just last month. Although the text of the mandate has not been published, the announcement states that the mandate proposes sustainability reporting will only apply to companies with over 1,750 employees and annual turnover exceeding EUR450 million, with simplified standards and voluntary sector-specific disclosures. Only businesses within this scope would also be required to provide sustainability reporting under taxonomy rules (i.e. a classification of sustainable investments).

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The Network for Greening the Financial System (NGFS) has released an updated guide on climate scenario analysis for central banks and supervisors, building on the 2020 edition. The revised guide reflects significant methodological progress and best practices in scenario design, data and modelling, with a new emphasis on short-term scenarios to assess near-term financial risks from climate change and evolving policy developments. While retaining the original four-step framework, which includes: (i) identifying objectives and scope; (ii) choosing climate scenarios; (iii) assessing economic and financial impacts; and (iv) communicating and using results; the guide expands on each step with new insights, methodologies and examples. It serves as a practical reference for authorities and financial institutions integrating climate scenario analysis into their risk management frameworks and will continue evolving alongside ongoing sector developments.

The Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2025 have been laid before UK Parliament, accompanied by an explanatory memorandum. The Regulations extend, by a further 12 months, the transitional arrangements under Parts 2 and 3 of the Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2019 to 31 December 2026. These temporary provisions allow specified categories of Gibraltar-based firms to provide financial services in the UK and, similarly, UK-based firms to access Gibraltar's financial services market. Last extended by the Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2024, the temporary arrangements ensure continuity while secondary legislation for the long-term framework, the Gibraltar Authorisation Regime, established under the Financial Services Act 2021 is finalised. HM Treasury engaged with the Government of Gibraltar and both parties agreed to the extension.

The UK Financial Conduct Authority (FCA) has published its findings from its multi-firm review of contracts for difference (CFD) providers, assessing compliance with the consumer duty's "price and value" outcome. The review found examples of good practice but highlighted significant concerns and areas needing improvement. While some firms simplified charging structures and restricted high-risk retail clients, many failed to make meaningful changes following implementation of the duty, with board reports often restating requirements rather than analysing compliance. Fair value assessments (FVAs) were frequently inadequate, focusing narrowly on spreads and execution speed while overlooking material costs such as overnight funding charges and ancillary fees. The FCA highlighted poor transparency on fee structures and unjustified overnight funding charges, including on matched positions, which can create substantial costs with little benefit.

Few firms pay interest on client margin deposits despite high market rates, raising further concerns about fair value. Weaknesses also persisted in monitoring vulnerable clients, appropriateness testing and not adequately considering consumer complaints in FVAs. CFDs remain complex and risky products, and the FCA warns that foreseeable harm could arise from practices such as charging for hedged positions without offsetting costs. The regulator will engage directly with firms showing poor compliance and consider further action, stressing that CFD providers must deliver good outcomes, communicate clearly and ensure fair value under the consumer duty. The FCA encourages CFD manufacturers and distributors to consider these findings and address these identified gaps.

The House of Lords (Industry and Regulators Committee) has issued a call for evidence for its new inquiry into the role of UK regulators in promoting economic growth. This follows the government's action plan on its new approach to ensure regulators and regulations support growth. The inquiry will explore how regulators contribute to economic growth, how implications of prioritising growth might impact their other duties and how regulators are responding to the action plan. The call for evidence includes a list of questions to consider and provide responses to. The deadline for submissions is January 9, 2026.

The International Organization of Securities Commissions (IOSCO) has published its final report on neo-brokers. These are a sub-set of digital-first broker-dealers leveraging social media and online platforms to provide low-cost, online-only investment services with minimal human interaction. While these evolving business models enhance market access, IOSCO highlights the associated risks and provides five key recommendations for regulators and firms to ensure that neo-brokers operate in an environment that upholds investor protection and market transparency.

These include: (i) acting honestly and fairly with retail investors; (ii) providing clear disclosure of fees and charges to retail investors and advertising; (iii) ensuring transparency of revenue and obtaining consent before providing ancillary services; (iv) assessing the impact of payment for order flow on the best execution of customer orders; and (v) maintaining robust IT infrastructure to prevent service disruptions.

The UK Prudential Regulation Authority (PRA) has published policy statement PS22/25, confirming changes to the retail deposits threshold for the UK leverage ratio requirement. Following feedback on its March consultation, the PRA has amended the final policy to increase the retail deposits threshold for major UK firms from GBP50 billion to GBP75bn, compared to the GBP70bn initially proposed. It will also calculate the metric of firms' retail deposits assessed against this threshold using a three-year averaging mechanism. The non-UK assets threshold remains unchanged at GBP10bn. Modifications by consent granted during the review, which allowed firms to disapply the leverage ratio part of the PRA Rulebook while thresholds were under consideration, will cease on June 30, 2026. The final policy will take effect on January 1, 2026. The PRA will continue annual reviews of both thresholds as part of the Financial Policy Committee's oversight of the leverage ratio framework. The final policy and rules are set out in the appendices to the policy statement.

The Investment Association and the Investment Management Association of Singapore, in partnership with the UK Financial Conduct Authority (FCA) and Monetary Authority of Singapore (MAS), have released a joint report on challenges and opportunities in tokenised asset markets across the UK and Singapore. The report highlights an "adoption gap" between innovation in digital assets and investor requirements. It introduces a practical operational readiness checklist in section 4, to guide market participants looking to design and launch tokenised financial products.

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The UK Financial Services Compensation Scheme (FSCS) has published its November 2025 Outlook newsletter, providing an update on compensation figures for the current financial year and an early view of the levy forecast for 2026/27. It confirms that the 2025/26 levy remains at GBP356 million, with no additional levies expected for firms. Compensation payments are forecast to decrease by 5% to GBP315m, primarily due to changes in the types of claims expected. Recoveries remain a priority, with GBP40m anticipated by year-end. An early forecast for 2026/27 indicates a levy of GBP342m (a slight decrease from 2025/26) based on compensation costs of GBP294m. The FSCS will publish a budget update in early 2026 detailing expected management expenses for 2026/27, which form part of the overall levy and are jointly consulted on by the UK Prudential Regulation Authority and UK Financial Conduct Authority. The final levy will be confirmed in May 2026.

The European Central Bank (ECB) has issued its opinion on the European Commission's proposed amendments to the EU securitisation framework, which was submitted in June. The package consists of a proposal to amend the EU Securitisation Regulation, a proposal to amend the Capital Requirements Regulation as regards exposures to securitisations and a consultation on measures to amend the Liquidity Coverage Ratio (LCR) Delegated Regulation. The ECB broadly supports the reforms aimed at enhancing the functioning of the EU's securitisation market, but makes a number of general and specific observations, including that:

• Proposed changes to synthetic securitisations require careful consideration. Although this segment is driving market growth, if not properly managed by originator credit institutions, large synthetic securitisations could amplify procyclicality through rollover risk, potentially affecting financial stability.

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The International Organization of Securities Commissions (IOSCO) has published its final report on the tokenisation of financial assets. The report summarises observations from IOSCO's monitoring exercise led by its Fintech Task Force. It examines the development and adoption of tokenisation and distributed ledger technology (DLT) in capital markets, to share understanding among IOSCO members of current use cases and regulatory responses. IOSCO finds that while tokenisation, enabled by DLT, offers potential efficiency gains such as shorter settlement cycles and improved collateral mobility, adoption remains limited. This is considered to be due to new or heightened risks such as interoperability challenges and the lack of credible settlement assets, which hinder scalability.

Other evolving risks include legal uncertainty, operational vulnerabilities and cyber threats, which mirror existing risk categories but manifest differently under DLT, requiring tailored risk controls. Regulatory approaches to respond to these risks vary globally, with some IOSCO members applying existing frameworks while others have issued new guidance or sandbox programs. The report concludes with examples of steps taken by authorities in various jurisdictions to address the application of existing regulatory frameworks and risks arising from tokenised capital markets products. IOSCO also encourages regulators to apply recommendations from its previous reports on crypto and digital asset markets and decentralised finance to ensure consistent outcomes under the principle of "same activities, same risks, same regulatory outcomes".

The UK Financial Conduct Authority (FCA) has published findings from a multi-firm review of business-wide risk assessments (BWRA) and customer risk assessments (CRA) as part of its financial crime supervisory work under the 2025–30 strategy. You may like to read our article "Financial Crime: The FCA's Strategy for 2025 – 2030" for further information on the strategy.

The FCA found that while most firms maintain BWRAs, weaknesses remain in identifying, understanding and assessing risk. Common issues include failure to tailor assessments to specific business risks, lack of detail and evidence to support claims of being "low risk" and limited quantitative analysis. Examples of good practice include annual reviews of BWRAs, comprehensive assessments using both quantitative and qualitative analysis and tailored assessments aligned to the firm's business model, products and customers.

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The European Parliament's Committee on Economic and Monetary Affairs (ECON) has adopted its final report on the impact of AI on the financial sector. This follows the draft report published in May, which highlighted concerns around regulatory overlaps and legal uncertainty, and set out recommendations to encourage responsible use of AI in financial services. This final report builds on those recommendations, reinforcing the need for clarity on how existing financial and other regulations interact with the EU AI Act. It advocates for proportional supervisory approaches and supporting measures, such as the issuance of clear and practical guidance by the European Commission, to foster innovation while safeguarding market integrity. Further, the report emphasises that current sectoral legislation on AI is sufficient to cover AI deployment in its present form but highlights the importance of continuous monitoring to identify any duplications or gaps in the current financial services legislation applicable to AI deployment, especially with a view to safeguarding consumer rights and the right to privacy.

Delegated Regulation 2025/1416 amending Delegated Regulation (EU) 2023/2772 has been published in the Official Journal of the European Union. Adopted on 11 July, it introduces targeted amendments, referred to as "quick fix" amendments, to defer the application of specific European sustainability reporting standards (ESRS) under the Omnibus I sustainability package, to ease reporting burdens and provide legal certainty for companies already reporting for financial year 2024 ("wave one" companies). The amendments allow these companies to continue omitting certain disclosures for financial years 2025 and 2026. Additionally, larger wave one companies (with over 750 employees) will now benefit from the same phase-in provisions previously reserved for smaller entities. The amendments address gaps left by the "stop-the-clock" Directive, which deferred reporting obligations for wave two and three companies but excluded wave one. The Regulation applies retrospectively from financial years starting on or after January 1, 2025 and entered into force on November 13.

The Council of the EU has published an "I" item note from the Presidency to its Permanent Representatives Committee (COREPER) inviting it to confirm the provisional political agreement on the Crisis Management and Deposit Insurance (CMDI) legislative package. This package includes amendments to the Bank Recovery and Resolution Directive (2014/59/EU) (BRRD), the Deposit Guarantee Schemes Directive (2014/49/EU) (DGSD) and the Single Resolution Mechanism Regulation (806/2014) (SRM). The provisional political agreement on these legislative proposals was reached between the European Parliament (EP) and the Council of the EU in June. On 5 November, the EP's Committee on Economic and Monetary Affairs (ECON) endorsed the texts. Following this, the Chair of ECON sent a letter to the Chair of COREPER indicating that, if the Council of the EU transmits its agreed position (subject to legal-linguistic review), she will recommend that the EP accept the Council's position without amendments at second reading.

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The Bank of England (BoE) has published a consultation paper outlining its proposed regulatory framework for sterling-denominated systemic stablecoins. Under the framework, HM Treasury (HMT) will determine which payment systems using stablecoins, and their service providers, are recognised as systemically important. Once designated, these entities will fall within the BoE's remit and be subject to its powers under the Banking Act 2009. The proposed regime does not cover stablecoins used for non-systemic purposes which are not widely used by individuals to make retail or business payments. These activities will remain under the supervision of the UK Financial Conduct Authority (FCA).The consultation builds on feedback to the 2023 discussion paper.

Key proposals include:

• Allowing issuers to hold up to 60% of backing assets in short-term sterling-denominated UK government debt, with the remaining 40% as unremunerated deposits at the BoE. Issuers deemed systemic at launch, or transitioning from the FCA regime, may initially hold up to 95% in short-term UK government debt to support viability during growth.

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The UK Financial Conduct Authority (FCA) has published a statement with findings from its review of certain credit builder products, which claim to improve consumers' credit scores by reporting regular payments to credit reference agencies (CRAs). The FCA found little evidence that these products significantly enhance credit scores for most consumers and highlighted potential risks, including misrepresentation of a customer's financial circumstances and facilitating access to unaffordable credit. Many of these products are unregulated, and firms often fail to clearly disclose their limitations. Following FCA engagement, five firms have ceased offering such products, while others have amended their models and marketing practices. The FCA continues to work with firms and CRAs to improve data reporting standards while considering whether it should take further action.

The Network for Greening the Financial System (NGFS) has published a series of explanatory notes to enhance clarity and usability of its long-term climate scenarios. These notes respond to user feedback seeking greater transparency on underlying assumptions and narratives and aim to support broader application of NGFS scenarios. They cover energy investments, scenario narratives and key findings, key assumptions, physical risks and tipping points in the earth system in the context of NGFS physical risk assessment. The documents form part of Phase V of the NGFS scenario development and go beyond the high-level results presented in the Phase V presentation deck released in November 2024, offering users a closer look at individual scenario outcomes.

The European Commission (EC) has published calls for evidence on proposals to amend two Delegated Regulations: the Taxonomy Climate Delegated Act and the Taxonomy Environmental Delegated Act. The Taxonomy Climate and Environmental Delegated Acts, adopted respectively in 2021 and 2023, specify the technical screening criteria for activities contributing to the six EU climate and environmental objectives including climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, circular economy, pollution prevention and control and biodiversity. The proposed amendments aim to simplify, clarify and enhance usability of these criteria. This initiative forms part of the EC's broader effort to reduce reporting burdens for companies and support sustainable finance through clearer and more proportionate rules. The deadline for comments on both proposals is December 5.

The BIS Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) have published two reports addressing financial market infrastructures' (FMIs) management of general business risks and losses.

The Level 3 assessment report reviews compliance with PFMI Principle 15 ("general business risk") across 34 FMIs based on work carried out in 2023–24. The report identifies six significant concerns highlighting clear challenges for FMIs' resilience to different types of risk that could result in general business losses. These include: (i) failure to consider general business risk when determining liquid net assets funded by equity (LNAFE); (ii) insufficient resources for recovery and wind-down plans; (iii) lack of additional LNAFE beyond participant default coverage; (iv) absence of recovery plans; (v) gaps in orderly wind-down planning; and (vi) no explicit plan for raising additional equity in case of capital shortfalls. In response, the CPMI and IOSCO has issued a consultative report proposing supplemental guidance to the PFMI. The guidance does not introduce new standards but elaborates on the existing PFMI principles. It clarifies the scope of general business risk and its interaction with other principles, and provides guidance on identifying, monitoring and managing general business risks; determining the minimum amount of LNAFE; and governance and transparency. The guidance also considers the findings from the Level 3 assessment report. The deadline for comments is February 6, 2026.

The Payments Vision Delivery Committee (PVDC) has published its long-term strategy for the future UK retail payments infrastructure, building on the government's National Payments Vision. The PVDC, comprising HM Treasury, the Bank of England, the UK Financial Conduct Authority (FCA) and the UK Payments Systems Regulator, developed the strategy following the Mansion House 2025 announcement of a new model of public and private sector collaboration.

With user needs at its core, the strategy focuses on five high-level strategic outcomes: (i) greater choice of innovative, cost-effective payment options that meet consumers and business needs; (ii) interoperability across a multi-money ecosystem, including new and existing forms of digital money; (iii) strong protections against fraud and financial crime; (iv) fair, transparent and non-discriminatory access for participants to drive competition and innovation; and (v) operational and financial resilience of the payments ecosystem.

Governance and delivery oversight will be led by the newly established Retail Payments Infrastructure Board, alongside an industry-led Delivery Company responsible for implementing the design. Implementation is expected to span several years. The FCA confirms in a statement which has been published on the same day that the strategy will be followed by the "Payments Forward Plan", which will be a sequenced plan of future payments initiatives.

The European Banking Authority (EBA) has launched a data collection, through competent authorities, to identify EU counterparties who must apply to the EBA for validation of the ISDA standard initial margin model (SIMM) under the European Market Infrastructure Regulation (EMIR) and their contact persons. All financial and non-financial counterparties exchanging initial margins calculated using ISDA SIMM, directly or indirectly, must apply for authorisation from their competent authority, as mandated by Article 11(3) EMIR and the EBA's no-action letter of December 17, 2024. The information provided will be used to onboard counterparties onto the EBA's validation system during the first half of 2026, ahead of counterparties' applications to the EBA for validation of ISDA SIMM expected in the second half of 2026. Failure to obtain validation will prohibit the use of ISDA SIMM until counterparties rectify their status with the EBA. A list of validated counterparties is expected by the end of 2026.

The European Commission (EC) has launched a consultation on the Fundamental Review of the Trading Book (FRTB) under Basel III, focusing on market risk for banks. Although most Basel III requirements have applied since January, the EC postponed FRTB implementation on several occasions and most recently to 1 January 2027 due to delays and uncertainty regarding FRTB implementation in other major jurisdictions. To address potential negative impacts arising from an unlevel playing field in the international implementation of the FRTB, the consultation seeks feedback on whether the EC should adopt a delegated act, using its powers under Article 461a of the Capital Requirements Regulation by the end of March 2026. This empowerment, due to previous postponements, now only allows the introduction of targeted relief measures and targeted multipliers for up to three years.

Longer term solutions will be duly and timely considered in a comprehensive way. The proposed policy options comprises two main components: (i) the introduction of temporary targeted amendments to the market risk framework that would address aspects of the framework on which other jurisdictions have already deviated or indicated that they would plan to deviate in their final FRTB implementation; and (ii) the introduction of a multiplier for the overall market risk capital requirements that banks negatively impacted by the new rules (i.e., banks facing an increase in capital requirements for market risk) would be allowed to use to significantly limit their market risk capital requirements increases for three years. The EC highlights that due to the temporary nature of the multiplier and its objective, the methodology should be simple and risk‑sensitive, and relatively easy to implement, maintain and supervise. The deadline for responses is 6 January 2026.

The European Banking Authority (EBA) has published a follow-up peer review report examining the supervisory practices of EU competent authorities regarding their assessment of credit valuation adjustment (CVA) risk of the institutions under their supervision. The same four EU competent authorities which were part of the EBA's 2023 peer review were also part of this follow up review. The EBA found that competent authorities continue to largely assess CVA risk sufficiently, using approaches which are fit for purpose in satisfying the regulatory and supervisory review and evaluation process guidelines. Furthermore, since the 2023 report, all competent authorities have made progress to strengthen their CVA risk assessments and address the follow-up measures suggested as part of that report. However, only one competent authority was found to have made specific efforts to review compliance with the regulatory technical standards (RTS) in Commission Delegated Regulation (EU) 2018/728 on the procedures for excluding transactions with non-financial counterparties established in a third country from the own funds requirements for CVA risk (Exclusion RTS). The EBA urges continued efforts to ensure robust CVA risk management and compliance with the Exclusion RTS to ensure that this risk is properly managed and capitalised by the institutions under their supervision.

HM Treasury (HMT) has published a consultation on proposals to reform the UK's anti-money laundering and counter-terrorist financing (AML/CTF) supervisory regime for professional services firms. This follows the October consultation response and policy statement confirming that the UK Financial Conduct Authority (FCA) will be the sole AML supervisor for legal, accountancy and trust and company service providers under the Money Laundering Regulations 2017 (MLRs). The consultation sets out the FCA's proposed key duties, powers and accountability mechanisms that the FCA will need for supervising professional services firms under the MLRs, along with the legislative changes needed to implement these reforms. While many proposals involve extending existing MLR provisions to the FCA in its new expanded role, HMT is also considering whether further enhancements are necessary to the MLRs to ensure the FCA has a comprehensive supervisory toolkit.

Key proposals include the following as set out below.

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HM Treasury (HMT) has published a draft statutory instrument (SI), the Over the Counter Derivatives (Intragroup Transactions) Regulations 2026, for technical comment, alongside a policy paper. The proposed Regulations aim to replace the temporary intragroup exemption regime (TIGER), which expires on 31 December 2026, with a permanent framework for intragroup exemptions from clearing and margin requirements under the UK European Market Infrastructure Regulation (UK EMIR). The draft SI should be read alongside the UK Financial Conduct Authority's consultation paper, published on the same day, which sets out supporting proposals to simplify the exemption process.

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The UK Financial Conduct Authority (FCA) has published consultation paper CP25/30 on changes to its binding technical standards (BTS) on the intragroup exemption regime under the UK European Market Infrastructure Regulation (UK EMIR). The consultation should be read alongside HM Treasury's (HMT) draft statutory instrument (SI), published on the same day for technical comment, which sets out the proposed amendments to UK EMIR. This consultation summarises HMT's proposed legislative changes to the intragroup regime and sets out the FCA's proposals to implement these changes alongside additional changes to consolidate the regime and further reduce burdens on counterparties.

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The UK Financial Conduct Authority (FCA) has published a progress statement on its proposed motor finance consumer redress scheme consultation, following the UK Supreme Court ruling on 1 August. In the statement, the FCA confirms that the consultation deadline has been extended from 18 November to 12 December. The FCA also confirms that it has been actively engaging with stakeholders and has received feedback on key issues, including on the methodology for calculating redress, the time period for the scheme, the rate of compensatory interest, how independent mechanisms will ensure confidence, including the role of the Financial Ombudsman Service and ideas for alternative approaches, and fraud prevention. It urges respondents to provide detailed evidence and alternative suggestions where they disagree with proposals, all of which will be considered before final decisions are made.

Final rules are still expected in early 2026 but the FCA confirms this will now be February or March. While some complaints have been paused since January 2024 and the FCA has consulted on extending this pause beyond 4 December 2025, the consultation is now closed and the FCA is considering responses. However, the FCA stresses that complaints cannot remain paused indefinitely and lenders are therefore encouraged to maintain momentum to deliver certainty for customers and the wider market.

The Economic Secretary to HM Treasury (HMT) has published a letter confirming it has commissioned the Financial Services Skills Commission to produce a comprehensive report on the impact of AI and other disruptive technologies on the UK financial services sector. The research, aligned with the Financial Services Growth and Competitiveness Strategy, will examine emerging technologies, their effect on the sector's growth at both national and regional levels and on implications for customers. It will also identify the skills required for successful adoption and deployment of the technologies and set out a clear plan with actionable steps for employers, employees, education providers and government on how to build the skills required over the next decade. The final report is scheduled for mid-2027.

The European Banking Authority (EBA) has published a final report on guidelines for environmental scenario analysis under the Capital Requirements Directive (CRD), as amended by CRD VI (Directive (EU) 2024/1619). These guidelines complement the EBA's January 2025 environmental, social and governance (ESG) risk management framework by clarifying supervisory expectations for how institutions should conduct environmental scenario analysis, including for institutions using the internal ratings-based approach for calculating the own funds requirements for credit risk. The EBA consulted on the guidelines in January. In response to feedback, the EBA has amended the guidelines with a focus on enhancing clarity and simplifying expectations in line with operational realities. The scope has been streamlined to focus on environmental risks, with climate as the priority. 

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HM Treasury (HMT) has released its financial inclusion strategy, outlining a comprehensive national plan to remove barriers to financial participation and to build financial resilience. The strategy focuses on six main areas: (i) improving digital inclusion and access to banking through the roll-out of 350 in-person banking hubs and the launch of a pilot scheme enabling the opening of a bank account without standard ID; (ii) supporting savings by delivering regulatory clarity to enable employers to offer workplace savings schemes with confidence and driving uptake of the government's Help to Save scheme; (iii) ensuring the insurance market is supporting the financial wellbeing of households and vulnerable customers; (iv) increasing access to affordable credit; (v) strengthening debt advice provision; and (vi) introducing compulsory financial education in primary schools. HMT will review the strategy's implementation progress two years after publication and provide an update thereafter.