The Financial Services Act 2012 (Relevant Functions in relation to Complaints Scheme) (Amendment) Order 2026 was published, accompanied by an explanatory memorandum. The Order expands the remit of the Financial Regulators Complaints Commissioner (FRCC), as set out in the Financial Services Act 2012 (Relevant Functions in relation to Complaints Scheme) Order 2014, to cover complaints relating to the UK Financial Conduct Authority's (FCA) supervisory functions under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs).

Following a 2024 consultation, the Money Laundering and Terrorist Financing (Amendment) Regulations 2026 were made, which widened the information-sharing gateways in the MLRs to enable the FCA to share supervisory information with the FRCC. Due to an oversight in the 2014 Order, the FRCC's remit did not extend to investigating complaints about the FCA's MLR supervisory functions. This Order addresses that omission and corrects minor drafting errors in the 2014 Order. It enters into force on 23 July.

The European Securities and Markets Authority (ESMA) has published its final report on the simplification of financial transaction reporting under the Markets in Financial Instruments Regulation (MiFIR), the European Market Infrastructure Regulation (EMIR) and the Securities Financing Transactions Regulation (SFTR), together with a factsheet. This follows the interim report published in May which provided a summary of feedback to its June 2025 call for evidence on how to simplify and streamline reporting. 

ESMA recommends a phased reform programme combining short-term burden reduction with a long-term structural reform. At the centre of this strategy is the development of a long-term “report once” model, under which firms would submit data through a single, modular reporting framework capable of serving multiple regulatory and supervisory purposes. This aligns with the “scenario 2a” approach (which evolved from “option 2a” in ESMA’s June 2025 call for evidence). On dual-sided reporting, the final report confirms that a full transition to single-sided reporting was not retained because those data points which are currently reported are used to assess data quality.   

In the shorter term, ESMA proposes a series of simplification measures to provide more immediate burden reduction including streamlining intragroup exemptions, reducing or removing certain reporting fields and reconciliation requirements, simplifying error and omission notifications, and reviewing dual-sided reporting requirements, among other measures mentioned in section 5.2 of the report. ESMA will now engage with EU institutions on the policy recommendations, with implementation requiring legislative amendments and phased development of common reporting standards and infrastructure.

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/24 proposing reforms to streamline consumer investment disclosure requirements across the Markets in Financial Instruments Directive (MiFID), Insurance Distribution Directive (IDD) and non-MiFID investments business. The proposals would align cost disclosure requirements with the Consumer Composite Investments (CCI) regime, which replaced the prescriptive requirements in the Packaged Retail and Insurance-based Investment Products and Undertakings for Collective Investment in Transferable Securities disclosure documents with a new CCI "product summary". The regime allows firms flexibility over how they present information in line with the consumer duty.

Following a review of MiFID derived requirements, the FCA intends to make changes to align Conduct of Business Sourcebook (COBS) disclosure rules with the CCI regime on a conceptual and technical level, and apply the same duty-driven approach, focusing on consumer engagement and understanding.

Proposals include:

• Aligning COBS more closely with the CCI regime and making cost disclosures more consistent throughout the investment journey, so that the pre-sale presentation of product costs aligns with the CCI disclosure framework.
• Removing the MiFID-derived cumulative effect illustration pre-sale and post-sale and instead requiring firms to show how costs have impacted returns in regular post-sale reporting.​

Read more.

The UK Financial Conduct Authority (FCA) has published a statement announcing that the Upper Tribunal has made an order suspending parts of its motor finance redress scheme while legal challenges brought by several parties are considered. The order was made on terms agreed between the FCA and the challengers, with the partial suspension enabling firms to continue preparing for the scheme while avoiding duplication of work if the challenges succeed. The Tribunal is scheduled to hear the challenges on 14-18 December or 16-26 February 2027. Firms are still expected to comply with all rules that are not suspended and a list of retained scheme rules has been published

Under the suspension, firms are currently not required to calculate, communicate or pay compensation under the scheme timetable; however, they must continue preparatory work, including identifying relevant complaints and gathering data. Firms must also notify complainants who are not entitled to compensation under the scheme within the scheme deadlines, subject to limited exceptions. If a firm requires more time to notify consumers, the FCA will not treat it as non-compliant or take enforcement action as long as consumers are notified within seven weeks of the relevant scheme deadline.

Firms are expected to update complainants to explain when the legal challenge will be heard, what the partial suspension means, and the likely impact on the timetable for dealing with complaints and paying any compensation owed.

The FCA reiterates that it considers the scheme the quickest and fairest route to consumer redress and intends to defend it. If the scheme is ultimately upheld, compensation payments are expected to begin in 2027. If it is overturned, the FCA may instead require firms to resolve complaints through the standard complaints process, which could result in greater involvement from the UK Financial Ombudsman Service. The FCA expects firms to plan for the event of no scheme and to be operationally and financially ready for a complaint-led and supervisory approach to resolve historical liabilities, in line with the default statutory timelines.

In the interim, while the legal challenges are ongoing, the FCA will continue to take a pragmatic approach as previously set out in its May statement.

The European Banking Authority (EBA) has published a report with the results of a targeted peer review assessing how competent authorities supervise compliance with the Capital Requirements Regulation and Bank Recovery and Resolution Directive Pillar 3 disclosure requirements between June 2023 and June 2025. The EBA found that most authorities had fully or largely integrated Pillar 3 requirements into their supervisory frameworks, with supervisory practices generally operating efficiently and demonstrating a high degree of convergence across the EU. However, the review identified some inconsistencies between jurisdictions, including one authority rated as only partially compliant and another receiving largely "not applied" ratings due to the absence of formal assessment methodologies and processes. The EBA sets out specific individual follow-up measures where deficiencies had been identified, as well as best practices for improvement.

The Payments Vision Delivery Committee (comprising HM Treasury, the Bank of England, the UK Financial Conduct Authority and the UK Payment Systems Regulator) has published an update on the future retail payments ecosystem to support the Retail Payments Infrastructure Board's consultation on the design of the UK's next-generation retail payments infrastructure. The update outlines a proposed framework for the roles and responsibilities of participants within the future ecosystem, including a central core infrastructure scheme and operator, the product-level arrangements governing specific payment journeys, and supporting commercial, governance and consumer protection frameworks. It emphasises that the future infrastructure should support innovation, competition, interoperability and broad access while maintaining operational resilience and effective safeguards against fraud, money laundering and other financial crime.

The UK Financial Conduct Authority (FCA) has published final policy statement PS26/14 confirming the final fees and levies for 2026/27 to fund itself, the UK Financial Ombudsman Service (FOS) and certain government departments, following its March consultation. The FCA's annual funding requirement for 2026/27 will be GBP788.9 million, although GBP72.4m of retained financial penalty income from 2025/26 will be offset against fees, reducing the total amount payable by firms to GBP716.5m, a 0.7% increase from the previous year.

The FCA has largely finalised its proposals as consulted on, including a 1% increase to application, transaction and notification fees, continued staged increases to minimum fees in the A and consumer credit fee-blocks, and updated periodic fee rates reflecting changes in the data used to calculate them.

The policy statement also confirms the 2026/27 FOS compulsory jurisdiction levy of GBP86m, the levy rates collected on behalf of government departments, and amendments to the FCA's FEES guidance to clarify that direct debit is the preferred method of payment. The FCA also confirmed that it will respond separately on cryptoasset application fees, with final rules expected in its September Handbook Notice.

The draft Overseas Prudential Requirements Regime (Credit Institutions and Investment Firms) Regulations 2026 were published, accompanied by a draft explanatory memorandum. The Regulations support the transition to the FSMA 2000 model of regulation, under which detailed prudential requirements are set by the UK Prudential Regulation Authority within a framework established by government and Parliament. This transition entails the revocation of provisions of the UK Capital Requirements Regulation (UK CRR) and restatements, as needed, in UK legislation to facilitate the FSMA model, with UK CRR provisions replaced with regulator rules, supervisory statements and statements of policy.

The Regulations restate existing UK CRR equivalence provisions in legislation to create a single overseas prudential requirements regime (OPRR), preserving the scope and effect of the current prudential equivalence framework and treating existing equivalence decisions as designations under the new regime. The OPRR enables HM Treasury to designate overseas jurisdictions for specified prudential purposes, with future designations requiring a further statutory instrument and parliamentary approval. In particular, the Regulations provide a framework for designation in the context of: (i) exposures to overseas credit institutions, investment firms and exchanges; (ii) overseas eligible covered bonds; (iii) exposures to overseas central banks, regional governments, local authorities and public sector entities (with specific provision made for those in Gibraltar); and (iv) issuance of capital by overseas intermediate financial holding companies.

The Regulations are expected to enter into force on 1 January 2027.

The EU Anti-Money Laundering Authority (AMLA) has launched a consultation on draft implementing technical standards (ITS) establishing a common EU-wide format for reporting suspicious transactions and activities under the Anti-Money Laundering Regulation (EU) 2024/1624. Currently, the way suspicions and transaction records are reported differs from one country to another. This makes it harder for companies operating across borders to know what is expected from them, and harder for Financial Intelligence Units (FIUs) to exchange information with each other and with their partners. The proposed ITS would introduce a harmonised set of data points and reporting templates for obliged entities, while allowing for sector-specific reporting requirements, with the aim of improving consistency across member states, reducing reporting complexity for cross-border firms, and enhancing information sharing and processing by FIUs. The deadline for responses is 20 September. A public hearing will be held on 9 September.

The UK Payment Systems Regulator (PSR) has announced that its authorised push payment reimbursement policy is having a positive impact, according to the findings of an independent review. The findings show that payment fraud losses have fallen by GBP73 million per year, APP scam volumes have reduced by approximately 35,000 cases, reimbursement rates have increased from 54% to 65% overall (and to 97% for in-scope claims), and firms with historically higher fraud levels have made the most significant improvements.

The PSR noted that there is no evidence of market exit or significant moral hazard, although some inconsistency in implementation remains across firms. To address this, the PSR has published a roadmap setting out its next steps. The regulator will also consult, before the end of the year, on measures to improve the application of the policy and will continue to monitor evolving fraud risks, including by publishing data on the platforms used by fraudsters to target victims.

The UK Prudential Regulation Authority (PRA) has published a new webpage reminding firms of their obligations under the Depositor Protection Part of the PRA Rulebook regarding the identification, marking and reporting of Financial Services Compensation Scheme (FSCS) protected deposits, following industry queries. The PRA highlights that, under rules 43.1(1) and (2), firms must include in their class A tariff base both covered deposits and the total balance of deposits where the account holder is not absolutely entitled or which constitute safeguarded funds, unless the firm has confirmed that such deposits are not covered deposits.

Where a firm lacks sufficient information to determine eligibility, the PRA expects such deposits to be included. Amounts must be calculated consistently with the single customer view and exclusions view requirements in Chapter 12. The PRA also reminds international branches to reflect these requirements when calculating total potential FSCS liability for branch returns, noting this is a factor in its assessment of branch operations under Supervisory Statement SS5/21. Firms are expected to ensure compliance ahead of year-end reporting for 2026 and to engage with supervisors where necessary.

The UK government has published a bulletin confirming initial insights from the earlier call for evidence on the ownership and control test under UK Financial Sanctions Regulations. The call for evidence sought input on the practical operation of the test and any particular challenges in implementing the requirements.

Feedback provided the UK Office of Financial Sanctions Implementation (OFSI) with a clearer picture of how often questions of hypothetical control are raised in practice. The term hypothetical control refers to the aspect of the control test which asks the person applying the test to consider whether or not the potential controller would, if they so desired, be able (directly or indirectly) to direct the controlled entity's business as they wished. There is no requirement to demonstrate actual exercise of such hypothetical control for this aspect of the test, and it is notoriously difficult to apply in practice as it is a particularly broad and subjective area.

Respondent feedback confirmed that they encountered challenges most frequently under the Russian sanctions regime and highlighted the cost and operational burden in making assessments based on limited information, requiring enhanced due diligence, legal advice, and delaying and/or escalating business decisions. Feedback also noted the limitations on the usefulness of existing tools and guidance which are not necessarily reliable in applying the test in practice.

The bulletin confirms that this area of policy remains under ongoing review, and the government will continue to consider options for providing greater clarity.

The Digital Regulation Cooperation Forum (DRCF) has published a call for input under its "consumer interest and AI" project, project, seeking views on consumer attitudes to, and the management of risks arising from, generative and agentic AI. The call for input is structured in two phases. The first phase focuses on consumer attitudes to the risks associated with generative and agentic AI adoption, including what risks consumers feel they may be exposed to, and to what extent they are, and are not, prepared to tolerate risks in exchange for benefits of AI adoption. The deadline for responses on the first phase is 3 July. The second phase focuses on the tools, governance frameworks and regulatory approaches available to policymakers, regulators and firms to mitigate AI-related harms and deliver effective consumer protection. The deadline for responses on the second phase is 2 September. The DRCF states that responses will inform its ongoing policy work and broader engagement, including future workshops and its Responsible AI Forum, with a view to shaping the debate on proportionate, outcomes-focused regulation of AI across sectors. It does not plan to provide advice or guidance.

The Bank of England (BoE) and the UK Financial Conduct Authority (FCA) have published their joint approach document on the regulation of systemic stablecoin issuers. Under the regime, the FCA will regulate all UK-issued qualifying stablecoins and, in future, their use in payments. However, HM Treasury (HMT) may bring a stablecoin issuer within the joint regulatory framework of the BoE and the FCA by recognising the issuer as systemic. The consultation builds on the BoE's recent proposals in its June publication and the FCA's final stablecoin issuance rules in PS26/10 (please see Fintech section for more on this).

For jointly regulated systemic stablecoin issuers, the regulators are splitting supervisory responsibilities across three key areas:

• Areas where the FCA is the lead authority, and where the FCA rules apply—examples include the consumer duty, conduct and the market abuse regime.
• Areas of overlapping responsibility, where both the FCA rules and the BoE's code of practice (which is currently still in draft) apply—examples include operational resilience, record keeping, and issuance, legal claim and redemption.
• Areas where the BoE is the lead authority, and where the BoE's code of practice applies—examples include backing assets, capital and reserve requirements, safeguarding, and failure arrangements. In the case of overlapping responsibilities, the regulators expect to be able to manage these with tools they have experience using, including coordination of supervision and escalation mechanisms.

Read more.

The Bank of England (BoE) has updated the Digital Securities Sandbox Dashboard to confirm that, going forward, certain stablecoins can be acceptable settlement assets. The change in scope will allow digital securities depositories to settle the cash leg of transactions using approved stablecoins issued in the UK or overseas.

UK-issued stablecoins pegged to any currency will be permitted, as long as: (i) before 25 October 2027, the issuer will have to have demonstrated that they will be able to comply with the incoming requirements for UK issuers of qualifying stablecoins and are registered with the UK Financial Conduct Authority (FCA) for the purposes of the money laundering regime; or (ii) after 25 October 2027, the issuer will need to be authorised to issue a qualifying stablecoin. Overseas issued stablecoins will also be permitted if they are pegged to a non-GBP currency.

To be used as settlement assets in the sandbox, the stablecoins will need to meet minimum requirements which mirror the criteria used for stablecoins in the FCA's regime for UK-issued qualifying stablecoins. The minimum requirements relate to:

• Universal rights of redemption for all holders.
• Backing assets comprised of those required for UK issuers by the FCA's final rules and subject to appropriate risk management in relation to composition and redemption.

Read more.

The UK Financial Conduct Authority (FCA) has published a package confirming the final policy position for the main aspects of the new UK cryptoasset regime which is coming into effect on 25 October 2027. The rules build on a new licensing regime introduced by the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, which extend the regulatory perimeter to include the activities of issuing qualifying stablecoins, safeguarding cryptoassets, operating a qualifying cryptoasset trading platform, dealing (and arranging deals) in qualifying cryptoassets, and staking.

The package includes five final policy statements and three sets of finalised guidance:

• PS26/9: Admissions & Disclosures and Market Abuse Regime for Cryptoassets.
• PS26/10: Stablecoin Issuance.
• PS26/11: Regulated Cryptoasset Activities.
• PS26/12: Prudential Regime for Cryptoasset Firms, including additional consultations on related guidance on COREPRU and CRYPTOPRU rules.
• PS26/13: Application of the FCA Handbook to Cryptoasset Activities.
• FG26/5: Application of the Consumer Duty to cryptoasset firms.
• FG26/6: Cryptoasset operational resilience.
• FG26/7: Approach to international cryptoasset firms.

For more information on this week's developments, you may wish to read our blog post titled "Final rules for new UK crypto regime".

The European Banking Authority (EBA) has published a roadmap setting out how it will deliver its mandates under the revised EU Deposit Guarantee Schemes Directive 2026/804 (DGSD3). The reforms are part of a package seeking to strengthen the EU bank crisis management framework by opening the possibility to use DGS funds in resolution. The EBA will develop 12 regulatory products over the next three years, structured in phased batches, to support implementation of DGSD3 ahead of its application in May 2028. These relate to matters such as:

• Improving depositor information.
• Ensuring faster repayment in both domestic and cross border bank failures.
• The calculation of DGS funds and contributions, and the process to reach the target level.
• Conditions when the cap on contributions of DGS funds to resolution can be lifted.
• Enhancing cooperation between national deposit guarantee schemes and authorities.
• Strengthening stress testing frameworks to ensure crisis preparedness.
• Conditions for the use of DGS in preventative measures.

The EU Anti-Money Laundering Authority (AMLA) has issued an advisory note highlighting money laundering and terrorist financing (ML/TF) risks associated with the end of the transitional period under the Markets in Crypto-Assets Regulation (MiCAR). After 1 July, firms must be authorised as MiCAR-compliant crypto-asset service providers (CASPs) to continue providing crypto-asset services in the EU. The note outlines ML/TF risks arising from the end of the transitional period and identifies measures that can be taken by the crypto-asset sector, anti-money laundering and counter-terrorist financing supervisors, and financial intelligence units to ensure a coordinated and risk-based response that protects the integrity of the EU financial system. The note includes a table setting out the relevant risks and the corresponding suggested mitigation measures.

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/23 on the changes to the scope and proportionality of the consumer duty. This follows recent developments in response to calls for clarity on the application of the duty in the context of wholesale markets and complex distribution chains, and the FCA's commitment to address these concerns. For further background on this, you may be interested in our webinar titled "Ahead of the Curve: Consumer duty" is the future brighter for wholesale firms?.

The proposals relate to the FCA rules and guidance, including non-handbook guidance. The key proposed changes are as follows:

• Application of the duty limited to retail market business with UK customers. This would amend the current approach where the duty is applied in accordance with sector-specific conduct rules, meaning that if those sector-specific conduct rules apply to cross-border services, so does the duty. The proposal seeks to reduce complexity and cost in potentially applying overlapping regimes for cross-border activity. Note, however, that certain exclusions apply, for example in relation to Crown servants living overseas, pre-paid UK funeral plans and regulated or ancillary activities for UK pensions.
• Clearer delineation of six key concepts which are used by firms to work out how the duty is meant to apply, those concepts being: (i) retail market business; (ii) relevant exclusions depending on the nature of the business; (iii) product definition; (iv) distribution chain; (v) specific disapplication depending on the firm's role; and (vi) material influence.

Read more.

The European Banking Authority (EBA) has published a consultation paper setting out a draft methodology for the imposition of fines under the Markets in Crypto-Assets Regulation (MiCAR). The proposed framework is intended to ensure that fines imposed on issuers of significant asset-referenced tokens (ARTs) and e-money tokens (EMTs) are consistent, proportionate and transparent, and support effective compliance with the regime. Under MiCAR, the EBA is responsible for supervising issuers of tokens designated as significant, and the draft methodology outlines how fines may be calculated where infringements are committed negligently or intentionally by issuers or members of their management bodies. The deadline for comments is 28 September, with a public hearing scheduled for 16 July.

Separately, the European Commission has announced it has extended the deadline for input to its consultation on EU crypto-asset rules by one month to 30 September.

The European Banking Authority (EBA) has published its final revised guidelines for the supervisory review and evaluation process (SREP) and supervisory stress testing, mandated under the Capital Requirements Directive (CRD). The SREP is the core supervisory process that consolidates findings from all supervisory activities into a comprehensive assessment of an institution. Following consultation, the guidelines consolidate all relevant SREP provisions into a single, comprehensive framework as part of the EBA's efforts to simplify and enhance the EU supervisory framework. The update integrates new elements, including environmental, social and governance factors, operational resilience, third-country branches and clarifications on the interaction between the revised Pillar 1 and Pillar 2 capital requirements, including the output floor.

The guidelines also align with the interest rate risks for the banking book and credit spread risk arising from non-trading book activities package and incorporate ICT risk assessment into the main SREP framework. Other updates include improved proportionality, sequencing, and supervisory effectiveness, with a clearer link between supervisory measures and assessment areas. The revised guidelines will replace the existing SREP Guidelines and the Guidelines on ICT risk assessment under the SREP, with application from 1 January 2027. They will be translated into all the official EU languages and published on the EBA website. The deadline for competent authorities to report whether they comply with the guidelines will be two months after the publication of the translations.

The Digital Regulation Cooperation Forum (DRCF) has issued a call for input under its Thematic Innovation Hub on the theme of "authentication and trust", exploring how regulators can help innovators achieve public trust in new technologies and systems. The Hub enables regulators to better understand emerging risks and opportunities and to engage earlier with innovators developing complex new technologies.  The call focuses on the opportunities and challenges associated with two key sub-themes: (i) digital verification, including where these services may support or intersect with open finance and wider smart data frameworks. The DRCF makes clear that this term refers solely to private-sector use cases and focuses exclusively on the verification of identity attributes, rather than the government's ongoing work on digital identity; and (ii) synthetic media and deepfakes, including AI-generated content that may pose risks to authentication, consumer trust and intellectual property rights. Responses are intended to merely inform the DRCF's future cross-regulatory work, and the DRCF does not intend to provide advice or guidance in response to questions raised through the call for input. The deadline for input is 14 August. The DRCF may engage further with respondents through webinars and/or roundtables.

The Bank of England (BoE) has published the Retail Payments Infrastructure Board (RPIB) consultation on the design of the UK's future "next‑generation" retail payments infrastructure, building on the government's National Payments Vision and the Payments Vision Delivery Committee (PVDC) strategy.

The consultation focuses on the core clearing and messaging infrastructure needed for the design's blueprint and does not intend to prescribe user-facing products or services. The consultation is structured around three areas, each of which will be considered alongside each other: (i) the future payment journeys the infrastructure should enable and support, including new payment methods such as account-to-account payments at the point of sale and enhanced cross-border payments; (ii) the design principles that should guide its development; and (iii) the role of the core infrastructure within the wider payments ecosystem. The BoE notes that success will also depend on progress in two related areas: (i) ecosystem roles and responsibilities for participants; and (ii) the development of successful products and services, including priority use cases identified in the PVDC strategy (such as account-to-account payments at the point of sale).

The design process is intended to be closely coordinated with wider reforms by HM Treasury and the UK Financial Conduct Authority, to modernise payments regulation. The consultation also includes an indicative roadmap, setting out how design and implementation could be sequenced.

The BoE further highlights that the new infrastructure should support interoperability across different forms of digital money (including the potential future of the digital pound). The deadline for comments is 11 September. Feedback will help the RPIB identify areas where further analysis, testing or industry engagement is needed, including through new engagement forums. Thereafter, the RPIB will publish a summary of responses and outline next steps in the high-level design phase, which will be taken forward by the new delivery company later this year.

The Financial Services and Markets Act 2023 (Commencement No. 15 and Saving and Transitional Provisions) Regulations 2026 were made and published. The Regulations form part of the phased implementation of the Financial Services and Markets Act 2023 (FSMA 2023) with respect to the revocation of assimilated law (the body of EU law retained at the point of Brexit).

In particular, from 1 January 2027, the Regulations revoke Articles 81(1)(a)(iii), 82(a)(iii), 107(3) and (4), 114(7), 115(4), 116(5), 382(4)(b), 391 and 497 of the Capital Requirements Regulation (Regulation 575/2013) (CRR), that relate to existing equivalence regimes which are being replaced by the new UK overseas prudential requirements regime. Related legislation, specifically Regulation 11(5)(e) of the Gibraltar (Miscellaneous Amendments) (EU Exit) Regulations 2019 and Implementing Decision 2014/908, which contains equivalence decisions relating to Articles 107(4), 114(7), 115(4), 116(5) and 142(2) of the UK CRR are also being revoked. The Regulations also amend earlier commencement regulations to remove the CRR Equivalence Directions 2020 from an existing saving provision and introduce saving and transitional provisions to preserve the treatment of central counterparties (CCPs) as qualifying CCPs (QCCPs) under Article 497 the CRR. This is to ensure continuity of treatment for recognised CCPs and those seeking recognition under the European Market Infrastructure Regulation, during the transition to the new regime.

The Financial Action Task force (FATF) has launched a consultation on draft guidance to support the implementation of its revised Recommendation 16 (Wire transfers) on payment transparency. The Recommendation is commonly referred to as the "Travel Rule" and was updated in June 2025. The proposed guidance aims to reflect developments in the payments landscape and to strengthen the security of cross-border payments by increasing the transparency of information accompanying transfers and introducing measures to address fraud and errors. Feedback is sought on a range of issues, including:

• Detecting and preventing misdirected payments, including by leveraging the three options for alignment checks foreseen in the revised Standard.
• Implementation that supports financial inclusion, including in lower-capacity jurisdictions.
• How Recommendation 16 applies to newer payment methods, such as digital wallets and mobile money.
• Implementing Recommendation 16 and meeting data protection and privacy requirements together.

The deadline for responses is 21 August, with the final guidance intended to assist jurisdictions and firms in meeting the revised standards by the end of 2030. The full list of consultation questions is set out in the explanatory memorandum to the draft guidance.

The UK Financial Conduct Authority (FCA) has published an updated webpage providing information for firms on motor finance complaints in the context of the ongoing legal challenge to the redress scheme. The FCA notes that there remains uncertainty regarding the scheme's requirements while the legal proceedings are ongoing. The FCA is engaging with the Tribunal and the parties involved in the legal challenge on the possibility of suspending certain elements of the scheme. Firms are reminded to continue carrying out work that can be undertaken now and will be required in all circumstances.

But otherwise, it will take a pragmatic approach and, for the time being, will not require firms to communicate with customers or make payments in accordance with the scheme timetable. Neither will it enforce compliance with the requirement to submit monthly reports. The FCA will keep the position under review as the Tribunal timetable becomes clearer and will engage with lenders and consumer groups on whether further customer communications, scheme preparation measures or contingency planning guidance may be appropriate.

The Council of the EU has announced that it has agreed its negotiating mandate on proposed reforms to the Sustainable Finance Disclosure Regulation (EU) 2019/2088 (SFDR) — known as the SFDR 2.0 proposal, adopted in November 2025. The SFDR requires market participants to disclose how they integrate social, environmental and governance sustainability risks and adverse impacts into their investment offers. The reforms aim to simplify the sustainability-related transparency requirements, reduce administrative burdens, and improve the comparability of financial products for investors.

Overall, the Council supports the proposed changes which include the introduction of three new product categories—"sustainable", "transition", and "ESG basics", to replace the current framework and address concerns around existing concepts that have led to greenwashing. However, its negotiating mandate also introduces the following amendments:

• For products classified as "sustainable" or "transition", firms disclosing principal adverse impacts will have to use at least three prescribed indicators (to be set by the European Commission) to support claims and improve cross-product comparability.
• Investments in fossil fuel companies may qualify as transition investments where 20% of capital expenditure is aligned with EU taxonomy (green classification) rules and the company has a clear, time-bound emissions reduction strategy; such investments will be subject to a fourth mandatory adverse impact indicator.
• General-purpose issuances by EU public sector bodies may be included in the "transition" category under certain conditions.
• Alternative investment funds marketed exclusively to professional investors may be exempt from applying the categorisation provisions.

The Council's mandate will form the basis for negotiations with the European Parliament once it has adopted its own respective position.

The U.S. Office of Foreign Assets Control (OFAC) and the UK Office of Financial Sanctions Implementation (OFSI) have published joint guidance providing a comparative overview of their respective economic sanctions frameworks. The guidance highlights key similarities and differences across terminology and structure in areas such as sanctions lists, licensing, recordkeeping and reporting requirements. The aim of the guidance is to help private sector firms understand and comply with their obligations under both regimes. The OFSI published a blog, on the same day, to announce the publication and detail its shared objectives with OFAC.

The European Securities and Markets Authority (ESMA) has issued a public statement clarifying its expectations ahead of the end of the transitional period on 1 July for authorisation under the Markets in Crypto-Assets Regulation (MiCAR). ESMA calls on crypto-asset service providers (CASPs) that are not MiCAR-authorised to cease operations and implement an orderly wind down of their EU activities while safeguarding client interests. ESMA expects unauthorised CASPs to:

• Immediately stop onboarding new EU clients, opening new client relationships or accounts, and carrying out marketing or solicitation activities.
• Limit the provision of services to those necessary to sell or transfer crypto-assets, reallocate assets, or close positions, and custody arrangements for a period strictly required to support an orderly exit.

Read more.

The European Banking Authority (EBA) has published its final report with draft implementing technical standards (ITS) amending the Pillar 3 disclosure framework to finalise the implementation of the disclosure requirements introduced under the revised Capital Requirements Regulation (CRR3). This follows the May 2025 consultation. The ITS revise disclosures on environmental, social and governance (ESG)-related risks and introduce new requirements on equity exposures and aggregate exposures to shadow banking entities. The intention is to improve clarity, consistency and usability within the EU's broader simplification agenda. The final draft ITS are closely linked to the ESG supervisory reporting framework set out in the related consultation paper and are advised to be read together.

In relation to ESG disclosures, and in line with the CRR3 mandate, the ITS extend the scope of application beyond large listed institutions to include large non-listed institutions, other institutions, small and non-complex institutions (SNCIs) and large subsidiaries. The framework introduces a more proportionate and streamlined approach, with differentiated disclosure requirements based on institutions size and complexity. In particular, SNCIs are required to disclose only essential information (including on physical and transition risks and exposures to fossil fuel sectors), while the requirements for larger institutions are clarified and streamlined rather than expanded.

The ITS also take into account existing supervisory guidance and seek to enhance consistency across frameworks, including through alignment of terminology and instructions which can be found in the press-release.

The draft ITS will be submitted to the European Commission for adoption. They are expected to apply from a reference date of 31 December 2026, with a later application date of 31 December 2027 for SNCIs. The instructions to the templates will not be published in the Official Journal, but will be published on the EBA website, and disclosures should be provided in accordance with those instructions. They will be available in all languages and shall remain directly applicable in all Member States as part of the ITS.

The Bank of England (BoE) has published a final policy statement setting out its regulatory framework for sterling-denominated systemic stablecoins, alongside a consultation on the draft code of practice for issuers. This follows the November 2025 consultation.

Under the regime, which will be established through amendments made by the Financial Services and Markets Act 2023 to the Banking Act 2009, the UK Financial Conduct Authority (FCA) will regulate the issuance, custody and admission to trading of UK-issued qualifying stablecoins and, in due course, their use in payments, while systemic stablecoins recognised by HM Treasury will be regulated jointly by the BoE and the FCA.

Following consultation feedback, the BoE has made several changes to the final policy. Key changes include:

• Revising the backing asset composition from a 60/40 to a 70/30 split between short‑term UK government debt and unremunerated central bank deposits (overnight repo and reverse repo transactions using eligible government securities with a residual maturity of six months will be permitted).
• Replacing proposed holding limits with a temporary GBP40 billion issuance "guardrail", which the BoE considers significantly less complex to implement.

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The UK Prudential Regulation Authority (PRA) has published consultation paper CP9/26, setting out proposed adjustments to the Basel 3.1 internal model approach (IMA) for market risk. The Basel 3.1 standards introduce a comprehensive set of amendments to the market risk framework, commonly referred to as the fundamental review of the trading book (FRTB), with implementation deferred to 1 January 2028. As part of its ongoing monitoring of FRTB implementation, the PRA has identified several areas where targeted adjustments could improve the proportionality and operational effectiveness of the framework, while maintaining robust prudential standards.

Key proposals include:

• Extending the profit and loss attribution test monitoring period from one year to three years.
• Adjusting elements of the risk factor eligibility test (RFET).
• Introducing targeted adjustments and operational simplifications to the non modellable risk factors framework, a new feature of the Basel standards linked to the RFET.
• Reducing barriers to gradual IMA approval by adjusting calculations for firms who use a mix of the IMA and standardised approaches, preventing a scenario where capital requirements could rise as firms move gradually on to IMA.
• Implementing operational simplifications to the treatment of collective investment undertakings.
• Making other minor adjustments and clarifications to the IMA framework.
• Updating reporting and disclosure requirements to align with the proposals above.

The deadline for responses is 18 September. The PRA proposes that the implementation date for the IMA, including the changes resulting from this consultation, will remain 1 January 2028. No other changes are being proposed and all other rules come into force in January 2027, as previously planned.

The Bank of England (BoE) has announced the scenario phase of its second system wide exploratory scenario (SWES), this time focused on private markets. The BoE has issued participants with a hypothetical stress scenario that details a severe, but plausible, global macro-economic recession over a five-year period. The severity of this shock has been calibrated to represent a tail-risk outcome for the global economy and is broadly consistent with the severity of other stress tests run, such as the bank capital stress test. The exercise aims to assess whether vulnerabilities in private markets could have systemic implications and under what conditions. Conducted in two rounds, participants will model the impact of the scenario and their behavioural responses.

The exercise will examine vulnerabilities including leverage, valuation opacity, liquidity pressures, interconnectedness and deteriorating credit quality, as well as systemic transmission channels through which stress could spread to markets, institutions and the real economy. Following round 1, the BoE will provide aggregated feedback, allowing firms to update their responses. Initial findings will be published in the July Financial Stability Report, with interim results expected later in the year and a final report expected in 2027. A new webpage detailing the hypothetical scenarios to be used in the SWES was published on the same day.

The Bank of England (BoE), together with Bafin, the Bundesbank, the Commodity Futures Trading Commission and the European Securities and Markets Authority (ESMA), have published a summary report with key findings from the 2025 CCP Global International Default Simulation (CIDS) exercise. The "fire drill" exercise involved 38 central counterparties (CCPs), together with their members, involving the simulation of the default of a hypothetical common clearing member across a wide range of asset classes. This included commodities, equities, interest rate swaps, credit default swaps and foreign exchange. It was the largest CIDS exercise to date and was coordinated by CCP Global, an industry body representing CCPs globally.

The exercise demonstrated that CCPs and clearing members are broadly capable of executing default management procedures concurrently across multiple CCPs. However operational pressures—particularly resource constraints, competing priorities, and limited availability of experienced personnel—were evident. Feedback also highlighted the need for greater standardisation of communication, auction processes and file formats across CCPs, as well as improved use of portal-based systems to reduce operational risks.

In a press-release published on the same day, ESMA listed the areas from the findings where further progress is expected ahead of the next iteration, including:

• Encouraging industry-led progress to reduce fragmentation in procedures and communication conventions employed by CCPs, and promote greater use of portal-based solutions.

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HM Treasury (HMT) has published its consultation response on the reform of the UK's anti-money laundering and counter-terrorist financing (AML/CTF) supervisory regime for professional services firms. This follows the decision announced last October that the UK Financial Conduct Authority (FCA) will be the sole AML supervisor for legal service providers, accountancy service providers and trust and company service providers under the Money Laundering Regulations 2017 (MLRs). A consultation, published in November 2025, set out the proposed key responsibilities and duties for the FCA's expanded role, along with the legislative changes needed to implement these reforms.

The consultation response includes the policy decisions on these proposals, including:

• Registration and gatekeeping. Making the FCA responsible for registering professional services firms carrying out AML/CTF regulated activity and for maintaining a public register of those firms. The FCA will also be given an explicit power to cancel a firm's registration where it is no longer carrying out regulated activity. In addition, the application of regulation 58 "fit and proper" requirements, enabling supervisors to assess the integrity, competence and compliance history of firms and their beneficial owners, officers and managers, will be extended across legal and accountancy service providers, aligning these sectors with trust and company service providers, which are already within scope.

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The European Banking Authority (EBA) has published a report proposing targeted simplifications to the EU bank capital framework, following a holistic review of the microprudential, macroprudential and resolution capital regime in the EU ("stacking order"). The report forms part of the EBA's broader priority of simplifying and enhancing the efficiency of the regulatory and supervisory framework under its 2026 work programme and follows its earlier report in October 2025 on the efficiency of the regulatory and supervisory framework.

The EBA does not advocate a fundamental redesign but instead recommends potential adjustments to reduce complexity and improve consistency, predictability and effectiveness while preserving the acquired resilience of the European banking system. Recommendations in the report follow four guiding principles: preserving overall resilience and capital neutrality; adhering to international standards; ensuring proportionality; and enhancing the efficiency and depth of the Single Market.

Key recommendations include:

• Microprudential stack. Preserving most elements of the current microprudential toolkit, including Pillar 1, Pillar 2 requirements and Pillar 2 guidance while clarifying and strengthening their respective roles. The report also recommends streamlining the leverage ratio stack by converting its Pillar 2 requirement into a buffer and removing its Pillar 2 guidance. In addition, the EBA suggests removing macroprudential considerations from the microprudential stack.

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HM Treasury has published the terms of reference for the newly appointed Wholesale Digital Markets Champion, Chris Woolard CBE, setting out how Mr Woolard will work in partnership with industry and government to accelerate the digitalisation of UK wholesale financial markets. Mr Woolard will also provide leadership to co-ordinate the sector's wider implementation of digital as outlined in the Wholesale Financial Markets Digital Strategy published as part of the Leeds Reforms.

The Champion's key responsibilities include: (i) establishing a cross-industry taskforce, with representatives from across the market ecosystem, to provide input and support; (ii) delivering a report (by July 2027) to the Chancellor, developed with the sector, covering how UK wholesale markets can best adopt tokenisation and other related technologies, as well as how the sector and government can ensure DLT interoperability; (iii) promoting the delivery of the strategy across the sector; and (iv) coordinating with the Chairs of other related reform workstreams (including delivering T+1 settlement and removing paper shares). Mr Woolard will provide an initial forward plan, including plans to establish the industry taskforce by July. Mr Woolard has been appointed for 18 months.

The Commission Implementing Regulation (EU) 2026/1288 was published in the Official Journal of the European Union (OJ). The Implementing Regulation provides for a stand-alone suspension of the derivatives trading obligation (DTO) set out in Article 28 of the Markets in Financial Instruments Regulation (EU) No 600/2014 (MiFIR) for certain EU financial counterparties. Under Article 32a MiFIR (introduced by Regulation (EU) 2024/791 - MiFIR II), the European Commission (EC) may suspend the DTO by making an implementing act following a request from a national competent authority for certain investment firms acting as market makers with non-EEA counterparties when certain conditions are met. The effect of this Implementing Regulation is that certain named firms will be permitted to execute derivatives within the scope of the DTO on UK trading venues. The Implementing Regulation will enter into force on 18 June, the third day following its publication in the OJ. The EC will review whether the grounds for the suspension of the DTO continue to apply every five years from 18 June.

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/19, proposing targeted amendments to its Decision Procedure and Penalties Manual (DEPP) to ensure that its penalty framework and decision-making processes remain up-to-date, transparent and effective. The proposals also reflect the introduction of the market abuse regime for cryptoassets.

Key proposals include:

• Market abuse. Increasing the minimum initial disciplinary penalty level for serious market abuse committed by individuals from GBP100,000 to GBP150,000 to account for inflation.
• Deterrence. Making clear that the FCA has the ability to increase penalties for wealthier individuals for deterrence, having regard to income and assets.
• Relevant income. Clarifying how to treat deferred income, including bonuses, pay and shares, in line with recent Upper Tribunal decisions.

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The European Commission (EC) has launched a consultation on the development of guidelines to support the effective implementation of the Corporate Sustainability Due Diligence Directive (EU) 2024/1760 (CS3D). The EC will issue guidelines that provide practical orientation to companies on how to fulfil their due diligence obligations, to Member State authorities on how to implement and enforce CS3D, and to stakeholders on how to pursue their rights. The guidelines will also be relevant for companies and other stakeholders in non-EU countries that are linked to the supply chains of companies with obligations under CS3D. The deadline for comments is 24 July.

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

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

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

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

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

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

The report identifies key trends:

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

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

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

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

Key changes include:

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

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

The proposals seek to:

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

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

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

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

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

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

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