The European Banking Authority (EBA) has launched a consultation on the methodology, templates and template guidance for the 2027 EU wide stress test, assessing the resilience of EU banks and the wider banking system. The exercise introduces significant simplifications to improve efficiency and risk sensitivity, while preserving the robustness and comparability of results. Key changes include a substantial reduction in data requirements and closer alignment of information with harmonised supervisory reporting. For the first time, the exercise will also integrate both transition and physical climate risk assessments. The consultation has been launched earlier than in previous cycles to support banks’ preparedness and the EBA also plans to hold a series of workshops for further guidance. The results of the stress test will continue to inform the Supervisory Review and Evaluation Process.

Companies House has published its third progress report on the implementation of reforms under Parts 1 to 3 of the Economic Crime and Corporate Transparency Act 2023. The report highlights progress in strengthening the integrity of the UK companies register and tackling economic crime, supported by increased data-sharing with HM Revenue & Customs and the Insolvency Service. This includes contributions to a National Crime Agency-led operation targeting high-street criminality and money laundering.

The report also reflects progress in introducing mandatory identity verification (IDV) for directors and people with significant control, aimed at strengthening transparency and deterring those who use UK corporate structures to facilitate crime. Looking ahead, further measures are planned, including further IDV roll-out, enhanced transparency of the Register of Overseas Entities and a more intelligence-led enforcement approach. Annual progress reports will continue until 2030.

The UK Financial Conduct Authority (FCA) has published a document to help firms understand and prepare for the motor finance redress scheme. The document reflects common queries received by the FCA and is intended to address issues of wider relevance. It should be read in the context of the ongoing legal challenge to the scheme. The FCA notes that it may update the document or take further action in relation to the scheme's rules or guidance as that challenge progresses, and firms should monitor FCA announcements closely.

The UK Financial Conduct Authority (FCA) has published a letter (dated 1 June) to the House of Lords Financial Services Regulation Committee. The letter sets out the FCA's findings from its "lessons learned" exercise of its consultation on publicising enforcement investigations. The FCA acknowledges that its original proposals were poorly communicated and came as a surprise to industry due to insufficient early engagement and supporting data. The FCA confirmed it has since reinforced its commitment to more predictable and transparent consultation practices. The letter also summarises the operation of the updated enforcement guide introduced in June 2025, following final rules in PS25/5.

The UK Financial Conduct Authority (FCA) has published its first external publication of the emerging technology horizon scan 2026. It is intended to inform debate and support industry collaboration, rather than to provide formal regulatory guidance or predictions.

The report identifies key trends:

• Technological convergence is accelerating, changing the way financial systems operate and serve consumers, creating new opportunities and risks.
• Personalised intelligence could help consumers navigate their lives. Where AI becomes the primary interface between consumers and firms, this could improve financial decision-making and access to tailored products. However, it also highlights issues around autonomy, digital exclusion and customer protection.
• Synthetic crime is rapidly evolving and will impact how the FCA tackles financial crime. Synthetic media is also making it increasingly difficult to distinguish between real and manipulated content. This may erode trust and expose consumers and firms to new forms of fraud and deception.
• Programmable finance could support growth. Distributed ledger technology, tokenisation, central bank digital currencies, stablecoins and smart contracts are becoming mainstream, and these developments can increase speed and efficiency.

The Financial Stability Board (FSB) has published a consultation report on sound practices for responsible adoption of AI. The report sets out 12 sound practices aimed at supporting financial institutions in managing AI-related risks while enabling innovation. The proposed practices are structured around three core areas: (i) organisation-wide AI governance (practices 1–4); (ii) risk management and mitigation across the lifecycle of AI development and deployment (practices 5–10); and (iii) management of AI-related cyber, information and communication technology, and third-party risks (practices 11–12).

The practices are intended to complement existing international standards and promote cross-border coordination and information-sharing, rather than impose prescriptive requirements or create new regulatory obligations. Financial institutions' boards and senior management are encouraged to consider these practices when shaping strategy, technology adoption and risk management. The deadline for feedback is 22 July, with a final report expected in October.

The Money Laundering and Terrorist Financing (Amendment) Regulations 2026 have been made and laid before Parliament, alongside an explanatory memorandum. The Regulations make amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) to implement the government's consultation response to its 2024 consultation on improving the effectiveness of the MLRs. The amendments aim to strengthen the UK's anti-money laundering and counter-terrorist financing regime and ensure continued compliance with Financial Action Task Force standards.

Key changes include:

• Refining due diligence requirements so that enhanced measures focus on higher risk transactions and jurisdictions.
• Converting thresholds from EUR to GBP.
• New provisions governing pooled client accounts.
• Bringing the service of selling an off-the-shelf firm within scope of trust or company service provider services.
• Strengthening the regime for cryptoasset businesses.
• Changes to the scope of trust registration requirements.
• Improving information-sharing between supervisory authorities and other regulatory bodies.

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The UK Financial Conduct Authority (FCA) has published consultation paper CP26/18 as part of its mortgage rule review, proposing targeted reforms to improve access to mortgage lending for first-time buyers and underserved consumers. The proposals follow the June 2025 discussion paper on the future of the mortgage market and the FCA's feedback statement.

The proposals seek to:

• Widen access to interest-only and part interest-only lending.
• Make it easier to raise mortgage finance in later life.
• Lower barriers for firms that want to lend to consumers with irregular income.
• Encourage lenders to take a more individualised approach when assessing the creditworthiness of customers with impairment in their credit history, rather than declining them based on a definition designed for debt consolidation and reporting purposes.
• Lower barriers for firms that want to lend in a foreign currency or to consumers with a foreign income.
• Increase flexibility for borrowers who want bridging finance, which can help break a lengthy sales chain or fund a renovation.
• Increase the scope for firms to offer mortgages with different features and therefore, different risks.

The FCA's proposals take into account the potential for adverse outcomes for some consumers, and also consider the risk that consumers may need to rent for longer if they cannot purchase a home. The deadline for comments is 28 July. Feedback will be considered and a final policy statement is expected in the second half of the year.

The UK Financial Conduct Authority (FCA) has published a response letter (dated 8 June) to a letter from the House of Commons Treasury Committee sent in May, setting out the status of the motor finance redress scheme and the implications of ongoing legal challenges.

The FCA's view is that the scheme remains the quickest and most effective way to deliver redress to affected agreements but confirms that challenges brought by certain lenders and a claims entity will delay implementation. The FCA emphasises that firms must continue preparing operationally and financially, including identifying in-scope agreements and holding adequate capital, while warning of supervisory and enforcement action where preparedness is insufficient. The letter highlights significant concerns about misconduct in the claims management sector, including misleading marketing, multiple representation and potential fraud risks exacerbated by delays, and notes ongoing regulatory intervention and cross-authority cooperation to address these issues. The FCA also welcomes ideas from firms and consumer organisations on how, despite the legal challenges, firms who want to can start paying fair redress now.

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HM Treasury (HMT) has published a speech delivered by chancellor Rachel Reeves at the AI Adoption Summit. The speech sets out how the government is implementing its strategy to accelerate AI adoption and outlines next steps. In particular, the chancellor confirmed the upcoming publication of a financial services AI adoption plan on 14 July, when she delivers her Mansion House speech.

During the speech, the chancellor confirmed the launch of the Advisory AI Growth Lab, a forum which will bring together regulators to provide practical guidance on how current rules apply to emerging AI applications, with an initial focus on legal services. She also announced the introduction of the AI Economics Institute, a research organisation of HM Treasury and the Department for Science, Innovation and Technology. Later this month, the National Cyber Action Plan is due to be published. The chancellor further confirmed that legislation would be brought forward in the autumn to better provide for and enable the safe testing of innovative products and services.

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The European Parliament has announced that it has reached a provisional agreement with the Council of the EU on a package of measures to simplify regulatory requirements for a new category of undertakings named small "mid-cap" companies (SMCs). The undertakings fall between small and medium-sized enterprises (SMEs) and large companies, and the measures form part of the European Commission's Omnibus IV legislative proposal, adopted in May 2025. The agreement is intended to support scaling businesses and avoid "cliff-edge" increases in regulatory obligations when firms outgrow SME status, by extending to SMCs a range of exemptions and lighter requirements currently available to SMEs.

The press release states that SMCs are broadly defined in principle as companies with fewer than 1,000 employees and either up to EUR200 million in turnover or EUR172m in total assets. The simplified regime will apply across several EU frameworks, including the General Data Protection Regulation, where lighter record-keeping obligations will apply for low-risk processing data and capital markets rules (including the Markets in Financial Instruments Directive II and the Prospectus Regulation), enabling easier access to SME growth markets and simplified disclosure requirements. Additional simplifications are introduced in other areas. The measures remain subject to formal adoption by both institutions before publication in the Official Journal of the European Union and entry into force. Member states will have 15 months to introduce the Directive into their national legislation.

The European Banking Authority (EBA) has published a discussion paper on extending its Pillar 3 data hub to small and non-complex institutions (SNCIs). The hub provides public access to prudential information from all European Economic Area credit institutions in a single location. It was launched in January for large and other institutions and the EBA is now progressing its extension to SNCIs. For these institutions, the EBA is mandated to prepare and publish the Pillar 3 disclosures based on supervisory reporting data submitted to competent authorities. The discussion paper proposes a simplified process detailing the methodology for calculating Pillar 3 disclosures. It also outlines the next steps and the expected timeline for the first publication. The deadline for feedback is 20 July and a public hearing is scheduled for 1 July. Responses will inform the finalisation of the SNCI process and the calculation methodology.

The UK Financial Conduct Authority (FCA) has published a statement with an update on reforming the UK Money Market Fund Regulation (MMFR), following the government's announcement to repeal and replace the existing regime. Following its 2023 consultation and further market engagement, the FCA confirms that requirements will largely move into FCA rules and guidance, while also introducing a new resilience requirement requiring all MMFs to hold sufficient liquidity to withstand market stress.

The FCA will retain current minimum weekly liquid asset (WLA) requirements. However, it expects stable net asset value (NAV) MMFs to hold at least 40% WLA and variable NAV MMFs at least 20% to meet the new resilience requirement. Being lower than these levels temporarily should only occur to meet redemptions or in exceptional circumstances for reasons beyond the manager's control. Daily liquid asset requirements will remain unchanged, and no additional guidance is proposed. The FCA also intends to proceed with other reforms consulted on, including removing links between liquidity thresholds ("delinking") and introducing enhanced "know your customer" requirements to strengthen investor protection.

The government expects legislation to repeal the MMFR to be introduced by the end of the year, with the FCA aiming to align its new rules to this timetable. Interim final guidance on WLA levels will be published, and a policy statement with further detail will follow.

The UK Financial Ombudsman Service (FOS) has published its response to the UK Financial Conduct Authority's (FCA) consultation on simplifying pensions and investment advice rules. The FOS broadly supports the proposed shift from prescriptive requirements to greater reliance on a more principles-based framework and does not expect this shift to undermine its ability to determine complaints. However, it notes that greater reliance on high-level principles may increase the scope for differing views on how these principles should be applied, making clear regulatory guidance increasingly important. The FOS is also concerned that limited firm engagement on price and value assessments under the consumer duty could make complaint resolution more contentious, and it calls for further FCA guidance, including case studies and examples of good and poor practice.

The FOS further acknowledges that complaints may become more nuanced and consistency will be harder to demonstrate. However, it seeks to address this through close collaboration with the FCA and clear FCA guidance. Overall, it does not expect the reforms to have a material impact on its complaint-handling role or outcomes. The FOS will continue to monitor complaints in this area and share insights with the FCA.

HM Treasury has published a call for evidence for the independent review into access to banking services, assessing the impact of the decline in face-to-face services across the UK. The review will consider: (i) which services are important or essential for customers to be able to access; (ii) which groups of customers may need access to in-person banking services; and (iii) whether the decline in access is causing detriment to customers, and the materiality of the detriment caused. It will focus on those who require access (such as vulnerable customers), rather than those who simply desire or prefer in-person banking services. It will also consider the needs of both individual retail customers and organisations, including small businesses, non-profit and community groups.

The review is limited to banking services that currently lack statutory protections and excludes cash withdrawal and deposit services, which are already covered by legislation. The deadline for comments is 20 July and the evidence gathered will help inform the chair's recommendations to government.

The UK Financial Conduct Authority has entered into a Memorandum of Understanding with the UK Office of Financial Sanctions Implementation. The MoU replaces an earlier MoU dated 21 November 2023 and sets out cooperation arrangements and exchange of information between the two regulators. The regulators commit to reviewing the effectiveness and efficiency of the MoU every two years.

The UK Financial Conduct Authority (FCA) has published quarterly consultation paper No. 52, inviting feedback on proposed amendments to its Handbook.

Proposed changes include:

• Simplifying product-level climate and sustainability disclosure requirements for asset managers, life insurers and pension providers, while maintaining the original policy intent under PS21/24.
• Aligning FCA fees to set regulated income as the tariff base for cryptoasset firms and inserting new fee categories to account for new regulated crypto activities.
• Consequential amendments to reflect the revocation of UK Capital Requirements Regulation provisions.
• Allowing certain authorised funds to hold cryptoasset exchange traded notes subject to a limit of 10% of scheme property.
• Deleting the requirement for approvers of qualifying cryptoasset financial promotions to submit notifications following certain approvals.
• Updating section M of the Retail Mediation Activities Return (RMA-M) and related guidance.

The deadline for comments is 13 July.

The European Commission (EC) has adopted a Delegated Regulation 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 Delegated Regulation sets out amendments 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. It reflects feedback from the November 2025 consultation and the most recent April consultation, as well as input from member state experts. The Delegated Regulation will now be reviewed by the European Parliament and the Council of the EU, with a three-month scrutiny period (extendable by a further three months). If no objection is raised, the measures will enter into application on 1 January 2027, for a period of three years. The EC has published Q&As alongside the adopted Delegated Regulation.

The Cross Market Operational Resilience Group (CMORG) has published guidance on frontier AI and cyber resilience for financial institutions. The guidance highlights that advanced AI systems are accelerating the speed, scale and sophistication of cyber-attacks, significantly compressing the time between vulnerability discovery and exploitation. This creates an immediate challenge for firms to adapt now to maintain resilience.

CMORG indicates that remediation timelines may need to compress from weeks to days, and in some cases hours, requiring firms to operate with greater urgency, coordination and discipline. Financial institutions are advised to place stronger emphasis on rapid patch deployment, balanced against potential impacts such as service availability. An effective response will also require coordinated action across governance and leadership, operating models, technology architecture, detection and response capabilities, and the management of supply chain and ecosystem risk.

Given the pace of development in frontier AI, this guidance is expected to evolve over time. It is intended to provide a practical and actionable baseline for firms to assess their current capabilities and accelerate their response.

The Financial Services and Markets Act 2023 (FSMA 2023) (Commencement No. 14) Regulations 2026 have been made and published. The Regulations use powers under FSMA 2023 to revoke assimilated law relating to short selling in anticipation of the new UK regime coming into force on 13 July under the Short Selling Regulations 2025 and the FCA rules published in April.

The Regulations will revoke on 13 July:

• Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps ("the Short Selling Regulation").
• The Financial Services and Markets Act 2000 (Short Selling) Regulations 2012.
• Instruments made under the Short Selling Regulation, as assimilated into UK law.
• The Short Selling (Notification Thresholds) Regulations 2021.
• The Short Selling (Notification Threshold) Regulations 2023.

Commission Delegated Regulation (EU) 2026/440 amending Delegated Regulation (EU) 2015/63 on ex ante contributions to resolution financing arrangements, was published in the Official Journal of the European Union (OJ). It amends the framework to align with recent changes to the Bank Recovery and Resolution Directive (BRRD), the Investment Firms Regulation (IFR) and the Investment Firms Directive (IFD) and to reduce administrative burden and improve proportionality The amendments include:

• Updates to the definition of "investment firms" and "competent authority".
• A simplified contribution methodology for certain Class 2 investment firms (with an option to apply risk‑adjusted calculations where this results in a lower contribution).
• Removal of the risk indicator based on own funds and eligible liabilities held in excess of the minimum requirement for own funds and eligible liabilities (MREL).
• Removal of the denominator from the interbank loans and deposits indicator.
• A limitation period for requesting restatements and revisions of data submitted to resolution authorities.

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The EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) has launched a consultation on draft guidelines on ongoing monitoring of business relationships under Article 26(5) of Regulation 2024/1624. The guidelines aim to ensure a proportionate, risk based and effective application of monitoring obligations across all obliged entities and set out key principles including:

• Expectations for updating customer information through periodic and event driven reviews.
• The sources of information that may be used alongside non exhaustive lists of factors to assess during periodic customer information reviews and event trigger reviews.
• How monitoring frameworks should be designed and implemented to detect unusual or suspicious activity, using appropriate manual or automated controls.

They further reflect the need for clear governance, adequate documentation, appropriate staff training, and the responsible use of advanced analytical tools, supported by effective human oversight, where appropriate. The deadline for comments is 3 September, with a public hearing scheduled for 2 July. Final guidelines are expected in Q4.

The European Supervisory Authorities (the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority) have published their first annual report on major ICT-related incidents under the Digital Operational Resilience Act (DORA). The report covers 2025 and records 3,383 major incidents across all financial sectors. The ESAs emphasise that this figure does not indicate structural weakness as the direct impact on clients and transactions was generally limited.

The report also highlights that ICT risks are increasingly borderless, with around one third of incidents having a cross-border impact. System failures and external events were the main drivers. Nearly one third of incidents originated from third-party failures, with the ESAs highlighting the critical role of outsourced services and the need for robust third-party risk management and oversight. By contrast, the relatively low number of cybersecurity-related incidents suggested that existing safeguards and detection mechanisms were broadly effective. While the sector has demonstrated resilience to ICT-related threats, the ESAs stress that firms must maintain high cybersecurity standards, particularly to keep pace with the potential use of highly capable AI-driven tools.

The House of Lords (Financial Services Regulation) Committee has published a report following its inquiry into the growth and proposed regulation of stablecoins in the UK. Among other things, the report examines the Bank of England (BoE) and UK Financial Conduct Authority's (FCA) proposed regulatory regimes for systemic and non systemic stablecoins and assesses whether they are measured and proportionate. The Committee finds that the UK is lagging behind the U.S. and EU in developing its regulatory framework and urges regulators to adhere to existing timelines to avoid delay.

While broadly supportive of the proposals, the report highlights aspects which require re-consideration. It notes there are several elements which diverge from international approaches, particularly proposals relating to unremunerated backing assets requirements, the stablecoin holding limits and the restrictions on commercial bank issuance. The report calls for: further BoE analysis on the impact of holding limits on high-value cases; greater clarity from HM Treasury (HMT) on how it will determine whether stablecoins are systemic; and re-consideration by the FCA of the proposed k-factor requirement for stablecoin issuers. It also notes HMT's intention to bring stablecoins into the payments regulatory perimeter but highlights the lack of detail on scope.

The Committee further calls on HMT and the UK regulators to assess whether existing legal frameworks adequately address risks from unhosted and unregulated wallets, and to be prepared to legislate where necessary. It urges the government and UK regulators to consider its recommendations on how the proposed regulations may need to be re-adjusted to bring certainty and confidence.

The European Securities and Markets Authority (ESMA) has published a letter addressed to the European Commission (EC) de-prioritising certain 2026 deliverables under its annual work programme. Due to the increased workload arising from the market integration and supervision package (MISP) proposal and the broader political focus towards simplification and burden reduction, ESMA confirms that a small number of planned policy deliverables (set out in Table A of Annex I in the work programme) may become obsolete or altered depending on the final outcome of the legislative negotiations of the MISP package. To avoid duplication or inconsistency, ESMA has also decided to postpone related consultations until after the package is adopted. For more information on MISP and its potential implications for market participants, you may wish to watch our webinar.

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UK Payments Initiative Ltd (UKPI) has announced the launch of a new industry-led payment scheme designed to support scalable account‑to‑account payments using open banking. The scheme supports the ambitions set out in the UK government's National Payments Vision. It introduces a framework for variable recurring payments, enabling consumers to authorise recurring or flexible payments directly from their bank accounts without sharing card details or relying on traditional direct debit, within their own agreed limits. This gives consumers greater control over who can collect money, how much can be taken and how long that permission lasts.

The UKPI scheme establishes a common rulebook, commercial model and operational standards, developed collaboratively by UK banks and fintech firms. Initially, the payments will be available for use cases such as payments to government, utilities, charities and financial services. The framework incorporates consumer protection measures, including safeguards and dispute processes to support trust across participants. The rulebook has been finalised and the scheme is now moving into market rollout following successful live proving. The UK Financial Conduct Authority published a statement on the same day signalling its support for the UKPI's launch.

The Basel Committee on Banking Supervision (BCBS) has published a report outlining observed practices in banks' information and communication technology (ICT) risk. The report aims to compare regulatory, supervisory and industry practices across jurisdictions relevant to addressing non-malicious ICT incidents in global systemically important banks, domestic systemically important banks and other banks of interest (e.g., digital-only banks) that affect the delivery of critical operations. It complements the BCBS's earlier cyber resilience work.

Drawing on a survey of 16 jurisdictions and industry engagement, the BCBS identifies key findings, including that non malicious ICT incidents have varied across jurisdictions in recent years and are most driven by change control gaps, weaknesses in system design, capacity and performance issues, and failures linked to external dependencies. The report highlights core practices adopted by banks relating to governance, business continuity, change management, technology solutions and third-party risk management. It is intended to serve as a reference point for firms and supervisors in strengthening their ICT risk management practices for their specific circumstances. The BCBS will continue to monitor developments related to the digitalisation of finance and financial technology from a prudential perspective, including developments in AI models and the implications for banks' cybersecurity.

The Commission Delegated Directive (EU) 2026/374 amending Delegated Directive (EU) 2017/593 under the Markets in Financial Instruments Directive (MiFID II) has been published in the Official Journal of the European Union (OJ). The Directive updates the rules on the provision of third-party execution and research services to investment firms that provide portfolio management or other investment or ancillary services. The amendments reflect changes introduced by Directive (EU) 2024/2811, allowing investment firms greater flexibility to pay for research and execution services either jointly or separately.

The Delegated Directive introduces enhanced requirements where firms operate research payment accounts, including obligations on budgeting, controls, and audit trails, and reinforces that research charges must be based on a pre-set budget and not linked to transaction volumes. It also imposes a strengthened obligation on firms to assess the quality, value and usability of third-party research on at least an annual basis against robust criteria, and to take remedial action where deficiencies are identified. The Directive will enter into force on 22 June, being the 20th day following publication in the OJ. Member states must transpose the Directive by 5 June, with application from 6 June.

The UK Financial Conduct Authority (FCA) has published Q&A responses from its 2026 webinar on the UK anti money laundering (AML) framework for cryptoasset firms. They clarify how the current Money Laundering Regulations 2017 (MLRs) will operate alongside the forthcoming cryptoasset regime under the Financial Services and Markets Act 2000 (Cryptoassets Regulations) 2026, which commences on 25 October 2027. Topics addressed include:

• Applications under the Financial Services and Markets Act 2000 (FSMA) regime.
• MLR registration will remain the route for firms providing in scope cryptoasset services until the new regime commences, but firms will need to obtain FSMA authorisation to continue operating under the new regime, with no automatic conversion. Current FSMA authorised firms must apply to vary their permissions if they wish to undertake the new cryptoasset regulated activities when the regime commences. Applications for the new regime will open on 30 September until 28 February 2027. Firms should consider the impact of when they submit their application. Firms are encouraged to prioritise securing FSMA authorisation over MLR-registration (with more guidance set out in an earlier webpage) and undertake early gap analyses against threshold conditions and proposed rules.

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The International Organization of Securities Commissions (IOSCO) has published its final report on valuing collective investment schemes (CIS), following the November 2025 consultation. The report updates and consolidates IOSCO's earlier principles on the valuation of CIS (2013) and the valuation of hedge fund portfolios (2007) into a single set of recommendations to enhance the reliability, consistency and transparency of fund valuation practices across jurisdictions. Specifically, the report reflects feedback from market participants, recent market developments including the increased exposure to illiquid and private assets and heightened retail participation, and periods of market stress and volatility.

The recommendations focus on: (i) governance and oversight arrangements (including under stressed market conditions); (ii) management of conflicts of interest; (iii) the application of sound and consistently applied valuation methodologies; (iv) appropriate use and oversight of third party valuation providers, and (v) transparency, disclosure and record keeping. These are set out in more detail in chapter 3 of the report. IOSCO states the recommendations are intended to be proportionate and adaptable across jurisdictions while promoting a more harmonised and globally consistent valuation framework.

The UK Joint Money Laundering Steering Group (JMLSG) has published a consultation on proposed amendments to Part I of its anti-money laundering and counter-terrorist financing (AML/CFT) guidance for the financial services sector. It reflects changes introduced by the draft Money Laundering and Terrorist Financing (Amendment) Regulations 2026 (as laid and not yet made) including:

• Clarification of the term "unusually" in paragraph 2.9.
• Introduction of a bank insolvency exception in paragraph 5.2.4A.
• Updates relating to pooled client accounts in paragraph 5.3.142 and Annex 5 V.
• Amendments concerning due diligence and verification of authority where a person acts on behalf of others in paragraphs 5.3.94A and 5.3.99.

The deadline for comments is 29 June.

The Commission Delegated Regulation (EU) 2026/392 amending the regulatory technical standards (RTS) in Delegated Regulation (EU) 2017/577, has been published in the Official Journal of the European Union (OJ).

The Delegated Regulation is based on the European Securities and Markets Authority April 2025 final report and reflects amendments to the Markets in Financial Instruments (MiFIR) framework, including those introduced by Regulation (EU) 2024/791. These include extending record-keeping obligations to five years for operators of trading venues, approved publication arrangements and consolidated tape providers, and replacing the double volume cap with a single volume cap, together with related changes to publication requirements. It also removes provisions relating to the previous volume cap reporting framework, including associated reporting requirements and formats. The Regulation further reflects amendments introduced by Directive (EU) 2024/790 to the definition of 'systematic internaliser'. It also updates provisions on data reporting formats, clarifying that XML should be used for periodic reporting, while allowing ESMA and competent authorities to specify formats for ad hoc requests. To minimise burden, it encourages the use of existing datasets, including transaction data reported under Article 26 of MiFIR. The Delegated Regulation will enter into force on 21 June, being the 20th day following its publication in the OJ.

The European Securities and Markets Authority (ESMA) has published its annual report on the quality and use of data in 2025. This sixth edition expands the scope of coverage to include prospectus reporting, credit rating agency reporting, central counterparty supervisory reporting, crowdfunding reporting, major ICT-related incident reporting under the Digital Operational Resilience Act (DORA), reference data under the Markets in Financial Instruments Regulation (MiFIR) and ESMA registers.

The report shows continued progress in improving the quality, usability and supervisory application of regulatory data across EU financial markets. However, the report also highlights differing levels of maturity across datasets. Reporting under the European Market Infrastructure Regulation (EMIR) reached a steady state, with stable reporting rules and reconciliation requirements during 2025. MiFIR transaction reporting showed similar progress, with targeted data quality measures supporting more systematic supervisory use. As a result, transparency indicators are now calculated using MiFIR transaction data. Other regimes, notably the Securities Financing Transactions Regulation (SFTR) and the Alternative Investment Fund Managers Directive (AIFMD) also showed positive developments but require further improvements in data quality and usability. For less mature datasets, the report presents first indicative measures of quality and use.

Looking ahead, ESMA, together with national competent authorities, will continue to further support sustained improvements in the quality of regulatory data with next steps set out in Chapter 5 of the report.

The UK Financial Conduct Authority (FCA) has published Handbook Notice 141, outlining amendments to the FCA Handbook resulting from the following statutory instruments:

• Collective Investment Schemes (Use of Distributed Ledger Technology in Authorised Funds) Instrument 2026 and Collective Investment Schemes (Direct Dealing) Instrument 2026, which entered into force on 30 April. These reflect Handbook changes following PS26/7 on progressing fund tokenisation.
• Consumer Credit (Regulatory Reporting) (Amendment) Instrument 2026, which entered into force on 29 May. This makes minor amendments in SYSC 1.5.3R and SUP 16.
• Supervision Manual (Amendment) Instrument 2026, which entered into force on 1 June and introduces a new annual retail banking business model regulatory return, replacing the previous series of ad hoc data collections. 

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The UK Financial Conduct Authority (FCA) has published policy statement PS26/8 confirming final rules introducing a new annual regulatory return, replacing previous ad hoc retail banking business models (R2B2) data collections. The return will apply to banks and building societies meeting specified thresholds, including providing services to UK retail customers, reporting at least 200,000 UK customer relationships and having revenues of GBP5 million or more.

The reporting framework comprises two elements: (i) a core financial data request covering key product segments (including mortgages, personal banking and lending, and business banking), wholesale funding, and firm level financial metrics; and (ii) an "off the shelf" document request requiring readily available business documents, such as business plans and management reporting.

Following feedback to the January consultation, the FCA has made targeted amendments to the rules and the R2B2 template to streamline requirements, clarify definitions and group reporting rules, and reduce operational burden. Firms must submit the return annually in line with their accounting periods, with the first submission due by the end of November. The FCA will review the data annually to ensure it is of high quality and will review the collection after five years. The Supervision Manual (Amendment) Instrument 2026, which will make the relevant Handbook changes, comes into force on 1 June.

The UK Prudential Regulation Authority (PRA) has published a policy statement (PS15/26) on phase 1 of its Pillar 2A review. The policy statement provides feedback on the PRA's previous May 2025 consultation paper (CP12/25). In addition, having considered the responses to CP12/25, the PRA has made changes to the draft policy materials to provide greater detail and increase clarity where relevant, including:

• Excluding exposure to SMEs from the systematic methodology for unconditionally cancellable commitments in the retail exposure class.
• Removing exposures secured by collateral recognised through the Financial Collateral Simple Method (FCSM) from the scope of the systematic methodology.
• Providing greater flexibility in how firms are expected to assess their idiosyncratic credit risks, compared to the consultation proposal to introduce expectations for firms to use credit scenarios.
• Clarificatory updates to improve transparency and guidance for all firms, and changes to the small domestic deposit takers (SDDT) policy materials to align the operational risk Pillar 2A methodology for SDDTs and non-SDDTs.

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The European Commission (EC) has adopted a Delegated Regulation regarding regulatory technical standards (RTS) specifying operational risk requirements under the Capital Requirements Regulation (CRR), as amended by the CRR3. The Delegated Regulation is based on draft RTS submitted by the European Banking Authority (EBA) and specifies key aspects of the operational risk framework. The RTS, amongst others:

• Business indicator components—specify the components of the business indicator by setting out a list of items and the elements to be excluded from the business indicator.
• Mergers, acquisitions and disposals—set out how institutions are to determine adjustments to the business indicator and their loss data set following mergers, acquisitions and disposals. In the case of disposals, they specify the conditions under which competent authorities may grant permission to exclude amounts related to disposed entities or activities from the business indicator, and the timing of such adjustments.

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The UK Financial Conduct Authority (FCA) has set out guidance in a new report on compliance with the UK sanctions regimes. The FCA acknowledges that the rules on sanctions have become more complicated since February 2022.

The FCA expects firms to understand when they could be engaging in activities which are at risk of causing sanctions breaches, for example:

• Transferring funds out of accounts shortly after an individual or entity is sanctioned.
• Accessing financial services or economic resources through complex ownership chains, relatives, or close associates.
• Using third parties, intermediaries, or correspondent banks to obscure connections to a sanctioned person.
• Routing funds through cryptoasset or e-money wallets to conceal links to designated persons.
• Conducting cash withdrawals for onward movement to high-risk jurisdictions.
• Mis-declaring the nature or end use of goods in trade transactions.
• Providing falsified or incomplete trade documentation.

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The UK prudential regulation authority (PRA) has published a policy statement providing feedback on the PRA's July 2025 consultation paper CP19/25 on the restatement of UK Capital Requirements Regulation (CRR) definitions in the PRA Rulebook, along with its final policy. Following respondent feedback, the PRA is making the following changes to the draft policy it consulted on:

• Consistent italicisation of embedded CRR terms in the PRA Rulebook Glossary definitions and cross-references to legislative definitions throughout.
• Change to the "branch" definition in the PRA Rulebook Glossary to better align its wording with the CRR definition.
• Additional wording in Article 229(3) of the Credit Risk Mitigation (CRR) Part to specify the meaning of "market value" in that context.
• Change to the "recognised exchange" definition to reflect the policy position confirmed in PS6/26—Recognised exchanges policy and transfer of main indices.

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The UK Financial Conduct Authority (FCA) has updated its webpage on quality controls in the benchmarks sector, which is relevant to benchmark administrators, price reporting agencies and data suppliers. The update sets out the FCA's findings following a multi-firm review of the quality of calculation controls, looking in particular at error identification, classification, prioritisation and notification. The FCA identified two distinct approaches taken by firms: first, a quantitative approach led by data; and second, a qualitative approach which was judgement-led. Quantitative approaches are more easily applied consistently, although the FCA noted that they needed frequent recalibration and there may be data gaps. Qualitative approaches are less consistent but can allow for judgement to be applied, which may reduce data gaps.

The FCA has also noted that well-designed management information, i.e., details of how errors were identified and root cause insights, could help identify where there may be recurring weaknesses. However, there are limitations with such record-keeping, which makes it hard for firms to demonstrate that their control and governance arrangements are effective. The FCA also commented that conflicts of interest policies and registers needed to be fully considered and put into practice to be effective in the context of error handling.

The FCA will carry out further work in 2026 on other risks set out in its portfolio letter, including corporate governance. Firms should take note of the FCA's findings and address any weaknesses identified.

The UK Financial Conduct Authority (FCA) has published a press release highlighting that some firms, when approving financial promotions, should be doing more to protect consumers in line with the consumer duty. The FCA carried out a review that assessed ten authorised firms that approve financial promotions for businesses which are not authorised by the FCA, looking at firms who were approving financial promotions for buy-now, pay-later (also now referred to as deferred payment credit), crowdfunding and corporate finance firms. The new rules on authorised firms approving promotions for unauthorised firms came into force on 7 February 2024. The FCA's review focussed on sampling promotions that had been approved since the firm was authorised.

The FCA found that the strongest firms were applying the consumer duty from the start of their processes and were able to make sure that every promotion approved was accurate, clear and reached the right audience. However, some firms approved adverts with unsubstantiated claims or allowed retail investors to see promotions intended for professional clients. In some cases, firms relied on third-party templates instead of doing the checks themselves. As a result of the FCA's work, one firm has already had to conduct a remediation exercise, and some websites have been blocked to retail customers. The FCA will continue to monitor compliance and hold firms to account if they fall short.

The European Commission (EC) has adopted a Delegated Regulation supplementing Regulation (EU) 2024/3005 (ESG Rating Regulation) with regard to regulatory technical standards (RTS) specifying the information to be included in the application for authorisation as an ESG rating provider and in the application for recognition of an ESG rating provider. Before supervision of ESG rating providers can take place, ESMA must first authorise an applicant in accordance with the processes set out in Articles 6 to 8 of the ESG Rating Regulation or recognise an applicant in accordance with Article 12 of the ESG Rating Regulation. In October 2025, ESMA published a final report on the technical standards on the transparency and integrity of ESG rating activities which included final draft RTS on authorisation and recognition.

This Delegated Regulation sets out in Annex II the information that needs to be included in an application for authorisation or recognition to operate as an ESG rating provider in the EU, including information on:

• General and contact person details.
• Ownership structure, activities and senior management.
• Procedures and methodologies of ESG ratings.
• Policies and procedures to identify conflicts of interest.
• Outsourcing arrangements.
• Previous ESG ratings.

Annex III of the Delegated Regulation also sets out specific, additional information which must be provided in an application for recognition of ESG rating providers established outside the EU. The Delegated Regulation is due to apply from 2 July.

The European Securities and Markets Authority (ESMA) has published a consultation paper on amendments to its guidelines on standardised procedures and messaging protocols used between investment firms and their professional clients under Article 6(2) of the Central Securities Depositories Regulation (CSDR). This forms part of ESMA's work to support market participants in preparing for the transition to a T+1 settlement cycle. ESMA is proposing to amend the guidelines in light of the proposed amendments to Articles 2 and 3 of Commission Delegated Regulation (EU) 2018/1229 (RTS on Settlement Discipline), as set out in its final report on the RTS on Settlement Discipline published in October 2025. The updates aim to make post-trade communication faster, clearer and more consistent across the EU. In addition, ESMA is proposing to clarify the discretion available to investment firms and professional clients when documenting their contractual arrangements and is seeking stakeholders' views on potential amendments to the existing guidelines that could support its objective of simplification and reducing regulatory burden.

Key changes to the guidelines include:

• Reflecting the mandatory use of electronic, standardised communication channels and international messaging standards.
• Removing references to non-electronic and non-machine-readable communication methods, such as oral allocations and confirmations, except in cases of temporary technical disruptions.

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The European Commission (EC) has published a report on its assessment of the markets for commodity derivatives, emission allowances and derivatives of emission allowances under Article 90(5) of the MiFID II Directive, as amended by MiFID III. The report is addressed to the European Parliament and the Council of the EU. Input was provided by the European Securities and Markets Authority (ESMA) and the Agency for the Cooperation of Energy Regulators (ACER). The European Banking Authority (EBA) did not provide input as they informed the EC that this would require a more in-depth analysis.

The report found that stakeholders' responses and the EC's assessments did not point to an urgent need to make substantive changes to the relevant commodity derivatives framework. However, targeted amendments could be considered in the future. The findings from the report include:

• Data-sharing and reporting—the EC acknowledges that the current reporting framework for commodity derivatives is complex. Under a gradual approach, short-term measures to facilitate data-sharing between authorities and improve the interoperability of data sets could be explored. This could include the institutionalisation of data exchanges between financial and energy regulators, with systematic access granted to respective supervisory data, eliminating the need for ad hoc access requests. The EC could also explore the adoption of unique identifier formats for transactions reported under both financial and energy frameworks.

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The International Organization of Securities Commissions (IOSCO) has published its final report on a Supervisory Toolkit for AI Use in Capital Markets. The report is based on IOSCO's previous work, and provides supervisors with a practical, multi-phased approach to monitoring ongoing advancements in AI, the concentration and dependency on AI service providers, and AI's expanding range of applications and risks in capital markets. The report is designed to complement, not replace, national frameworks, and to offer a common foundation for supervisory dialogue between authorities and firms.

The report sets out three complementary layers to support supervisory oversight:

• Areas of supervisory consideration: the first layer outlines areas of supervisory consideration, building on the work conducted for previous IOSCO reports on AI.
• Tools for supervisory oversight of key areas: the second layer provides supervisors with more detailed tools to support evaluation across four areas of focus: (i) governance and risk management; (ii) third-party and outsourcing risk management; (iii) disclosure; and (iv) recordkeeping and reporting. It also includes practical examples of questions that supervisory authorities may find helpful when planning examinations of supervised firms' AI use.
• Indicators and data sources: the third layer provides supervisors with suggested indicators for monitoring AI adoption and use, alongside a range of engagement methods to gather relevant information.

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The UK Financial Conduct Authority (FCA) has published a report setting out findings from its transition finance pilot exercise on barriers to scaling finance for UK climate solutions. The FCA focused on UK-led climate solutions and drew on extensive engagement with capital providers and climate solutions companies at different stages of maturity. The FCA found no material regulatory barriers but identified three system level challenges: (i) many climate solutions struggle to reach sufficient commercial maturity to attract private capital; (ii) capital is not always well matched to opportunities, despite strong appetite, owing to misalignment in the scale, tenor or risk-return profile of climate solution opportunities; and (iii) information and capacity gaps across the market create frictions, increasing costs and reducing confidence, particularly for small and medium-sized enterprises (SMEs). These barriers can be addressed through coordinated action across government, public finance institutions and market participants. The FCA also sets out key takeaways separately for climate solutions companies, capital providers and insurers, alongside supporting resources to guide next steps.

The FCA confirmed that it will use the findings to inform policy development and market coordination, and to continue its broader work on sustainable finance and SME access.

The International Organization of Securities Commissions (IOSCO) has published a consultation report on regulatory considerations and good practices on the evolution of market liquidity during the trading day for equity markets. The consultation highlights a growing concentration of trading activity at market close, driven by technological developments and trading strategies, noting that while deeper closing auctions may enhance price discovery, they may also pose risks. IOSCO therefore proposes a set of good practices aimed at supporting fair, orderly and resilient markets. This is based on the analysis of how liquidity is distributed throughout the trading day, the implications of evolving liquidity patterns and auction designs, and the effectiveness of existing regulatory and supervisory approaches. The deadline for feedback is 21 August.

In parallel, IOSCO has published a report on extended trading hours for equity markets. This report looks at how extended trading works across IOSCO jurisdictions and its benefits and risks. It finds that trading outside normal hours varies between jurisdictions and is mainly retail-driven, with limited institutional involvement. Where it exists, it is usually introduced by trading venues in response to demand. However, this is characterised by lower liquidity, wider bid-ask spreads, and different execution conditions compared to regular hours. Based on the findings, IOSCO emphasises the importance of continued monitoring and information-sharing to ensure that market integrity, operational resilience and investor protection remain central as trading practices evolve. While the report focuses on equity markets, IOSCO may explore related areas (such as asset management, valuations, risk management or derivatives) in the future.

The UK Payment Systems Regulator (PSR) has published its consultation paper CP26/1 on proposals to require specific card schemes to report UK financial performance. The proposals stem from one of four remedies identified as possible ways to address the findings of the market review of card scheme and processing fees, which were published last year. Proposals in relation to two of the other remedies (the information, transparency and complexity remedy and the price governance remedy) have already been taken forward, while the fourth remedy is not being pursued. This consultation paper sets out the proposals to introduce the regulatory financial reporting remedy (which relates to publishing scheme information).

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The European Commission has adopted a Delegated Regulation setting out regulatory technical standards (RTS) establishing an EU code of conduct for issuer-sponsored research under the Markets in Financial Instruments Directive (MiFID II). This follows the European Securities and Markets Authority's final report on the code of conduct, which was published with final draft RTS in October 2025. The code of conduct is provided for by measures introduced by the EU Listing Act Directive, which amend MiFID II, with the aim of increasing the use of issuer-sponsored research.

The RTS require investment firms to obtain information from research providers so that they can assess whether research should be labelled as "issuer-sponsored research", which is produced in compliance with the EU code of conduct which is set out in the RTS annex. As a reminder, research providers must comply with the code if they intend their research product to be labelled as "issuer-sponsored" research rather than a marketing communication.

The RTS shall enter into force on the third day following its publication in the Official Journal of the European Union (OJ). This differs from the timing set out in the final draft RTS, which provided that the RTS would enter into force on the 20th day following publication in the OJ and would apply from 6 June.

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/16, proposing amendments to the regime governing the registration of authorised fund assets. A key driver of the consultation is enabling access to private market investments for funds. Currently, the regulatory rules restrict depositaries' ability to delegate certain registration and safekeeping functions in relation to certain types of private market assets. This means that depositaries (or their controlled nominees) are required to hold legal title to certain types of assets, which may expose them to legal, reputational and financial risk. Consequently, authorised alternative investment funds may be limited as to their ability to invest in such assets where depositaries are unwilling to take on these risks. This set of proposals relates to AIFs rather than UK undertakings for collective investment in transferable securities (UCITS), as UCITS funds are not impacted in the same way as AIFs.

The FCA proposes to ease these restrictions in relation to the registration function, so that depositaries are able to delegate the functions subject to certain conditions. Specifically, the FCA is proposing to allow depositaries of authorised AIFs managed by full-scope AIFMs to delegate certain registration and safekeeping functions for private market assets. For assets which are not safe custody investments or AIF custodial assets, the ability to delegate is limited to affiliates of the authorised fund manager. For assets which are safe custody investments but not AIF custodial assets, depositaries would be able to delegate to a regulated third party. Regarding UCITS, the consultation proposes a new rule that a UCITS depositary must not delegate any function to the authorised fund manager.

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