The European Securities and Markets Authority (ESMA) has published a peer review report assessing the authorisation and supervision of a crypto-asset service providers (CASPs) under the Markets in Crypto-Assets Regulation (MiCAR). While the peer review was conducted in Malta and sets out specific recommendations addressed to the Malta Financial Services Authority (MFSA), ESMA also makes broader recommendations which apply to all national competent authorities (NCAs).

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The UK Financial Conduct Authority has announced plans to review its client categorisation rules to unlock more investment opportunities for wealthy investors and support capital markets. The review will focus on maintaining proportionality and supporting economic growth by modernising the client classification regime, providing greater clarity and confidence for firms and forming part of a broader strategy to enhance the competitiveness of the UK's financial services sector. The FCA will consult on the elective professional client categorisation later this year.

The UK Financial Conduct Authority (FCA) has published its 2024/25 report on the secondary competitiveness and growth objective (SCGO), outlining the progress made since July 2024 and setting out its forward-looking priorities for the remainder of the reporting period. The SCGO, introduced under the Financial Services and Markets Act 2023, requires the FCA to publish annual reports for the first two years following the objective's introduction. This is the second such report and is accompanied by two annexes. Annex 1 provides a six-month progress update on the FCA's response to the Prime Minister's letter of December 2024, which called on UK regulators to identify actions that could unlock economic growth. In its response, the FCA outlined around 50 initiatives aimed at supporting innovation, streamlining regulation to reduce regulatory burden and boosting market access. The annex tracks progress against those commitments, several of which align with pledges made in the UK Government's March policy paper. Annex 2 presents the FCA's performance against a suite of published metrics designed to assess how its rules and guidance have contributed to advancing the SCGO. The FCA also published its response to the HM Treasury's (HMT) 2024 remit letter, reaffirming its commitment to embedding the SCGO into its five-year strategy. The letter outlines the FCA's efforts in strengthening the UK's capital markets, supporting innovation and technology and ensuring that regulatory reform is aligned with sustainable growth and consumer protection.

The European Banking Authority (EBA) has published a consultation paper proposing amendments to Commission Delegated Regulation (EU) No 241/2014 on the timing for the application for prior permission to reduce own funds and eligible liabilities instruments under Articles 77, 78 and 78a of the Capital Requirements Regulation (CRR). The assessment timeline to process the applications to reduce own funds and eligible liabilities instruments had been extended the from three to four months, to accommodate more complex evaluations by competent and resolution authorities. However, following a monitoring period and in light of feedback from institutions, the EBA now considers that authorities have gained sufficient experience to process applications more efficiently. As such, the EBA proposes reverting to a three-month timeframe. References to the simplified requirement for liquidation entities, with an MREL set at the loss absorption amount, are also deleted from the RTS. This is to reflect amendments made by Directive 2024/1174 to the Bank Recovery and Resolution Directive, which exclude liquidation entities from the requirement to obtain the prior permission of the resolution authority to affect the call, redemption, repayment or repurchase of liabilities that would meet the eligibility requirements for the MREL. The deadline for comments on the consultation is 9 October following which the EBA will submit the final draft RTS to the European Commission for adoption.

The Bank of England's Financial Policy Committee (FPC) has published its July financial stability report alongside the record of its 27 June meeting. After assessing the risks to the UK financial system, the FPC reports that global financial markets remain vulnerable, with elevated risks stemming from geopolitical tensions, trade fragmentation and sovereign debt pressures.

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The Bank of England and the Prudential Regulation Authority (PRA) have released a letter to PRA-regulated firms and relevant financial market infrastructure (FMIs) outlining the thematic findings from the 2024 Cyber Stress Test (CST24). PRA-regulated firms and relevant FMIs are encouraged to consider these findings in the implementation of their operational resilience policies.

The CST24 involved providers and users of wholesale services modelling the operational, financial and confidence impacts of suspected, confirmed and longer cyber-attack scenarios affecting transaction settlement.

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The Prudential Regulation Authority (PRA) has announced it will be reviewing the Loan to Income (LTI) flow limit requirements, following the Financial Policy Committee's (FPC) recommendation, as stated in its July financial stability report. In line with this, the PRA is offering an interim modification by consent, allowing lenders to temporarily disapply the current rule that limits new residential mortgage loans with an LTI ratio of 4.5 or above to 15% of total new lending. Firms opting into the modification must: (i) within one month, submit detailed information on their business plan (including the percentage share of high LTI mortgages expected to be approved in each of the four quarters), risk appetite and risk management frameworks which include details of any planned increase in high LTI lending; and (ii) on a monthly basis, notify the PRA on the volume and share of high LTI mortgage approvals and completions within the previous month, with the first submission covering the preceding three months. Once granted, the modification will remain effective until 30 June 2026, or earlier if the rule is amended or withdrawn as a result of the PRA's review.

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The Financial Stability Board (FSB) has published its final report on leverage in non-bank financial intermediation (NBFI) which highlights the significant role of NBFI leverage in recent financial stress episodes and provides policy recommendations to mitigate associated financial stability risks. The recommendations build on existing implemented policy measures by authorities and the work of standard-setting bodies (SSBs) and relate specifically to identification and monitoring, NBFI leverage in core financial markets, counterparty and credit risk management, addressing incongruencies in regulatory treatment and cross border cooperation.

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The European Banking Authority (EBA) has published a consultation paper on proposed revisions to its product oversight and governance (POG) guidelines for retail banking products. The EBA considers the update necessary in light of its June 2024 greenwashing report, which identified growing risks across the financial sector and to align with recent legislative amendments to the Capital Requirements Directive (CRD) and Capital Requirements Regulation (CRR) concerning Environmental Social Governance (ESG) risk management.

The revised guidelines aim to strengthen safeguards against greenwashing and ensure that financial institutions maintain high standards of conduct when offering products with ESG features. The EBA proposes a proportionate and targeted approach, adjusting a limited set of existing requirements related to the product's subject matter, manufacturers internal controls, the target market, distribution channels and information flows for the manufacturer's arrangements. A small number of consequential updates are also proposed. The deadline for comments on the consultation is 9 October, with the final guidelines expected to be published in Q1 2026 and effective from 1 December 2026. A virtual public hearing is scheduled for 11 September.

The European Securities and Markets Authority (ESMA) has published official translations of its guidelines on supervisory practices to prevent and detect market abuse under the Markets in Crypto-Assets Regulation (MiCAR). The guidelines, initially released in April through a final report, outline general principles to promote high-quality and effective supervision of market abuse in crypto-assets, alongside more targeted practices to support national competent authorities (NCAs) in detecting and preventing such abuse. The guidelines will now apply from 9 October, being three months after their publication in all official EU languages. NCA's shall confirm by 9 September whether they comply or intend to comply with the guidelines. If an NCA does not comply or does not plan to comply, it must notify ESMA, providing the reasons for its position. ESMA will subsequently publish this information on its website.

The UK Prudential Regulation Authority (PRA) and the UK Financial Conduct Authority (FCA) have published joint final policy statement 11/25, finalising amendments to the PRA Rulebook and FCA Guidance (FG25/4) on the de minimis threshold for the Loan to Income (LTI) flow limit in mortgage lending. The LTI flow limit seeks to ensure that mortgage lenders limit the number of new residential mortgage loans made with an LTI ratio at, or greater than, 4.5 to no more than 15% of their total number of new mortgage loans per annum. This final policy statement follows the April consultation proposing to raise the threshold so that the LTI flow limit only applies to lenders issuing residential mortgages in aggregate exceeding GBP150 million per four rolling quarters (an increase from the current threshold of GBP100 million). The policy statement explains that the updated recommendation addresses the impact of inadvertent regulatory tightening due to growth in the UK economy since the threshold was first implemented. The aim is to reduce regulatory burdens on smaller lenders, allowing them to extend more residential mortgages before being subject to the LTI flow limit. The final amendments to the PRA Rulebook and FCA guidance remain consistent with the consultation proposals. The new rules and updated guidance are implemented through the PRA Rulebook: CRR Firms, Non-CRR Firms: Housing (Amendment) Instrument 2025 and will take effect on 11 July.

The European Banking Authority (EBA) has published a consultation paper on its draft guidelines for managing third-party risk with regards to non-ICT related services. The guidelines will revise and update its prior 2019 outsourcing guidelines in line with the Digital Operational Resilience Act (DORA). The guidelines reaffirm that financial entities' management bodies remain fully accountable for all activities, including those outsourced to third-party service providers (TPSPs), particularly when critical or important functions are involved. The guidelines specify steps to be taken for the lifecycle of third-party arrangements, covering risk assessment, due diligence and termination processes, and stress the need for adequate resources to manage associated risks. To promote consistency with DORA, the draft guidelines allow financial institutions to maintain a single unified register for both ICT and non-ICT services, reducing administrative burden by limiting the level of information to be documented. A transitional period of two years is provided for financial entities under the scope of the updated guidelines, to review and amend existing third-party arrangements and update their non-ICT registers accordingly. The deadline for comments on the consultation is 8 October and a virtual public hearing is scheduled for 5 September.

The European Commission (EC) has adopted a Delegated Regulation amending a Delegated Regulation it adopted on 10 June, to introduce a review clause requiring the EC to independently assess countries that may pose a threat to the EU financial system, even if they are not publicly identified by the Financial Action Task Force (FATF). The Delegated Regulation adopted on 10 June amended the list of high-risk third countries laid down in Commission Delegated Regulation 2016/1675. The EC states that countries that are not publicly identified as being subject to calls for action or increased monitoring by the FATF might still pose a threat to the integrity of the EU financial system. Where membership of such countries to the FATF is suspended because of gross violations of core principles upon which that standard-setter is built, the threat to the EU financial system is likely to increase. The proposed review clause would require the EC to complete an autonomous assessment of whether such countries are high-risk third countries as referred to in Article 9 of Directive 2015/849 by 31 December.

The UK Financial Conduct Authority (FCA) has published its feedback to the interim working group's final report on credit information market governance, which was developed in response to the FCA's Credit Information Market Study (CIMS). The CIMS final report proposed a new industry governance model named the Credit Reporting Governance Body (CRGB). An industry working group (IWG) was tasked with designing recommendations for the CRGB's structure and remit, to include strengthening self-governance in the credit information market, improving consistency and quality in data sharing and ensuring broader representation and transparency in decision-making. The FCA supports the IWG's recommendations and suggests areas for further consideration during implementation.

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The European Banking Authority (EBA) has published a consultation paper on its draft guidelines on ancillary services undertakings (ASUs) specifying the criteria for the identification of activities referred to in Article 4(1)(18) of the Capital Requirements Regulation (CRR), as amended by CRR III (Regulation 2024/1623). The draft guidelines set the criteria for the identification of: (a) activities that should be considered a "direct extension of banking"; and (b) activities that should be considered "ancillary to banking". They also outline the process to identify activities that the EBA may consider similar to those referred to in the CRR, to ensure that the guidelines remain responsive to emerging sources of risks.

The proper identification of ASUs plays a key role in determining the scope of prudential consolidation for banking groups, thereby enabling institutions to comply with the obligations laid down in the CRR on a consolidated basis. The EBA expects the guidelines to be read in conjunction with Regulation (EU) 2022/676 (regulatory technical standards on methods of prudential consolidation). The deadline for comments on the consultation is 7 October and a virtual public hearing is scheduled for 2 September. The date of application remains to be specified.

The UK Financial Conduct Authority (FCA) has published finalised guidance on the treatment of Politically Exposed Persons (PEPs) under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The guidance is intended to help firms apply a proportionate and risk-based approach to managing money laundering risks associated with PEPs, their relatives and close associates.

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The UK Financial Conduct Authority (FCA) has announced the launch of its new and improved FCA Handbook website. The website, currently in a beta version, retains all existing features but seeks to offer improved navigation, facilitates better understanding of rule connections and make it easier to compare different versions of FCA Handbook text to determine what has been added or deleted over time. While in beta phase, the FCA will continue to test and refine the website, with both the current and new websites accessible during the testing phase. The full rollout is expected later this year, ensuring continuous updates to rules and guidance throughout the transition. The FCA has also published a how-to guide and FAQs.

The European Commission has adopted a Delegated Regulation amending Delegated Regulation (EU) 2021/2178 to simplify reporting requirements for environmentally sustainable activities under the EU Taxonomy Regulation. It also amends Delegated Regulations 2021/2139 and 2023/2486 to simplify certain technical screening criteria for determining whether economic activities cause no significant harm to environmental objectives.

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The UK Financial Conduct Authority (FCA) has published consultation paper CP25/20 on the systematic internaliser (SI) regime for bonds and derivatives. The consultation builds on the November 2024 final policy statement which introduced new bond and derivative transparency rules for trading venues and discussed the future of the SI regime. Given the removal of the pre-trade transparency from SI's obligations in bonds and derivatives, the FCA is now consulting on the SI regime and continued alignment between the transparency and SI regimes, along with additional proposals aimed at enhancing the functioning of UK markets.

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The UK Prudential Regulation Authority (PRA) has published its final policy statement in relation to amendments being made to the UK framework on capital buffers. Together with the Capital Buffers and Macro-prudential Measures Regulations 2025 (Capital Buffer Regulations), published in June, the amendments result in some regulatory material on the UK capital buffers framework being removed from the statute book and replaced by PRA policy material. In addition, the PRA has sought to streamline some of its policy materials on capital buffers, to enhance usability and clarity.

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The European Securities and Markets Authority (ESMA) has announced the selection of Ediphy (fairCT), a fintech company, as the first consolidated tape provider for bonds in the EU. The decision marks a significant step towards establishing consolidated tapes in the EU, contributing to the development of the Savings and Investment Union and enhancing capital markets in Europe. Ediphy (fairCT), was selected following a thorough assessment process against the criteria listed in the EU Markets in Financial Instruments Regulation. The firm met all eligibility requirements and achieved the highest overall score on the award criteria. ESMA now invites Ediphy (fairCT) to apply for formal authorisation without delay, after which it will operate the CTP for bonds for five years under ESMA's direct supervision.

HM Treasury (HMT) has published a policy note and draft statutory instrument on the ancillary activities exemption, which is an exemption (originally introduced in the revised EU Markets in Financial Services Directive) from investment firm authorisation requirements for firms that trade commodity derivatives or emission allowances as an ancillary activity to their main business. The exemption is intended for non-financial firms such as energy and other commodity trading firms which are active in both physical trading and financial instrument trading. Currently, firms must determine their eligibility for the exemption and ancillary activities test (AAT), which is burdensome and expensive for firms.

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The UK Financial Conduct Authority (FCA) has launched a consultation on its proposed revised approach to the ancillary activities test (AAT). The AAT is the test that firms must conduct to determine whether they can use an exemption (originally introduced under the revised EU Markets in Financial Instruments Directive) from investment firm authorisation requirements for their commodity derivatives or emission allowances trading business which is as an ancillary activity to their main business. The FCA's consultation is published on the same day as HM Treasury announced its revised policy approach to the exemption and the AAT. This approach will give the FCA powers to make rules in relation to the AAT and to set a new annual threshold for activity below which a person can also use the ancillary activities exemption (AAE).

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The draft Markets in Financial Instruments (Miscellaneous Amendments) Regulations 2025 has been laid before the UK Parliament under the Financial Services and Markets Act 2023 (FSMA 2023), together with a draft explanatory memorandum. The draft Regulations form part of the continued process to repeal and replace assimilated EU financial services law following Brexit. Specifically, these Regulations will restate key definitions from Commission Delegated Regulation (EU) 2017/565 (MiFID Org Regulation) into UK law, ahead of its revocation through a pending separate commencement instrument (as announced in the 2024 Mansion House speech). The MiFID Org Regulation sets out detailed organisational and conduct requirements for investment firms, including provisions on client categorisation, best execution, conflicts of interest, outsourcing and internal audit functions. These firm-facing obligations will be replaced by rules developed by the UK Financial Conduct Authority and the UK Prudential Regulation Authority, in line with the FSMA 2023 framework which delegates responsibility for detailed regulatory standards to the regulators. The draft Regulations also seek to modify definitions already within the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 to clarify terminology.

The EU T+1 Industry Committee (the Industry Committee) held a summit, presenting its high-level roadmap for transitioning to a shorter T+1 securities settlement cycle, targeted for implementation by 11 October 2027. While there is no formal public consultation on the roadmap or report, there is a feedback phase to gather additional input from stakeholders that may support the Industry Committee's future work. The deadline for comments is 31 August. After the consultation period, firms are encouraged to begin preparing their transition strategies and allocating resources for system upgrades and testing throughout the remainder of the year.

The European Central Bank (ECB) has published a Memorandum of Understanding (MoU) (dated 27 June) that the ECB has entered into with the European Union's Anti-Money Laundering Authority (AMLA) to enhance cooperation between prudential and anti-money laundering supervision. The MoU establishes practical arrangements for cooperation and information exchange, aiming to enhance supervisory effectiveness, maximise efficiency and avoid duplication of efforts. Under the MoU, the AMLA will directly supervise certain high-risk financial institutions (referred to as "selected obliged entities") that are particularly exposed to cross-border money laundering. These include payment institutions, crypto-asset service providers and, in some cases, banks that also fall under the ECB's prudential supervision. Article 92(3) of the AMLA Regulation requires the AMLA and the ECB to conclude a MoU setting out the practical modalities for cooperation and for exchanging information in the performance of their respective tasks by 27 June.

The European Supervisory Authorities (the European Banking Authority, European Insurance and Occupational Pensions Authority and European Securities Markets Authority—the ESAs) have announced the signing of a multilateral Memorandum of Understanding (MoU) (dated 27 June) with the European Union's Anti-Money Laundering Authority (AMLA). The agreement establishes a framework for effective cooperation and information exchange among the four institutions. The MoU outlines practical arrangements for collaboration, aiming to enhance supervisory convergence across the EU's financial sector. It also seeks to facilitate the sharing of relevant information, promote cross-sectoral learning and support capacity building in areas of mutual interest. The agreement is a key component of the AMLA's broader cooperation framework with the financial sector, as required under Article 91 of the AMLA Regulation, which mandates the conclusion of a multilateral MoU with the ESAs by 27 June.

The UK Financial Conduct Authority (FCA) has published a consultation paper CP25/18 (CP) on tackling non-financial misconduct (NFM) in financial services, building on its 2023 consultation on diversity and inclusion in the financial sector. The CP is accompanied by a press release and updated webpage. The CP includes a final policy statement in Chapter 2, confirming the extension of existing NFM rules for banks to non-bank financial services firms. These final rules, which come into effect on 1 September 2026, amend the Code of Conduct and the Fit and Proper Test for Employees and Senior Personnel sourcebooks. The changes aim to align expectations across the sector regarding serious misconduct such as bullying, harassment and violence, and clarify when such behaviour constitutes a breach of FCA rules. In addition to finalising these rules, the FCA is consulting on proposed new FCA Handbook guidance to support consistent application of the NFM framework across firms. The deadline for comments is 10 September.

The Financial Ombudsman Service (FOS) has published its annual report and accounts for 2024/25, accompanied by a press release. The report highlights a 54% year-on-year increase in complaints, with 305,726 new cases received, the highest volume since the PPI issue in 2018/19. The significant increase is driven primarily by complaints concerning motor finance commission (73,328 cases) and unaffordable lending (71,685 cases), alongside notable increases in fraud and scams. Around half of all complaints were submitted by professional representatives, a sharp increase from 25% the previous year. On average, across all financial products, the FOS upheld 34% of the complaints it resolved, compared to 37% in 2023/24. In response to operational pressures, the FOS confirms it is expanding its workforce, modernising its structure and investing in digital transformation.

The UK All-Party Parliamentary Group (APPG) on Fair Banking has published its latest report, "No Half Measures – A Blueprint to Beat APP Fraud", alongside a press release. The report assesses the UK's response to authorised push payment (APP) fraud and the early impact of the mandatory reimbursement requirement (MRR) introduced by the UK Payment Systems Regulator (PSR) in October 2024. The APPG recognises the MRR as a step forward in consumer protection but emphasises that it is not a complete solution to fraud. Key gaps remain, particularly in areas such as cryptocurrency platforms and international transfers, which remain outside the scope of the current reimbursement framework. The APPG calls for a balanced, system-wide approach, urging collaboration to effectively combat APP fraud rather than placing disproportionate expectations on financial institutions alone. In Q4 2025, there will be an independent one-year review assessing the impact of the MRR, as well as the PSR's wider policy approach to APP fraud.

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Commission Delegated Regulation (EU) 2025/532 has been published in the Official Journal of the European Union. The Delegated Regulation supplements the Digital Operational Resilience Act (DORA) with regard to regulatory technical standards (RTS) specifying the elements that a financial entity has to determine and assess when subcontracting information and communication technology (ICT) services supporting critical or important functions.

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The European Securities and Markets Authority (ESMA) has published a press release sharing its view that the pre-trade controls that investment firms have implemented warrant further convergence. The EU Markets in Financial Instruments Directive (MiFID II) requires investment firms engaging in algorithmic trading to have effective systems and risk controls to ensure that its trading systems are resilient, have sufficient capacity, are subject to appropriate trading thresholds and limits, and prevent incorrect orders being sent. Those systems must also ensure that the trading systems cannot be used for market abuse or insider trading or other purposes contrary to the EU Market Abuse Regulation. Commission Delegated Regulation (EU) 2017/589 further specifies the pre-trade controls that an investment firm must have in place to meet these MiFID II requirements.

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The Single Resolution Board (SRB) has published updated operational guidance, accompanied by a press release, on the solvent wind-down (SWD) of trading books. The guidance is intended to outline the scope and key expectations for SWD planning and potential execution. Its objectives are to provide a framework to: (i) ensure that banks are adequately prepared and possess the necessary capabilities to plan for a SWD in resolution; and (ii) enable the timely and effective execution of the SWD plan within a reasonable timeframe. This version of the guidance updates and replaces the SRB's original SWD guidance, published in December 2021, which was aimed at facilitating the phase-in of SWD-related expectations. It incorporates feedback from banks and other stakeholders, and addresses the shortcomings identified by the SRB from its review of banks' deliverables. The SRB has also simplified the guidance by removing complexity and enhancing proportionality.

The European Banking Authority (EBA) has published two consultation papers under the Capital Requirements Regulation (CRR), as amended by the revised Capital Requirements Regulation (CRR III).

The first consultation paper proposes amendments to the guidelines on the application of the definition of default under Article 178 of the CRR.

Key proposals include:

• Maintaining the 1% threshold for the net present value loss in debt restructuring, emphasising the framework's flexibility and alignment with accounting principles.
• Considering a shortened probation period for certain forborne exposures from one year to three months—however this is not incorporated in the draft amended guidelines.

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The UK Financial Conduct Authority (FCA) has issued final policy statement PS25/8, accompanied by an updated webpage, confirming the regulatory fees and levies for the financial year 2025/26. This follows the FCA's April consultation and sets out the final rates for each fee-block, including those funding the FCA, the Financial Ombudsman Service and other government levies. The fees allow the FCA to recover the costs of delivering its priorities and strategy as outlined in its 2025/26 work programme. The annual funding requirement required for the FCA is GBP783.5 million, which includes the baseline cost of ongoing regulatory activities and exceptional projects. In response to the consultation feedback, the FCA makes minor corrections and clarifications to the final rules, including updates to tariff data definitions and provisions to recover costs associated with skilled person appointments under the Money Laundering Regulations. The final rules are implemented through the Periodic Fees (2025/2026) and Other Fees Instrument 2025. Firms are encouraged to use the FCA's online fees calculator to determine their individual fees based on the published rates. The FCA confirms it will invoice fee payers from July onwards for their 2025/26 periodic fees and levies.

The European Securities and Markets Authority (ESMA) has issued a thematic note to assist firms when making sustainability claims to ensure that they are clear, fair and not misleading. The aim of the thematic note is to provide market participants with information and build on observed market practices. The note focuses on environmental, social and governance (ESG) credentials and outlines four guiding principles on making sustainability claims: (i) accurate—sustainability claims should fairly and accurately represent the entity's sustainability profile without exaggeration and avoiding falsehoods, omissions and cherry-picking; (ii) accessible—sustainability claims should be based on information that is easy to access and understand, with the appropriate level of detail and clarity, avoiding oversimplification; (iii) substantiated—sustainability claims should be backed by clear, credible reasoning, facts and processes, with transparent methodologies and limitations; and (iv) up to date—sustainability claims should be up to date with any material changes disclosed promptly, including a clear indication of the analysis' date and perimeter.

The House of Lords Financial Services Regulation Committee (the Committee) has launched a call for evidence as part of its inquiry into the growth of private markets in the UK following the regulatory reforms introduced after 2008. The inquiry seeks to examine: (i) whether post-2008 regulatory capital and liquidity reforms have affected banks' capacity or willingness to lend, thereby shifting risk from the regulated banking sector to less transparent private markets; and (ii) the extent of the Bank of England's visibility into the size of these private markets, their links to the banking system and the potential for any spillover risks. The Committee poses ten specific questions and the deadline for responses is 18 September.

The European Banking Authority (EBA) has issued its final guidelines, accompanied by a press release, on the treatment of acquisition, development and construction (ADC) exposures to residential property under Article 126a of the Capital Requirements Regulation (CRR). These guidelines mark the first phase of the EBA's roadmap for implementing credit risk provisions under the EU Banking Package. They clarify the conditions under which institutions may apply a reduced risk weight of 100%, instead of the default 150%, to ADC exposures that meet specific credit risk-mitigating criteria. These conditions include: (i) at least 50% of total contracts must be either pre-sale contracts with a cash deposit of at least 10% of the sale price, pre-lease contracts with a cash deposit equal to or exceeding three times the monthly lease rate, or a combination of sale and lease contracts; and (ii) obligor-contributed equity of at least 25% of the property's value upon completion. This threshold was revised down from 35% following the May 2024 consultation. The guidelines also introduce flexibility for public housing projects by reducing the equity requirement to 20% and broadening the scope of eligible equity to include committed subsidies.

The European Commission (EC) has adopted a Delegated Regulation supplementing the Capital Requirements Regulation (CRR) with regard to regulatory technical standards (RTS) specifying methods for identifying the main risk driver of a position and determining whether a transaction represents a long or short position. The proposed general method to identify the main risk driver hinges on sensitivities defined under the market risk standardised approach (FRTB-SA) or on add-ons defined under the standardised approach for counterparty credit risk (SA-CCR). For the determination of the direction of the positions, the methodology is aligned with the one set out in the technical standards developed in accordance with Article 279a(3), point (b), of the CRR. For relatively simple instruments, such as fixed-rate bonds, floating-rate notes, stocks, forwards, futures, simple swaps and plain vanilla options, a simplified method has also been specified. The Delegated Regulation will enter into force on the twentieth day following its publication in the Official Journal of the European Union.

The European Banking Authority (EBA) has published technical advice to the European Commission, alongside a press release, on a possible Delegated Act concerning fees for the validation of pro forma models under the European Market Infrastructure Regulation (EMIR). EMIR, as amended by EMIR 3, requires that counterparties apply for authorisation to their competent authorities before using, or adopting a change to, a model for initial margin calculation used as a risk-mitigation technique for over-the-counter (OTC) derivative contracts not cleared by a central counterparty (CCP). The EBA is charged with establishing a central validation function for the elements and general aspects of pro forma models, and any changes to those. It must also charge an annual fee, per pro forma model, to counterparties using the pro forma models it validates.

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The UK Financial Conduct Authority (FCA) has published a consultation paper CP25/17 (CP) accompanied by a press release and updated webpage, proposing a new regulatory framework for "targeted support" in pensions and retail investments. The CP forms part of the Advice Guidance Boundary Review and the FCA's five-year strategy to support growth and help consumers navigate their financial lives. The deadline for comments is 29 August and a policy statement is expected by the end of the year, subject to the volume of feedback received.

The CP proposes the introduction of a new regulated activity of targeted support, which would allow firms to provide ready-made suggestions on investment products or courses of action to groups of consumers with common characteristics, making it clear that such support does not constitute fully personalised financial advice. The UK Government has announced that it will consult on amending the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 accordingly to introduce the new regulated activity. A draft statutory instrument is expected to be published alongside the Mansion House speech on 15 July. The targeted support framework would not impact the existing regulatory framework for activities that can currently be delivered as guidance without FCA authorisation.

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The European Securities and Markets Authority (ESMA) has published its final report on the 2023-2024 common supervisory action (CSA) carried out with national competent authorities (NCAs)on the integration of sustainability risks and disclosures in the investment management sector. The CSA assessed how NCAs supervise compliance with the Alternative Investment Fund Managers Directive (AIFMD), the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive and the Sustainable Finance Disclosure Regulation (SFDR). ESMA concludes that while there is a satisfactory level of compliance, significant vulnerabilities remain, including: (i) inconsistent integration of sustainability risks into investment processes; (ii) deficiencies in entity-level and product-level SFDR disclosures; and (iii) ongoing greenwashing risks. The report highlights the need for enhanced supervisory convergence, urging NCAs to maintain proactive engagement with market participants and to follow up on cases where vulnerabilities were identified. NCAs are also encouraged to apply the European Supervisory Authorities' (ESAs) common understanding of greenwashing as a reference point in their ongoing supervision.

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The Council of the EU has published initial four-column tables for the two key legislative proposals under the Payment Services Package: (i) the proposed Payment Services Directive (PSD3); and (ii) the Payment Services Regulation (PSR). The tables present, side-by-side, the positions of the European Commission, the European Parliament and Council of the EU, along with a fourth column left blank for Member State comments.

The UK Prudential Regulation Authority (PRA) has issued final policy statement PS10/25, setting out the annual fees for the 2025/26 financial year, following the consultation in April (CP8/25). The final policy introduces only minor amendments to the draft proposals set out in the consultation. Overall, the total levies and fees have increased by 3% year-on-year. Within this, the Bank of England (BoE) levy has risen by 4%, the PRA levy has decreased by 1% and other levies and fees have increased by 4%. The PRA's Total Funding Requirement for 2025/26 is set at GBP350.2 million, representing a 0.8% decrease compared to the previous year. The Annual Funding Requirement for 2025/26 stands at GBP336.4m, representing a GBP5.1m increase from the 2024/25 figure of GBP331.3m. It is also GBP7.7m higher than the amount proposed in the consultation. This is primarily due to a larger allocation of the BoE's investment portfolio and central support costs to the PRA, partially offset by a reduction in the pensions provision. The policy also confirms the introduction of a Future Banking Data Fee, supporting the PRA's role in the BoE's programme to modernise regulatory data collection. The updated PRA Rulebook, incorporating the PRA Rulebook: PRA Fees Amendment Instrument 2025, entered into force on 2 July.

A Corrigendum to Regulation (EU) 2024/2987, referred to as the revised European Market Infrastructure Regulation (EMIR 3), has been published in the Official Journal of the European Union. This Regulation amends Regulations (EU) No 648/2012 (EMIR), No 575/2013 (Capital Requirements Regulation) and (EU) 2017/1131 (Money Market Fund Regulation) to introduce measures aimed at mitigating excessive exposures to third-country central counterparties. The Corrigendum corrects a legal reference concerning the identification of high-risk third countries for anti-money laundering and counter-terrorist financing purposes. Specifically, it replaces an incorrect reference to Regulation (EU) 2024/1624 with the correct citation to Directive (EU) 2015/849, known as the Anti-Money Laundering Directive.

The UK Financial Conduct Authority (FCA) has published final policy statement PS25/7, alongside an updated webpage, on data decommissioning. Following the FCA's consultation in April, it has proceeded with:

• Removing the requirement for data collection relating to: (i) FSA039—Client money and assets, (ii) Section F of the Retail Mediation Activities Return (RMAR) and (iii) Form G—The Retail Investment Adviser Complaints Notifications Form.
• Simplifying the FCA Handbook to remove guidance about data collections that have already been decommissioned.
• Entirely removing forms that are already included in the Annexes to SUP 16.

These changes support the FCA's five-year strategy to become a smarter, more data-driven regulator. The changes are implemented through the Data Decommissioning Instrument 2025, effective from 27 June. The FCA states it will continue to review and streamline data collections to maintain effective supervision while reducing regulatory burdens.

The UK Financial Conduct Authority (FCA) has published Handbook Notice 131, outlining updates to the FCA Handbook resulting from the following statutory instruments.

• Enforcement Guide (Amendment) Instrument 2025. Revokes the previous Enforcement Guide and introduces a new Enforcement Guide (ENFG). Accompanied by the Enforcement Guide (Consequential Amendments) Instrument 2025, which amends various sections of the FCA Handbook, including the Glossary and introduces a new chapter named SUP 6B. Both instruments entered into force on 3 June.
• Private Intermittent Securities and Capital Exchange System (PISCES) Instrument 2025 and Private Intermittent Securities and Capital Exchange System (PISCES) (Consequential Amendments) Instrument 2025. Establishes the regulatory framework for the PISCES sandbox, a new private market for the intermittent trading of private company shares and introduces the PISCES (PS) sourcebook. Both instruments entered into force on 10 June.

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The European Banking Authority (EBA) has published its spring 2025 risk assessment report alongside a press release, outlining key developments and emerging risks within the European Union/European Economic Area (EU/EEA). The report highlights, among other things:

• Strong capital and liquidity positions across EU/EEA banks, with profitability remaining at historically high levels, although increased uncertainty and financial market volatility could challenge the sustainability of this.
• Rising credit risks, particularly in sectors vulnerable to geopolitical tensions, tariffs and supply chain disruptions.
• Elevated operational risks, driven by increasing cyber threats and a surge in fraudulent activities.
• Shifts in funding strategies, with banks relying more on deposits and secured debt to support asset growth.
• Exposure to climate-related risks, both transitional and physical, with significant variation across institutions and jurisdictions.

The report is also accompanied by a spring risk assessment questionnaire.

The European Supervisory Authorities (the European Banking Authority, European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority) have launched a joint consultation on their joint draft guidelines for integrating environmental, social and governance (ESG) risks into financial stress tests for banks and insurers. These guidelines, mandated by the Capital Requirements Directive (CRD) and the Solvency II Directive, aim to harmonise how competent authorities across the EU consistently incorporate ESG risks into their supervisory frameworks. They establish a common framework for designing ESG-related stress testing methodologies and standards, ensuring consistency across the financial sector. They allow authorities to either integrate ESG risks into existing stress testing frameworks or conduct complementary assessments under adverse ESG scenarios, depending on the applicable sectoral legislation. Key elements of the draft guidelines include: (i) detailed guidance on the design and features of ESG stress tests; and (ii) organisational and governance requirements, including sufficient human resources with ESG expertise, data collection and management systems and appropriate timelines for scenario analysis. The guidelines are also designed to be forward-looking, allowing for future methodological advancements and improvements in ESG data availability. The deadline for responses is 19 September, with a public hearing scheduled for 26 August. The guidelines are expected to be finalised by the end of the year and published by 10 January 2026.

The European Commission has adopted a Delegated Regulation supplementing Regulation (EU) 2023/1114 (Markets in Crypto Assets Regulation) (MiCAR), regarding regulatory technical standards (RTS) specifying the minimum contents of the liquidity management policy and procedures for issuers of asset-referenced tokens (ARTs) and e-money tokens (EMTs). The RTS aim to ensure that issuers maintain robust liquidity frameworks capable of withstanding both normal and stressed market conditions.

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