The European Banking Authority (EBA) has published a final report amending its guidelines on the application of the definition of default under Article 178 of the Capital Requirements Regulation (CRR), as amended by CRR3. This follows the EBA's July 2025 consultation. The report introduces targeted amendments to better reflect specific aspects of non recourse factoring, increasing the exceptional days past due threshold at invoice level from 30 to 90 days for factoring arrangements to better reflect the economic features of purchased receivables. The amended guidelines also confirm that the existing 1% threshold for the net present value loss in debt restructuring remains appropriate for prudential default recognition. In addition, the guidelines have been updated to align with the amendments introduced by the CRR3. The EBA has decided not to introduce changes to shorten the probation period or to introduce specific treatment for the recognition of moratoria, considering the existing framework already provides sufficient flexibility. The guidelines will now be translated into the official EU languages and published on the EBA website. They will apply from three months after the date of publication. Competent authorities must report on whether they comply with the guidelines within two months after the publication of the translations.

The European Banking Authority (EBA) has published a consultation paper containing draft regulatory technical standards (RTS) amending Commission Delegated Regulation (EU) 2021/598 supplementing the Capital Requirements Regulation (EU) No 575/2013 (CRR) with regard to RTS for assigning risk weights to specialised lending exposures under the supervisory slotting criteria approach (SSCA).

The proposed amendments aim to: (i) align the existing RTS with changes introduced by Regulation (EU) 2024/1623 (CRR3), including updated definitions and terminology; (ii) clarify how environmental, social and governance (ESG) risk factors should be taken into consideration when applying the SSCA; and (iii) simplify and harmonise the application of the assessment criteria by leveraging on the supervisory experience gathered since the publication of the original RTS. This includes several clarifications, in particular in the annexes where several criteria are amended, streamlined or complemented by specifying new sub-factors or sub-factor components. The deadline for comments is 7 August with a public hearing scheduled for 27 May.

The UK Financial Conduct Authority (FCA) has published a revised version of its payment services and electronic money approach document, which sets out the FCA's guidance on the provisions of the Payment Services Regulations 2017 (PSRs) and the Electronic Money Regulations 2011. The changes to the guidance: (i) reflect the new safeguarding rules for payment and electronic money institutions which came into force on 7 May. The FCA published a mark-up showing the proposed related amendments to its approach document in August 2025; and (ii) align the guidance with the new rules on terminating framework contracts, as set out in paragraph 8.98 of the revised approach document. The changes relate, among other things, to the minimum notice period for contract terminations where payment service providers may terminate a framework contract by giving at least 90 days' notice to the customer, subject to exceptions under the PSRs. The FCA has also updated its webpage on safeguarding requirements for payment and electronic money institutions to reflect the changes.

The European Securities and Markets Authority (ESMA) has published a statement setting out the results of its common supervisory action (CSA) with national competent authorities on the integration of sustainability in firms' suitability assessment and product governance processes and procedures under the Markets in Financial Instruments Directive (MiFID II). ESMA announced the launch of the CSA in October 2023, and the exercise took place over the course of 2024 and 2025. The statement summarises the results of the CSA, highlights the key themes that have emerged from the work and provides some high level interim supervisory expectations on a few key areas to foster consistent implementation while reducing burden during the current transition period.

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The European Securities and Markets Authority (ESMA) has published a compliance table under the Markets in Cryptoassets Regulation (MiCAR) setting out member state compliance with its guidelines on when a third-country firm is deemed to solicit clients established or situated in the EU, and the supervision practices to detect and prevent circumvention of the reverse solicitation exemption under MiCAR. This follows an earlier compliance table published on 5 May, setting out member state compliance with ESMA's guidelines on procedures and policies (including client rights) in the context of cryptoasset transfer services under MiCAR on investor protection.

The BIS Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) have published a joint consultation and updated versions of their 2017 central counterparties (CCP) resilience guidance, and their 2015 public quantitative disclosure standards (PQDs) for CCPs. The purpose of the proposed amendments is to incorporate relevant proposals from the January 2025 BCBS-CPMI-IOSCO report on the transparency and responsiveness of initial margin in centrally cleared markets. The proposed amendments address areas such as the use of margin simulation tools, measurement of initial margin responsiveness, governance of margin models, the use of margin model overrides, and enhancements to CCP public disclosures. The consultation clarifies that the proposed amendments are not intended to create additional standards for CCPs beyond those set out in the Principles for Financial Market Infrastructure. The deadline for comments is 30 June.

The UK Financial Conduct Authority (FCA) has published a statement announcing it is launching a review of the claims management market, prompted by concerns that some claims management companies (CMCs) and law firms are delivering poor consumer outcomes. The review will examine the root causes of poor practices across the market, including aggressive marketing, misleading advertising, unfair exit fees, and instances where consumers are being signed up without their consent or by multiple firms, leading to confusion and delaying compensation. While these issues in relation to motor finance claims have been brought into sharper focus, the FCA has also noted concerns about the handling of other claims.

Working with the Solicitors Regulation Authority and other regulatory partners, the FCA will examine: (i) whether consumers receive fair value, and whether existing price caps are still fit for purpose; (ii) financial incentives and whether these create potential conflicts of interest; and (iii) review whether the full end-to-end consumer journey, including lead generation, marketing and advertising, delivers good consumer outcomes. The review will also consider whether different approaches across different regulatory regimes affect firm behaviour and if some firms are failing to secure the appropriate permissions. The FCA expects full and open cooperation from all firms in the review and indicates that it, together with its regulatory and enforcement partners, may take robust action where this is not the case. It will also make recommendations to the government for any potential legislative reform, including whether CMCs and law firms should be subject to stronger compensation mechanisms if they cause harm.

The UK Financial Conduct Authority has announced the creation of a joint regulatory taskforce—with the Solicitors Regulation Authority, Information Commissioner's Office and Advertising Standards Authority—to tackle poor practices in the handling of motor finance claims by certain claims management companies and law firms. The taskforce will coordinate intelligence sharing and take targeted, coordinated actions using the full extent of their powers to mitigate harm to consumers. Regulatory actions will be progressed, with outcomes communicated jointly, signalling a unified regulatory response and clear expectations for market behaviour. The taskforce will focus on addressing misleading advertising and sign-up processes, meritless claims, multiple representation and unfair exit fees. It will also look at firms' financial and operational resilience including, but not limited to, the quality and integrity of accounting and audit practices. The taskforce will run for a minimum of six months followed by a progress review.

The Financial Stability Board (FSB) has published a report on vulnerabilities in private credit. The FSB notes that, while private credit brings benefits such as tailored finance for companies and investor diversification, it also embeds several vulnerabilities. The report focuses on the potential vulnerabilities around bank interlinkages; borrower credit risk and opacity in valuation practices; concentration, leverage and liquidity issues; and data challenges faced by regulators when monitoring exposures. The FSB also highlights that private credit remains untested in a prolonged economic downturn and so warrants close attention.

Looking ahead, the FSB encourages regulatory authorities to: (i) address data challenges, including those related to the lack of granular fund and loan-level data and the absence of harmonised global definitions; (ii) deepen analysis of interlinkages of private credit with private equity and insurers and of liquidity mismatches in private credit funds; and (iii) share supervisory approaches on risk management and governance for banks and non-banks active in private credit, including aggregation of exposures, valuation practices and the use of private ratings.

The European Securities and Markets Authority (ESMA) has launched a consultation on a new approach to updating the parameters for stress test scenarios under the Money Market Funds (MMF) Regulation. Under the MMF Regulation, ESMA is required to develop guidelines establishing common reference parameters of the stress test scenarios to be included in the stress tests that MMFs or managers of MMFs are required to conduct and update these guidelines annually based on the input provided by the European Systemic Risk Board (ESRB).

ESMA proposes to replace the annual update of the parameters included in the guidelines (section 5 of the guidelines that includes the calibrations) with an annual update of a dedicated page on the ESMA website where the parameters would be made available. This approach is intended to streamline the update of the parameters, improve accessibility for MMF managers across the EU, and provide greater flexibility in terms of timing, as the new parameters would be immediately available and applicable without waiting for the translations of the guidelines to be finalised. The guidelines would continue to set out the framework and methodology for MMF stress testing, while the ESMA webpage would exclusively be used to publish the updated annual calibration of the parameters. From a supervisory perspective, the change would allow market participants to use the new set of parameters closer to the publication of the related ESRB scenario and reduce the risk of discrepancies. The change is also intended to reduce burden and simplify the process for ESMA and national competent authorities, in line with ESMA's simplification and burden reduction initiative.

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The UK Parliament has published an updated webpage confirming that the Listed Investment Companies (Classification etc) Bill, a Private Members' Bill introduced in September 2024, will make no further progress as the 2024-2026 session of Parliament has come to an end. The Bill made provision about listed investment companies; the classification and characteristics of those companies; and for connected purposes. It related to collective investment undertakings of the closed-end type, the shares of which are admitted to trading on any market or venue operated by a UK recognised investment exchange, known as Listed Closed-End Investment Companies and did not relate to collective investment undertakings other than the closed-end type.

The European Securities and Markets Authority (ESMA) has published official translations of its final guidelines on internal controls for benchmark administrators (BMAs), credit rating agencies (CRAs) and market transparency infrastructures (MTIs), which include trade repositories, data reporting services providers and securitisation repositories. They repeal and replace ESMA's previous CRA-specific internal control guidance, extend coverage to BMAs and MTIs, and update expectations to address technology-related risks and integration of new technologies. The final report was initially published by ESMA in December 2025. The guidelines will apply from 1 October.

The European Commission has adopted a Delegated Regulation supplementing the European Market Infrastructure Regulation ((EU) No 648/2012) (EMIR), specifying the method for the determination of fees charged by the European Banking Authority (EBA) for the validation of pro forma initial margin models. EMIR, as amended by EMIR 3, requires that counterparties apply for authorisation to their competent authorities before using, or adopting a change to, a model for initial margin calculation used as a risk-mitigation technique for over-the-counter (OTC) derivative contracts not cleared by a central counterparty. The EBA is required to establish a central validation function for the elements and general aspects of pro forma models, and any changes to those. It can also charge an annual fee per pro forma model to counterparties using the pro forma models it validates.

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The Capital Requirements Regulation (Market Risk Transitional Provision) Regulations 2026 (which were made on 29 April) has been published, together with an explanatory memorandum. The Regulations relate to changes to the UK implementation of Basel 3.1. They insert a new Article 465A into the UK Capital Requirements Regulation as a transitional provision relating to the UK Prudential Regulation Authority's (PRA) internal model approach rules. This means that credit institutions and designated investment firms will not be required to apply the PRA's market risk rules on updated internal model requirements during the transitional period between 1 January 2027 and 31 December 2027. The PRA rules will allow institutions to continue to use their existing models during this transitional period until 1 January 2028. The draft version of the Regulations was published in March. The Regulations will come into force on 30 December.

The Eurosystem has published a report setting out targeted proposals to strengthen the macroprudential framework for non-bank financial intermediation (NBFI), aimed at addressing growing systemic risks arising from the sector's expansion and interconnectedness with banks.

The proposals include:

• Implementing internationally agreed reforms to the NBFI regulatory framework in the EU.
• Enhancing the macroprudential toolkit, including through the introduction of an explicit macroprudential tool for ex ante mitigation of the risk of liquidity mismatch in open-ended funds.
• Introducing system-wide stress testing (SWST) in Europe to identify and quantify short-term market and liquidity risks, while considering their interplay with solvency risk. The proposed SWST exercise would target the entities and markets that matter most for EU financial stability, with key markets in scope including: sovereign bond markets; unsecured short-term funding markets; covered and corporate bond markets; interest rate; and foreign exchange derivatives markets and repo markets.

Read more.

The European Securities and Markets Authority (ESMA) has published its final report on the integrated collection of funds' data, as part of its broader simplification and burden reduction agenda for EU reporting frameworks and due to legislative changes introduced by the Directive amending the Alternative Investment Fund Managers Directive (AIFMD) and the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive (AIFMD II). ESMA proposes moving away from fragmented national reporting requirements towards a common EU reporting framework based on a single reporting template, designed to be proportionate to different fund sizes and investment strategies, with the aim of reducing duplication and improving data consistency. This would operate under a hybrid operational model, with data collected at national level but with data validation, storage and analytics being organised at EU level. The EU-level centralised data hub would facilitate data sharing between authorities and limit duplicative data requests.

ESMA will take forward the conclusions of the report in the context of its forthcoming work on the regulatory and implementing technical standards under AIFMD II. It will publish a consultation paper later this year, with the aim of finalising the technical standards by April 2027. After that, the implementation of the new template and the remaining recommendations will be phased in, with the first phase integrating reporting under AIFMD II, and the second phase expanding the integrated framework to other reporting obligations. The go-live of reporting is expected in H1 2029 at the earliest.

The European Parliament's (EP) Committee on Economic and Monetary Affairs (ECON) has published a draft report (dated 28 April) on the European Commission's proposal for a Regulation amending the Sustainable Finance Disclosure Regulation (EU) 2019/2088 (SFDR), Regulation (EU) No 1286/2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) and repealing Commission Delegated Regulation (EU) 2022/1288. The proposal, known as SFDR 2.0, was adopted in November 2025. The report contains a draft EP legislative resolution which sets out amendments to the proposed Regulation. For more background on SFDR 2.0, particularly its impact on funds and asset managers, you may wish to read our article "SFDR 2.0 overhaul: impact of the new categories and disclosures on funds and asset managers".

ESMA has published an interim report on transaction reporting on the call for evidence on a comprehensive approach for the simplification of financial transaction reporting under the Markets in Financial Instruments Regulation (600/2014) (MiFIR), the European Market Infrastructure Regulation ((EU) No 648/2012) (EMIR), the Securities Financing Transactions Regulation ((EU) 2015/2365) (SFTR) and sectoral regulation. The report was published as part of ESMA's broader simplification and burden reduction agenda for EU reporting frameworks. The interim report provides a summary of the feedback to its June 2025 call for evidence.

Most respondents indicated that overlapping and inconsistent reporting requirements, frequent and unsynchronised regulatory changes, fragmented reporting channels and dual reporting are major drivers of cost and complexity. Further to the feedback it received, ESMA has updated the four guiding principles presented in the call for evidence. They now focus on preserving information value, decreasing overlaps, pursuing global alignment and balancing costs and benefits. The feedback has also enabled ESMA to carry out more detailed analysis on two of its proposed simplification options, namely scenario 1a (delineation by type of instrument) and scenario 2a (report once model).

The report does not yet include policy recommendations. Next steps for ESMA include further engagement with market participants, including through an open hearing on 28 May, before publishing final recommendations expected by July.

The Credit Institutions and Investment Firms (Miscellaneous Definitions) (Amendment) Regulations 2026 were published with an explanatory memorandum. This follows HM Treasury's policy response on applying the Financial Services and Markets Act 2000 model of regulation to the UK Capital Requirements Regulation (UK CRR). The Regulations make amendments to support the transition away from retained EU law by ensuring that key prudential definitions continue to be set out in domestic legislation ahead of the revocation of relevant provisions in the UK CRR. The draft version was laid before Parliament in March. The Regulations enter into force on 1 January 2027.

The European Securities and Markets Authority (ESMA) has launched a call for evidence on the structure of European equity markets, presenting an analysis of trends between 2022 and 2025 based on transaction data reported under the Markets in Financial Instruments Regulation (MiFIR). ESMA's analysis suggests that equity markets continue to function well overall, with stable levels of addressable liquidity and on book trading, although it notes a decline in lit continuous trading that has been offset by greater use of other trading mechanisms, including closing auctions, frequent batch auctions and systematic internaliser trading. The analysis also covers how liquidity is allocated across different trading mechanisms on a country by country basis.

ESMA invites stakeholder input on a broad range of topics including: (i) ESMA's understanding of the trading landscape; (ii) identified trends in relation to on- and off-book trading, and addressable and non-addressable liquidity; (iii) price formation; (iv) attractiveness and choice of venues; (v) dedicated questions on dark trading and 24-hour (or extended-hour) trading; (vi) growing use of benchmark transactions; and (vii) member preferencing. The call for evidence also confirms that ESMA has decided to repeal the Q&A which states that periodic auctions are subject to the tick size regime.

The deadline for responses is 30 June, with a feedback statement expected in the second half of the year.

The European Securities and Markets Authority (ESMA) has launched its sixth EU‑wide stress test exercise for central counterparties (CCPs), under the European Market Infrastructure Regulation (EMIR). The stress test aims to assess CCPs' resilience to severe but plausible adverse market scenarios and identify potential vulnerabilities. The exercise, supported by an adverse scenario developed by the European Systemic Risk Board (ESRB), covers 16 CCPs, including all authorised EU CCPs and two UK‑based Tier 2 CCPs, and enhances the analytical framework by introducing improved methodologies and expanded scope. For the first time, it assesses the aggregate impact of CCPs' recovery and resolution arrangements on market participants and EU financial stability. ESMA will launch data collection in early May, with results expected to be published in Q1 2027.

The UK Financial Conduct Authority (FCA) has announced that from 11 May, cryptoasset firms preparing for the new UK cryptoasset regime will be able to request pre‑application meetings through the FCA's pre‑application support service (PASS). The meetings are free of charge and are intended to allow firms to discuss proposed business models and regulatory expectations with the FCA and to raise questions ahead of applying for authorisation or a variation of permission. Meetings will take place from July, before the authorisation gateway opens on 30 September. The new cryptoasset regulatory regime scheduled to commence on 25 October 2027. For further background on the regime, you may wish to watch our webinars which are available here.

The European Securities and Markets Authority (ESMA) has launched a consultation on draft guidelines on endorsement under the Environmental, Social and Governance (ESG) Ratings Regulation (EU) 2024/3005, setting out its proposed approach to the endorsement of non‑EU ESG ratings. The proposed guidelines are intended to complement the statutory endorsement conditions by specifying the information and documentation ESG rating providers are expected to submit when applying to ESMA for endorsement of non‑EU ESG ratings, as well as the ongoing requirements on the processes and controls to be demonstrated on an ongoing basis following authorisation. The deadline for comments is 29 May, after which ESMA will finalise the guidelines and publish a final report. Further information on the outcome of the consultation and the adoption of the guidelines will be communicated before the end of July. The guidelines are expected to apply three months after publication in all EU official languages on ESMA's website, with ESMA taking them into account for supervisory purposes from 2 August.

The Bank of England (BoE) and the UK Prudential Regulation Authority (PRA) have published updated Statements of Policy (SoP) setting out their respective approaches to cost benefit analysis (CBA). The BoE SoP sets out how it conducts CBAs when making rules for financial market infrastructures, in particular central counterparties and central securities depositories. It explains that CBA is integral to the BoE's policymaking and statutory obligations under the Financial Services and Markets Act 2000, with a primary focus on assessing impacts on UK financial stability and economic output, while also having regard to innovation.

The updated PRA SoP14/24 similarly confirms that CBA is an integral part of PRA policymaking for PRA regulated firms and explains how the PRA assesses expected costs and benefits (including impacts on safety and soundness, policyholder protection, competition and UK competitiveness). In parallel, it published a technical note setting out its standard cost model, which provides a structured and proportionate methodology for estimating firms' direct operational compliance costs or savings arising from regulatory changes. The PRA welcomes feedback on the model, as stated in a new webpage, to support its continuous improvement.

The European Banking Authority (EBA) has published a decision confirming it has streamlined its guidelines on connected clients as defined under the Capital Requirements Regulation, by partially deleting certain sections following the entry into force of Commission Delegated Regulation (EU) 2024/1728. This Delegated Regulation introduces binding regulatory technical standards specifying when institutions must identify groups of connected clients, rendering some existing guideline provisions redundant. As a result, the EBA has removed those elements of the guidelines that are no longer necessary. The decision is accompanied by a consolidated version of the guidelines, reflecting the partial deletions and applies to credit institutions across the EU.

The UK Financial Conduct Authority (FCA) has published Market Watch 85, setting out how the information‑sharing provisions in the Economic Crime and Corporate Transparency Act 2023 (ECCTA) can be used by firms to prevent, detect and investigate economic crime, including criminal market abuse. The FCA explains that ECCTA allows in-scope firms to share customer or former customer information with other firms directly where specified "warning" or "request" conditions are met, while providing protection from breaches of confidentiality and civil liability, subject to continued compliance with data protection requirements. The warning condition applies where a firm has taken (or would have taken) safeguarding action, such as terminating or restricting the service provided to a customer, due to suspected criminal market manipulation. The request condition applies where a firm has requested information from another firm, which it reasonably believes holds information that may assist it in taking "relevant action", including preventing, detecting or investigating economic crime.

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The UK Financial Conduct Authority (FCA) has published consultation paper CP26/15, setting out proposals to review and simplify the financial promotions rules in the Consumer Credit sourcebook (CONC). This follows feedback to the 2024 call for input that the regime is overly complex and outdated, particularly in light of the consumer duty. The FCA proposes removing a number of prescriptive rules and guidance that overlap with the duty, while retaining key consumer protections. This includes the ability for consumers to bring private actions for breaches of the financial promotions rules, which is not available for breaches of the consumer duty. The draft rules also include minor amendments to CONC 3.3.1AG to reflect changes introduced by the Digital Markets, Competition and Consumer Act 2024.

Furthermore, CP26/15 includes a discussion paper on cost disclosure, seeking views on the effectiveness of representative annual percentage rate (commonly referred to as APR) disclosures in light of research that indicates a lack of understanding among consumers as to how APR functions as a measure of cost.

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The European Banking Authority (EBA) has updated the list of correlated currencies in accordance with the technical standards mandated by Article 354 of the EU Capital Requirements Regulation (Regulation (EU) No 575/2013) (CRR). Article 354 allows institutions to provide lower own funds requirements against positions in relevant closely correlated currencies.

The EBA updated the list by way of a draft Implementing Regulation amending the relevant technical standards (which are set out in Implementing Regulation (EU) 2015/2197), with an Annex confirming the revised list. The update is intended to ensure that the listed currency correlations continue to reflect actual market conditions and is based on the EBA's latest assessment using data up to 31 March 2025. The amendments do not introduce any methodological or substantive policy changes, but instead apply the existing framework in Implementing Regulation (EU) 2015/2197 to an updated data set. Once adopted, the Amending Implementing Regulation will replace the current Annex to Implementing Regulation (EU) 2015/2197 and will enter into force on the 20th day following publication in the Official Journal of the European Union. The revised list has been submitted to the European Commission for endorsement, as confirmed in the EBA's press release.

The Commission Implementing Regulation (EU) 2026/905 supplementing the EU Benchmark Regulation (EU) 2016/1011 (BMR) was published in the Official Journal of the European Union (OJ). The Implementing Regulation designates a list of spot foreign exchange (FX) benchmarks that meet the criteria in Article 18a of the BMR, with the effect that those benchmarks are excluded from the scope of the BMR. The designated benchmarks are:

• USD/INR (U.S. dollar/–Indian rupee).
• USD/KRW (U.S. dollar/–Korean won).
• USD/TWD (U.S. dollar/–Taiwan dollar).
• USD/PHP (U.S. dollar/–Philippine peso).

A draft version of the Regulation was published in January for consultation following feedback from a May 2025 consultation assessing whether the benchmarks satisfy the Article 18a conditions, including their widespread use for hedging purposes and the absence of equivalent EU‑administered benchmarks. The Regulation enters into force on 17 May, being the 20th day following its publication in the OJ.

The UK Financial Conduct Authority (FCA) has published Primary Market Bulletin 63 (PMB 63) setting out updates relevant to primary market participants following the implementation of the Public Offers and Admissions to Trading Regulations 2024 (POATRs).

The FCA finalises technical note (TN) 717.3 on sponsors' record keeping requirements, following consultation in PMB 61 and without further amendments, and consults on revised guidance in TN 619.2 on working capital statement disclosures. The proposed revisions include new guidelines allowing issuers, in limited circumstances, to rely on uncommitted facilities in their working capital deductions, subject to appropriate disclosure. The deadline for responses to the consultation on TN 619.2 is 15 June. The bulletin also provides a summary of minor amendments to the UK Listing Rules (UKLR) sourcebook and the Prospectus Rules: Admission to Trading on a Regulated Market (PRM) sourcebook made through quarterly consultation papers, and signals future consultations on POATRs-related rule changes in Q4 this year— inviting market participants and advisers to notify the FCA of any "snagging" issues with the UKLR or PRM by the end of August.

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The UK Financial Conduct Authority (FCA) has published consultation paper CP26/14, setting out proposals to amend its rules on information sharing during UK equity initial public offerings (IPOs). The FCA proposes to amend its conduct of business sourcebook (COBS) to: (i) remove the mandatory seven‑day waiting period between the publication of an approved registration document or prospectus and connected research, and; (ii) repeal the related requirements mandating that syndicate banks intending to publish connected IPO research share the same information with a range of unconnected analysts, as they do with their own research analysts. The FCA considers that the current regime, introduced in 2018 to encourage the production of unconnected research and mitigate conflicts of interest, has not achieved its intended effects and has instead lengthened IPO timelines, increased costs and exposed issuers to additional market risk.

The consultation also proposes a technical correction to COBS 12.2.21R. The correction addresses an inconsistency resulting from earlier changes made to the FCA rules when the UK MiFID Organisational Regulation (on-shored Regulation 2017/565) was revoked and its requirements transferred into FCA rules.

Finally, the FCA is seeking feedback on further potential reform, and the consultation paper includes discussion questions on alternative approaches to the timing of publishing an approved prospectus or registration document in conjunction with connected research, and restrictions on pre-mandate analyst/issuer communications.

The deadline for responses is 29 May.

The UK Financial Conduct Authority (FCA) has published a statement confirming that its proposed motor finance redress scheme has been formally challenged, which may delay compensation payments to affected consumers. The FCA expressed disappointment that the challenge could prolong uncertainty for both consumers and the motor finance market. The FCA is considering its response and will provide further details on its approach later this week.

The European Commission (EC) has adopted two Delegated Regulations supplementing the Environmental, Social And Governance (ESG) Ratings Regulation (EU) 2024/3005 on the transparency and integrity of ESG rating activities. The first Delegated Regulation sets out regulatory technical standards (RTS) on the supervisory fees to be charged by the European Securities and Markets Authority (ESMA) to ESG rating providers. The second draft Delegated Regulation establishes the procedural framework for ESMA's imposition of fines and periodic penalty payments on ESG rating providers. Draft versions of the Regulations were published in January for feedback. The Council of the EU and the European Parliament will now scrutinise the Delegated Regulations, and if neither object, they will enter into force on the day following publication in the Official Journal of the European Union, applicable to all member states.

The UK Financial Conduct Authority (FCA) has published a new webpage summarising discussions held with members of its cyber coordination group (CCG) on good and poor practice in cyber resilience. The FCA focuses on three areas: incident response and recovery; implications on emerging technologies (including AI and post‑quantum cryptography (PQC)); and insider risk management. The FCA notes that the insights do not introduce new regulatory expectations but are intended to help firms assess and strengthen their cyber resilience in line with existing expectations and operational resilience requirements.

On incident response and recovery, CCG members highlighted the importance of comprehensive service mapping of key personnel, technology assets and third-party services to strengthen response capabilities, the use of severe but plausible scenarios to test recovery at scale, and early and sustained senior management involvement in testing and response exercises. Many members also reported benefits from subscribing to the National Cyber Security Centre's early warning service. Key challenges include difficulty in mapping in complex organisations and technology environments, limited relationships with the board hindering early senior management involvement, and difficulties engaging with third parties where contractual requirements are limited or there's no shared history of expectations.

Read more.

The UK Financial Conduct Authority (FCA) has published Handbook Notice No. 140, outlining amendments to the FCA Handbook resulting from the following statutory instruments:

• Financial Services Compensation Scheme (FSCS) (Management Expenses Levy Limit 2026/2027) Instrument 2026, entering into force on 1 April. This amends the FEES manual to reflect the approved levy cap for 2026/27.
• Short Selling Rules Sourcebook Instrument 2026, entering into force on 13 July. This introduces a new short selling sourcebook, which replaces the assimilated EU short selling regime and establishes a new UK framework.
• Individual Accountability (SMCR Review) Instrument 2026, with most changes having entered into force on 24 April while certain provisions come into force later in July and September. This implements the Phase 1 reforms of the Senior Managers and Certification Regime, aimed at improving proportionality and efficiency.

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The European Parliament, the Council of the EU and the European Commission have announced the signing of a joint declaration agreeing to a "one Europe, one market roadmap", committing to deliver measures to strengthen and complete the EU Single Market by the end of 2027. The roadmap reflects a coordinated political and operational commitment to boost EU competitiveness amid geopolitical and economic volatility. It includes clear targets for legislative proposals and agreement by the co-legislators (set out in the annex), quarterly progress reviews, defined responsibilities for all EU institutions, and regular stocktaking to oversee implementation of the roadmap.

The annex groups key legislative and policy initiatives, together with indicative timelines, under five strategic building blocks: (i) simplifying rules; (ii) a more integrated Single Market, with the ten most harmful barriers removed; (iii) championing strong trade; (iv) reducing energy prices and decarbonising; and (v) driving digital and AI transformation. The three institutions commit to respecting these timelines and giving these initiatives the highest political priority in a manner that respects the legislative process and prerogatives of each institution.

The UK Prudential Regulation Authority (PRA) has published policy statement LIAF01/26, finalising a series of amendments to its Rulebook and policy materials that it considers low impact. The changes include:

• Finalisation of amendments to the Fees Part of the PRA Rulebook consulted on in the PRA's November 2025 consultation on regulatory fees and levies for 2026/27, which include updating invoice due dates for firms paying GBP50,000 or more in annual PRA and UK Financial Conduct Authority fees (effective 30 April).
• Removal of redundant MiFID Organisational Regulation references from the Skills, Knowledge and Expertise Part of the Rulebook following post‑EU withdrawal reforms (effective 30 April).
• Clarificatory amendments to Statement of Policy (SoP) 2/23 on the Small Domestic Deposit Taker (SDDT) regime, providing guidance for applicants with non‑UK parent undertakings (effective 23 April).

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The European Banking Authority (EBA) has published an opinion responding to the European Commission's (EC) proposed amendments to the EBA's final draft regulatory technical standards (RTS) on operational risk under the Capital Requirements Regulation (CRR) as amended by CRR3. The EBA previously published reports on the final draft RTS and implementing technical standards in June 2025, followed by further final draft RTS on operational risk loss, in August 2025. In March, the EC informed the EBA in a letter of its intention to endorse the draft RTS with amendments, including bundling the RTS into one single Commission Delegated Regulation.

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The Council of the EU has published notes from its General Secretariat to the Permanent Representatives Committee (COREPER), setting out the final compromise text for the proposed revised Payment Services Directive (PSD3) and Payment Services Regulation (PSR), collectively known as "the Payment Services Package". The legislative package aims to modernise the EU's regulatory framework for payment services, building on the foundations of PSD2 to enhance consumer protection, strengthen fraud prevention and improve the functioning of open banking. It also seeks to address the pending challenges in the context of the impact and application of PSD2 in the internal market and adapt it to align with new market developments.

The Council also published an "I" item note from its General Secretariat, suggesting that COREPER approves the text of the draft Directive and draft Regulation with a view to reaching an agreement at second reading with the European Parliament (EP). The Council and the EP agreed their respective negotiating positions on the legislative proposals in June 2025 and April 2024, which we cover in more detail in our blog post titled "European Council and Parliament reach provisional agreement on EU Payments Package". For more background on the proposed package, you may wish to read our article titled "Paving the way for the future of payments - The PSD III package is here: discover its key features".

The UK Prudential Regulation Authority (PRA) has published consultation paper LIAC01/26, proposing a series of low-impact amendments to its Rulebook and policy materials.

The proposals include:

• Amendments to the Groups Part of the PRA Rulebook to clarify the treatment of voting rights in proportional consolidation for CRR firms.
• Consequential changes to various PRA rules following the revocation of certain provisions in the Capital Requirements Regulations 2013 by HM Treasury through the Financial Services and Markets Act 2023 (Commencements No.12 and Saving Provisions) Regulations 2026, applying from 1 January 2027.
• Technical amendments to the UK countercyclical capital buffer technical standard in light of Basel 3.1 implementation, applying from 1 January 2027.
• Changes to Statements of Policy (SoP) on other systemically important institutions (O‑SIIs), including moving the designation exercise from an annual to a biennial assessment. These changes are proposed to apply from 1 November, alongside clarifications on the scope and application of the O‑SII buffer in SoP1/16 and SoP4/16, which are proposed to apply from July.
• Amendments to SoP1/20 to reduce the frequency of publication of Solvency II technical information to once every three years. This would apply in July.

The deadline for comments is 21 May.

HM Treasury (HMT) has published the response to its July 2025 consultation on reforming the Senior Managers and Certification Regime (SMCR). The response concerns Phase 2 of the reforms and confirms the government's planned reforms to the Financial Services and Markets Act 2000, including to:

• Remove the Certification Regime from primary legislation, including the annual recertification requirement, and enable the regulators to consider a more proportionate and flexible framework in their rulebooks.
• Reduce the number of senior management functions that require regulator pre-approval. Regulators will be given a new power to specify circumstances where it would be suitable for a firm to notify the regulators of the appointment of a senior manager following the firm's assessment of fitness and propriety.

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The UK Financial Conduct Authority (FCA) and UK Prudential Regulation Authority (PRA) have published final policy statements (FCA PS26/6 and PRA PS12/26) on Phase 1 reforms to the Senior Managers and Certification Regime (SMCR). The reforms largely implement proposals as consulted on in July 2025. For more detail on the reforms, you may wish to read our blog post titled UK Senior Managers and Certification Regime overhaul: understanding proposals for reform.

The FCA's reforms focus on streamlining administrative requirements and include greater flexibility around the 12‑week rule (allowing firms 12 weeks to submit, rather than obtain approval for, Senior Management Function (SMF) applications), extended validity periods for criminal record checks, simplified requirements for statements of responsibilities and management responsibilities maps (with firms given up to six months to notify changes), removal of overlapping multiple certifications within the Certification Regime, updated guidance on Fit and Proper recertification, extended deadlines for updating the Directory (from seven to 20 business days), and raising certain enhanced firm thresholds by 30%.

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HM Treasury has announced a package of reforms aimed at modernising the UK payments regulatory framework to support innovation while maintaining consumer protection. The government confirms that it will shortly consult on reforms which include:

• Integrating the regulation of payment services and electronic money into the UK's core financial services framework, creating a single regime covering both traditional and tokenised payments (including stablecoins and tokenised deposits).
• Regulating stablecoins used for payments under a new UK regulated activity, alongside legislation to reduce administrative burdens for stablecoin payment providers.
• Adapting payments regulation to address payments conducted by AI agents.
• Granting the FCA new powers to oversee the future development of open banking and commercial open banking payment schemes.
• Streamlining regulation by setting out the government's response to consolidating the UK Payments Systems Regulator within the UK Financial Conduct Authority.
• Appointing a Wholesale Digital Markets Champion to support the development of tokenised wholesale markets as part of the government's wholesale financial markets digital strategy.

HM Treasury (HMT) has published its response to its September 2025 consultation, confirming its intention to proceed with abolishing the UK Payment Systems Regulator (PSR) and consolidating its functions within the UK Financial Conduct Authority (FCA), subject to primary legislation. While responses were broadly supportive of integration within the FCA's existing FSMA framework, the government is still considering different legislative design options and will reflect further on feedback before finalising the model.

Key points from the response include:

• The PSR's functions under assimilated payment services legislation will transfer to the FCA, including functions under the Payment Services Regulations 2017, the Payment Card Interchange Fee Regulations 2015 and the Payment Accounts Regulations 2015 (including oversight of the Current Account Switching Service), alongside retention of a designation regime for bringing payment systems into and out of scope of regulation.
• Transitional legislation will preserve existing PSR requirements, technical standards and guidance (including those relating to the authorised push payment scam reimbursement regime), with the FCA determining its regulatory approach under the new framework. These transferred functions may be reviewed as part of HMT's wider programme to modernise and future proof payment services and e money law, which it will set out in detail in due course.

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HM Treasury (HMT) has published the draft Financial Services and Markets Act 2000 (Cryptoassets) (Amendment) Regulations 2026 and a policy note proposing targeted changes to the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026. The draft statutory instrument (SI) seeks to address unintended consequences of the cryptoasset regime and support the interim use of UK‑issued qualifying stablecoins (UKQS) for payments ahead of wider payments services reforms announced in a related press release. The reforms are expected to bring UKQS payment services into the regulated payments perimeter.

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The UK Financial Conduct Authority (FCA) has published a speech by Jessica Rusu, chief data, information and intelligence officer, setting out how the FCA intends to support fintech firms in the next phase of innovation amid rapid advances in AI and the emergence of "agentic commerce".

The FCA highlighted its principles-led, outcomes focused approach to AI regulation and announced the next phase of its AI Lab, including: (i) an extended partnership with NVIDIA and NayaOne; (ii) a second cohort of firms entering AI Live Testing, which will conclude by the end of the year, with an evaluation report expected in Q1 2027; (iii) the scaling of the Supercharged Sandbox, giving more UK fintechs access to data and Nvidia compute to build their products, with a second intake opening on 5 May; and (iv) confirmation that the FCA will not introduce new AI specific rules at this stage, but will instead publish examples of good and poor practice later in the year. In parallel, the FCA emphasised the role of its recently published open finance roadmap and announced that its Scale Up Unit is now open for expressions of interest from solo regulated firms to support them in scaling and entering new markets.

The UK Financial Conduct Authority (FCA) has published a new webpage setting out good and poor practice identified from a review on managing potential risks arising from inactive appointed representatives (ARs). The FCA states that where ARs carry out no regulated activities, principals cannot rely on transaction based oversight and must ensure effective governance, monitoring and engagement. Unexplained inactivity may indicate weaknesses in the principal's governance, monitoring, oversight and risk management and increase the risk of consumer harm. The FCA expects firms to: reflect on whether arrangements for inactive ARs remain appropriate; provide clear explanations in REP025 regulatory returns where ARs have not carried out regulated activities during the specific reporting period; and take timely action to reassess, suspend or terminate AR relationships where appropriate, including notifying the FCA when the status of the relationship changes.

Good practice included clear expectations set at onboarding, active and data led oversight, and early intervention on inactive ARs. Poor practice included situations where principals lacked understanding of AR business models, allowed prolonged inactivity without engagement, or failed to monitor how ARs presented themselves to consumers, increasing the risk of consumers being misled about regulatory status. The FCA notes that some firms have already strengthened oversight and offboarded inactive ARs following supervisory engagement and it expects all principals to review their arrangements to ensure risks are appropriately managed.

The European Commission has adopted two Delegated Regulations supplementing the Environmental, Social And Governance (ESG) Ratings Regulation (EU) 2024/3005 on the transparency and integrity of ESG rating activities. Both Regulations are based on the final draft RTS published by the European Securities and Markets Authority in October 2025. They will enter into force on the 20th day following publication in the Official Journal of the European Union and will apply from 2 July.

The first Delegated Regulation sets out regulatory technical standards (RTS) on the separation of ESG rating activities from other business activities carried on by ESG rating providers. It specifies the measures and safeguards applicable where a derogation from the separation requirement is relied upon, to prevent conflicts of interest. In particular, providers must establish separate organisational structures and working environments for staff involved in the rating process from any activities listed in Article 16(1) of the ESG Ratings Regulation. Staff will also require regular self declarations confirming non involvement in those activities. Additional technical and internal control measures apply where providers intend to carry on investment services and/or insurance or reinsurance activities, with further safeguards for those that provide, or intend to provide, benchmarks.

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The European Commission has launched a consultation on a draft delegated act proposing targeted amendments to the EU prudential framework for banks' market risk, specifically the Fundamental Review of the Trading Book (FRTB) under the Capital Requirements Regulation (CRR). While most Basel III reforms have applied since 1 January 2025, the FRTB has been deferred on several occasions, most recently to 1 January 2027 in response to uncertainty around implementation timelines and potential deviations from the Basel standards in other major jurisdictions. The draft delegated act sets out amendments, intended to apply from 1 January 2027, to support a level playing field for EU banks competing internationally in trading activities by offsetting the negative capital impact of the FRTB for a period of three years. The proposals reflect feedback from a November 2025 consultation and input from member state experts. Formal adoption of the delegated act is expected on 19 May, to provide banks and supervisors with greater certainty ahead of implementation.

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The UK Financial Conduct Authority (FCA) has published its innovation insights 2025 report, setting out key trends in UK fintech innovation, evolving regulatory risks and lessons from firms' engagement with the FCA's innovation services. By sharing insights, the FCA aims to support earlier and clearer regulatory engagement and strengthen evidence-led policy and supervision.

The report notes that while global fintech investment exceeded USD130 billion in 2025, funding has become more selective, concentrating on fewer, more mature firms, with the UK ranking second globally for disclosed investment. It highlights a shift in the key challenge faced by firms, from product development to understanding how regulation applies to them, with demand for FCA support increasing significantly. This includes a 49% rise in applications to the Regulatory Sandbox and Innovation Pathways in 2025, particularly in relation to AI, distributed ledger technology, and open banking and open finance. In the report, the FCA also summarises steps taken in 2025 to expand its innovation services. Looking ahead, the FCA signals a focus in 2026 on clearer guidance, more structured testing pathways, broader engagement with incumbent firms, and supporting UK competitiveness and international growth.