The Bank of England (BoE) has published a consultation paper seeking views on draft supervisory expectations for central counterparties (CCPs) that wish to accept tokenised versions of collateral eligible under the proposed CCP Rulebook.

The BoE also seeks views on industry interest on a wider range of tokenised asset types, should any become eligible for acceptance as collateral in the future. The expectations are not intended to create a separate regulatory regime for tokenised collateral but instead aim to provide greater clarity on what the BoE would expect CCPs to consider when submitting applications to accept such collateral through the existing supervisory process for the assessment of new forms of collateral.

The BoE's initial view is that the existing regulatory framework does not prevent CCPs from accepting tokenised forms of eligible collateral. However, it notes from industry engagement that additional clarity may help CCPs interpret and apply the requirements. The BoE encourages firms actively considering acceptance of tokenised collateral for central clearing to engage with it on potential proposals. The deadline for responses is 12 February 2027.

The Central Counterparties (Equivalence) (Indonesia and the People's Republic of China) Regulations 2026 have been laid before Parliament and published, accompanied by an explanatory memorandum. Under Article 25(1) of the UK European Market Infrastructure Regulation, a central counterparty (CCP) must be recognised by the Bank of England (BoE) in order to provide clearing services to UK clearing members or trading venues. The BoE may recognise a third-country CCP only where HM Treasury has determined that the legal and supervisory arrangements of the relevant third country are equivalent to those of the UK. These Regulations determine that the regulatory and supervisory regimes for specified CCPs authorised by their respective regulatory authorities are equivalent to the UK regime. The Regulations will enter into force on 19 November.

The European Securities and Markets Authority (ESMA) has published a final report containing final draft regulatory technical standards (RTS) amending Commission Delegated Regulation (EU) No 153/2013 to reflect changes specified under the revised European Market Infrastructure Regulation (EMIR 3). EMIR 3 amended Article 46 of EMIR to permanently broaden both the type of eligible guarantees and the scope of who may use them. The final draft RTS specify the conditions under which public guarantees, public bank guarantees and commercial bank guarantees may be accepted as collateral, including appropriate concentration limits, credit quality requirements and stringent wrong-way risk requirements for public bank guarantees and commercial bank guarantees.

In addition, while EMIR 3 does not amend Article 47 of EMIR on investment policy, ESMA is also proposing targeted changes to the central counterparty (CCP) investment policy set out under Delegated Regulation (EU) No 153/2013. The targeted changes concern: (i) the conditions under which debt instruments can be considered highly liquid, bearing minimal credit and market risk and hence can be considered as eligible financial instruments for the purpose of CCP investment policy; and (ii) the highly secured arrangements in which financial instruments posted as margins or as default fund contributions can be deposited. The RTS were consulted on in February. ESMA will submit the final report and draft RTS to the European Commission, which has three months to decide whether to adopt them. Following their adoption, the RTS are then subject to non-objection by the European Parliament and the Council of the EU.

The European Securities and Markets Authority (ESMA) has published its final report on revised guidelines on standardised procedures and messaging protocols between investment firms and their professional clients under the Central Securities Depositories Regulation (CSDR). The revised guidelines follow the May consultation and update ESMA's 2019 guidelines to align them with the amended regulatory technical standards (RTS) on settlement discipline. Under the new regulatory environment, investment firms need to receive their professional clients' settlement details earlier than previously required. The amendments are designed to enhance settlement efficiency and support a smooth transition to T+1. The guidelines clarify the key elements necessary to achieve the new regulatory objective, including: (i) the compulsory use of electronic standardised communication methods; and (ii) the adoption of international open communication procedures and standards for messaging and reference data.

Only a subset of the original guidelines has been amended. The revised guidelines will be published on ESMA's website once they have been translated into all official EU languages. They will apply from 7 December, alongside the relevant provisions of the RTS on settlement discipline. They will also replace the 2019 guidelines from this date. Tracked and clean versions of the revised guidelines are available in Annexes III and IV of the final report.

The Bank of England (BoE) has published a consultation paper setting out proposals for updated rules that would permit central counterparties (CCPs) to accept uncollateralised letters of credit (LOCs) as collateral. The consultation also covers the risk mitigants that CCPs would have to implement if they chose to accept this type of collateral. The proposals relate to initial margin only, and the BoE does not expect CCPs to accept LOCs as variation margin. Any CCPs wishing to accept LOCs would need to apply for the BoE's permission in the usual way; the BoE is not proposing a separate permission regime for LOCs.

The proposed changes would be implemented in the Collateral Part of the UK CCP Rulebook (currently still in draft). Key proposals include:

• References to "commercial bank guarantees" would be replaced with "commercial bank letters of credit", which is the terminology generally used by market participants.
• Currently, CCPs can only accept commercial bank guarantees from non-financial counterparties (NFCs) that are clearing members. The consultation proposes allowing CCPs to accept LOCs from NFCs that clear as clients, for example through a "pass-through" model.
• The requirement for LOCs to be fully collateralised would be removed.
• Current draft rule 5.1(2) would be amended so that acceptable LOCs would need to be issued by authorised UK credit institutions or authorised overseas credit institutions.
• CCPs would be required to monitor each issuer's creditworthiness on an ongoing basis.
• The single-issuer limit would fall from 10% to 5% of the CCP's total collateral.
• Current draft rule 10.4(2) allows CCPs to increase the current 10% single-issuer limit to 25%, where commercial bank guarantees constitute over 50% of the CCP's total collateral. This rule would be deleted.
• CCPs would also have to run validation checks with the issuer before accepting an LOC.
• To qualify as highly liquid collateral, an LOC that names both the CCP and the clearing member (posting on behalf of the client) as beneficiaries would need to require the CCP's consent before the clearing member could redeem it.

The Bank also expects CCPs to factor LOCs into their stress testing, including scenarios where the LOC issuers to which they have the largest exposures fail.

The deadline for responses is 15 January 2027. The BoE proposes to publish the final rules in the first half of 2027, with no implementation period. The rules would come into force no earlier than the date on which the UK CCP Rulebook takes effect. The BoE considers that an implementation period is not necessary as the proposals only impose new requirements on CCPs that choose to accept LOCs as collateral.

Two Regulations supplementing the Central Securities Depositories Regulation No 909/2014 (CSDR) have been published in the Official Journal of the European Union (OJ). The Regulations make amendments to the CSDR framework to reflect reforms introduced by the CSDR Refit Regulation (EU) 2023/2845:

• Commission Delegated Regulation (EU) 2026/1519 amending the regulatory technical standards (RTS) laid down in Delegated Regulation (EU) 2017/392 regarding the information that central securities depositories (CSDs) must provide to competent authorities as part of the review and evaluation process under Article 22(1) of the CSDR.
• Commission Implementing Regulation (EU) 2026/1512 amending the implementing technical standards laid down in Implementing Regulation (EU) 2017/394 as regards standard forms, templates and procedures for the purposes of the information provided by CSDs for the review and evaluation process of central securities depositories.

Separately, Commission Delegated Regulation (EU) 2026/1536 was also published in the OJ on the same date. It amends the RTS laid down in Commission Delegated Regulation (EU) 2018/1229 on settlement discipline to introduce measures aimed at improving settlement efficiency in the EU and supporting the transition from a T+2 to a T+1 settlement cycle on 11 October 2027.

All the Regulations will enter into force on 3 November, being the 20th day following publication in the OJ. The RTS on settlement discipline will generally apply from 7 December, except for certain specified provisions which will apply from 11 October 2027. The RTS on the review and evaluation process will apply from 3 November 2027.

The BIS Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) have published a joint final report on financial market infrastructures' (FMIs) management of general business risks and general business losses. The report follows the November 2025 consultation and takes into account findings from the Level 3 assessment report on the implementation of PFMI Principle 15 (general business risk), which identified issues with FMIs' management of general business risks and the liquid net assets funded by equity held to cover potential losses. It sets out supplemental guidance to the PFMI for FMIs and relevant authorities, including in relation to the FMIs' recovery and orderly wind-down, specifically on:

• identifying, monitoring and managing general business risks
• determining the minimum amount of liquid net assets funded by equity to be held against potential general business losses
• governance and transparency in managing general business risks.

The guidance in the final report should be taken into account by FMIs and relevant authorities when developing their approach to meeting the PFMI.

The draft Financial Services and Markets Act 2023 (Addition of Relevant Enactments) Regulations 2026 have been laid before Parliament, accompanied by a draft explanatory memorandum. The draft Regulations seek to expand the scope of the Financial Market Infrastructure (FMI) Sandbox powers under the Financial Services and Markets Act 2023 by adding a number of further enactments in addition to those already listed under section 17(3). This includes the National Debt Act 1870, the Finance Act 1916, the Insolvency Act 1986, the Companies Act 1989, the Financial Services (Banking Reform) Act 2013 and the Payment Services Regulations 2017.

The changes are intended to support the operation of the Digital Securities Sandbox (DSS), which enables firms to test digital securities infrastructure and distributed ledger technology solutions in a live market environment under a temporarily modified legal and regulatory regime. Participating entities in the DSS are subject to a set of modified legislative requirements, where existing requirements outside of the DSS may act as a barrier or an obstacle to using new technology in the provision of in-scope FMI activities.

The regulations would allow HM Treasury to apply, disapply or modify the effect of the additional enactments through subsequent statutory instruments where required to facilitate the DSS. Any substantive modifications to the relevant legislation will be set out in future statutory instruments.

The UK Financial Conduct Authority (FCA) has published its findings from a review of governance at a sample of benchmark administrators. The review is the final part of supervisory work undertaken in response to risks identified in the FCA's 2024 portfolio letter, which highlighted weaknesses in some governance arrangements. In this review, the FCA assessed governance across five areas: (i) board composition and capability; (ii) board engagement, challenge and decisions; (iii) governance structure, delegation and escalation; (iv) board packs and information flow; and (v) governance assurance and continuous improvement. Firms generally had established governance frameworks and a clear commitment to oversight and accountability.

The FCA's key observations include:

• Board capability: As risks evolve, firms may benefit from considering whether the board continues to have the right collective capability, for example in technology, cyber resilience, data management and methodology. Where individuals hold several roles, firms may benefit from considering capacity, competing priorities, potential conflicts and key-person dependency.
• Decisions: In some cases, governance records did not clearly capture board decisions, challenge, decision rationale and resulting actions. Firms may want to ensure that decisions taken outside scheduled meetings are brought into the formal governance record where necessary.
• Group structures: Arrangements were most effective where the UK regulated entity retained clear visibility of its own risks and obligations. Where individuals hold responsibilities across several entities or governance bodies, firms should consider how potential conflicts are identified, discussed and managed in practice.
• Management information: Some firms noted that the volume of reporting could make it difficult to identify the most important issues. Firms may wish to consider whether reports distinguish information provided for awareness from matters requiring discussion, decision or escalation.
• Assurance and conflicts: Some firms may benefit from adopting a more structured approach to assessing governance effectiveness. Firms may wish to consider whether their conflicts-of-interest arrangements capture the full range of conflicts most relevant to their businesses, and how these arrangements operate.

The government is currently reviewing the UK Benchmarks Regulation and its consultation on the proposed new Specified Authorised Benchmark Regime closed earlier this year. The FCA welcomed the consultation and is working with the government to reform the regime, although has not confirmed its next steps, and no upcoming formal engagement is noted on the Regulatory Initiatives Grid. It encourages benchmark administrators to engage with the reform process.

The European Securities and Markets Authority (ESMA) has published a call for evidence (CfE) on the potential use of tokenised collateral by central counterparties (CCPs). Tokenisation of collateral has been identified as one of the most significant applications of financial-market digitalisation, enabling assets to be mobilised, transferred and reused more efficiently, reducing operational friction and freeing up liquidity and capital across the financial system. ESMA is therefore seeking to understand better its implications for CCPs before determining whether any action within its remit is needed to ensure that these developments take place within a safe and sound regulatory and supervisory framework.

The CfE aims to gather evidence on the legal, market, operational and infrastructure issues raised by tokenised collateral arrangements. ESMA states that the CfE is not intended to reassess or expand the categories of assets eligible as CCP collateral. Rather, it focuses on understanding whether the use of tokenisation may affect the manner in which otherwise eligible assets are mobilised, transferred, managed, protected and realised, and whether existing regulatory and supervisory frameworks remain adequate in that context. The deadline for comments is 15 January 2027. ESMA will review feedback in Q1 2027 and, considering both responses and its broader tokenisation work, will determine the most appropriate next steps.

The European Banking Authority (EBA) has published a final report containing draft amendments to the regulatory technical standards (RTS) under Delegated Regulation (EU) 2017/390, supplementing the Central Securities Depositories Regulation (CSDR) prudential framework. The changes respond to the CSDR Refit (Regulation (EU) 2023/2845), which now permits banking CSDs to provide banking-type ancillary services to participants of other CSDs, including foreign currency cash settlement. To address the potential credit, liquidity and concentration risks arising from the provision of these services, the EBA was mandated to revise the RTS. The amended RTS update the prudential framework for banking CSDs and designated credit institutions to ensure it adequately reflects and mitigates the additional complexity arising from such arrangements, including credit and concentration risk and collateral management considerations. In addition, the final draft RTS aligns references with amendments made to the Capital Requirements Regulation.

Following the December 2025 consultation, the EBA has made mainly clarificatory amendments. Section 4.2 of the report summarises the key points raised and the subsequent analysis, discussion and action taken (if deemed necessary). The draft RTS will be submitted to the European Commission for endorsement before being published in the Official Journal of the European Union.

The European Securities and Markets Authority (ESMA) has published a statement on the transitional regime for third-country central securities depositories (CSDs). ESMA notes that, under the Central Securities Depositories Regulation (Regulation 909/2014), third-country CSDs may continue to provide certain notary services to issuers and central maintenance services to participants only until a recognition decision is taken or until 17 January 2027, whichever is earlier. ESMA highlights that the Market Integration and Supervision Package (MISP) proposes to extend this transitional period by a further three years following MISP’s entry into force, and that both the Council of the EU and the European Parliament appear broadly supportive of the extension.

In response to operational concerns raised by market participants, and in light of the emerging consensus among EU co-legislators, ESMA acknowledges that neither it nor national competent authorities (NCAs) can suspend or disapply directly applicable EU legislation, even in exceptional circumstances, and that any formal changes to the applicable regime would require EU legislation. Nonetheless, ESMA expects NCAs not to prioritise supervisory or enforcement action against non-recognised third-country CSDs pending the proposed extension under MISP taking effect.

The Council of the EU has published a note from the Presidency to the Permanent Representatives Committee (COREPER) on the proposed Market Integration and Supervision Package (MISP), together with compromise texts (dated 2 October) of the three legislative proposals forming part of the package, specifically:

• the text of the proposed Regulation on settlement finality, which would repeal the Settlement Finality Directive (Directive 98/26/EC) and amend the Financial Collateral Directive (Directive 2002/47/EC)
• the text of the proposed Directive amending the Undertakings for Collective Investment in Transferable Securities Directive (UCITS), Alternative Investment Fund Managers Directive (AIFMD) and Markets in Financial Instruments Directive II (MiFID II) frameworks on the further development of capital market integration and supervision within the EU (MISP Directive)
• the text of the proposed Regulation amending a range of existing EU financial services legislation to support the further development of EU capital market integration and supervision within the EU (MISP Regulation).

The note states that the compromise texts largely preserve the original legislative proposals from the European Commission and are now presented for final agreement. There has, however, been some movement of note, particularly in relation to the Regulation of Settlement Finality, which has been amended so that the protections for third-country registered and EU systems are more closely aligned.

The note also explains that the texts intend to strengthen market integration, improve supervisory consistency, expand market transparency, and modernise trading infrastructure while balancing the differing priorities of member states. Further detail on the key elements of the proposals is set out in the Annex. The note also highlights that agreement is still needed on the European Securities and Markets Authority funding arrangements and the definition of significant trading venues before the overall package can be agreed.

An updated Council webpage states that the Economic and Financial Affairs Council is expected to agree its position on the legislative proposals at its meeting on 9 October.

The Central Counterparties (Transitional Provision) (Extension and Amendment) Regulations 2026 have been laid before Parliament, accompanied by an explanatory memorandum. The Regulations extend the transitional provisions for overseas qualifying central counterparties (QCCPs) under Article 497 of the UK Capital Requirements Regulation by a further 12 months, to seven years after an application for recognition was made. This extension aims to ensure that UK firms with indirect exposures to these overseas CCPs do not face a sudden and disruptive increase in their capital requirements upon expiry of the QCCP transitional regime, which the explanatory memorandum notes for some CCPs within the regime could otherwise fall as early as 31 December.

As part of broader efforts to modernise the UK regulatory framework for UK and overseas CCPs, the government has already announced proposals for a new permanent framework for determining QCCP status. This would replace the current QCCP transitional regime. HM Treasury intends to legislate to implement these reforms later in the year.

The Regulations also make consequential amendments to the Financial Services and Markets Act 2023 (Commencement No. 15 and Saving and Transitional Provisions) Regulations 2026 to ensure that the saving and transitional provisions in that instrument in respect of QCCPs align with the extended expiry date.

The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) have published a cyber resilience toolkit for financial market infrastructures (FMIs) and a discussion paper on the challenges and risks of FMIs' reliance on third-party service providers. The toolkit provides a set of voluntary, non-binding practical tools intended to help FMIs strengthen their cyber resilience frameworks and implement operational resilience-related components of the CPMI-IOSCO Principles for Financial Market Infrastructures. The toolkit is intended to complement the 2016 guidance on cyber resilience for FMIs. In parallel, the discussion paper identifies and examines key challenges related to the provision of third-party services to FMIs, especially for the delivery of critical services. It sets out several questions for stakeholders on the identified risks and possible areas for further engagement. The deadline for comments on both the toolkit and the discussion paper is 1 December.

The European Securities and Markets Authority (ESMA) has published a statement highlighting key deadlines and action points for firms to take when preparing for the transition to a T+1 settlement cycle, which takes effect on 11 October 2027. ESMA states that while readiness surveys conducted by the EU T+1 Industry Committee show an overall good and increasing level of awareness and commitment to the transition, implementation levels remain uneven across EU financial markets, sectors and firms.

While the rules have been known since mid-October last year, ESMA proposed amendments to Commission Delegated Regulation (EU) 2018/1229 to set new requirements, which are particularly relevant for the transition to T+1. ESMA states that firms should consider these in combination with the recommendations of the EU T+1 Industry Committee and accelerate the technical work needed to prepare for the transition to T+1 settlement. The statement also highlights the following key compliance deadlines:

• First deadline: 7 December—for the requirements to improve the first post-trade step, the exchange of allocations and confirmations, in terms of timing and through the default use of international communication standards.
• Final deadline: 11 October 2027—for the requirements to optimise the settlement layer, including sending instructions early enough to securities settlement systems, and the generalisation of certain functionalities in central securities depositories (CSDs), such as auto-partial settlement, hold and release, and auto-collateralisation.

ESMA and the national competent authorities are in the last stages of reviewing the Level 3 guidelines on allocations and confirmations. ESMA considers that the guidelines and the Committee's recommendations will give firms a clear basis for finalising their implementation of electronic, standardised and timely allocation and confirmation processes.

ESMA states that different implementation strategies are possible and firms should undertake thorough analysis and planning, prioritise automation and standardisation, consider new partnerships where relevant, and ensure timely data quality (including correct reference data and standard settlement instructions).

ESMA also reiterates that no-one can be ready in isolation. Firms should assess the readiness of their entire ecosystem, up and down the trading and settlement chain—clients, brokers, custodians, CSD participants, CSDs, central counterparties, trading venues, vendors and outsourcing providers—to enable early testing, identify defects and reduce disruption risk at go-live on 11 October 2027. The regulator warns that insufficient preparedness could trigger significant operational and reputational risks, including flawed interdependencies with financial market infrastructures and IT providers, inability to meet client demands, and higher IT and training costs from last-minute remediation.

HM Treasury has published the recommendations of the UK-U.S. Transatlantic Taskforce for Markets of the Future, to strengthen cooperation between the UK and U.S. on digital assets and capital markets. In the digital assets space, the recommendations include establishing an industry-led group to test and share best practices on cross-border tokenisation use cases, identifying common approaches to the regulatory treatment of tokenised assets, supporting the development of a cross-border stablecoin market, and coordinating on international standards for the prudential treatment of cryptoassets at the Basel Committee on Banking Supervision. Alongside the recommendations, the UK and the U.S. published a joint statement on stablecoins, underscoring a joint commitment to the digitalisation of finance.

The taskforce's capital markets recommendations focus on reducing cross-border frictions through greater cooperation between UK and U.S. authorities in areas including capital raising, consolidated tapes, audit standards and supervisory cooperation. Progress on the delivery of the recommendations will be reported through the UK-U.S. Financial Regulatory Working Group, to ensure they translate into practical outcomes for businesses and consumers on both sides.

The Central Counterparties (Equivalence) Regulations 2026 have been published, accompanied by an explanatory memorandum. Under Article 25(1) of the European Market Infrastructure Regulation (UK EMIR), certain overseas central counterparties (CCPs) may only provide clearing services to clearing members or trading venues established in the UK where that CCP is recognised by the Bank of England (BoE). In turn, the BoE is only able to recognise a CCP where HM Treasury (HMT) has determined that the legal and supervisory arrangements of the jurisdiction in which it operates are equivalent to those of the UK. These Regulations determine that the regulatory and supervisory regimes for CCPs in Australia, Japan, Hong Kong, India, the United Arab Emirates, South Africa and the United States (for CCPs under Securities and Exchange Commission (SEC) authorisation) are equivalent to the UK regime. The Regulations enter into force on 3 August.

The European Securities and Markets Authority (ESMA) has published its final report with final regulatory technical standards (RTS) on the elements that central counterparties (CCPs) should consider when setting admission criteria for clearing members. The RTS were developed under the revised European Market Infrastructure Regulation (EMIR 3), which amended the CCP participation requirements framework, including by allowing for non-financial counterparties (NFCs) to become clearing members, subject to requirements. The RTS do not prescribe specific admission criteria; instead, they establish a harmonised set of factors that CCPs should take into account when assessing the applicants, including NFCs, and designing their participation requirements. The final draft RTS considers the feedback received through ESMA's October 2025 consultation and public hearing. The RTS have been submitted to the European Commission for endorsement and will subsequently be scrutinised by the European Parliament and the Council of the EU.

The European Commission has adopted two Delegated Regulations under the Central Securities Depositories Regulation No 909/2014 (CSDR):

• The first Delegated Regulation amends the regulatory technical standards (RTS) laid down in Commission Delegated Regulation (EU) 2018/1229 on settlement discipline, to introduce measures aimed at improving settlement efficiency in the EU and supporting the transition from a T+2 to a T+1 settlement cycle on 11 October 2027. The revised RTS strengthen allocation, confirmation and settlement processes, establish earlier deadlines for the provision of settlement information by professional and retail clients, and enhance the monitoring, reporting and analysis of settlement fails. The Delegated Regulation is based on the final report published by the European Securities and Markets Authority (ESMA) in October 2025.
• The second Delegated Regulation amends the RTS laid down in Delegated Regulation (EU) 2017/392 regarding the information that central securities depositories (CSDs) must provide to competent authorities as part of the review and evaluation process under Article 22(1) of the CSDR. The amendments align the RTS with the reforms introduced by the CSDR Refit Regulation (EU) 2023/2845. The Delegated Regulation specifies: (i) the information the CSD is to provide to the competent authority for the purposes of the review and evaluation; (ii) the information that the CSD's competent authority is to supply to other authorities when sharing the results of the review and evaluation; and (iii) the information that the competent authorities responsible for supervising different CSDs within the same group are to supply to one another when performing the review and evaluation. The Delegated Regulation is based on the final report published by ESMA in February 2025.

The RTS on settlement discipline will generally apply from 7 December, except for certain specified provisions which will apply in 2027. The RTS on the review and evaluation process will apply one year after it enters into force.

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.

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 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 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.

Read more.

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

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

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

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

Key changes to the guidelines include:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Bank of England (BoE) has published a consultation paper setting out its proposed fees regime for the supervision of financial market infrastructures (FMIs) for 2026/27.

Key proposals include a 3.2% reduction in UK central counterparties (CCPs) fees (excluding rulebook costs) and a 7.7% increase in UK central securities depositories (CSDs) fees to reflect work on repealing and replacing UK CSDR. The BoE intends to work with the UK Financial Conduct Authority and HM Treasury (HMT) to publish a full roadmap later this year on the repeal and replacement of UK CSDR, including a permanent regime for digital securities settlement.

In addition, the BoE proposes to maintain the UK CCP rulebook development costs, keeping the 2026/27 recovery instalment at GBP1.5 million, with any excess costs to be recovered in 2027/28. Fees for non‑UK CCPs and CSDs would be broadly unchanged, with small reductions for certain categories.

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The International Organization of Securities Commissions (IOSCO) and the Committee on Payments and Market Infrastructures (CPMI) have published a joint report setting out their findings of their level 2 assessment of the UK's implementation of the principles for financial market infrastructures (PFMI). These principles set expectations for the design and operation of key FMIs in order to enhance their safety and efficiency and, more broadly, limit systemic risk and foster transparency and financial stability. The report sets out the conclusions and recommendations of whether, and to what degree, the UK legal, regulatory and oversight frameworks applied to systemically important payment systems (PSs), central securities depositories (CSDs) and securities settlement systems (SSSs), as of 30 September 2023.

The report finds that the UK legal, regulatory and oversight frameworks for PSs are complete and consistent with all principles under the PFMI, while the UK legal, regulatory and oversight frameworks for CSDs and SSSs are complete and consistent in most aspects, with some areas for improvement where implementation was broadly or partly consistent or not consistent. For UK CSDs and SSSs that provide banking-type ancillary services, the framework was consistent with 15 principles, broadly consistent with five principles (that is, principles 9, 11, 15, 16 and 23) and not consistent with principle 10. For other UK CSDs and SSSs, additional gaps relating to principles 4 and 7 were found, where implementation was partly consistent.

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The UK Financial Conduct Authority (FCA), the UK Prudential Regulation Authority (PRA) and the Bank of England (BoE) have published final policy statements setting out a co‑ordinated framework for operational incident and third‑party reporting. This follows consultations published in 2024.

The regulators are collectively replacing sector‑specific incident reporting regimes with a single, unified operational incident reporting framework. Under this, firms will make one reporting submission through FCA Connect, regardless of the regulators involved. Payment service providers (PSPs) will also now report serious operational incidents only through the new consolidated regime. Changes to the reporting process for PSPs are reflected in amendments to the Payment Services and Electronic Money Approach Document. The rules will apply from 18 March 2027.

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The Bank of England (BoE) has published a consultation paper proposing a new statement of policy (SoP) that will establish the BoE's approach to using its permissions and requirements powers to facilitate a discretionary mobilisation stage as part of the onboarding process of new central counterparties (CCPs). In particular, the draft SoP sets out how the BoE would impose voluntary de minimis limits on CCP activity and, where appropriate, grant time-limited permissions to modify or waive certain CCP rules (except for the fundamental rules in the CCP Rulebook). In addition, the consultation seeks views on how CCPs can apply for mobilisation and the information that prospective CCPs should provide, along with details on how CCPs would exit mobilisation.

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The European Securities and Markets Authority (ESMA) has published two final reports with final draft regulatory technical standards (RTS) mandated under the review of the European Market Infrastructure Regulation (EMIR 3). Both reports were consulted on in June 2025.

The final draft RTS on margin transparency requirements, as required under Article 38 EMIR, specify 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. The final draft RTS contain provisions on the information to be provided by a CCP to its clearing members, the CCP initial margin simulation tool and information to be provided by clearing members and clients providing clearing services.

The final draft RTS on clearing fees and associated costs, as required under Article 7c(4) EMIR, specify further details of the information to be disclosed by CSPs regarding clearing fees to be charged to CCPs for providing clearing services and any other fees charged, as well as any associated costs, with the aim of increasing costs transparency.

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The European Securities and Markets Authority (ESMA) has launched a consultation on draft regulatory technical standards (RTS) specifying the relevant conditions under which public guarantees, public bank guarantees and commercial bank guarantees may be accepted as collateral under the revised European Market Infrastructure Regulation (EMIR 3). Specifically, stakeholders, including non-financial counterparties, are requested to share views on: (i) the conditions under which public, public bank and commercial bank guarantees may be accepted as CCP collateral; (ii) the criteria for treating certain debt instruments as eligible under CCP investment policies; and (iii) the highly secure arrangements in which emission allowances posted as margins or default fund contributions can be deposited.

There is no mention of whether letters of credit, which are understood to be the instruments that are most desirable to be used in this context, would count as guarantees for such purposes, although ESMA has previously treated the two terms as synonymous. The deadline for responses is 30 April, after which ESMA expects to submit final draft RTS to the European Commission in Q4.

The Bank of England (BoE) has published its policy statement confirming the fees regime for financial market infrastructure (FMI) supervision for the 2025/26 fee year, following its October 2025 consultation. The BoE confirms that it will adopt the proposals set out in the consultation paper, including:

• Maintaining existing fee ratios across FMI categories and introducing a new Category 3 for UK payment systems, to align with other FMI types where this categorisation already exists. The BoE will provide further detail on the timing for applying the new fee ratios and implementing Category 3 in the 2026/27 FMI fees consultation paper, which is expected in April (rather than October as in previous years), following stakeholder feedback requesting earlier consultations on future annual fees. This approach will be maintained going forward.
• Increasing certain fees, notably for central counterparties (CCPs) and central securities depositories, to reflect expanded policy and rule‑making responsibilities under the Financial Services and Markets Act 2023, and to recover one‑off costs associated with developing the UK CCP rulebook over a three‑year period.

The BoE also confirms updated hourly rates for special supervisory projects, the treatment of under‑ or overspends from the 2024/25 fee year, and that enforcement fine revenues cannot be used to offset supervisory costs. It also confirms that HM Treasury are exploring options to increase the statutory fee cap for payment systems in future and will consult on any proposals in due course.

Delegated Regulation (EU) 2026/323 amending Delegated Regulation (EU) 2022/805 to update the supervisory fee framework for benchmark administrators under the oversight of the European Securities and Markets Authority (ESMA), has been published in the Official Journal of the European Union (OJ). The Delegated Regulation, which was first adopted on 29 October 2025, follows the expansion of ESMA's supervisory remit under the Benchmarks Regulation (EU) 2016/1011 (BMR) which now includes EU benchmark administrators endorsing third-country benchmarks.

The Delegated Regulation has updated Delegated Regulation (EU) 2022/805 to include supervisory fees for EU administrators that endorse third-country benchmarks. The Delegated Regulation entered into force on 12 February.

The International Organization of Securities Commissions (IOSCO) has published its 2026 work programme , setting out its five strategic priorities for the year:

• Strengthening financial resilience and market effectiveness – new key initiatives in this field for 2026 include: (i) addressing over-the-counter derivatives reporting fragmentation; (ii) working on the impact of market microstructures on liquidity and of extended trading hours on equity trading venues; (iii) contributing to the Financial Stability Board's (FSB) work on issues of non-bank data availability, use and quality; and (iv) contributing, as necessary, to follow-up work on the issue of leverage in non-bank financial intermediation (NBFI). IOSCO will also continue to develop work to strengthen the operational resilience of financial market infrastructures (FMIs).
• Enhancing investor protection – IOSCO will launch a new TechSprint in partnership with the UK Financial Conduct Authority's AI Lab and will explore products such as cryptoasset funds, private credit vehicles and retail-facing derivatives. IOSCO will also continue to engage with platform providers to advocate for restrictions on harmful or fraudulent content and to promote the use of its I-SCAN tool (its Enhanced Investor Alerts Portal).
• The evolution of public and private markets – key initiatives in this field include assessing the growing interconnectedness between private equity activities and the audit sector, contributing to the FSB's deep dive on private credit and researching the functioning of public equity markets.

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HM Treasury (HMT) has announced that the inaugural UK‑China Financial Working Group in Beijing resulted in several landmark agreements aimed at strengthening bilateral cooperation in financial services. According to the press release, the key commitments secured during the forum will make it easier for UK businesses to trade with China and will reinforce London's position as the world's leading international financial centre. Agreements were also reached to pursue new forms of cooperation between the UK and China on innovative financing, including the potential issuance of renminbi denominated sovereign biodiversity bonds to cement the UK's role as the global hub for green finance, as well as more efficient cross-border settlement services, supporting trade and investment flows.

A joint readout has also been published confirming that both sides have agreed to work towards the signing of a Memorandum of Understanding on cooperation in central counterparty (CCP) supervision between the People's Bank of China and the Bank of England, and to continue all necessary cooperation to support UK equivalence and recognition processes for Chinese CCPs and Chinese processes for UK CCPs.

The European Commission has published a draft Implementing Regulation for consultation which introduces a list of certain spot foreign exchange (FX) benchmarks that will be exempt from the requirements under Article 18a of the Benchmark Regulation (BMR). The draft follows the May 2025 consultation to identify spot FX benchmarks used for hedging in jurisdictions where currencies are not freely convertible and where administrators, often unregulated and based outside the EU, cannot benefit from equivalence under Article 30, nor are incentivised to apply for recognition or endorsement due to costs and limited market benefit. Following consultation feedback, the draft Regulation identifies the following benchmarks as meeting the conditions of Article 18a and therefore to be excluded from the scope of the BMR:

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

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Delegated Regulation (EU) 2026/264 amending the regulatory technical standards (RTS) in Delegated Regulations (EU) 2018/1645 and 2018/1646, pursuant to the Benchmark Regulation (EU) 2016/1011, has been published in the Official Journal of the European Union (OJ). The Amending Regulation was first adopted on 27 October 2025. These amendments update the form and content of applications for recognition, authorisation and registration of third-party benchmark administrators and those located in the EU. They reflect changes introduced by the BMR recognition regime under Regulation (EU) 2019/2175, including the transfer of responsibility for recognising and supervising third country benchmark administrators from national competent authorities to the European Securities and Markets Authority, as well as further reforms under Regulation (EU) 2025/914 aimed at reducing the regulatory burden on administrators of smaller benchmarks. The amendments to both RTS are consolidated in a single Amending Regulation which enters into force on 19 February.

The European Securities and Markets Authority (ESMA) has announced the signing of a Memorandum of Understanding (MoU) with the Reserve Bank of India to support cooperation and information‑exchange for the recognition of Indian central counterparties (CCPs). The MoU fulfils the requirement under Article 25 of the European Market Infrastructure Regulation (EMIR) for a cooperation arrangement to be in place between ESMA and the relevant third-country authority whose legal and supervisory frameworks have been recognised as equivalent. This is a step towards restoring EU clearing members' access to Indian CCPs since certain CCPs had their recognition decisions withdrawn in 2022. ESMA also confirms that it will continue discussions with the Securities and Exchange Board of India and the International Financial Services Centres Authority with a view to establishing similar cooperation arrangements.

The European Central Bank (ECB) has announced that the Eurosystem will accept marketable assets issued in central securities depositories (CSDs) that use distributed‑ledger‑technology (DLT) services as eligible collateral for Eurosystem credit operations from 30 March. As with other marketable assets, these DLT‑based instruments must meet the Eurosystem's collateral eligibility criteria and collateral management requirements. This includes settlement through eligible securities settlement systems that comply with the Central Securities Depositories Regulation (CSDR) and are reachable via TARGET2‑Securities.

These assets will be handled as collateral in the same way as other marketable assets under existing Eurosystem's collateral management practices. The ECB also announced it is launching a workplan to assess whether, and under what conditions, assets issued using DLT and not represented in eligible traditional securities settlement systems, could become eligible as collateral in the future. Using a phased approach, the ECB will consider technological progress, market developments and evolving regulatory developments, including under the Central Securities Depositories Regulation, the DLT Pilot Regime, the Markets in Cryptoassets Regulation and national securities laws in the euro area.

The UK Financial Conduct Authority (FCA) has updated its webpage on T+1 settlement to set out actions it expects firms to take this year to update their systems and processes, and test those changes by year-end. This includes implementing and testing changes to operational systems and processes, agreements with third party providers and counterparty arrangements. The FCA also advises firms to implement appropriate automation to increase processing capacity, support quicker settlement and strengthen resilience during periods of high volumes or market stress. In parallel, the T+1 Accelerated Settlement Taskforce has published a final quarterly review of 2025, including updates on readiness and the path ahead in 2026.

The Financial Services and Markets Act 2023 (Commencement No. 12 and Saving Provisions) Regulations 2026 have been published. The Regulations, which were made on 13 January, use powers under the Financial Services and Markets Act 2023 (FSMA 2023) to revoke provisions in the UK Capital Requirements Regulation (UK CRR) and related legislation. They also make saving provisions relating to some of the revoked provisions The Regulations continue the process of revoking certain pieces of retained EU law relating to financial services and restating them into UK domestic law, including through regulator-made rules. You may like to read our article "A boost for UK Financial Services" for further information.

Specifically:

• Regulation 2 revokes, on 1 July, certain provisions of Commission Implementing Regulation (EU) 2016/1646 concerning main indices and recognised exchanges for the purposes of the CRR.
• Regulation 3 revokes, on 1 January 2027, further provisions of the CRR on prudential requirements for credit institutions and investment firms, and related instruments.

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The Bank of England, UK Prudential Regulation Authority and UK Financial Conduct Authority have published their 2025 annual CBEST thematic report. CBEST is a threat-led penetration testing assessment framework of cyber resilience, helping regulators, firms and financial market infrastructures (FMIs) identify vulnerabilities and take remedial action. This report summarises insights from recent CBEST assessments conducted across firms and FMIs. While it does not introduce any new or additional regulatory expectations, it articulates gaps, some of them foundational, observed in firms' and FMIs' cyber defences.

Key messages for firms and FMIs to consider include:

• To reduce the likelihood of severe cyberattacks, firms and FMIs should harden operating systems by patching vulnerabilities and securely configuring key applications.
• The impact of unauthorised access to sensitive systems and information can be reduced by strengthening credentials management, enforcing strong passwords, considering the use of multi-factor authentication, preventing or detecting insecure credential storage and through appropriate segmentation of networks.

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