The following posts provide a snapshot of selected UK, EU and global financial regulatory developments of interest to banks, investment firms, broker-dealers, market infrastructures, asset managers and corporates.
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ESMA publishes technical advice on scope of CSDR settlement discipline regime
26 June 2025
The European Securities and Markets Authority (ESMA) has published a final report and press release, providing technical advice to the European Commission (EC) on narrowing the scope of the Central Securities Depositories Regulation (CSDR) cash penalties under the CSDR settlement discipline regime. CSDR Refit, which came into force in January 2024, referred to the need for the settlement discipline rules to be more operational and better tailored to diverse market operations and transactions. To this end, ESMA's report provides technical advice to the European Commission on the underlying causes of settlement fails which are considered not to be attributable to participants in the transaction, as well as circumstances which are not considered as trading, and which should therefore not be subject to settlement discipline measures.
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FATF publishes targeted update and guidance on virtual assets and VASPs
26 June 2025
The Financial Action Task Force (FATF) has published its sixth targeted update on the implementation of its standards for virtual assets (VAs) and virtual asset service providers (VASPs), alongside an updated webpage. The report assesses global progress in applying anti-money laundering and counter-terrorist financing (AML/CFT) measures to VAs and VASPs, noting improvements in regulation and enforcement. However, challenges remain and the report sets out key recommendations on: (i) risk assessment and policy approach to VASPs; (ii) licensing/registering and supervising VASPs; (iii) implementation of the Travel Rule; (iv) addressing emerging and increasing risks related to stablecoins and decentralised finance arrangements; and (v) recommendations for the private sector.
In parallel, FATF has also released Best Practices on Travel Rule Supervision, providing more detailed guidance to assist jurisdictions in effectively supervising compliance with the Travel Rule for VASPs. The guidance offers practical examples and supervisory approaches to address common implementation challenges. -
FCA to launch new and improved Handbook website
26 June 2025
The UK Financial Conduct Authority (FCA) has announced its plan to launch a new and improved FCA Handbook website as part of its five-year strategy to enhance regulatory efficiency. The updated website will retain all existing features but will offer improved navigation, facilitate understanding of rule connections and make it easier to compare different versions of Handbook text. A beta version will be available soon, with both the current and new websites accessible during the testing phase. The full rollout is expected later this year, ensuring continuous updates to rules and guidance throughout the transition.Topic : Other Developments -
BoE and PRA publish annual reports
26 June 2025
The Bank of England (BoE) and Prudential Regulation Authority (PRA) have published a series of annual reports, which are set out below.- BoE Annual Report and Accounts. The BoE has set out its strategic investment priorities for 2025–2028, which include: monetary policy transformation, in the context of the Bernanke Review recommendations; modernising the BoE's central banking operations and streamlining data collections; supporting greater innovation in retail and wholesale payments in the UK and internationally; supporting growth in the economy; reviewing the BoE's activities for efficiency and effectiveness; and completing transformation agendas.
Topic : Other Developments -
PRA publishes 2024/2025 secondary competitiveness and growth report
26 June 2025
The UK Prudential Regulation Authority (PRA) has published its 2024/25 competitiveness and growth report, setting out how it has advanced its secondary competitiveness and growth objective (SCGO). The SCGO was introduced under the Financial Services and Markets Act 2023 (FSMA 2023) and requires the PRA to advance the international competitiveness and growth of the UK economy, particularly in financial services. The regulators are required to publish two annual reports, in 2024 and 2025, on SCGO implementation. The PRA also comments on its secondary competition objective (SCO), which requires the PRA to facilitate effective competition in the markets for services provided by PRA-authorised firms. Earlier this month, the House of Lords Financial Services Regulation Committee published a report on the regulators' progress in supporting growth and competitiveness, finding a prevailing culture of risk aversion by the regulators which undermines the objective.
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FCA findings on risk and wind-down planning in payment and e-money firms
26 June 2025
The UK Financial Conduct Authority (FCA) has published the findings of its multi-firm review into risk management and wind-down planning across e-money and payment firms. While the FCA had observed examples of good practice in the structure of firms' wind-down plans (WDPs) and risk management frameworks, it concluded that no firm fully met its expectations and in particular were not adhering to the FCA's finalised guidance. Key areas identified as needing improvement are set out below.
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PSR consults on the revocation of SD4
26 June 2025
The UK Payment Systems Regulator (PSR) has published consultation paper CP25/2 alongside a new webpage, proposing the revocation of Specific Direction 4 (SD4) and its amendment, SD4a. SD4, introduced following the PSR's 2016 infrastructure market review, requires the operator of the LINK payment system to procure its central infrastructure every ten years via a competitive process.
The PSR now considers this requirement may no longer be an effective means of addressing competition concerns, due to evolving market conditions (in particular, decreased cash withdrawals and reduced scheme revenues). Instead, the PSR proposes that active regulatory oversight of LINK and its infrastructure provider, Vocalink, would be a more effective way to mitigate risks associated with a monopoly position. The consultation seeks views on the proposed revocation, particularly the risks the removal may create on competition, innovation and end-user outcomes, and how enhanced supervision of LINK and Vocalink could help address them. The deadline for responses is by 5:00pm on 17 July. -
ESMA publishes technical advice on eligible assets for UCITS
26 June 2025
The European Securities and Markets Authority (ESMA) has published its final technical advice to the European Commission (EC) on the review of the UCITS Eligible Assets Directive (EAD) accompanied by a press release. The EAD clarifies the types of assets in which UCITS funds may invest. ESMA's advice assesses how the EAD has been implemented across jurisdictions and sets out a range of proposals to overcome divergent practices by national regulators and markets. Central to ESMA's recommendations is the adoption of a look-through approach to assess asset eligibility for at least 90% of a UCITS portfolio. ESMA also proposes allowing up to 10% indirect exposures to alternative assets, subject to strict regulatory safeguards. The EC is expected to consider ESMA's advice in its review of the UCITS EAD framework.Topic : Fund Regulation -
ESMA report proposes amendments to DLT pilot regime for permanent adoption
25 June 2025
The European Securities and Markets Authority (ESMA) has published a report, accompanied by a press release, on the functioning and review of the Distributed Ledger Technology (DLT) pilot regime. The DLT pilot regime allows certain DLT market infrastructures to operate with exemptions from some EU financial services legislation. The regime has so far received limited uptake, with only three authorised infrastructures and minimal live trading activity. The report identifies operational and legal challenges, such as interoperability issues and restricted access to central bank money and refers to industry feedback, that the thresholds for financial instruments that may be admitted to trading or recorded on DLT market infrastructures may be too restrictive.
Read more.Topic : FinTech -
FCA publishes discussion paper on the future of the UK mortgage market
25 June 2025
The UK Financial Conduct Authority (FCA) has published discussion paper DP25/2 (DP) accompanied by an updated webpage and press release, on the future of the UK mortgage market, as part of its ongoing mortgage rule review. The DP forms part of the FCA's five-year strategy to rebalance risk, support growth and help consumers navigate their financial lives. It outlines potential reforms to improve access to sustainable home ownership, support responsible lending and encourage market innovation.
Read more.Topic : Consumer / Retail -
EU legislative bodies reach political agreement on CMDI framework
25 June 2025
The Council of the EU and the European Parliament have announced they have reached a political agreement on the legislative package to reform the crisis management and deposit insurance framework for banks in the EU. The package includes targeted amendments to the Bank Recovery and Resolution Directive, the Single Resolution Mechanism Regulation and the Deposit Guarantee Schemes Directive. The reform aims to strengthen the EU's ability to manage bank failures, including small and medium-sized banks, by facilitating access to industry-funded safety nets, such as national resolution funds and the Single Resolution Fund. These tools are intended to supplement a failing bank's own loss-absorbing capacity, thereby reducing reliance on taxpayer-funded bailouts, referred to as the "bridge the gap" mechanism.
Read more.Topic : Recovery and Resolution -
UK Government consults on measures to support UK sustainable finance
25 June 2025
The UK Government's Department for Energy Security & Net Zero has published a series of three consultations on proposals to help UK-regulated financial institutions and large companies to develop climate transition plans. The first consultation seeks views on proposals to implement climate-related transition plan requirements, including mandating that entities develop and disclose transition plans or explain why they have not disclosed a plan and making it a legal requirement to take steps in line with a transition plan. The consultation also considers the scope of companies that should be captured (with a focus on ensuring the requirements are proportionate and concentrate on economically significant entities).
Read more.Topic : Sustainable Finance -
Regulation amending CRR in relation to SFT stable funding factors published in OJ
25 June 2025
Regulation (EU) 2025/1215 of the European Parliament and of the Council of EU of 17 June amending the Capital Requirements Regulation (CRR) in relation to the stable funding factors for securities financing transactions (SFTs) and unsecured transactions with a residual maturity of less than six months, was published in the Official Journal of the European Union. The factors are used to apply the net stable funding requirements under the CRR and, by virtue of article 510(8) of CRR, were due to be increased unless otherwise specified in a legislative act adopted on the basis of a European Commission proposal. However, the current position is instead being maintained to ensure the ongoing efficient functioning of SFTs and collateral markets and to avoid an undue increase in funding costs for credit institutions. The Regulation enters into force on 26 June and applies from 29 June. Under the revised framework, the European Banking Authority will assess and report on the impact of these changes every five years.Topic : Prudential Regulation -
ESMA consults on draft RTS for margin transparency requirements and clearing costs
24 June 2025
The European Securities and Markets Authority (ESMA) has published two consultation papers (CP) proposing draft regulatory technical standards (RTS) mandated under the review of European Market Infrastructure Regulation (EMIR 3).- Draft RTS on EMIR 3 margin transparency requirements (under article 38 EMIR), regarding the information to be provided by central counterparties (CCPs) on their margin simulation tools and by clearing service providers (CSPs) on their margin simulation requirements; and by both on their margin models. The aim is to improve transparency for clearing participants and enable them to better predict margin calls.
- Draft RTS on clearing fees and associated costs (under article 7c(4) EMIR), specifying further details of the information to be disclosed by CSPs regarding clearing fees and associated costs, with the aim of increasing costs transparency.
The deadline for responses is 8 September. ESMA will submit the final draft technical standards to the European Commission by 25 December. -
PRA consults on proposed reforms to credit union investment rules
24 June 2025
The Prudential Regulation Authority (PRA) has published consultation paper CP13/25 proposing amendments to the credit union investment rules to permit investments in credit union service organisations (CUSOs). The proposals would result in changes to the credit unions part of the PRA Rulebook and to supervisory statement (SS) 2/23.
The key proposals are:- To amend the PRA Rulebook to clarify that credit unions are permitted to invest in CUSOs.
- To introduce a new chapter in SS2/23 to outline the PRA's expectations for credit unions investing in or using CUSOs to manage associated prudential risks.
- To make consequential amendments to chapter 17 of SS2/23 following the PRA's proposed deletion of SS20/15 (on supervising building societies treasury and lending activities).
Topic : Prudential Regulation -
UK regulators publish updated MoU on payment systems
24 June 2025
The UK Financial Conduct Authority (FCA), Bank of England, Payment Systems Regulator (PSR) and Prudential Regulation Authority have issued a joint statement announcing their revised memorandum of understanding (MoU) on the supervision of payment systems in the UK.
The update follows a review conducted by the authorities in December 2024 which identified opportunities to enhance cooperation among the authorities in overseeing payment systems. The revised MoU aims to clarify the respective roles and coordination mechanisms of the authorities and introduces principles for regulatory cooperation including through regular engagements to share insights on the sector, delivering joint policy initiatives and coordinating supervisory work. The revised MoU reflects the PSR's current responsibilities, notwithstanding the UK government's announcement that the PSR's functions will largely be rolled into the FCA in the future, with no immediate changes being made by the UK Government to the PSR's remit or ongoing work programme. -
UK Government publishes 10-year industrial strategy plan
23 June 2025
The UK Government has published a policy paper outlining its industrial strategy. The strategy centres around eight priority sectors (the IS-8), including financial services. The UK government's ambition is to establish the UK as the world's most innovative full-service financial centre by 2035. A dedicated sector plan is expected to be published alongside the mansion house speech on 15 July.
Key measures to achieve this objective include:- Ensuring financial services enables growth across the real economy, with retail banks and wholesale markets providing credit and liquidity.
- Mobilising pensions capital into the UK.
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Council of EU adopts negotiating position on omnibus sustainability package
23 June 2025
The Council of the EU has announced it has adopted its negotiating mandate on the Omnibus I package which proposes targeted amendments to, amongst other things, the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D). The EU has already published Directive (EU) 2025/794 which implemented the "stop-the-clock" proposal, postponing the application date of aspects of CSRD and CS3D.
Read more.Topic : Sustainable Finance -
BoE renews statement of commitment
23 June 2025
The Bank of England (BoE) has announced it has renewed its statement of commitment to the FX Global Code, based on the revised code dated December 2024. The FX Global Code outlines principles of good practice in the foreign exchange market. By reaffirming its commitment, the BoE attests that its internal processes align with the code's principles. The BoE encourages all FX market participants, including its counterparties, to adhere to the updated code to maintain high standards in the market.Topic : Regulatory Reform Post Brexit -
ESMA progresses streamlined reporting efforts with call for evidence, discussion paper and final reports
23 June 2025
The European Securities and Markets Authority (ESMA) has launched a call for evidence (CfE) as part of its Data Strategy to gather feedback on how to simplify and streamline supervisory reporting. The aim is to reduce the operational burden and costs associated with financial transaction reporting, particularly under MiFIR, EMIR and SFTR, while maintaining transparency and regulatory oversight. ESMA is exploring two potential approaches in the CfE: (i) eliminating overlaps within existing reporting requirements without changing current reporting channels and data collection infrastructure; or (ii) creating a unified reporting template for all instruments currently in-scope of EMIR, SFTR and MiFIR reporting (and potentially other reporting requirements) and adopt the "report once" principle.
The deadline for responses to the CfE is 19 September, with a final report expected to be published in early 2026. ESMA also published final reports summarising feedback from its consultations on RTS 22 on transaction data reporting and RTS 24 on order book data and RTS 23 on supply of reference data. No changes will be proposed to the current reporting frameworks while the supervisory reporting consultation is ongoing. The broader MiFIR Review will continue as planned.
In parallel, ESMA has also published a separate discussion paper and accompanying press release, seeking feedback on how to improve efficiency, consistency and effectiveness of supervisory reporting within the asset management sector, in particular with respect to AIFMD and UCITS Directive requirements. The deadline for comments on the discussion paper is 21 September, with the final report expected to be published in April 2026.Topic : Fund Regulation -
FATF publishes updated guidance on financial inclusion and AML/CFT measures
22 June 2025
The Financial Action Task Force (FATF) has published updated guidance accompanied by a press release, on financial inclusion and anti-money laundering and counter terrorist financing measures (AML/CFT). The update follows the enhancement of Recommendation 1 of the FATF Standards earlier this year, to emphasise the need for a risk-based approach to AML/CFT controls in a manner that promotes global financial inclusion, without undermining the effectiveness of the measures for the purpose of combatting crime. The guidance now includes practical case studies and sets out ways that national regulators and firms can leverage a risk-based approach to foster financial inclusion while safeguarding financial integrity. Examples of best practice in applying the risk-based approach are included in an Annex to the report.Topic : Financial Crime and Sanctions -
FATF report identifies vulnerabilities in counter proliferation financing
20 June 2025
The Financial Action Task Force (FATF) has published a report and accompanying press release, highlighting significant vulnerabilities in the global financial system's ability to combat proliferation financing (PF) and sanctions evasion. The report finds that only 16% of assessed jurisdictions are effectively implementing targeted financial sanctions. It discusses, amongst other things, trends and methods of sanctions evasion, challenges and good practices in mitigating PF risk and identifies four recommendations for further FATF work on counter proliferation financing.
Read more.Topic : Financial Crime and Sanctions -
ESMA publishes statement on ESRS supervision in the omnibus environment
20 June 2025
The European Securities and Markets Authority (ESMA) has issued a public statement on its intended approach to supervision of the European Sustainability Reporting Standards (ESRS), confirming its commitment to transparent sustainability reporting while acknowledging the need for proportionality. During the first few years of ESRS application, the Guidelines for Enforcement of Sustainability Information will need to be applied proportionately and realistically. National regulators can also help by conducting informal dialogues with issuers on areas for improvement in their reporting and by bearing in mind that uncertain regulatory context in which issuers are operating. ESMA confirms national regulators will also continue to promote a harmonised supervisory approach under its coordination.Topic : Sustainable Finance -
EBA review of RTS under PAD
20 June 2025
The European Banking Authority (EBA) has published a report and accompanying press release, on its review of the regulatory technical standards (RTS) under the Payment Accounts Directive concerning standardised terminology for payment account services. The EBA concludes that the current terminology remains fit for purpose. It acknowledges the growing relevance of instant credit transfers and notes that their inclusion in the RTS may become appropriate in the future, although no immediate changes are deemed necessary. Instead, the EBA proposes revisiting the findings in four years or when significant market or legislative developments occur to ensure the terminology remains relevant and effective. -
ESMA launches first selection procedure for consolidated tapes for shares and ETFs
20 June 2025
The European Securities and Markets Authority (ESMA) has launched the first selection procedure for a consolidated tape provider (CTP) for shares and exchange-traded funds. The selection process will be guided by the regulatory technical standards adopted by the European Commission on 12 June, which will be used as the basis for the assessment of some criteria. The contract notice and procurement documents can be accessed via ESMA's EU Funding & Tenders Portal, with the deadline for participation requests being 25 July. ESMA will review the submitted requests against the exclusion and selection criteria and will invite the successful candidates to submit a formal application. ESMA aims to finalise the selection by the end of this year, with the successful applicant operating the CTP for five years under its supervision.Topic : MiFID II -
FSB report identifies vulnerabilities in non-bank CRE investors
19 June 2025
The Financial Stability Board (FSB) has published a report, alongside a press release and updated webpage, examining vulnerabilities in non-bank commercial real estate (CRE) investors. The report identifies entities such as real estate investment trusts (REITs) and property funds as being particularly exposed to the risks of higher interest rates and highlights three key vulnerabilities in these types of investors.
Read more.Topic : Fund Regulation -
The Economic Crime and Corporate Transparency Act 2023 (Commencement No.5) Regulations
19 June 2025
The Economic Crime and Corporate Transparency Act 2023 (Commencement No. 5) Regulations have been made under the Economic Crime and Corporate Transparency Act 2023 (ECCTA). These regulations, made on 10 June, bring into force the following provisions: (i) section 194 which requires the Lord Chancellor to make Civil Procedure Rules enabling courts to dismiss strategic litigation against public participation (SLAPP) claims before trial in certain circumstances and to make certain costs orders; and (ii) section 195, which defines what constitutes a SLAPP claim. The regulations, along with relevant amendments to the Civil Procedure Rules 1998, entered into force on 18 June.Topic : Financial Crime and Sanctions -
Final draft RTS on EU active account requirement published
19 June 2025
Following its consultation, the European Securities and Markets Authority (ESMA) has published a final report, including final draft regulatory technical standards (RTS), on the conditions of the Active Account Requirement under the amended European Market Infrastructure Regulation (EMIR 3). The active account requirement requires EU counterparties active in certain derivatives to hold an operational and representative active account at an EU-authorised CCP. The final draft RTS sets out the operational conditions of the account, details of the representativeness obligation and the reporting requirements for in-scope entities as amended by ESMA following its consideration of feedback to the proposed RTS. ESMA's final report discusses the feedback received and explains its decision for either maintaining the original proposal or making changes. ESMA will now submit the final draft RTS to the European Commission for approval. The Active Account Requirement applies from 25 June. Until such time as the Active Account RTS enter into force, in-scope entities should discuss compliance with their national competent authority. -
EU Delegated Regulation on threat-led penetration testing published in OJ
18 June 2025
Commission Delegated Regulation (EU) 2025/1190 of 13 February has been published in the Official Journal of the European Union. The Delegated Regulation supplements the Digital Operational Resilience Act (DORA) with regard to regulatory technical standards (RTS) related to threat-led penetration testing (TLPT). The RTS specify the criteria for identifying financial entities required to carry out TLPT, and establish detailed requirements regarding the scope of testing, the methodologies to be used and the handling and reporting of results. Further, the RTS also sets out the requirements and standards governing the use of internal testers, ensuring their independence and competence, and outlines the framework for supervisory and other forms of cooperation necessary for implementation of TLPT and the mutual recognition testing. The Delegated Regulation will enter into force on the twentieth day following its publication in the Official Journal of the European Union, which is 8 July.Topic : Operational Resilience -
EC adopts amendments to transparency requirements under MiFIR Review
18 June 2025
The European Commission has adopted a Commission Delegated Regulation to amend regulatory technical standards (RTS) on transparency requirements. The MiFIR Review revised the Markets in Financial Instruments Regulation amending the pre- and post-transparency requirements for trading venues as regards equities and non-equities. The amendments took effect on 28 March 2024. The adopted Delegated Regulation has amended two RTS supplementing the MiFIR transparency requirements.
Firstly, the adopted Delegated Regulation amends Delegated Regulation (EU) 2017/583 on transparency requirements for bonds, structured finance products (SFPs) and emission allowances by aligning the scope of the pre-transparency obligation with the MiFIR provisions, updating the transparency requirements for pre-trade transparency and recalibrating the post-trade requirements.
Secondly, the adopted Delegated Regulation amends Delegated Regulation (EU) 2017/587 on transparency requirements for equities, including shares, depositary receipts, exchange-traded funds and certificates. Among other things, the amendments set out the details of pre-trade data to be made public, set pre-trade transparency requirements for systematic internalisers and prescribe the transactions that will be exempt from the share trading obligation due to characteristics that show that the transaction is not contributing to the price discovery process.Topic : MiFID II -
EU provisional agreement on proposal for shortening the settlement cycle to T+1 for CSDR
18 June 2025
The Council of the European Union and European Parliament have reached a provisional agreement to amend the Central Securities Depositories Regulation (CSDR) to introduce a shorter settlement cycle for transferable securities transactions within the EU. The European Commission welcomed the agreement in a press release. The CSDR amendment will reduce the settlement period from two business days after trading takes place (T+2) to one business day (T+1), with the aim of promoting settlement efficiency, improving the liquidity of capital markets and eliminating costs linked to the misalignment of settlement cycles between the EU and other jurisdictions. The co-legislators agreed, however, to exempt certain securities financing transactions (SFTs) from the T+1 settlement cycle requirement. To prevent potential circumvention of the T+1 requirement, the exemption will only apply where SFTs are formally documented as single transactions comprising two linked operations. The provisional agreement requires approval by both co-legislators before going through the formal adoption procedure. Following adoption, the proposed regulation will enter into force on the twentieth day following its publication in the Official Journal of the European Union and will apply from 11 October 2027.Topic : Financial Market Infrastructure -
FATF updates standards on payment transparency
18 June 2025
The Financial Action Task Force (FATF) has published revised standards and an accompanying explanatory note, updating its comprehensive framework on recommendations to strengthen global efforts in anti-money laundering, counter-terrorist financing and counter-proliferation financing, as announced during the joint FATF-MONEYVAL Plenary meeting. The FATF update includes amendments to Recommendation 16, which governs the transparency of wire transfers through the payment chain and is commonly referred to as the "Travel Rule. The revised recommendation is aimed to modernise FATF standards in response to the evolving payments landscape, which now includes a broader range of products and services, technologies and business models.
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EBA consults on draft RTS on proposed acquisitions of credit institutions
18 June 2025
The European Banking Authority (EBA) has published a consultation paper and accompanying press release, on draft regulatory technical standards (RTS) under the Capital Requirements Directive (CRD as amended by CRD IV). The draft RTS specify the minimum information that must be provided to competent authorities when notifying about proposed acquisitions of qualifying holdings in credit institutions. The aim is to standardise the notification process across the EU, ensuring a consistent application against the five assessment criteria set out under CRD.
Read more.Topic : Prudential Regulation -
EC proposes Securitisation package in bid to revive EU market
17 June 2025
The European Commission (EC) has published a Securitisation package which aims to strengthen and simplify the EU securitisation framework. It is the first legislative initiative proposed under the Savings and Investments Union Strategy. The package consists of a proposal to amend the EU Securitisation Regulation (Regulation (EU) 2017/2402), a proposal to amend the Capital Requirements Regulation (CRR) as regards exposures to securitisations and a consultation on measures to amend the Liquidity Coverage Ratio (LCR) Delegated Regulation (Commission Delegated Regulation (EU) 2015/61). The proposal to amend the Securitisation Regulation seeks to simplify the existing due diligence rules with the aim of reduce duplicative and time-consuming requirements for investors. Verification of information will no longer be required regarding EU-based selling parties and low-risk investments guaranteed by multilateral development banks will be exempt from due diligence.
Read more.Topic : Securities -
FCA response to House of Lords committee report on enforcement investigations published
17 June 2025
The UK Financial Conduct Authority (FCA)'s response to the report issued by the House of Lords Financial Services Regulation Committee (the Committee) on the FCA's proposals to publicise enforcement investigations has been published. The response addresses the Committee's concerns regarding the FCA's proposed changes to its enforcement approach and public disclosure of investigations. The FCA has since published its final policy statement confirming that it would not proceed with introducing a new 'public interest' framework.
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HMT updates BNPL policy for domestic premises suppliers
16 June 2025
HM Treasury has published a policy paper setting out an update to its final position to its 2024 consultation on regulating Buy-Now, Pay-Later (BNPL) products which led to the laying of the draft secondary legislation, The Financial Services and Markets Act 2000 (Regulated Activities etc) (Amendment) Order 2025. Under the draft regulation, domestic premises suppliers (DPS merchants), which are businesses who sell, offer to sell or agree to sell goods or offer to supply or contract to supply services in people's homes, are required to seek credit broking permissions to offer BNPL products as a payment option. However, in response to industry feedback, the UK Government has concluded that this requirement may have a disproportionate impact for small businesses and will potentially reduce consumer choice. Consequently, an amending negative statutory instrument to coincide with the BNPL regulation, will be laid to remove this requirement, while maintaining key consumer protections. These include: (i) BNPL lenders will be required to conduct affordability and creditworthiness checks before consumers can use the product; (ii) consumers will be able to raise complaints through the Financial Ombudsman Service and access protections under section 75 of the Consumer Credit Act; and (iii) BNPL lenders authorised by the UK Financial Conduct Authority (FCA) will be expected to comply with Consumer Duty rules, including regular monitoring and review of consumer outcomes. BNPL firms will also be expected to exercise greater oversight of the merchants using their services—including DPS merchants. The UK government and the FCA will continue to monitor the BNPL market and will take any action, if required, to prevent consumer harm. -
ESMA 2024 annual report
16 June 2025
The European Securities and Markets Authority (ESMA) has published its 2024 Annual Report, alongside a press release, outlining the activities undertaken and results achieved in EU capital markets over the past year. Key accomplishments include setting the necessary steps, governance and timeline for the EU's transition to a T+1 settlement cycle, the selection of consolidated tape providers to enhance market transparency and the implementation of new regulations under the Markets in Crypto-Assets Regulation. ESMA also contributed to the development of the European Single Access Point, advanced the optimisation of financial market data usage and issued new guidelines aimed at addressing and mitigating greenwashing risks. Its supervisory effectiveness was further strengthened through the execution of EU-wide stress tests and the deployment of enhanced enforcement tools.Topic : Other Developments -
TNFD announces new phase of work – nature related data solutions
16 June 2025
The Taskforce on Nature-related Financial Disclosures (TNFD) has announced a new phase of work to improve market access to decision-useful nature data with plans to release a set of recommendations at COP30 this year. This new phase of work will involve pilot testing and market consultations to develop technical design specifications for a proposed Nature Data Public Facility (NDPF). The pilot programme will: (i) test nature-data principles; (ii) test data quality of nature-related data set; (iii) identify nature-data gaps in need of long-term funding; and (iv) test the NDPF with downstream users to define their data needs and inform design specifications. TNFD will also launch a grand challenge to encourage the development of new technology solutions to enable small and medium-sized enterprises to rapidly assess their nature-related issues globally. The pilot testing will run until October and involve a wide range of global implementation partners as well as a diverse group of over 40 upstream nature data providers and more than 20 downstream nature data users and market intermediaries across markets and sectors.Topic : Sustainable Finance -
EBA publishes technical standards on operational risk capital requirements and supervisory reporting
16 June 2025
The European Banking Authority (EBA) has published final reports on draft regulatory technical standards (RTS) and draft implementing technical standards (ITS) relating to the revised operational risk framework under the Capital Requirements Regulation (CRR) as amended by the CRR3. The draft RTS and ITS will be submitted to the European Commission (EC) for adoption.
Read more.Topic : Prudential Regulation -
HMT issues wholesale cash oversight orders
16 June 2025
HM Treasury (HMT) has published a series of wholesale cash oversights orders (dated 12 June) issued for the purpose of the Bank of England's (BoE) wholesale cash oversight regime. The orders confirm the recognition of several firms under Part 5A of the Banking Act 2009 for their roles in the wholesale cash distribution system. Under the Banking Act 2009, the BoE is accountable for overseeing risks to the effectiveness, resilience and sustainability of wholesale cash distribution across the UK, or any part thereof. The firms recognised include Vaultex UK Limited, G4S Cash Centres (UK) Limited, Post Office Limited, National Westminster Bank Public Limited Company, The Royal Bank of Scotland Public Limited Company, Lloyds Bank PLC, Bank of Scotland PLC, Barclays Bank UK PLC, Barclays Bank PLC, HSBC UK Bank PLC, HSBC Bank PLC and Santander UK PLC. -
The Payment Services and Payment Accounts (Contract Termination) (Amendment) Regulations 2025
13 June 2025
The Payment Services and Payment Accounts (Contract Termination) (Amendment) Regulations 2025 (SI 2025/688) have been published, alongside an explanatory memorandum. The regulations amend regulation 51 of the Payment Services Regulations 2017 (PSRs) to strengthen consumer protections when banks and payment service providers (PSPs) terminate payment service contracts. Under the new rules, PSPs must now provide customers at least 90 days' notice—an increase from the two months currently required—before closing a customer's account or ending a payment service contract. They must also give a clear, specific written explanation for the termination, enabling customers to understand the decision and, if necessary, challenge it through the Financial Ombudsman Service.
The aim is to prevent arbitrary account closures, enhance transparency and support small businesses by giving them more time to secure alternative banking arrangements, reinforcing the government's commitment to economic growth and security under the Plan for Change.
The regulations also amend regulations 25 and 26 of the Payment Accounts Regulations 2015 to bring the notice period and the requirement to provide reasons for terminating basic bank account contracts in line with the updated PSRs. Banks will also need to provide reasons for refusing an application for a basic bank account.
The legislation enters into force on 28 April 2026 and will apply to contract terminations and bank account closures for contracts agreed from and including 28th April 2026. -
Outcome of joint FATF-MONEYVAL plenary
13 June 2025
The joint FATF-MONEYVAL Plenary meeting, hosted by the Council of the European Union and chaired by FATF President Elisa de Anda Madrazo and MONEYVAL Chair Nicola Muccioli, concluded with significant progress in global efforts towards anti-money laundering (AML), counter-terrorist financing (CFT) and counter-proliferation financing (CPF) efforts.
Key takeaways include:- The approval of changes to the FATF Standards to enhance cross-border payment security, supporting the G20 initiative to make payments faster, cheaper, more transparent and accessible.
- The adoption of Latvia's mutual evaluation report which assessed the effectiveness of the country's AML, CFT and CPF measures; the report will be published later this year.
Topic : Financial Crime and Sanctions -
BCBS voluntary framework for disclosure of climate-related financial risks
13 June 2025
The Basel Committee on Banking Supervision (BCBS) has released a framework for the voluntary disclosure of climate-related financial risks, alongside an updated webpage and press release. This framework, which builds on the November 2023 consultative document and forms part of the BCBS's broader efforts to strengthen the resilience of the banking system to climate-related risk, is designed to operate within the Pillar 3 disclosure framework. It aims to enhance financial stability by providing banks with structured guidance for disclosing both qualitative and quantitative climate-related financial risks. While the BCBS agreed for the framework to be voluntary in nature, jurisdictions may choose to implement it domestically. The framework is structured around a series of qualitative tables and quantitative templates.
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Council of European Union agrees negotiating mandate for proposed Payment Services Package
13 June 2025
The Council of the European Union has announced it has adopted its negotiating mandate for the proposed Payment Services Directive (PSD3) and Payment Services Regulation (PSR), collectively known as 'the Payment Services Package'. The legislative package aims to modernise the EU's regulatory framework for payment services, building on the foundations of PSD2 to enhance consumer protection, strengthen fraud prevention and improve the functioning of open banking. It also seeks to address the pending challenges in the context of the impact and application of PSD2 in the internal market and adapt it to align with new market developments. Once formally agreed by both the Council of European Union and the European Parliament, the proposals will establish the PSR, which will be directly applicable in the EU and will repeal PSD2, replacing it with PSD3. We discuss the Payment Services Package in our bulletin, "Combatting payment account fraud - latest regulatory developments from the European Union." -
House of Lords committee publishes report on barriers to growth and competitiveness
13 June 2025
The House of Lords Financial Services Regulation Committee (the Committee) has published a report, alongside a press release, evaluating the progress made by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) in supporting growth in the financial services sector and the wider UK economy. The Financial Services and Markets Act 2023 introduced a secondary objective for the regulators focused on international competitiveness and growth. While the Committee acknowledges that this objective has encouraged regulators to consider the broader impact of their actions, it also finds a prevailing culture of risk aversion by the regulators which undermines the objective. It states this contributes to persistent barriers that limit firms' ability to grow, innovate and compete. -
EC adopts Delegated Regulation to delay the application of Basel 3 market risk prudential requirements by an additional year
12 June 2025
The European Commission (EC) has adopted a Delegated Regulation amending Regulation 575/2013 (CRR) regarding the date of the application of market risk prudential requirements. The new market risk requirements were introduced by CRR amendments made by Regulation (EU) 2024/1623, which marked the completion of the second phase of the implementation of the Fundamental Review of the Trading Book (FRTB), part of the Basel 3 international standards. The application date has already been postponed a year to 1 January 2026. However, a further postponement—which would delay application until 1 January 2027—is being proposed to reflect concerns around delays in Basel 3 implementation by other jurisdictions and the potential impact on EU banks. The Delegated Regulation will be scrutinised by the European Parliament and Council for three months (and this period may be extended by a further three months).Topic : Prudential Regulation -
ESMA publishes principles for supervisory oversight of third-party risk
12 June 2025
The European Securities and Markets Authority (ESMA) has published a comprehensive set of principles, accompanied by a press release, aimed at strengthening the supervision of third-party risks across the EU financial sector. The principles are intended to guide national competent authorities (NCAs) in identifying, assessing and overseeing third-party risks for EU entities in the securities markets, in accordance with the relevant legal framework and the principle of proportionality. Aligned with international standards (IOSCO, FSB and BCBS), the principles apply to all third-party arrangements, whether the third party is intra-group or external, located within the EU or in a third country, and irrespective of the technology used. The fourteen principles are grouped into four thematic areas to support NCAs in exercising effective oversight and ensuring that entities appropriately manage third-party risks.
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EC adopts technical standards for the development of consolidated tapes
12 June 2025
The European Commission (EC) has adopted a suite of technical standards for the development of consolidated tapes. The creation of consolidated tapes and the removal of obstacles to the development of consolidated tapes, were a key action point following the findings of the European MiFID/MIFIR review. The changes relate to technical standards for data reporting service providers, i.e. approved publication arrangements (APAs), approved reporting mechanisms (ARMs) and consolidated tape providers (CTPs). The technical standards adopted consist of implementing technical standards and three sets of regulatory technical standards, supplementing Regulation (EU) No 600/2014 (MIFIR).
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ESMA final reports on the Prospectus Regulation and civil prospectus liability
12 June 2025
The European Securities and Markets Authority (ESMA) has published two final reports providing technical advice to the European Commission (EC). The final report on prospectus regulation forms part of ESMA's technical advice under the EU Listing Act, which seeks to make EU capital markets more accessible, especially for small and medium-sized enterprises (SMEs).
The report covers:- Draft technical advice on the standardised format and sequence of the prospectus, the base prospectus and the final terms.
Read more.Topic : Securities -
Council of EU adopts proposal to amend CRR in relation to SFT stable funding factors
12 June 2025
The Council of the European Union has announced it has adopted a proposal to amend the Capital Requirements Regulation (CRR) in relation to the stable funding factors for securities financing transactions (SFTs) and unsecured transactions with a residual maturity of less than six months. The factors are used to apply the net stable funding requirements under the CRR, and, by virtue of article 510(8) of CRR, were due to be increased unless otherwise specified in a legislative act adopted on the basis of a European Commission proposal. The original intention of article 510(8) was to increase the factors in line with the international standards agreed by the Basel Committee on Banking Supervision, but allowing for credit institutions to adapt in time, and calibrate appropriately, for the increase, which would have occurred by 28 June. However, the current position is instead being maintained to ensure the ongoing efficient functioning of SFTs and collateral markets and avoid an undue increase in funding costs for credit institutions. The decision to maintain the current position also intends to bolster the EU's competitive position given the decisions made by other jurisdictions (including the UK and the U.S.) to deviate from the Basel III international standards. The adopted amendments mark the final step in the legislative process and will be published in the Official Journal of the European Union, taking effect from 29 June. Under the revised framework, the European Banking Authority will assess and report on the impact of these changes every five years.Topic : Prudential Regulation