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 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 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 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 Securitisation (Overseas STS Equivalence) (European Union, Iceland, Liechtenstein and Norway) Regulations 2026 have been laid before Parliament. The Regulations introduce a permanent equivalence regime for European securitisations designated under the EU Securitisation Regulation as "simple, transparent and standardised" (STS). The effect of UK equivalence is that such securitisations benefit from preferential treatment under various UK regimes, including in relation to regulatory capital requirements. It is worth noting that there is no reciprocal recognition of UK STS securitisations.

The permanent equivalence regime will replace the existing temporary recognition regime which is due to expire on 30 June. Accordingly, the Regulations will come into force at 11:00pm on 30 June.

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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The UK Financial Conduct Authority (FCA) has published a new webpage inviting applications for its Scale-up Unit for FCA solo-regulated firms. The Unit was launched in October 2025 and is designed to provide bespoke regulatory support to fast-growing firms across three groups: banks and building societies, insurers, and FCA solo-regulated firms. For the pilot cohort of FCA solo-regulated firms, applicants must demonstrate that they meet the eligibility criteria, including: being FCA-regulated and operating for at least three years; experiencing a period of sustained growth, with average income growth exceeding 20% over a three-year period and projected to continue at that rate; and generating gross annual revenue of over GBP100 million and/or achieving an investor valuation of over GBP250m (for example, through funding rounds). Meeting the criteria will not automatically guarantee acceptance. The FCA will also consider whether an application meets the definitions set out in the webpage. Applications are open until 22 June.

The European Commission has launched consultations on the review of the Markets in Crypto Assets Regulation (MiCAR). The framework, implemented in 2024, establishes a harmonised regime covering crypto assets, including asset referenced tokens and e money tokens, as well as their issuers and crypto asset service providers. The consultation involves: (i) a public consultation on general views in relation to the different types of digital assets and the associated services industry used by individual retail users; and (ii) a targeted consultation covering more technical and legal questions for stakeholders on whether MiCAR remains fit for purpose in light of evolving market and international developments. Of particular interest in the targeted consultation is the section on topics beyond the initial scope of MiCAR, which covers questions on decentralised finance and prediction markets and perpetual futures.

Feedback will inform the EC's report on the application of MiCAR and the latest developments in markets crypto-assets, mandated by Articles 140 and 142 of the Regulation. The report may, if needed, be accompanied by a new legislative proposal to amend and complement this regulation. The deadline for feedback on both consultations is 31 August.

The House of Commons Treasury Committee has published a letter addressed to the UK Financial Conduct Authority (FCA) seeking further clarification on its motor finance redress scheme. This is following the FCA's announcement that the scheme is subject to legal challenges. The letter raises questions in relation to the consequences of the legal challenges, the additional administration caused by the legal challenges, the potential impact of any changes needed as a result of the challenges, the conduct of market participants more broadly, and the FCA's powers.

More specifically, key points of examination include: (i) current advice to consumers, the impact on complaint handling and compensation timelines, and potential risks such as fraud; (ii) details on the costs incurred by the FCA to date, additional costs arising from the litigation, and any impact on ongoing regulatory workstreams; (iii) how changes to or failure of the scheme could affect consumers, firms and the UK Financial Ombudsman Service; (iv) how lenders, claims management companies and law firms have responded to the scheme and the effect of their conduct on consumers; and (v) the adequacy of the FCA's powers to implement a compensation scheme and any lessons for Parliament. The Committee has requested the FCA to respond by 4 June.

The UK Financial Services Regulatory Initiatives Forum has published the tenth edition of the Regulatory Initiatives Grid, setting out the ongoing and upcoming initiatives impacting the UK financial services sector. The Grid provides an overview of the current state of play as opposed to launching new initiatives, and is also used to communicate timing updates on deliverables where relevant. The grid includes a multi-sector section which covers cross-cutting and omnibus topics such as sustainable finance and operational and financial resilience. There are further sector specific sections including in relation to: banking, credit and lending; payment services and cryptoassets; investment management; retail investment; and wholesale financial markets.

The grid includes a number of UK developments in relation to other items in this week's update, including those mentioned in the King's speech, and the prospective changes in the Financial Services and Markets Bill. Further information is detailed in those specific items covered this week. Separate press releases announcing the Grid have also been published by the UK Financial Conduct Authority and the Bank of England.

Readers are also invited to provide feedback on the Grid and its usefulness in enabling planning for regulatory initiatives and any suggested improvements.

The Financial Services and Markets Bill, first introduced in the King's speech as the "Enhancing Financial Services Bill", has had its first reading in the House of Lords. The text of the Bill was published with accompanying explanatory notes. It proposes significant amendments to primary legislation, including the Financial Services and Markets Act 2000, the Consumer Credit Act 1974 and the Financial Services (Banking Reform) Act 2013, as part of the government's growth and competitiveness strategy for the financial services sector.

Key proposals include: (i) modernising the Consumer Credit Act 1974 and reforming the UK Financial Ombudsman Service; (ii) consolidating the regulatory framework with the abolition of the UK Payment Systems Regulator; (iii) improving the operational effectiveness of the UK Financial Conduct Authority and the UK Prudential Regulation Authority; (iv) creating a new 'provisional licences' authorisation regime; (v) amendments to the appointed representatives regime including a requirement for principals to have specific permission to act as principal; (vi) creating a framework for HM Treasury to establish overseas recognition regimes for any financial services activity; (vii) reducing the burden of the Senior Managers and Certification Regime including repealing rules on the senior manager statements of responsibilities and the certification regime; (viii) updating the statutory framework underpinning the ring-fencing regime; and (ix) reforming the supervision of anti-money laundering / counter-terrorism financing.

The Bank of England (BoE) has published a discussion paper on central counterparty (CCP) resolution execution and resolvability. The paper focuses on three key resolution execution topics on the use of the BoE's resolution powers to resolve a CCP:

• Resolution powers and the credit hierarchy: how the BoE would manage the complexity arising in the calculation and execution of a resolution cash call.
• Returning value to CCP creditors: how value would be returned to CCP creditors that have recapitalised a CCP.
• Considerations in the execution of a statutory partial tear up: how the BoE would use its discretion when exercising its statutory tear up power in a default loss resolution, to return the CCP to a matched book.

The BoE also introduces draft "resolvability outcomes", requiring CCPs to demonstrate timely and robust capabilities to support the BoE's execution of resolution, including the ability to: (i) deploy recovery and resolution tools on the BoE's instruction; (ii) secure continuity of critical clearing services through resolution; and (iii) provide the BoE, HM Treasury and independent valuer with data, modelling and analysis as requested. The deadline for responses is 4 September. Feedback will inform a future consultation on CCP resolvability expected by the end of the year, with a further statement of policy on CCP resolvability expected in 2027. Responses may also be used to assess how the regime will apply to new firms and the appropriate degree of proportionality in the BoE's proposed policy on mobilisation of new CCPs.

The UK Financial Conduct Authority (FCA) has published a notice and terms of reference for a market study into claims management services. The study will examine the causes of potentially harmful practices, their impact on competition and consumer outcomes, and whether intervention is required. It will cover practices observed by FCA-regulated claims management companies (CMCs) and lead generators, as well as legal professionals. The FCA will be working closely with the Solicitors Regulation Authority as it carries out the market study.

The work will focus on claims management services provided in relation to financial services and financial products claims and housing disrepair claims. The deadline for comments is 19 June, with information requests to be issued to firms from June. The FCA intends to share early findings and consult on possible measures later this year, and will publish its final report by 19 May 2027.

The UK Prudential Regulation Authority (PRA) has issued a Dear CEO letter on innovations involving deposit-takers, e-money and regulated stablecoins. The letter supersedes the 2023 letter and provides clarification in light of recent developments including the UK cryptoassets regulatory framework. It should be read alongside the PRA's Dear CEO letter on the prudential treatment of banks' cryptoasset exposures.

The PRA's core expectations remain unchanged but the letter clarifies how firms should manage risks arising from innovation, especially as regards retail customers. In particular, the letter confirms that while deposit-takers may innovate within deposit structures (including tokenised deposits), any issuance of e-money or stablecoins within groups should take place through separate, non-deposit-taking and insolvency-remote entities, with clearly distinct branding and presentation. This should be supported by disclosures, warnings, on-boarding, and customer education, but should not be relied upon as the sole means of mitigating the risk of confusion.

Read more.

The UK Prudential Regulation Authority (PRA) has issued a Dear CEO letter setting out updated expectations on the prudential treatment of tokenised assets, stablecoins and other cryptoasset exposures. This replaces the 2022 guidance which set out interim expectations when cryptoasset markets were less developed and international standards were still under development.

The PRA reaffirms that firms should apply the full prudential framework to cryptoasset exposures, including the Fundamental Rules, Pillar 1 and Pillar 2 requirements, and the Internal Capital Adequacy Assessment Process. It emphasises the need to maintain strong governance and risk management, including by carefully assessing whether the characteristics of these assets are sufficiently captured within existing frameworks.

It confirms that a conservative capital treatment remains appropriate for most cryptoassets, including a 100% capital requirement for unbacked cryptoassets, while recognising that certain newer forms of cryptoassets may warrant a more risk-sensitive approach. The PRA also clarifies that tokenised traditional assets should generally receive the same prudential treatment as their non-tokenised equivalents where legal rights and underlying risks are comparable, in line with a "same risk, same regulatory outcome" principle.

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The Bank of England (BoE) has published a consultation paper setting out its proposed roadmap to extend RTGS and CHAPS settlement hours towards near 24x7 settlement. The paper confirms the previously announced early-morning extension of CHAPS from September 2027 and seeks industry views on the next phase of reforms. In particular, the BoE proposes a phased approach, initially introducing settlement on weekends (most likely Sundays) and certain UK bank holidays from 2029 at the earliest. This would be followed by a further extension of those settlement days from 2031 at the earliest, resulting in CHAPS settlement operating hours for 22 hours per day, Sunday to Friday. The BoE notes that these sequencing steps could be combined if consultation responses indicate sufficient demand.

The consultation outlines key operational, liquidity and financial stability considerations, including the need for changes to liquidity provision, staffing, and risk management frameworks. It also seeks feedback on sequencing, design choices and the long-term end-state, including potential expansion to 22x7 or near-continuous settlement. The deadline for responses is 10 August.

The UK Financial Conduct Authority (FCA) and Bank of England (BoE) have published a joint call for input on the development of tokenisation in UK wholesale financial markets. Tokenisation – being the representation and ownership of assets using distributed ledger technology (DLT) – has the potential to transform how assets are issued, traded and settled. The paper seeks feedback on how existing rules and market infrastructure may support or constrain the adoption of tokenisation and includes the following content.

• A potential framework to consider the future use of tokenisation in wholesale markets, covering both the long-term end state and the transition towards it.
• Identification of the key infrastructure, policy and regulatory principles and operational considerations proposed to feature in future policy and regulation.
• Proposals on the regulatory regime for issuing and exchanging digital assets, prudential and collateral treatment, and central bank money settlement of digital asset transactions.
• An initial roadmap of initiatives that will support market evolution, to help industry engagement.

The deadline for responses is 3 July. A feedback statement is due in summer, with a final cross-authority roadmap for the digitalisation of wholesale markets to follow later in the year.

HM Treasury (HMT) has published a policy statement on the reform of the Consumer Credit Act 1974 (CCA), setting out its response to the phase 1 consultation. HMT confirms plans to modernise the regime by aligning it with the Financial Services and Markets Act 2000 (FSMA) and transferring much of the detailed conduct regulation to UK Financial Conduct Authority (FCA) rules. The original proposals involved a phase 2 consultation; however, HMT considers that it has sufficient evidence to proceed without a further consultation. The related legislative proposals are in the Financial Services and Markets Bill which was published this week, including an enabling power for HMT to make secondary legislation on the transitional provisions to support a smooth transition.

The FCA rules will not replicate the CCA exactly but will be designed in line with the FCA's objectives and existing framework, including the consumer duty. Certain provisions will remain in legislation where necessary to preserve key rights, or where they cannot be replicated due to complexity. The government intends to repeal most prescriptive CCA information disclosure requirements and replace them with FCA rules (subject to consultation) and statutory sanctions, such as unenforceability and disentitlement to interest and fees, in favour of the FCA's supervisory and enforcement framework, but retain criminal offences as a deterrent.

The FCA has also published a statement setting out its approach to CCA reform and highlighting some of the existing rights and protections it will consider as part of its policy work.

For more detail on the reforms, you may wish to read our blogpost titled "Phase 2? We don't need phase 2 where we're going...".

HM Treasury (HMT) has published a report with findings from its review on the ring-fencing regime for banks. The review found that while the regime remains an important component of UK financial stability, it should be updated to be more flexible, proportionate and responsive to developments. The government intends to introduce certain changes through the Financial Services and Markets Bill (referred to as the Enhancing Financial Services Bill in the recent King's speech) including:

• Enabling the UK Prudential Regulation Authority (PRA) to remove ring-fencing rules where objectives are met by other prudential or resolution requirements to reduce duplication.
• Removing overly prescriptive elements in primary legislation.
• Improving regulatory alignment as between the ring-fencing rules and the resolution regime.
• Enabling HMT to move aspects of the regime into PRA rules so they can be updated more easily and to increase scope for modifications and waivers.

The government has also made the following commitments which are subject to consultation this summer:

• Introduction of a New Growth Allowance (with an allowance of up to 10% of Pillar 1 risk-weighted assets for credit risk to be consulted on) to unlock up to GBP80 billion of financing.
• Allow ring-fenced banks to offer more risk management products to businesses.
• Enable the participation of ring-fenced banks in certain funding schemes.
• Permit exposures to a wider range of financial institutions.

Read more.

The UK Financial Conduct Authority (FCA) has published findings from a multi firm review of credit rating agencies. The review focused on surveillance processes, credit rating methodologies and internal controls.
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On surveillance and credit rating methodologies, the FCA made findings in relation to governance, capabilities, and how the process works. While the FCA drew attention to a number of areas where good practice was well-evidenced, it highlighted areas with room for improvement, including:

• On surveillance, clearer, better-interpreted and cohesive monitoring frameworks and practices (including on an ongoing basis rather than just in terms of the minimum requirement of an annual review), better evidence of analytical capability expectations and capacity management, and more fulsome documentation of first line controls, decision-making and oversight.
• On credit rating methodologies, effective annual reviews of key components of methodologies and model types, better governance of adjustments within methodologies and models, clarification of roles and responsibilities (including for independent non-executive directors), and better documentation, feedback and oversight in relation to methodologies and models.

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The Bank of England, UK Financial Conduct Authority (FCA) and HM Treasury have published a joint statement on frontier AI models and cyber resilience, addressed to regulated firms and financial market infrastructures. The statement notes that frontier AI models already exceed the capabilities of skilled practitioners and can amplify cyber threats to firms' safety and soundness, customers, market integrity and financial stability. This is particularly true in cases where firms have not invested sufficiently in core cyber security.

The joint statement calls on firms to mitigate risks proactively in relation to the following:

• Governance and strategy: ensuring boards and senior management sufficiently understand frontier AI risks to set strategic direction and oversee how control functions manage risks. Firms should also consider whether they have appropriate insurance in place.
• Identification and risk management of vulnerabilities: being able to triage, prioritise, risk assess, and remediate vulnerabilities more quickly, more frequently, and at scale, including through automation where appropriate, while mitigating the operational risks from doing so.
• Managing risks from third parties: effectively managing AI-related cyber risks arising from third parties, supply chains and open-source software, including the capability to monitor and remediate external vulnerabilities.

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The UK government and UK Financial Conduct Authority (FCA) have published a policy paper announcing plans to reform the UK Money Market Fund Regulation (MMFR) regime, aimed at strengthening money market funds (MMFs) to better withstand periods of market disruption. The reforms are intended to replace the existing regime with a new framework under which most requirements for UK MMFs will be set out in FCA rules and guidance, including expectations for higher levels of liquidity. The government confirms it will introduce legislation when parliamentary time allows, with the new regime expected to be in place by Q4 (subject to parliamentary approval). The FCA is expected to issue a statement shortly with further details on its plans. The government also acknowledges the cross-border nature of MMFs, welcoming ongoing engagement with the EU and the European Commission's report published on 11 May. The government intends to extend the temporary marketing permissions regime, pending a longer-term solution on market access, in line with the UK's framework and process for recognition of overseas firms and funds.

HM Treasury has announced the launch of an independent review into access to banking, assessing the impact of declining face to face banking services across the UK. This is in light of the shift towards digital banking and ongoing bank branch closures. The review will gather evidence on the real world effects of reduced in person services, identify affected groups and communities (including vulnerable consumers and small businesses), and consider whether further action is required to safeguard access to banking. Its findings and recommendations, expected by October, will inform the government's proposed powers to intervene where necessary to protect access to banking services. The announcement is accompanied by terms of reference which set out the review's scope and objectives.

The UK Financial Conduct Authority (FCA) has published an updated webpage confirming the re-opening of its AI input zone. This forms part of the FCA's AI Lab, which supports the safe and responsible use of AI in financial services. The FCA is seeking views and examples to inform a publication on good and poor practices later this year. In particular, it is keen to understand what stakeholders consider "good" practice in terms of safe and responsible AI development, and what can be learned from and improved upon. The deadline for responses is 19 June.

The King's speech was delivered to Parliament, setting out a number of legislative measures relevant to financial services and the wider economic regulatory framework. The speech is accompanied by briefing notes, which outline the legislation to be brought forward. In the context of financial services, one of the bills announced is the Enhancing Financial Services Bill.

Key measures under this include:

• Reforming the UK Financial Ombudsman Service, as confirmed by HM Treasury (HMT) in its March consultation response to modernise the financial redress system.
• Abolition of the UK Payment Systems Regulator and integration into the UK Financial Conduct Authority (FCA), as confirmed by HMT in its April consultation response.
• Reducing administrative burden in the Senior Managers and Certification Regime, as confirmed by HMT in its April consultation response.
• Enabling credit unions to expand, as confirmed by HMT in its March call for evidence response on reforms to the credit union framework.

Read more.

The European Securities and Markets Authority (ESMA) has published a resolution briefing for central counterparties (CCPs) under the CCP Recovery and Resolution Regulation (EU) 2021/23 . The briefing provides practical guidance to national resolution authorities (NRAs) on how to operationalise the write-down and conversion of instruments (WDCI) tool within CCP crisis planning. The WDCI tool enables NRAs to absorb losses and recapitalise CCPs by writing down equity and, where necessary, converting debt instruments or other unsecured liabilities into new instruments of ownership—thereby, ensuring the stability and continuity of the CCP's activities.

The briefing focuses on the operational steps and conditions for NRAs to consider when drawing up CCP resolution plans, in particular to: (i) define and receive the relevant data from the CCP, which will enable it to calibrate the amount of resources available through a WDCI; (ii) take into account the impact on the relevant stakeholders, such as shareholders and creditors, financial markets and linked financial market infrastructures when doing so; and (iii) ensure the appropriate implementation of the WDCI and the reorganisation following implementation.

The UK Financial Conduct Authority (FCA) has announced a review into how investment firms support bereaved customers, following research indicating that only 47% felt they received adequate support. The review will focus on firms advising on, managing, or administering investments (including platforms, advisers and wealth managers), and will assess the end-to-end customer experience from notification of a death through to the settlement or transfer of investments. In particular, the FCA will examine firms' communication practices, treatment of vulnerable customers, service standards and handling of fees on bereaved accounts. The initiative builds on previous FCA findings where bereaved customers experienced delays, unclear processes and inconsistent support, and forms part of the FCA's broader consumer duty and consumer investments priorities. The FCA will begin contacting selected firms this month and intends to publish its findings, including examples of good practice and areas for improvement, later in the year.

HM Treasury (HMT) has published its consultation response on cross cutting reforms to the UK financial services regulatory environment. This follows its July 2025 consultation, which proposed changes to the legislative framework governing the operation of the UK financial services regulators, namely the UK Financial Conduct Authority (FCA) and the UK Prudential Regulation Authority (PRA).

Following feedback, the government confirms it will amend the Financial Services and Markets Act 2000 to:

• Set new, shorter statutory deadlines for determining applications for new firm authorisations, variations of permissions and senior manager approvals.
• Require the FCA and PRA to produce new long-term strategies, at least once every five years.
• Require the regulators to have regard to regulatory and supervisory principles, as well as remit letters (containing recommendations from HMT) when producing their new long-term strategies, while removing the requirement to consider these factors when making day-to-day decisions.
• Remove a range of lower-value reporting and procedural requirements placed on the regulators.

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The European Securities and Markets Authority (ESMA) has published an updated version of its opinion on multilateral systems and the trading venue perimeter under the revised Markets in Financial Instruments Directive 2014/65/EU (MiFID II). The opinion, first published in 2023, provides clarification as to when certain systems qualify as multilateral and need to be authorised as a trading venue, to ensure consistent implementation of the relevant requirements across the EU. The updated version, with changes marked in red, includes new paragraphs (51 and 52), which clarify the application regarding systems that pre-arrange transactions. In particular, it clarifies that:

• Request‑for‑quote and voice trading systems for non‑equity instruments are no longer subject to mandatory pre‑trade transparency requirements and therefore do not require a pre‑trade transparency waiver.
• Pre-arranging transactions in a multilateral way can only be done without trading venue authorisation where the trade is formalised on an EU trading venue. It also extends this to transactions formalised on certain equivalent third-country venues (i.e., those deemed equivalent under MiFIR trading obligations or recognised as equivalent regulated markets under EMIR), ensuring consistent treatment of such venues within the trading venue perimeter.

Other minor drafting clarifications are also made.

The EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) has published a reporting package to support the identification of provisionally eligible obliged entities by national competent authorities (NCAs). This marks the next preparatory step for its first selection cycle of entities to be subject to direct supervision from 2028, following the conclusion of its data collection exercise to test and calibrate risk assessment models.

The package, comprising a standardised reporting template and interpretative note for obliged entities, sets out instructions for NCAs to collect and submit the data required to determine which entities meet the criteria for selection in 2027. They will be responsible for collecting data by 15 August, followed by an error correction and alignment phase with home supervisors. A provisional list of eligible entities is expected to be finalised by the end of September. AMLA will host a public webinar on 10 June to offer eligible obliged entities (credit institutions, financial institutions, or their groups operating in at least six member states) a practical walkthrough of the template, with further information to follow.

HM Treasury (HMT) has published its response to the September 2025 consultation on the commercial credit data sharing (CCDS) regime and the October 2025 consultation on the bank referral scheme (BRS). The proposals aimed to develop the UK small-and medium-sized enterprise (SME) finance framework. Following feedback, the government intends to proceed with CCDS reforms when parliamentary time allows. Key changes include: (i) expanding the designation regime beyond regulated banks to capture major SME finance providers; (ii) requiring broader data sharing of voluntary participants' SME customer information across credit reference agencies; and (iii) ensuring that SMEs qualifying for CCDS reporting exit the scheme once they have clearly and consistently exceeded the turnover threshold. Other reforms are listed in Chapter 2. The reforms will require changes to the Small Business, Enterprise and Employment Act 2015 and the Small and Medium Sized Business (Credit Information) Regulations 2015, and may involve further consultation and industry-led implementation.

Following mixed feedback to the BRS consultation, the government will not legislate at this stage. Instead, it is seeking industry-led proposals from the private sector by 18 December.

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The European Securities and Markets Authority (ESMA) has published a final report with the results of its 2025 common supervisory action (CSA) on the compliance and internal audit functions of fund managers, conducted with national competent authorities (NCAs) across the EU and EEA. The review found that most fund managers broadly comply with key requirements under the Alternative Investment Fund Managers Directive (AIFMD) and Undertakings for Collective Investment in Transferable Securities (UCITS) frameworks; however, it identified weaknesses in governance, particularly regarding the independence of control functions, the quality and implementation of internal policies, and the effectiveness of senior management and board oversight. ESMA also noted significant variation in the quality and practical application of policies across firms, often linked to their size and complexity. The annex to the report contains examples of both good and poor practices. While the overall outcome was positive, ESMA encourages NCAs to follow up on identified breaches and vulnerabilities and to ensure timely remedial action, alongside continued supervisory engagement.

The European Commission (EC) has published a report assessing the adequacy of Regulation (EU) 2017/1131 on money market funds (MMFs), alongside new guidance in the form of FAQs. The EC's first 2023 MMF report concluded that the framework, in force since 2018, operates effectively in reducing liquidity risks, while identifying certain aspects relating to liquidity risk requiring further assessment. Building on this, the latest report finds that MMFs generally adopt a cautious approach, maintaining liquidity buffers above the regulatory minimum and demonstrating an ability to replenish them, including during periods of market stress. The report also includes analysis relevant to market resilience levels in the MMF sector, intended to serve as benchmarks to support supervisors in identifying situations that may warrant closer monitoring. The accompanying FAQs clarify expectations regarding minimum liquidity levels and the use of liquidity buffers, particularly in periods of market stress and heightened redemption requests.

The Single Resolution Board (SRB) has launched a consultation on a draft version of its operational guidance for banks on liquidity and funding in resolution and its annexes. The guidance, originally split across three separate documents, specifies the resolvability expectations related to liquidity and funding arrangements, and how banks should develop and demonstrate their capabilities in these areas. The SRB proposes to merge its guidance into a single document to supersede the previous publications, while updating existing expectations on: (i) the scope of key liquidity entities and standard identification methods; (ii) methodological assumptions for banks to estimate liquidity needs; (iii) governance expectations on the liquidity situation; and (iv) collateral-related expectations. The SRB confirms the proposed changes do not introduce new deliverables. The deadline for comments is 6 July.

The EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) has launched a consultation on draft regulatory technical standards (RTS) under Article 46(4) of Directive (EU) 2024/1640 (MLD 6). The draft RTS specify the respective duties of home and host supervisors of cross-border groups of obliged entities operating in the financial and non-financial sectors, and the modalities of cooperation between them.

Specific provisions in the draft RTS include:

• Information exchange, including obligations to share information on the supervisor's own initiative and upon request, with specific content requirements.
• Inquiries, setting out procedures for conducting or facilitating cross-border supervisory inquiries, including roles, timelines and post-inquiry exchanges.
• Common approaches, enabling supervisors to, where necessary, agree on coordinated or joint supervisory activities.

AMLA will hold a public hearing on 28 May for stakeholder input on the consultation.

The UK Financial Conduct Authority (FCA) has published a statement providing an update on the legal challenges to its motor finance redress scheme. The FCA confirms that, despite ongoing litigation (with a hearing unlikely before October), it continues to view the industry-wide scheme as the quickest and most effective route to deliver fair compensation and intends to defend it. It will provide a further update as soon as possible. In the meantime, firms are expected to continue preparatory work for implementation, including: (i) identifying relevant complaints; (ii) gathering data on commission arrangements and disclosure practices; (iii) working with claims companies to resolve instances where consumers are represented by more than one party; (iv) cooperating with the UK Financial Ombudsman Service (FOS) on any existing complaints that have been referred to it; and (v) submitting implementation plans (without formal attestations required) by 12 May. At the same time, the FCA is also considering whether, where complaints include both elements within the scheme and elements unrelated to motor finance commission, firms should progress the unrelated elements. Complaints that fall entirely outside the scope of the scheme should continue to be progressed in the usual way.

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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.