The Credit Institutions and Investment Firms (Miscellaneous Definitions) (Amendment) Regulations 2026 were published with an explanatory memorandum. This follows HM Treasury's policy response on applying the Financial Services and Markets Act 2000 model of regulation to the UK Capital Requirements Regulation (UK CRR). The Regulations make amendments to support the transition away from retained EU law by ensuring that key prudential definitions continue to be set out in domestic legislation ahead of the revocation of relevant provisions in the UK CRR. The draft version was laid before Parliament in March. The Regulations enter into force on 1 January 2027.

The European Securities and Markets Authority (ESMA) has launched a call for evidence on the structure of European equity markets, presenting an analysis of trends between 2022 and 2025 based on transaction data reported under the Markets in Financial Instruments Regulation (MiFIR). ESMA's analysis suggests that equity markets continue to function well overall, with stable levels of addressable liquidity and on book trading, although it notes a decline in lit continuous trading that has been offset by greater use of other trading mechanisms, including closing auctions, frequent batch auctions and systematic internaliser trading. The analysis also covers how liquidity is allocated across different trading mechanisms on a country by country basis.

ESMA invites stakeholder input on a broad range of topics including: (i) ESMA's understanding of the trading landscape; (ii) identified trends in relation to on- and off-book trading, and addressable and non-addressable liquidity; (iii) price formation; (iv) attractiveness and choice of venues; (v) dedicated questions on dark trading and 24-hour (or extended-hour) trading; (vi) growing use of benchmark transactions; and (vii) member preferencing. The call for evidence also confirms that ESMA has decided to repeal the Q&A which states that periodic auctions are subject to the tick size regime.

The deadline for responses is 30 June, with a feedback statement expected in the second half of the year.

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 UK Financial Conduct Authority (FCA) has announced that from 11 May, cryptoasset firms preparing for the new UK cryptoasset regime will be able to request pre‑application meetings through the FCA's pre‑application support service (PASS). The meetings are free of charge and are intended to allow firms to discuss proposed business models and regulatory expectations with the FCA and to raise questions ahead of applying for authorisation or a variation of permission. Meetings will take place from July, before the authorisation gateway opens on 30 September. The new cryptoasset regulatory regime scheduled to commence on 25 October 2027. For further background on the regime, you may wish to watch our webinars which are available here.

The European Securities and Markets Authority (ESMA) has launched a consultation on draft guidelines on endorsement under the Environmental, Social and Governance (ESG) Ratings Regulation (EU) 2024/3005, setting out its proposed approach to the endorsement of non‑EU ESG ratings. The proposed guidelines are intended to complement the statutory endorsement conditions by specifying the information and documentation ESG rating providers are expected to submit when applying to ESMA for endorsement of non‑EU ESG ratings, as well as the ongoing requirements on the processes and controls to be demonstrated on an ongoing basis following authorisation. The deadline for comments is 29 May, after which ESMA will finalise the guidelines and publish a final report. Further information on the outcome of the consultation and the adoption of the guidelines will be communicated before the end of July. The guidelines are expected to apply three months after publication in all EU official languages on ESMA's website, with ESMA taking them into account for supervisory purposes from 2 August.

The Bank of England (BoE) and the UK Prudential Regulation Authority (PRA) have published updated Statements of Policy (SoP) setting out their respective approaches to cost benefit analysis (CBA). The BoE SoP sets out how it conducts CBAs when making rules for financial market infrastructures, in particular central counterparties and central securities depositories. It explains that CBA is integral to the BoE's policymaking and statutory obligations under the Financial Services and Markets Act 2000, with a primary focus on assessing impacts on UK financial stability and economic output, while also having regard to innovation.

The updated PRA SoP14/24 similarly confirms that CBA is an integral part of PRA policymaking for PRA regulated firms and explains how the PRA assesses expected costs and benefits (including impacts on safety and soundness, policyholder protection, competition and UK competitiveness). In parallel, it published a technical note setting out its standard cost model, which provides a structured and proportionate methodology for estimating firms' direct operational compliance costs or savings arising from regulatory changes. The PRA welcomes feedback on the model, as stated in a new webpage, to support its continuous improvement.

The European Banking Authority (EBA) has published a decision confirming it has streamlined its guidelines on connected clients as defined under the Capital Requirements Regulation, by partially deleting certain sections following the entry into force of Commission Delegated Regulation (EU) 2024/1728. This Delegated Regulation introduces binding regulatory technical standards specifying when institutions must identify groups of connected clients, rendering some existing guideline provisions redundant. As a result, the EBA has removed those elements of the guidelines that are no longer necessary. The decision is accompanied by a consolidated version of the guidelines, reflecting the partial deletions and applies to credit institutions across the EU.

The UK Financial Conduct Authority (FCA) has published Market Watch 85, setting out how the information‑sharing provisions in the Economic Crime and Corporate Transparency Act 2023 (ECCTA) can be used by firms to prevent, detect and investigate economic crime, including criminal market abuse. The FCA explains that ECCTA allows in-scope firms to share customer or former customer information with other firms directly where specified "warning" or "request" conditions are met, while providing protection from breaches of confidentiality and civil liability, subject to continued compliance with data protection requirements. The warning condition applies where a firm has taken (or would have taken) safeguarding action, such as terminating or restricting the service provided to a customer, due to suspected criminal market manipulation. The request condition applies where a firm has requested information from another firm, which it reasonably believes holds information that may assist it in taking "relevant action", including preventing, detecting or investigating economic crime.

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The UK Financial Conduct Authority (FCA) has published consultation paper CP26/15, setting out proposals to review and simplify the financial promotions rules in the Consumer Credit sourcebook (CONC). This follows feedback to the 2024 call for input that the regime is overly complex and outdated, particularly in light of the consumer duty. The FCA proposes removing a number of prescriptive rules and guidance that overlap with the duty, while retaining key consumer protections. This includes the ability for consumers to bring private actions for breaches of the financial promotions rules, which is not available for breaches of the consumer duty. The draft rules also include minor amendments to CONC 3.3.1AG to reflect changes introduced by the Digital Markets, Competition and Consumer Act 2024.

Furthermore, CP26/15 includes a discussion paper on cost disclosure, seeking views on the effectiveness of representative annual percentage rate (commonly referred to as APR) disclosures in light of research that indicates a lack of understanding among consumers as to how APR functions as a measure of cost.

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The European Banking Authority (EBA) has updated the list of correlated currencies in accordance with the technical standards mandated by Article 354 of the EU Capital Requirements Regulation (Regulation (EU) No 575/2013) (CRR). Article 354 allows institutions to provide lower own funds requirements against positions in relevant closely correlated currencies.

The EBA updated the list by way of a draft Implementing Regulation amending the relevant technical standards (which are set out in Implementing Regulation (EU) 2015/2197), with an Annex confirming the revised list. The update is intended to ensure that the listed currency correlations continue to reflect actual market conditions and is based on the EBA's latest assessment using data up to 31 March 2025. The amendments do not introduce any methodological or substantive policy changes, but instead apply the existing framework in Implementing Regulation (EU) 2015/2197 to an updated data set. Once adopted, the Amending Implementing Regulation will replace the current Annex to Implementing Regulation (EU) 2015/2197 and will enter into force on the 20th day following publication in the Official Journal of the European Union. The revised list has been submitted to the European Commission for endorsement, as confirmed in the EBA's press release.

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 UK Financial Conduct Authority (FCA) has published Primary Market Bulletin 63 (PMB 63) setting out updates relevant to primary market participants following the implementation of the Public Offers and Admissions to Trading Regulations 2024 (POATRs).

The FCA finalises technical note (TN) 717.3 on sponsors' record keeping requirements, following consultation in PMB 61 and without further amendments, and consults on revised guidance in TN 619.2 on working capital statement disclosures. The proposed revisions include new guidelines allowing issuers, in limited circumstances, to rely on uncommitted facilities in their working capital deductions, subject to appropriate disclosure. The deadline for responses to the consultation on TN 619.2 is 15 June. The bulletin also provides a summary of minor amendments to the UK Listing Rules (UKLR) sourcebook and the Prospectus Rules: Admission to Trading on a Regulated Market (PRM) sourcebook made through quarterly consultation papers, and signals future consultations on POATRs-related rule changes in Q4 this year— inviting market participants and advisers to notify the FCA of any "snagging" issues with the UKLR or PRM by the end of August.

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The UK Financial Conduct Authority (FCA) has published consultation paper CP26/14, setting out proposals to amend its rules on information sharing during UK equity initial public offerings (IPOs). The FCA proposes to amend its conduct of business sourcebook (COBS) to: (i) remove the mandatory seven‑day waiting period between the publication of an approved registration document or prospectus and connected research, and; (ii) repeal the related requirements mandating that syndicate banks intending to publish connected IPO research share the same information with a range of unconnected analysts, as they do with their own research analysts. The FCA considers that the current regime, introduced in 2018 to encourage the production of unconnected research and mitigate conflicts of interest, has not achieved its intended effects and has instead lengthened IPO timelines, increased costs and exposed issuers to additional market risk.

The consultation also proposes a technical correction to COBS 12.2.21R. The correction addresses an inconsistency resulting from earlier changes made to the FCA rules when the UK MiFID Organisational Regulation (on-shored Regulation 2017/565) was revoked and its requirements transferred into FCA rules.

Finally, the FCA is seeking feedback on further potential reform, and the consultation paper includes discussion questions on alternative approaches to the timing of publishing an approved prospectus or registration document in conjunction with connected research, and restrictions on pre-mandate analyst/issuer communications.

The deadline for responses is 29 May.

The UK Financial Conduct Authority (FCA) has published a statement confirming that its proposed motor finance redress scheme has been formally challenged, which may delay compensation payments to affected consumers. The FCA expressed disappointment that the challenge could prolong uncertainty for both consumers and the motor finance market. The FCA is considering its response and will provide further details on its approach later this week.

The European Commission (EC) has adopted two Delegated Regulations supplementing the Environmental, Social And Governance (ESG) Ratings Regulation (EU) 2024/3005 on the transparency and integrity of ESG rating activities. The first Delegated Regulation sets out regulatory technical standards (RTS) on the supervisory fees to be charged by the European Securities and Markets Authority (ESMA) to ESG rating providers. The second draft Delegated Regulation establishes the procedural framework for ESMA's imposition of fines and periodic penalty payments on ESG rating providers. Draft versions of the Regulations were published in January for feedback. The Council of the EU and the European Parliament will now scrutinise the Delegated Regulations, and if neither object, they will enter into force on the day following publication in the Official Journal of the European Union, applicable to all member states.

The UK Financial Conduct Authority (FCA) has published a new webpage summarising discussions held with members of its cyber coordination group (CCG) on good and poor practice in cyber resilience. The FCA focuses on three areas: incident response and recovery; implications on emerging technologies (including AI and post‑quantum cryptography (PQC)); and insider risk management. The FCA notes that the insights do not introduce new regulatory expectations but are intended to help firms assess and strengthen their cyber resilience in line with existing expectations and operational resilience requirements.

On incident response and recovery, CCG members highlighted the importance of comprehensive service mapping of key personnel, technology assets and third-party services to strengthen response capabilities, the use of severe but plausible scenarios to test recovery at scale, and early and sustained senior management involvement in testing and response exercises. Many members also reported benefits from subscribing to the National Cyber Security Centre's early warning service. Key challenges include difficulty in mapping in complex organisations and technology environments, limited relationships with the board hindering early senior management involvement, and difficulties engaging with third parties where contractual requirements are limited or there's no shared history of expectations.

Read more.

The UK Prudential Regulation Authority (PRA) has published policy statement LIAF01/26, finalising a series of amendments to its Rulebook and policy materials that it considers low impact. The changes include:

• Finalisation of amendments to the Fees Part of the PRA Rulebook consulted on in the PRA's November 2025 consultation on regulatory fees and levies for 2026/27, which include updating invoice due dates for firms paying GBP50,000 or more in annual PRA and UK Financial Conduct Authority fees (effective 30 April).
• Removal of redundant MiFID Organisational Regulation references from the Skills, Knowledge and Expertise Part of the Rulebook following post‑EU withdrawal reforms (effective 30 April).
• Clarificatory amendments to Statement of Policy (SoP) 2/23 on the Small Domestic Deposit Taker (SDDT) regime, providing guidance for applicants with non‑UK parent undertakings (effective 23 April).

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The European Banking Authority (EBA) has published an opinion responding to the European Commission's (EC) proposed amendments to the EBA's final draft regulatory technical standards (RTS) on operational risk under the Capital Requirements Regulation (CRR) as amended by CRR3. The EBA previously published reports on the final draft RTS and implementing technical standards in June 2025, followed by further final draft RTS on operational risk loss, in August 2025. In March, the EC informed the EBA in a letter of its intention to endorse the draft RTS with amendments, including bundling the RTS into one single Commission Delegated Regulation.

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The Council of the EU has published notes from its General Secretariat to the Permanent Representatives Committee (COREPER), setting out the final compromise text for the proposed revised Payment Services Directive (PSD3) and Payment Services Regulation (PSR), collectively known as "the Payment Services Package". The legislative package aims to modernise the EU's regulatory framework for payment services, building on the foundations of PSD2 to enhance consumer protection, strengthen fraud prevention and improve the functioning of open banking. It also seeks to address the pending challenges in the context of the impact and application of PSD2 in the internal market and adapt it to align with new market developments.

The Council also published an "I" item note from its General Secretariat, suggesting that COREPER approves the text of the draft Directive and draft Regulation with a view to reaching an agreement at second reading with the European Parliament (EP). The Council and the EP agreed their respective negotiating positions on the legislative proposals in June 2025 and April 2024, which we cover in more detail in our blog post titled "European Council and Parliament reach provisional agreement on EU Payments Package". For more background on the proposed package, you may wish to read our article titled "Paving the way for the future of payments - The PSD III package is here: discover its key features".

The UK Prudential Regulation Authority (PRA) has published consultation paper LIAC01/26, proposing a series of low-impact amendments to its Rulebook and policy materials.

The proposals include:

• Amendments to the Groups Part of the PRA Rulebook to clarify the treatment of voting rights in proportional consolidation for CRR firms.
• Consequential changes to various PRA rules following the revocation of certain provisions in the Capital Requirements Regulations 2013 by HM Treasury through the Financial Services and Markets Act 2023 (Commencements No.12 and Saving Provisions) Regulations 2026, applying from 1 January 2027.
• Technical amendments to the UK countercyclical capital buffer technical standard in light of Basel 3.1 implementation, applying from 1 January 2027.
• Changes to Statements of Policy (SoP) on other systemically important institutions (O‑SIIs), including moving the designation exercise from an annual to a biennial assessment. These changes are proposed to apply from 1 November, alongside clarifications on the scope and application of the O‑SII buffer in SoP1/16 and SoP4/16, which are proposed to apply from July.
• Amendments to SoP1/20 to reduce the frequency of publication of Solvency II technical information to once every three years. This would apply in July.

The deadline for comments is 21 May.

HM Treasury (HMT) has published the response to its July 2025 consultation on reforming the Senior Managers and Certification Regime (SMCR). The response concerns Phase 2 of the reforms and confirms the government's planned reforms to the Financial Services and Markets Act 2000, including to:

• Remove the Certification Regime from primary legislation, including the annual recertification requirement, and enable the regulators to consider a more proportionate and flexible framework in their rulebooks.
• Reduce the number of senior management functions that require regulator pre-approval. Regulators will be given a new power to specify circumstances where it would be suitable for a firm to notify the regulators of the appointment of a senior manager following the firm's assessment of fitness and propriety.

Read more.

The UK Financial Conduct Authority (FCA) and UK Prudential Regulation Authority (PRA) have published final policy statements (FCA PS26/6 and PRA PS12/26) on Phase 1 reforms to the Senior Managers and Certification Regime (SMCR). The reforms largely implement proposals as consulted on in July 2025. For more detail on the reforms, you may wish to read our blog post titled UK Senior Managers and Certification Regime overhaul: understanding proposals for reform.

The FCA's reforms focus on streamlining administrative requirements and include greater flexibility around the 12‑week rule (allowing firms 12 weeks to submit, rather than obtain approval for, Senior Management Function (SMF) applications), extended validity periods for criminal record checks, simplified requirements for statements of responsibilities and management responsibilities maps (with firms given up to six months to notify changes), removal of overlapping multiple certifications within the Certification Regime, updated guidance on Fit and Proper recertification, extended deadlines for updating the Directory (from seven to 20 business days), and raising certain enhanced firm thresholds by 30%.

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HM Treasury has announced a package of reforms aimed at modernising the UK payments regulatory framework to support innovation while maintaining consumer protection. The government confirms that it will shortly consult on reforms which include:

• Integrating the regulation of payment services and electronic money into the UK's core financial services framework, creating a single regime covering both traditional and tokenised payments (including stablecoins and tokenised deposits).
• Regulating stablecoins used for payments under a new UK regulated activity, alongside legislation to reduce administrative burdens for stablecoin payment providers.
• Adapting payments regulation to address payments conducted by AI agents.
• Granting the FCA new powers to oversee the future development of open banking and commercial open banking payment schemes.
• Streamlining regulation by setting out the government's response to consolidating the UK Payments Systems Regulator within the UK Financial Conduct Authority.
• Appointing a Wholesale Digital Markets Champion to support the development of tokenised wholesale markets as part of the government's wholesale financial markets digital strategy.

HM Treasury (HMT) has published its response to its September 2025 consultation, confirming its intention to proceed with abolishing the UK Payment Systems Regulator (PSR) and consolidating its functions within the UK Financial Conduct Authority (FCA), subject to primary legislation. While responses were broadly supportive of integration within the FCA's existing FSMA framework, the government is still considering different legislative design options and will reflect further on feedback before finalising the model.

Key points from the response include:

• The PSR's functions under assimilated payment services legislation will transfer to the FCA, including functions under the Payment Services Regulations 2017, the Payment Card Interchange Fee Regulations 2015 and the Payment Accounts Regulations 2015 (including oversight of the Current Account Switching Service), alongside retention of a designation regime for bringing payment systems into and out of scope of regulation.
• Transitional legislation will preserve existing PSR requirements, technical standards and guidance (including those relating to the authorised push payment scam reimbursement regime), with the FCA determining its regulatory approach under the new framework. These transferred functions may be reviewed as part of HMT's wider programme to modernise and future proof payment services and e money law, which it will set out in detail in due course.

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HM Treasury (HMT) has published the draft Financial Services and Markets Act 2000 (Cryptoassets) (Amendment) Regulations 2026 and a policy note proposing targeted changes to the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026. The draft statutory instrument (SI) seeks to address unintended consequences of the cryptoasset regime and support the interim use of UK‑issued qualifying stablecoins (UKQS) for payments ahead of wider payments services reforms announced in a related press release. The reforms are expected to bring UKQS payment services into the regulated payments perimeter.

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The UK Financial Conduct Authority (FCA) has published a speech by Jessica Rusu, chief data, information and intelligence officer, setting out how the FCA intends to support fintech firms in the next phase of innovation amid rapid advances in AI and the emergence of "agentic commerce".

The FCA highlighted its principles-led, outcomes focused approach to AI regulation and announced the next phase of its AI Lab, including: (i) an extended partnership with NVIDIA and NayaOne; (ii) a second cohort of firms entering AI Live Testing, which will conclude by the end of the year, with an evaluation report expected in Q1 2027; (iii) the scaling of the Supercharged Sandbox, giving more UK fintechs access to data and Nvidia compute to build their products, with a second intake opening on 5 May; and (iv) confirmation that the FCA will not introduce new AI specific rules at this stage, but will instead publish examples of good and poor practice later in the year. In parallel, the FCA emphasised the role of its recently published open finance roadmap and announced that its Scale Up Unit is now open for expressions of interest from solo regulated firms to support them in scaling and entering new markets.

The UK Financial Conduct Authority (FCA) has published a new webpage setting out good and poor practice identified from a review on managing potential risks arising from inactive appointed representatives (ARs). The FCA states that where ARs carry out no regulated activities, principals cannot rely on transaction based oversight and must ensure effective governance, monitoring and engagement. Unexplained inactivity may indicate weaknesses in the principal's governance, monitoring, oversight and risk management and increase the risk of consumer harm. The FCA expects firms to: reflect on whether arrangements for inactive ARs remain appropriate; provide clear explanations in REP025 regulatory returns where ARs have not carried out regulated activities during the specific reporting period; and take timely action to reassess, suspend or terminate AR relationships where appropriate, including notifying the FCA when the status of the relationship changes.

Good practice included clear expectations set at onboarding, active and data led oversight, and early intervention on inactive ARs. Poor practice included situations where principals lacked understanding of AR business models, allowed prolonged inactivity without engagement, or failed to monitor how ARs presented themselves to consumers, increasing the risk of consumers being misled about regulatory status. The FCA notes that some firms have already strengthened oversight and offboarded inactive ARs following supervisory engagement and it expects all principals to review their arrangements to ensure risks are appropriately managed.

The European Commission has adopted two Delegated Regulations supplementing the Environmental, Social And Governance (ESG) Ratings Regulation (EU) 2024/3005 on the transparency and integrity of ESG rating activities. Both Regulations are based on the final draft RTS published by the European Securities and Markets Authority in October 2025. They will enter into force on the 20th day following publication in the Official Journal of the European Union and will apply from 2 July.

The first Delegated Regulation sets out regulatory technical standards (RTS) on the separation of ESG rating activities from other business activities carried on by ESG rating providers. It specifies the measures and safeguards applicable where a derogation from the separation requirement is relied upon, to prevent conflicts of interest. In particular, providers must establish separate organisational structures and working environments for staff involved in the rating process from any activities listed in Article 16(1) of the ESG Ratings Regulation. Staff will also require regular self declarations confirming non involvement in those activities. Additional technical and internal control measures apply where providers intend to carry on investment services and/or insurance or reinsurance activities, with further safeguards for those that provide, or intend to provide, benchmarks.

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The European Commission has launched a consultation on a draft delegated act proposing targeted amendments to the EU prudential framework for banks' market risk, specifically the Fundamental Review of the Trading Book (FRTB) under the Capital Requirements Regulation (CRR). While most Basel III reforms have applied since 1 January 2025, the FRTB has been deferred on several occasions, most recently to 1 January 2027 in response to uncertainty around implementation timelines and potential deviations from the Basel standards in other major jurisdictions. The draft delegated act sets out amendments, intended to apply from 1 January 2027, to support a level playing field for EU banks competing internationally in trading activities by offsetting the negative capital impact of the FRTB for a period of three years. The proposals reflect feedback from a November 2025 consultation and input from member state experts. Formal adoption of the delegated act is expected on 19 May, to provide banks and supervisors with greater certainty ahead of implementation.

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The UK Financial Conduct Authority (FCA) has published its innovation insights 2025 report, setting out key trends in UK fintech innovation, evolving regulatory risks and lessons from firms' engagement with the FCA's innovation services. By sharing insights, the FCA aims to support earlier and clearer regulatory engagement and strengthen evidence-led policy and supervision.

The report notes that while global fintech investment exceeded USD130 billion in 2025, funding has become more selective, concentrating on fewer, more mature firms, with the UK ranking second globally for disclosed investment. It highlights a shift in the key challenge faced by firms, from product development to understanding how regulation applies to them, with demand for FCA support increasing significantly. This includes a 49% rise in applications to the Regulatory Sandbox and Innovation Pathways in 2025, particularly in relation to AI, distributed ledger technology, and open banking and open finance. In the report, the FCA also summarises steps taken in 2025 to expand its innovation services. Looking ahead, the FCA signals a focus in 2026 on clearer guidance, more structured testing pathways, broader engagement with incumbent firms, and supporting UK competitiveness and international growth.

The UK Financial Conduct Authority (FCA) has published findings from its multi‑firm review examining the impact of market soundings on market quality in UK equity capital market (ECM) transactions. The review analysed data from 63 UK equity and equity linked transactions conducted by five wholesale banks between January 2023 and June 2025. The FCA found that trading volumes fell by an average of 13% during market sounding periods but did not observe material impacts on other market quality metrics, including effective and quoted spreads and market depth. On average, 33 investors were market sounded per transaction, with one instance approaching nearly 90 recipients; however, transactions that sounded above average numbers of recipients did not meaningfully increase overall demand or oversubscription after launch.

While the FCA does not prescribe limits on the number of market sounding recipients, it notes that the risk of inside information leakage may increase as the scale or duration of a market sounding grows and suggests firms consider whether their policies and procedures adequately reflect this. The FCA will continue to engage with banks and other market participants through supervisory work. In addition, the FCA sought feedback on Article 11 of the UK Market Abuse Regulation (MAR) with some banks suggesting improvements, including closer alignment with the EU market soundings regime and reduced record keeping requirements. The FCA will consider this feedback when assessing any future changes to UK MAR.

The legislative package reforming the crisis management and deposit insurance (CMDI) framework for banks in the EU was published in the Official Journal of the European Union (OJ). The package includes targeted amendments to: (i) the Bank Recovery and Resolution Directive (BRRD) regarding early intervention measures, conditions for resolution and funding of resolution action and Directive 2014/24/EU, regarding valuation services in resolution; (ii) the Single Resolution Mechanism Regulation (SRMR) regarding early intervention measures and conditions for resolution and funding of resolution action; and (iii) the Deposit Guarantee Schemes Directive (DGSD) regarding the scope of deposit protection, use of deposit guarantee schemes funds, cross-border co-operation, and transparency.

The reforms aim to strengthen the EU's ability to manage bank failures, including small and medium-sized banks, by facilitating access to industry-funded safety nets, such as national resolution funds and the Single Resolution Fund. These tools are intended to supplement a failing bank's own loss-absorbing capacity, thereby reducing reliance on taxpayer-funded bailouts, referred to as the "bridge the gap" mechanism. The transposition deadline for amendments to the two directives is 11 May 2028. The amendments to the SRMR and DGSD are to apply (with some exceptions) from 11 May 2028 and the amendments to the BRRD from 12 May 2028.

The UK Prudential Regulation Authority (PRA) has published consultation paper CP7/26, setting out proposed regulated fees and levies for 2026/27. The PRA proposes a total funding requirement of GBP346.6 million, a 1% decrease from 2025/26, which includes an annual funding requirement (AFR) of GBP329.3m. The AFR is the budgeted cost of ongoing regulatory activities and a 7% decrease from 2025/26, but may need to be revised when final estimates for costs are available.

The proposals include fee rates to meet the AFR; an increased cost allocation for the Future Banking Data programme; inflation-linked increases to internal model application, model maintenance and restructuring project fees; and changes to new firm authorisation fees. The PRA also sets out its proposed approach to allocating an estimated GBP2m surplus from 2025/26. The deadline for comments is 15 May. The PRA proposes to implement the changes from 13 July, except for the new internal model application fee and the model maintenance fee for calculating exposure values for securities financing transactions under the value-at-risk approach. This would take effect from the Basel 3.1 implementation date of 1 January 2027.

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 UK Prudential Regulation Authority (PRA) has published its business plan for 2026/27, setting out its regulatory and supervisory priorities for the year ahead.

The PRA's strategic priorities include:

• Maintaining the safety and soundness of the banking and insurance sectors, and ensuring continued resilience, with a focus on embedding major reforms such as Basel 3.1 and the small domestic deposit takers regime, as well as enhanced operational resilience and cyber risk management.
• Being at the forefront of identifying new and emerging risks, including those arising from geopolitical developments, economic and financial market developments and the evolving use of AI. The PRA will also continue to support the Basel Committee on Banking Supervision's targeted review of the prudential treatment of cryptoasset exposures and monitor sector-wide resilience while maintaining international and bilateral engagement.
• Supporting competitive, dynamic and innovative markets, while facilitating international competitiveness and growth through streamlined reporting (via the Future Banking Data programme) and tailoring support for fast-growing and innovative financial firms through its new scale-up unit and the concierge service for new inbound international firms.
• Running as an inclusive, efficient and responsive regulator within the Bank of England and increasing its adoption of emerging technology tools to improve its regulatory processes for firm authorisations, the Senior Managers and Certification Regime, internal model permission application and approvals.

The business plan sets out more detailed initiatives under each strategic priority.

The European Banking Authority (EBA) has published its response to the European Commission's (EC) targeted consultation on the competitiveness of the EU banking sector. The EBA emphasises the importance of completing and deepening the single market and the banking union as key drivers of competitiveness. It also highlights the resilience of EU banks strengthened by the post‑financial crisis reforms, while noting ongoing challenges including geopolitical risks, exposures to non‑bank financial institutions and digital transformation.

Building on the findings from its October 2025 report on the efficiency of the regulatory and supervisory framework (which put forward 21 recommendations to simplify the banking rulebook) the EBA emphasises that competitiveness can be enhanced through targeted simplification. It states that such efforts should respect principles of: maintaining financial stability and credibility through continued commitment to Basel III standards; enabling banks to fully benefit from the single market while preserving and deepening it and the banking union; and ensuring an EU wide level playing field— applying proportionality where appropriate to avoid the fragmentation of the rulebook. The EBA confirms it will continue to work closely with the EC to support a competitive, resilient and stable EU banking sector.

The European Commission (EC) has adopted a Delegated Regulation supplementing the Capital Requirements Regulation (EU) No 575/2013 (CRR), as amended by the CRR3. It sets out regulatory technical standards (RTS) specifying what constitutes an equivalent legal mechanism to ensure that a residential property under construction is completed within a reasonable timeframe. The Delegated Regulation is based on the European Banking Authority's final draft RTS published in August 2025. Article 124 of the CRR sets out the requirements for assigning risk weights to exposures secured by mortgages on immovable property, including conditions under which exposures to properties under construction may qualify for preferential treatment. The EC has the power under Article 124(14) to specify what constitutes an equivalent legal mechanism to ensure that the property under construction is completed within a reasonable timeframe.

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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 EU Authority for Anti‑Money Laundering and Countering the Financing of Terrorism (AMLA) has launched two consultations on draft measures setting out requirements for business‑wide risk assessments (BWRAs) and group‑wide anti-money laundering and countering the financing of terrorism (AML/CFT) frameworks under the EU Anti‑Money Laundering Regulation (AMLR).

The first consultation specifies draft regulatory technical standards (RTS) under Articles 16(4) and 17(3) of the AMLR, setting minimum standards for the design and implementation of group‑wide AML/CFT frameworks. They address organisational aspects of group wide AML/CFT requirements, provisions on information sharing within groups, criteria for identifying the parent undertaking in the Union where multiple obliged entities are linked to a third country head office, and the extension of group wide requirements to structures other than groups (which is particularly relevant to the non financial sector). The draft RTS also cover additional measures and requirements where branches or subsidiaries operate in third countries. AMLA proposes a single set of RTS to cover both Article 16(4) and Article 17(3) mandates. The deadline for comments is 15 June, with a public hearing scheduled for 20 May. Feedback will be considered with the final draft RTS due to be submitted by 30 September.

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The UK Financial Conduct Authority (FCA) has published a blog post discussing the findings from firms' year 2 consumer duty board reports and what firms can do now to help them prepare for the next round of reporting in Q3. Under the consumer duty, firms must report annually on what their monitoring found about customer outcomes, and what actions they will take as a result. The FCA notes that while firms have improved, further progress is needed ahead of the third reporting cycle.

The FCA observed stronger governance and board oversight, including more formal board review and approval of reports, better action plans and ownership, and wider use of quantitative and qualitative data to demonstrate customer outcomes. There is also more evidence of firms improving how they identify and monitor outcomes for vulnerable customers. However, the FCA notes that the quality and depth of analysis was variable.

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The European Securities and Markets Authority (ESMA) has launched a call for evidence on the purposes, market practices, needs and risks associated with restricted subscription and private credit ratings. In particular, ESMA seeks views on:

• The characteristics and use cases of restricted subscription and private credit ratings, including their benefits compared with publicly disclosed ratings.
• The characteristics of the parties who are contracting for restricted subscription and private credit ratings and those to whom they are disclosed or distributed.
• Evidence on whether, and to what extent, the analytical processes, governance arrangements, and internal controls applied to restricted subscription and private credit ratings are comparable to those applied to public credit ratings.

ESMA requests evidence-based responses, including quantitative information where available, as well as concrete examples drawn from market practice. The deadline for comments is 31 May. Responses will be reviewed in Q2 with a view to assessing whether specific regulatory adjustments or clarifications may be needed to enhance clarity on the application of the Credit Rating Agencies Regulation (EC) No 1060/2009.

The UK Financial Conduct Authority (FCA) has published policy statement PS26/5, setting out its new rules and final statement of policy for the UK short selling regime. In addition, the FCA published an operational guide to provide more detailed information on the operational changes required and the timeframe for implementation. This follows the introduction of the Short Selling Regulations 2025 (SSR 2025) under the Financial Services and Markets Act 2023 and the October 2025 consultation on the draft rules. The FCA has created a new Short Selling Sourcebook within its Handbook, to consolidate existing requirements and to introduce targeted changes to reduce regulatory burdens and improve market efficiency. Following consultation feedback, the FCA's final rules make further changes in the following areas to provide additional clarity and enhance its proposals:

• Removing the requirement for market makers to notify each financial instrument they want to benefit from the market maker exemption. They will only be required to submit a single "activity based" notification which will enable them to use the exemption for market making activities in any financial instrument. Market makers must also submit an "annual attestation" to demonstrate their compliance with the conditions to use the exemption.
• Considering, as part of its forthcoming review of the disclosure guidance and transparency rules (DTRs), whether the existing disclosure framework in DTR 5 could be used or adapted to require issuers to publish issued share capital specifically for short selling purposes.

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The UK Financial Conduct Authority (FCA) has published consultation paper CP26/13, proposing changes to the Perimeter Guidance Manual (PERG) within the FCA Handbook to clarify the scope of the new regulated cryptoasset activities and when permissions will be required. In addition, the consultation paper aims to provide clarity for firms transitioning from the FCA's current cryptoasset regime (under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017) (MLRs) to the new cryptoasset activities under the Financial Services and Markets Act 2000 (FSMA).

The proposed new chapter in PERG will contain guidance on how to determine whether an activity is within the perimeter, and guidance on the new specified investments and new regulated cryptoasset activities, including which permissions may be required for certain business models and how specific exclusions operate and other related issues. The FCA also clarifies that, as outlined by HM Treasury in the explanatory memorandum accompanying the Cryptoasset Regulations 2026, FSMA authorised cryptoasset firms will not need to register as "cryptoasset exchange providers" or "custodian wallet providers" under the MLRs but instead will only need to notify the FCA. However, these firms will still need to comply with the MLRs. The proposed guidance in full is set out in the draft Perimeter Guidance (Regulated Cryptoasset Activities) Instrument 2026, in Appendix 1 of the consultation paper.

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The UK Office of Financial Sanctions Implementation (OFSI) has published its strategy for 2026–2029. The strategy is based around the "Promote, Enable, Respond and Change" (PERC) framework:

• Promote: To shape expectations and set the standard, OFSI will run targeted campaigns for priority sectors; publish clear guidance products and assessments showing what non-compliance is and how to avoid it; and work with domestic and international regulators to promote consistency. "Promote" key performance indicators (KPIs) include sector-specific engagement campaigns and delivering joint or co-branded public output (such as joint guidance, public statements, case studies or advisories) with international partners on a quarterly basis.
• Enable: OFSI will remove friction for legitimate activity and support sanctions compliance behaviour that is fast, predictable and scalable by encouraging early engagement from firms to address risks or uncertainties, providing direct, practical compliance advice on complex scenarios, and maintaining an effective and regularly updated licensing offer with high, publicised service standards. Engagement will be modern and digital by default, including online services, reporting and forms, supported by enhanced data use, data sharing and AI enabled workflows. The "enable" KPI is to close 50% of licensing cases within six months.

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The Single Resolution Board (SRB) has published its response to the European Commission's (EC) targeted consultation on the competitiveness of the EU banking sector. The SRB emphasises that while the banking union has substantially strengthened the resilience of EU banks, its incomplete nature continues to hinder cross-border integration and efficiency.

The SRB highlights the need for progress towards a more integrated European deposit protection framework, a strengthened and more predictable approach to liquidity in resolution, and improvements to the cross border allocation of capital and liquidity within banking groups, supported by robust resolvability safeguards. It also calls for targeted simplification of the regulatory framework, including greater coherence across prudential, resolution and macroprudential requirements and streamlined minimum requirement for own funds and eligible liabilities processes, while maintaining overall resilience and financial stability. The SRB states that these measures would support both market integration and the international competitiveness of EU banks, and confirmed its intention to continue engaging with the EC as it develops its policy response.

The European Central Bank (ECB) has published its Governing Council's response to the European Commission's targeted consultation on the competitiveness of the EU banking sector. The response builds on the ECB's High-Level Task Force (HLTF) simplification proposals, endorsed by the ECB in December 2025. The response and proposals are endorsed by all euro area central banks.

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The European Commission has adopted a Delegated Regulation supplementing Directive 2014/65/EU (MiFID II), with regard to regulatory technical standards (RTS) specifying the criteria to be taken into account by investment firms when establishing and assessing the effectiveness of their order execution policies. The Delegated Regulation is based on ESMA's final draft RTS published in April 2025. The RTS specify rules on, among other things: (i) selecting execution venues; (ii) monitoring investment firms' execution policies; (iii) order routing; (iv) the handling of specific client instructions and related investor protection safeguards; (v) the periodic assessment of investment firms' order execution policies; and (vi) how to identify classes and subclasses of financial instruments for which the investment firms execute orders on behalf of clients.

When the Delegated Regulation enters into force, it will repeal Delegated Regulation (EU) 2017/575 which sets out data to be published by execution venues on the quality of execution of transactions on their venues and Delegated Regulation (EU) 2017/576, which sets out obligations for investment firms to publish information on the identity of execution venues and the quality of execution obtained. The Delegated Regulation will enter into force on the 20th day following its publication in the Official Journal of the European Union. It will apply 18 months after entry into force, allowing firms time to update their order execution policies, procedures and systems.

The UK Financial Conduct Authority (FCA) has published its open finance roadmap, setting out its vision for open finance in the UK from now until 2030. The FCA explains that the roadmap draws on lessons from open banking and international experience and takes a phased evidence-led and collaborative approach.

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The European Securities and Markets Authority (ESMA) has published a webpage with official translations of its guidelines on the periodic information that benchmark administrators, credit rating agencies (CRAs), data reporting services providers and market transparency infrastructures must submit to ESMA. The guidelines repeal and replace ESMA's previous 2019 guidelines on the submission of periodic information by CRAs, together with its previous 2021 guidelines on periodic information and notification of material changes to be submitted to ESMA by trade repositories. The guidelines have applied since 1 January 2026. They clarify the format and frequency of the different categories of information which ESMA expects to receive in its role as supervisor, as well as harmonising and simplifying periodic reporting by these entities. The related final report was originally published in June 2025.

The UK government, through the UK Office of Financial Sanctions Implementation (OFSI), has updated its webpage, extending the deadline for responses to its call for evidence on the application of the ownership and control test under the UK Financial Sanctions Regulations. The deadline for responses has been extended from 11:59pm on 13 April to 11:59pm on 20 April.