The following posts provide a snapshot of selected UK, EU and global financial regulatory developments of interest to banks, investment firms, broker-dealers, market infrastructures, asset managers and corporates.
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HMT publishes latest NRA of money laundering and terrorist financing risks
17 July 2025
HM Treasury has published its latest 2025 National Risk Assessment (NRA) of Money Laundering and Terrorist Financing, offering a comprehensive review of the UK's exposure to financial crime. Building on the 2015, 2017, and 2020 assessments, the 2025 NRA evaluates: (i) the UK's AML/CFT framework and the government's response to the 2020 NRA; (ii) overarching money laundering (ML) risks; (iii) overarching terrorist financing (TF) risks; (iv) sector-specific ML/TF risks under the Money Laundering Regulations (MLRs); and (v) emerging cross-cutting risks outside MLR-regulated sectors.
Read more. -
PSR publishes regulatory fees figures for 2025/26
17 July 2025
The UK Payment Systems Regulator (PSR), in conjunction with the UK Financial Conduct Authority (FCA), has published its regulatory fees figures for 2025/26. The annual funding requirement is set at GBP27 million, with fees allocated based on transaction volume (80%) and value (20%) across regulated payment systems for the 2024 calendar year. The PSR confirms that the ongoing consolidation into the FCA will be managed within existing budgets, with no immediate fee increases planned. The minimum fee threshold remains at GBP 100, and special project fees may apply to for-profit payment system operators. Fee payers are required to submit transaction data by 1 March, with invoices issued from July and final payments due within 30 days of receipt. The PSR confirms its fee methodology remains consistent with prior policy statements PS18/12 and PS23/2. -
UK FCA Primary Market Bulletin 56 published
17 July 2025
The UK Financial Conduct Authority (FCA) has published its latest edition of its newsletter for primary market participants, Primary Markets Bulletin 56. The bulletin covers three key areas: (i) the FCA's recent success in optimising data and technology to strengthen its ability to identify failures to report positions and market abuse; (ii) the upcoming expiry of certain transitional provisions under the UK Listing Rules on 29 July; and (iii) the FCA's desire to improve primary markets datasets so that they can be used more efficiently by markets participants. In terms of the transitional provisions expiring on 29 July, the FCA notes that these include transitional provisions for eligibility requirements for inflight applicants, and certain transitional provisions for shell companies under UKLR 13, UKLR 4 and UKLR 24.Topic : Other Developments -
ESMA feedback statement on the private securitisation reporting regime
17 July 2025
ESMA has published its feedback statement on the outcome of its consultation on the private securitisation reporting regime. ESMA had previously consulted on introducing changes to the disclosure regime including in relation to a new, simpler, prescribed template. The feedback statement confirms that while respondents generally supported the idea of simplifying the disclosure framework, there was little appetite for proposed amendments to the relevant technical standard at this stage. In terms of next steps, ESMA does not intend to proceed with any further action until there is more clarity in respect of level 1 changes being made to the Securitisation Regulation (Regulation (EU) 2017/2402), which will come into force under the wider European securitisation reforms.Topic : Securities -
Mansion House: HMT updates policy on applying FSMA 2000 model of regulation to UK CRR
17 July 2025
HM Treasury (HMT) has published an update to its policy note on applying the Financial Services and Markets Act 2000 model of regulation to the UK Capital Requirements Regulation (UK CRR). An earlier version of the policy note was originally published in 2024. The updated approach includes proposals and commentary on three key topics – Basel 3.1, overseas recognition regimes and key UK CRR definitions.
On overseas recognition regimes, HMT has confirmed it will take a standardised approach, with each piece of legislation setting out the scope, effect, policy outcomes and "matters to consider" when considering whether other jurisdiction's regimes should be designated as recognised. It is seeking specific feedback on the proposed overseas prudential requirements regimes, which would replace the current equivalence regimes in the UK CRR. HMT's intention, in the main, is to carry forward the existing equivalence decisions into the new regime; however, it confirms that the effect of current equivalence decisions would not be preserved for exchanges and there may be additional flexibility where appropriate, as regards certain exposures or activities.
Read more.Topic : Prudential Regulation -
HMT consultation response on improving the effectiveness of the money laundering regulations
17 July 2025
HM Treasury (HMT) has published its consultation response in relation to its 2024 consultation on proposals to improve the effectiveness of the UK Money Laundering Regulations (MLRs). The consultation concentrated on four areas: (i) customer due diligence; (ii) system coordination around economic crime; (iii) clarifying scope; and (iv) registration requirements for the Trust Registration Service. The response confirms that a number of updates will be made to the MLRs and associated guidance. On customer due diligence, in particular, the following key changes were confirmed as set out below.
Read more.Topic : Financial Crime and Sanctions -
PRA policy statement confirming amendments to the large exposures framework
17 July 2025
The UK Prudential Regulation Authority (PRA) has published a policy statement confirming amendments to the large exposures framework in respect of exposures arising from mortgage lending, exposures to the UK FSCS, requirements for G-SIIs and O-SIIs to highly indebted French non-financial corporations. These formed part of the 2024 consultation on the large exposures framework, which also included other topics not covered by this policy statement. The policy statement also confirms amendments in respect of groups of connected clients, as consulted on in 2023.
The PRA had proposed removing the provision allowing firms to reduce exposures by using immovable property on the grounds that immovable property is illiquid and therefore not a reliable mitigant in a stress scenario. The policy statement confirms that this change will proceed. However, in respect of small domestic deposit takers (SDDTs), the PRA has acknowledged feedback that such a change may require revisiting the PRA's strong and simple framework proposal that the PRA would engage with SDDTs for which the sum of their large exposures is above 300% of their tier 1 capital (as part of the C-SREP process).
Read more.Topic : Prudential Regulation -
PRA policy statement on restatement of CRR and Solvency II requirements in the PRA rulebook
17 July 2025
The UK Prudential Regulation Authority (PRA) has published a policy statement outlining the PRA's final policy on the definition of capital (as consulted on in 2024), and on proposals in relation to securitisations and mapping external credit rating agency ratings to credit quality steps (ECAI mapping) (also consulted on last year). The policy statement confirms that the changes in relation to the definition of capital (which included restating the majority of relevant requirements in Part Two of the UK Capital Requirements Regulation) are not substantive, and that additional guidance is included in the new Statement of Policy and in SS7/13 (new version effective from 1 January 2026). On ECAI mapping, the policy statement confirms that the PRA has taken on board feedback in respect of the mapping tables, guidance needed and interaction with the Basel 3.1 standards, and confirms that the mapping tables amendments will come into force on 1 January 2026 (ahead of the PRA's implementation of the Basel 3.1 standards). PRA will publish further consequential amendments on the mapping rules changes in due course. Regarding securitisation supervisory expectations, the PRA confirms that it is making certain changes to SS9/13 to add new expectations that are not dependent on Basel 3.1 implementation, and that a subsequent policy statement will cover those that are dependent on Basel 3.1 implementation. As proposed, the updates to SS9/13 will come into force on 1 January 2026.Topic : Prudential Regulation -
FCA and ICO joint insights on the future of open finance
17 July 2025
​The UK Financial Conduct Authority (FCA) and the Information Commissioner's Office (ICO) have published a joint article through the Digital Regulation Cooperation Forum (DRCF), outlining their collaborative efforts and next steps to shape the future of open finance and smart data. Open finance seeks to extend open banking principles to a wide range of financial products, empowering consumers with greater control over their data while promoting innovation and competition. The article emphasises the importance of secure, consent-driven data sharing, supported by the UK's Smart Data framework and the newly enacted Data Use and Access Act, to be integral to the vision for open finance. The ICO will play a key role in ensuring that data protection and consumer rights remain central to the development of open finance.
Read more.Topic : Other Developments -
ECB publishes final guide on outsourcing cloud services
16 July 2025
The European Central Bank (ECB) has published its final guide on outsourcing cloud services, following from a July 2024 consultation. Feedback on the consultation is set out in an accompanying feedback statement. The guide clarifies supervisory expectations for banks under the ECB's remit in relation to the Digital Operational Resilience Act (DORA). While not legally binding, the guide outlines good practices for effective cloud outsourcing risk management, particularly given growing reliance on a limited number of third-party providers. Key areas covered include governance and risk management strategy, pre-outsourcing analysis, contractual arrangements, exit strategies and termination rights, and ongoing monitoring and oversight. The guide emphasises a risk-based and proportionate approach to outsourcing cloud services, tailored to the diverse structures, activities and risk profiles of ECB-supervised banks. The final version distinguishes more clearly between DORA requirements and ECB-recommended practices. -
Mansion House: HMT and BoE announce plans for new UK retail payments model under NPV
15 July 2025
HM Treasury has published an update on the National Payments Vision (NPV), announcing plans to implement a new collaborative model for delivering the UK's next-generation retail payments infrastructure. The Payments Vision Delivery Committee (the Committee), established to strengthen regulatory coordination and lead key activities, has agreed the new model which will redefine roles across the payments ecosystem, establishing clear responsibilities for public authorities and industry to accelerate the renewal of the UK's retail payments infrastructure and capitalise on emerging technologies. The model also supports short-term activity to improve resilience and functionality of the existing Fasters Payments System, which Pay.UK has been progressing in the industry. Pay.UK will continue its role as operator of existing systems, while contributing its expertise to the evolving framework. The Bank of England (BoE) will establish and chair the Retail Payments Infrastructure Board, which will oversee delivery of the infrastructure alongside the Committee, Pay.UK and a newly formed Delivery Company. The Committee will publish its full strategy for retail payments infrastructure in autumn of this year, with a Payments Forward Plan expected by the end of the year. The BoE published its own statement and the UK Payment Systems Regulator also issued a separate update on its webpage. -
Mansion House: Leeds Reforms
15 July 2025
HM Treasury has published a press release confirming a significant package of measures aimed at making the UK the prime destination for financial services by 2035, referred to as the "Leeds Reforms". The Leeds Reforms cover a broad range of financial services sub-sectors, and include proposals and initiatives to unlock retail investment, remove frictions to investment activity in the UK, free capital for investment in the UK, and promote innovation. The Reforms formed the foundation of the chancellor of the exchequer's speech delivered at Mansion House on 15 July, in conjunction with the UK's Financial Services Growth and Competitiveness strategy.Topic : Other Developments -
ESAs publish joint guide on oversight of critical third-party providers under DORA
15 July 2025
The European Supervisory Authorities (European Banking Authority, European Insurance Occupational Pensions Authority, and European Securities and Markets Authority) have published a joint guide detailing their oversight activities under the Digital Operational Resilience Act (DORA). The guide outlines the processes employed by the Joint Examination Teams to supervise critical ICT third-party service providers (CTPPs). Offering a high-level overview of the CTPP Oversight framework, the guide covers (i) governance structures; (ii) oversight processes; (iii) the founding principles; (iv) available supervisory tools; and (iv) the adoption process. While the guide is not legally binding and does not supersede existing EU legal requirements, the ESAs encourage financial entities and third-party providers to use it in preparation for DORA′ oversight implementation. The guide may be subject to future revisions, when necessary.Topic : Operational Resilience -
Mansion House: UK chancellor of the exchequer announces reform of the ring-fencing regime
15 July 2025
The UK chancellor of the exchequer has delivered a speech at Mansion House, London which heralded a large number of UK regulatory reforms with significant impact on the financial services sector. These were announced alongside the publication of the UK's Financial Services Growth and Competitiveness Strategy and the Leeds Reforms. In her speech, the chancellor has confirmed the government's commitment to "meaningful reform" of the UK's ringfencing regime, further reiterated in the Financial Services Growth and Competitiveness Strategy document which stated that HM Treasury's (HMT) report of its review of the ringfencing regime is expected in early 2026. HMT's overview of the call for evidence outcome in relation to the Financial Services Growth and Competitiveness Strategy, also confirms the government's intention to reform the ringfencing regime with a view to supporting growth.Topic : Bank Structural Reform -
Mansion House: Financial Services Growth and Competitiveness Strategy
15 July 2025
The UK government has published its Financial Services Growth and Competitiveness Strategy, a ten-year plan to drive growth and competitiveness in the UK financial services sector. The strategy follows a call for evidence issued in November 2024 and has been published in tandem with the Leeds Reforms and the UK chancellor of the exchequer's speech, delivered at Mansion House on 15 July. The strategy covers five areas of focus: (i) delivering a competitive regulatory environment; (ii) harnessing the UK's global leadership of financial services; (iii) embracing innovation and leveraging the UK's fintech leadership; (iv) building a retail investment culture and delivering prosperity through UK capital markets; and (v) setting the UK′s financial services sector up with the skills and talent it needs. The strategy encompasses a wide range of proposals and initiatives announced on 15 July, with key take-aways for the financial sector covered in our webinar delivered on 16 July.Topic : Other Developments -
Mansion House: HMT consultation on cross-cutting reforms in the UK regulatory environment
15 July 2025
HM Treasury (HMT) has published its consultation paper on cross-cutting reforms in the UK regulatory environment in relation to key performance indicators, principles and strategies to be applied by the UK Financial Conduct Authority (FCA) and the UK Prudential Regulatory Authority (PRA). For application determinations, HMT proposes shortening the statutory timeframes for new firm authorisations and variations of permission from: (i) 6 months to 4 months for complete applications; (ii) from 12 months to 10 months for incomplete applications; and (iii) for SMCR approved persons applications from 3 months to 2 months. The consultation also covers the UK government's intention to consult on a proposal for streamlined authorisation conditions for innovative start-ups (also referred to as giving provisional licences or "L-plates") and to legislate to require the FCA and PRA to set out long-term strategies in line with an amended "have regard" framework in relation to regulatory principles and the relevant remit letter. The deadline for responses is 9 September.
Read more.Topic : Other Developments -
UK FSMA 2000 (Markets in Financial Instruments) (Amendment) Regulations 2025 laid
15 July 2025
The UK FSMA 2000 (Markets in Financial Instruments) Amendment Regulations 2025 have been laid. The regulations extend the UK Financial Conduct Authority's (FCA) powers of direction to a new category of derivative, referred to as "applicable OTC commodity derivatives". This encompasses commodity derivatives traded over-the-counter that would otherwise fall outside scope of the FCA's powers because they were outside the definition of financial instrument, as specified in part 1 of schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. The new term "applicable OTC commodity derivative" will replace the existing term "over the counter contract" in regulation 27 of the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017, which is being removed pursuant to paragraph 47 of schedule 2 to the Financial Services and Markets Act 2023. Accordingly, the amendment will come into force immediately after the 2023 Act changes are in force to ensure the changes are aligned.Topic : MiFID II -
Mansion House: FCA statement on market reforms and what's to come
15 July 2025
The UK Financial Conduct Authority (FCA) has published a statement on its work to date reforming the UK capital markets, and what lies ahead in terms of consultations and developments expected later this year and in 2026. The statement notes the recent work carried out by the FCA in respect of the financial markets, and refers to those market reforms highlighted in the UK chancellor of the exchequer's speech delivered at Mansion House on 15 July, including the landmark reforms to the advice guidance boundary on the new regulated activity of targeted support, proposals to modernise the redress system and consultations on reforming the Senior Managers and Certification Regime.
Read more.Topic : MiFID II -
HMT publishes recommendations for Financial Market Infrastructure Committee
15 July 2025
HM Treasury has published a letter, dated 1 July, from the chancellor of the exchequer to the governor of the Bank of England (BoE) setting out the government's recommendations to the BoE's Financial Market Infrastructure Committee (FMIC). Noting the BoE's primary objective of protecting and enhancing UK financial stability, and as regulator of central counterparties (CCPs) and central securities depositories (CSDs), its secondary objective of facilitating innovation, the chancellor states that the BoE should engage constructively with incumbent and new entrant financial market infrastructures (FMIs) to encourage responsible innovation, provided it aligns with regulatory objectives, and actively facilitate innovation across the BoE's policymaking. The BoE should also ensure that the regulatory burden on firms is rationalised to enable FMIs to offer new products and services without lowering regulatory standards, including as the regulatory framework for FMIs is updated (for example, the latest proposed updates to the CCP regulatory regime ). In addition, the UK must continue to engage effectively in international forums. The FMIC must respond to the recommendations within a year, setting out the actions taken or reasons for not taking certain steps.Topic : Financial Market Infrastructure -
Mansion House: UK Green Taxonomy work will not proceed
15 July 2025
HM Treasury (HMT) has published its response confirming the outcome of its consultation on the potential development of a green taxonomy in the UK. The consultation had sought views on whether such a taxonomy would be an appropriate tool for the UK to facilitate an increase in sustainable investment and mitigate the risk of greenwashing. In the response, HMT confirmed that the decision has been taken not to develop a green taxonomy in the UK, as such a taxonomy would not support the government's vision for the UK sector. Key themes evident in the feedback, which contributed to the conclusion that a taxonomy would not be the most effective tool for realising the UK's green finance ambitions, included: (i) the existence of a number of standards, frameworks and taxonomies that were already available; (ii) the difficulties with fragmentation and reconciling different approaches across jurisdictions; (iii) the complications of adding further data points into existing processes and procedures; and (iv) the limited evidence that a taxonomy would itself meet the objective of channelling capital towards net zero transition. While the work to develop a green taxonomy for the UK will not be proceeding, the response confirms the UK government's commitment to its other work on clean energy and growth, including the Financial Services Growth and Competitiveness Strategy — in respect of which sustainable finance is identified as a priority growth focus area.Topic : Sustainable Finance -
UK Mansion House 2025: UK government supports digitisation of UK shareholding framework
15 July 2025
The Digitisation Taskforce has published its final report, recommending a three-step plan to modernise the UK shareholding framework by eliminating paper share certificates and transitioning to a fully digitised and intermediated system. The UK government published its response the same day, confirming it has accepted all recommendations as part of its broader Wholesale Financial Markets Digital Strategy. The first phase, to be completed by the end of 2027, will legislate to end the issuance of paper shares and require companies to replace paper share registers with digitised versions, with the precise date to be set by a newly established technical group. The second phase will focus on legislative and operational reforms to enhance shareholder rights within the intermediated system. The UK government also intends to amend legislation to allow shares in UK companies to be held on overseas branch registers in uncertificated form by Q2 2027, supporting UK firms listed in Hong Kong. The final phase will see all shares transitioned into the intermediated system, subject to government-set criteria, including protections for vulnerable and older investors. The technical group, led by an industry chair, will oversee implementation and develop a detailed roadmap, including terms of reference and a timeline for reporting back to government.Topic : Securities -
FCA publishes final rules on POATR framework and UK Listing Rules
15 July
The UK Financial Conduct Authority (FCA) has published final policy statement (PS25/9) to implement the new Public Offers and Admissions to Trading Regulations 2024 (POATRs), which will replace the UK Prospectus Regulation. The rules were previously consulted on in July 2024 and January of this year. The new POATR framework, which seeks to lower capital-raising costs and enhance the UK's regulatory competitiveness, includes the PRM sourcebook for admissions to trading on regulated markets and updates to the Market Conduct sourcebook for primary multilateral trading facilities (MTFs). It also makes changes to the UK Listing Rules and other related rulebooks.
Read more.Topic : Securities -
FCA publishes final rules for firms operating public offer platforms
15 July 2025
The UK Financial Conduct Authority (FCA) has published final policy statement PS25/10, setting out the final rules for the new public offer platforms (POP) regime. This follows consultations in July 2024 and January of this year. The POP regime is part of the broader Public Offers and Admissions to Trading Regulations 2024 (POATRs), which will replace the UK Prospectus Regulation. It introduces a new regulated activity, enabling firms to raise over GBP5 million from a wide range of investors outside public markets, without needing to publish a full prospectus.
Read more.Topic : Securities -
Mansion House: HMT policy paper on wholesale financial markets digital strategy
15 July 2025
HM Treasury has published a policy paper on the wholesale financial markets digital strategy. The purpose of the strategy is to ensure the UK benefits from opportunities to improve its wholesale financial markets, by using new technologies effectively. This policy spans trading venues, clearing houses, settlement systems, payment systems and other elements of the UK's financial ecosystem that support the operation of financial markets. The policy is structured as focusing on three areas: (i) market optimisation – which includes removing paper-based and manual processes, and using data effectively; (ii) market transformation – which centres on proactive innovation for new models across the range of market activities and includes taking forwards the issuance of the UK's digital gilt instrument (DIGIT) using distributed ledger technology (please see above for HM Treasury's policy paper for further detail); and (iii) market leadership – where the UK government has committed to working with the sector to develop a cross-cutting approach which will seek to reduce potential fragmentation and regulatory barriers, and to appointing an industry expert "Digital Markets Champion". -
Mansion House: HMT policy paper with update on the digital gilt instrument (DIGIT) pilot
15 July 2025
HM Treasury (HMT) has published a policy paper on its update on the digital gilt instrument (DIGIT) pilot. The paper follows the Preliminary Market Engagement Notice (PMEN), which closed in April and which was the first stage of the procurement process. The pilot, part of the UK's broader strategy to explore distributed ledger technology (DLT) in sovereign debt issuance, seeks to: (i) enable the UK government to explore applications of DLT across the UK sovereign debt issuance lifecycle; and (ii) support the growth of UK-based DLT infrastructure and its adoption in financial markets. To meet these aims, the PMEN outlined an initial set of designs, including that DIGIT will be digitally native, short-dated, issued on a platform within the Digital Securities Sandbox (DSS) and separate from the government's debt issuance programme.
Read more.Topic : FinTech -
Mansion House: HMT consultation on FOS and joint FCA and FOS consultation on modernising the financial redress system
15 July 2025
HM Treasury (HMT) has published a consultation paper setting out proposed reforms to the UK Financial Ombudsman Service (FOS), in tandem with the joint UK Financial Conduct Authority and FOS consultation paper (CP25/22) on modernising the financial redress system (with accompanying press release). The consultations were also announced by the chancellor of the exchequer in her speech delivered at Mansion House on 15 July, where she referred to the delivery of the most significant reform to the FOS since its inception.
The HMT consultation sets out findings of the review of the FOS which was carried out as part of the UK government's Regulation Action Plan, and confirms the UK government's intention to deliver reforms in relation to: (i) the 'fair and reasonable' test to be applied by the FOS in accordance with the FCA's intention for relevant rules; (ii) formalisation of how the FOS and FCA work together to provide regulatory certainty; (iii) clarity on the FOS and FCA roles in the context of wider-implications issues and mass redress events; (iv) flexibility for the FCA in investigation of and response to mass redress events; and (v) an absolute time limit of ten years for bringing complaints to the FOS (with limited flexibility afforded to the FCA where a longer time is justified in exceptional circumstances).
Read more.Topic : Consumer / Retail -
Mansion House: HMT publications on new regulated activity of providing targeted support
15 July 2025
HM Treasury (HMT) has published a draft statutory instrument (SI) and policy note on providing targeted support. The draft SI amends the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 by specifying a new regulated activity of targeted support, which is not investment advice, but which constitutes the provision of a recommendation to an individual on the basis of a group with whom the individual shares similar characteristics and/or similar circumstances. The publications follow the UK Financial Conduct Authority's (FCA) June consultation paper on proposals for targeted support and are part of the joint undertaking between HMT and the FCA on the Advice Guidance Boundary Review—which in turn forms part of the broader UK Financial Services Growth and Competitiveness Strategy aim of unlocking retail investment. The policy note confirms HMT's intention to legislate this year. The deadline for comments is 29 August.Topic : Consumer / Retail -
HMT sets out approach to updating the UK's regulatory framework for CCPs
15 July 2025
HM Treasury has published a policy paper and two related statutory instruments (SI) on its approach to updating the UK's regulatory framework for central counterparties (CCPs). The Financial Services and Markets Act 2023 gave the Bank of England (BoE) powers to make rules for CCPs, envisaging that the CCP requirements in the UK's European Market Infrastructure Regulation (UK EMIR) would be replaced and restated partly in new UK legislation or in the BoE's new CCP rules.
The draft Central Counterparties (Amendment) Regulations 2025 restate certain provisions in the UK European Market Infrastructure Regulation on the authorisation and supervision of CCPs, requirements applicable to CCPs and provisions regarding overseas CCPs, including "location regulations". These changes will be made by amending the Financial Services and Markets Act 2000 and the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges, Clearing Houses and Central Securities Depositories) Regulations 2001 as well as the draft Financial Services (Overseas Recognition Regime Designations) Regulations 2025.
Read more.Topic : Financial Market Infrastructure -
Mansion House: UK government publishes draft Overseas Recognition Regimes Regulations and Guidance
15 July 2025
Alongside its Financial Services Growth and Competitiveness Strategy, the UK government has laid before Parliament, a draft of the Financial Services (Overseas Recognition Regime Designations) Regulations 2025 (the ORR Regulations) alongside an explanatory memorandum, and published Overseas Recognition Regimes Guidance (the ORR Guidance). The ORR is the UK's regime for providing "recognition" of a regulatory regime in an overseas jurisdiction, allowing cross-border financial services into the UK. It is similar to the EU's equivalence and the U.S.'s comparability regimes.
The ORR Regulations, which are intended to take effect on 28 November, bring together in a comprehensive regime the existing ORRs under the Short Selling Regulations 2025 and the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023 and the equivalence decisions that were inherited when the UK left the EU.
Read more.Topic : Regulatory Reform Post Brexit -
Mansion House: FOS to reduce interest rate applied before a decision to base rate plus 1%
15 July 2025
The UK Financial Ombudsman Service (FOS) has published a final policy statement and accompanying press release, confirming that the FOS is changing the interest rate applied to compensation awards to a time-weighted average of the Bank of England base rate plus one percentage point, applied on a simple basis. This change is being made as a result of feedback to the joint FOS and UK Financial Conduct Authority call for input published in June, which conveyed the view that the 8% interest rate does not reflect prevailing market conditions. This change will not impact complainants able to demonstrate actual loss (where the loss is considered in the primary compensation award) nor late payments (i.e. payment made after the deadline date set by the FOS for paying compensation, where the 8% interest rate is being retained in respect of the post-determination period). The FOS is aiming to implement the changes as of 1 January 2026 but will confirm the date in due course. The FOS also confirms that it has taken on board industry feedback on the potential complexity of having dual rates and will be developing and implementing calculators for both the existing and new rates, plus guidance, which will be developed in advance of the implementation date.Topic : Consumer / Retail -
Mansion House: Special Resolution Regime Code of Practice updated
15 July 2025
HM Treasury has published an updated version of the Banking Act 2009 Special Resolution Regime Code of Practice. The code sets out resolution tools and powers available under the Banking Act 2009 for authorities to use in certain circumstances. This latest version has been updated to reflect three developments: (i) the removal of FCA solo-regulated firms from the UK resolution regime; (ii) the introduction of the UK's expanded resolution regime for central counterparties (CCPs), meaning the Code no longer applied to CCPs; and (iii) the Bank Resolution (Recapitalisation) Act 2025, where the code has a new chapter on the recapitalisation payment mechanism.Topic : Recovery and Resolution -
Mansion House: Mortgage-related developments
15 July 2025
HM Treasury has announced the launch of a permanent mortgage guarantee scheme, aimed at supporting first-time buyers and home movers across the UK. The scheme enables access to 91–95% loan-to-value mortgages, allowing buyers to purchase a home with deposits as low as 5%. Effective from July, the scheme provides participating lenders with a government-backed guarantee, insuring them against a portion of potential losses on those qualifying mortgages. The scheme rules, published on the same day, set out the eligibility criteria, lender obligations and terms under which the government guarantee applies. The announcement accords with other significant mortgage market developments as referred to in the chancellor's Mansion House speech, including the Financial Policy Committee's announcement regarding the loan-to-income limit on mortgage lending which the UK regulators are implementing.Topic : Consumer / Retail -
Mansion House: UK SMCR proposals for reform announced
15 July 2025
The HM Treasury (HMT), the UK Financial Conduct Authority (FCA) and the UK Prudential Regulation Authority (PRA) have published consultations on various proposals to reform the UK Senior Managers and Certification Regime (SMCR). The proposals fall into two phases. Phase 1 comprises amendments to the FCA and PRA rules which the regulators can implement without legislative changes, meaning firms can benefit from these changes more quickly. Phase 2 will cover reforms requiring primary legislation to be amended, with a view to giving the regulators more flexibility to develop a proportionate regime.
For phase 1, the regulators have collaborated to produce consistent proposals in relation to areas for improvement arising from the feedback received in response to the regulators' 2023 joint discussion paper. Key proposed rule changes include amendments to the 12-week rule so that it is more practicable, streamlining and reducing duplication in the course of the application process, and increasing the thresholds for categorisation as an enhanced SMCR firm.
Read more.Topic : Conduct and Culture -
Bank Resolution (Recapitalisation) Act implemented
15 July 2025
The Bank Resolution (Recapitalisation) Act 2025 (Commencement) Regulations 2025 have been made, which brings into force certain provisions of the Bank Resolution (Recapitalisation) Act 2025 from 16 July, in parallel with the Prudential Regulation Authority (PRA) confirming concomitant changes to its rules also taking effect on 16 July, in its policy statement. The Act makes provision for recapitalisation costs in relation to the special resolution regime under the Banking Act 2009, and in particular, on how the regime is applied to smaller banks which do not hold a minimum requirement for own funds and eligible liabilities (MREL). It expands the statutory functions of the Financial Services Compensation Scheme (FSCS) so that it is required to provide funds to the Bank of England on request, which can be used to meet certain costs from the use of the resolution regime to manage the failure of a bank, building society or other PRA-authorised investment firm.
Read more.Topic : Recovery and Resolution -
Mansion House: PRA consults on adjustments to its Basel 3.1 market risk framework
15 July 2025
HM Treasury (HMT) and the UK Prudential Regulation Authority (PRA) have published updates with proposed changes to the expected implementation of Basel 3.1. The changes relate to delaying the implementation of the new internal model approach under the Fundamental Review of the Trading Book (FRTB-IMA) by a year, and to the advanced standardised approach (ASA) – specifically, the treatment of collective investment undertakings (CIUs) and the application of the residual risk add-on (RRAO) component.
The PRA consultation on adjustments to the Basel 3.1 market risk framework makes four proposals, accompanied by draft updates to rules and guidance set out in various appendices.- Proposal 1, which proposes to delay FRTB-IMA implementation to 1 January 2028. All other aspects of Basel 3.1 would proceed on 1 January 2027, as would the implementation of the Strong and Simple capital regime. This proposal recognises the challenges and operational complexity faced by firms with varying business models across multiple jurisdictions. In the interim period, firms with existing IMA permissions would retain those permissions, and positions not in scope of those permissions would move to the ASA. Otherwise, positions not in scope of existing IMA permissions would move to the new standardised approaches (whether ASA or simplified standardised approach, in accordance with the near-final market risk rules and related supervisory statement previously published).
Read more.Topic : Prudential Regulation -
Mansion House: Bank of England measures to maintain a fit for purpose resolution regime
15 July 2025
The Bank of England (BoE) has published a suite of publications in its capacity as the UK's resolution authority, covering significant updates in relation to its approach to setting the minimum requirement for own funds and eligible liabilities (MREL) and preferred resolution strategies, and its approach to assessing resolvability under the resolvability assessment framework (RAF).
On MREL and resolution strategies, the BoE has made a substantive update to the MREL framework, publishing a policy statement confirming the changes and an updated Statement of Policy which will be effective from 1 January 2026. As a high-level summary, key areas of change are set out below.
Read more. -
FSB chair letter on global outlook and priorities
14 July 2025
The Financial Stability Board (FSB) has published a letter from Andrew Bailey, Governor of the Bank of England, who was appointed chair of the FSB from 1 July. In the letter, the chair confirms his commitment to the FSB's work in the interest of financial stability and comments that global cooperation is key for ensuring resilience in the global financial system. He also confirms delivery of the FSB's report on non-bank financial intermediation (NBFI) leverage, the FSB workplan on non-bank data, and the updated FSB climate roadmap, as requested by the G20 presidency. In addition, the chair lists three priorities for his term: (i) enhancing surveillance capabilities to ensure surveillance keeps pace with developments in the markets and new technologies, including communicating with stakeholders outside the FSB membership; (ii) focusing on the key areas of NBFI policy implementation, private finance-related vulnerabilities, and the role of stablecoins for payment and settlement; and (iii) strengthening the FSB's effectiveness to prevent regulatory arbitrage and market fragmentation, including by considering areas capable of meaningful improvement as identified by the G20 implementation monitoring review process. The FSB chair is appointed for a term of three years, renewable once. -
FSB update on progress under 2021 roadmap on climate-related risks
14 July 2025
The Financial Stability Board (FSB) has published its 2025 progress report on the implementation of its 2021 Climate Roadmap. The report provides a factual overview of progress made across four key areas: disclosures, data, vulnerability analysis, and regulatory and supervisory practices. Its publication does not imply that all G20 members endorse every aspect of the initiatives described. In addition to reviewing past progress, the report outlines the FSB's medium-term strategy for addressing potential climate-related financial risks, continuing its focus on the same four areas listed below.
Read more.Topic : Sustainable Finance -
Mansion House: FSMA 2023 (Commencement No. 10 and Saving Provisions) Regulations 2025 made
14 July 2025
The Financial Services and Markets Act 2023 (Commencement No. 10 and Saving Provisions) Regulations 2025 have been made. The Regulations serve to implement legislative changes required in relation to the Mansion House reforms announced in relation to the UK overseas recognition regime (UK ORR), the UK Capital Requirements Regulation (UK CRR), and sustainable finance. The regulations will revoke on 28 November legislative provisions relevant to the framework for determining equivalence as on-shored post-Brexit, in alignment with the date on which the Financial Services (Overseas Recognition Regime Designations) Regulations 2025 are expected to come into force – a key step in establishing the UK's regime for providing "recognition" of a regulatory regime in an overseas jurisdiction. On UK CRR, the regulations revoke parts of the UK CRR, in respect of which significant prudential and resolution-related reforms were announced this week, with the relevant provisions coming into force on 1 January 2026. As well as the specific revocations in relation to the UK ORR, the UK CRR and sustainable finance, the regulations include savings provisions to preserve certain directions, decisions, applications and permissions under the current regimes, to ensure they continue to have effect once the revocation provisions have come into force.Topic : Regulatory Reform Post Brexit -
BNPL UK statutory instrument partially in force
14 July 2025
The UK statutory instrument (The Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) Order 2025) implementing the necessary legislative changes for progressing buy-now, pay-later (BNPL) regulation was made, accompanied by an explanatory memorandum. The draft secondary legislation was originally laid in May alongside HM Treasury's (HMT) response to its 2024 consultation. The instrument brings interest-free BNPL agreements within the regulatory perimeter by amending the scope of agreements which are capable of being "exempt agreements" under article 60F of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. In addition, it provides a carve-out from the regulated activity of credit broking for merchants offering BNPL agreements except in the case of domestic premises suppliers.
The instrument came into force on 15 July for certain limited purposes, including to enable the UK Financial Conduct Authority and the UK Financial Ombudsman to make rules and give guidance in relation to the changes. For other purposes, the instrument comes into force on 15 July 2026 which is in line with the expected timetable for BNPL regulation. You may also like to read our client bulletin, Buy-Now, Pay Later – The Journey Continues (and the end is nearly in sight) for further detail on HMT's response to the 2024 consultation on BNPL products. -
Regulation (EU) 2025/1355 on oversight of systemically important payment systems published in OJ
14 July 2025
Regulation (EU) 2025/1355 of the European Central Bank (ECB) adopted on 2 July has been published in the Official Journal of the European Union. This Regulation recasts and replaces Regulation (EU) No 795/2014, updating the oversight framework for systemically important payment systems (SIPS) in the euro area. It strengthens the ECB's supervisory role by aligning it with international standards, particularly the CPMI-IOSCO Principles for Financial Market Infrastructures. The Regulation applies to both large-value and retail payment systems, operated by either central banks or private entities. However, Eurosystem-operated SIPS are exempt from certain requirements (such as those relating to governance, wind-down planning, capital and liquidity buffers, collateral, and investment risks) where equivalent internal ECB rules already apply.
Read more. -
FCA publishes report on open finance sprint
11 July 2025
The UK Financial Conduct Authority (FCA) has published the 2025 outcomes report of the open finance sprint, held in March. The Sprint brought together stakeholders to develop practical data-sharing use cases across four key areas: financial wellbeing, financial growth, financial resilience, and digital identity and verification. The report captures participants outputs and does not represent the FCA's official position. Key themes for a trusted and effective open finance ecosystem included:
Read more.Topic : Other Developments -
ESMA revises cloud outsourcing guidelines to align with DORA
11 July 2025
The European Securities and Markets Authority (ESMA) has published its final report, updating the 2021 guidelines on outsourcing to cloud service providers in line with the Digital Operational Resilience Act (DORA). The 2021 guidelines were designed to assist firms in identifying, managing and monitoring risks associated with cloud outsourcing. However, since the implementation of DORA in January, which covers the same scope including ICT third-party risks, these guidelines are no longer needed for most financial entities. However, DORA does not apply to certain depositories under the Alternative Investment Fund Managers Directive (AIFMD) and the Undertakings for Collective Investment in Transferable Securities Directive (UCITSD). Therefore, ESMA revises the scope of the 2021 guidelines to apply only to these specific depositaries that fall outside DORA's coverage. According to ESMA, the content of the guidelines has not substantively changed. The updated guidelines will now be translated into all official EU languages and published on ESMA's website. National competent authorities must notify ESMA within two months of publication whether they comply or intend to comply with guidelines.Topic : Operational Resilience -
EC adopts Delegated Regulation to postpone ESRS disclosure requirements for wave one companies
11 July 2025
The European Commission has adopted a Delegated Regulation amending Delegated Regulation (EU) 2023/2772, introducing targeted amendments, referred as a "quick fix", to postpone the application of certain disclosure requirements under the European Sustainability Reporting Standards. These changes aim to reduce the reporting burden and enhance legal certainty for companies already subject to sustainability reporting for financial year 2024 ("wave one" companies). The amendments allow these companies to continue omitting certain disclosures, such as anticipated financial effects of sustainability-related risks, among others, 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. These changes are set out in an annex to the Delegated Regulation, which replaces Appendix C of ESRS 1 and provides a revised list of phased-in disclosure requirements. The amendments address the gap left by the "stop-the-clock" Directive, which deferred reporting obligations for wave two and three companies but excluded wave one. A broader ESRS review is underway, targeting simplification and alignment, with completion expected by financial year 2027.Topic : Sustainable Finance -
ESMA publishes final guidelines under MiCAR for CASP staff providing crypto-asset information
11 July 2025
The European Securities and Markets Authority (ESMA) has published its final guidelines under the Markets in Crypto-Assets Regulation (MiCAR) specifying the criteria for assessing the knowledge and competence of staff at crypto-asset service providers (CASPs). Aimed at enhancing investor protection and trust in the crypto-asset sector, the guidelines: (i) outline the minimum professional qualifications and experience required for staff providing information or advice on crypto-assets; (ii) set out the organisational requirements for assessment, maintenance and updating of knowledge and competence; and (iii) address specific risks associated with the crypto-asset market, such as high volatility and cybersecurity, by setting out the assessment criteria for staff knowledge and skills. The guidelines will be translated into all EU languages and will apply six months after publication. Competent authorities must notify ESMA within two months of publication whether they comply or intend to comply with guidelines.Topic : FinTech -
ESMA statement advises CASPs on mitigating investor risks over unregulated products
11 July 2025
The European Securities and Markets Authority (ESMA) has issued a public statement addressed to crypto-asset service providers (CASPs) that offer both regulated and unregulated services under the Markets in Crypto-Assets Regulation (MiCAR). ESMA calls on CASPs to avoid creating investor confusion about the regulatory protections that apply to unregulated products and services. To address this risk, ESMA reminds CASPs of their obligation to act fairly, professionally and in the best interests of their clients, to avoid any conduct that can mislead or confuse them. In the statement, ESMA also cautions against CASPs using their regulated status as a marketing tool to promote unregulated services, as this can further contribute to investor misunderstanding. To mitigate these risks, ESMA encourages CASPs to adopt all necessary measures and provides a practical table of "dos and don'ts". This includes measures such as maintaining clear and effective communication with clients at every stage of the sales process, ensuring marketing materials are fair, clear and not misleading and disclosing the absence of MiCAR protections for unregulated services, among others. -
EBA consults on draft RTS and guidelines for third country branches under CRD IV
10 July 2025
The European Banking Authority (EBA) has published three consultation papers under Directive 2013/36 (CRD IV), as amended by Directive 2024/169 (CRD VI), relating to the regulatory requirements for third country branches (TCBs). In particular relating to cooperation and colleges of supervisors for TCBs, the booking arrangements that TCBs are to apply, and instruments available for TCBs for unrestricted and immediate use to cover risks or losses.
Read more.Topic : Prudential Regulation -
BCBS report on interconnections between banks and NBFIs
10 July 2025
The Basel Committee on Banking Supervision (BCBS) has released a horizon-scanning report examining the interconnections between banks and non-bank financial intermediaries (NBFIs). The report discusses trends shaping bank-NBFI linkages, identifies key activities linking banks and NBFIs, covering leverage, clearing, market-making and underwriting services, and discusses the potential systemic risks arising from these interconnections. Drawing on case studies and stylised scenarios, the report demonstrates how failure in NBFIs could affect the banking system and broader financial stability. The report also identifies data gaps and limitations, emphasising the importance for granular, timely and high-frequency data to effectively monitor these interconnections. The BCBS intends to continue its assessment of these interconnections, with particular attention to synthetic risk transfers, to better understand their associated benefits and potential risks. -
ESMA peer review report issuing CASP oversight recommendations under MiCAR
10 July 2025
The European Securities and Markets Authority (ESMA) has published a peer review report assessing the authorisation and supervision of a crypto-asset service providers (CASPs) under the Markets in Crypto-Assets Regulation (MiCAR). While the peer review was conducted in Malta and sets out specific recommendations addressed to the Malta Financial Services Authority (MFSA), ESMA also makes broader recommendations which apply to all national competent authorities (NCAs).
Read more.Topic : FinTech -
FCA plans to modernise client categorisation rules
10 July 2025
The UK Financial Conduct Authority has announced plans to review its client categorisation rules to unlock more investment opportunities for wealthy investors and support capital markets. The review will focus on maintaining proportionality and supporting economic growth by modernising the client classification regime, providing greater clarity and confidence for firms and forming part of a broader strategy to enhance the competitiveness of the UK's financial services sector. The FCA will consult on the elective professional client categorisation later this year.