The UK Prudential Regulation Authority (PRA) has published a final policy statement (PS6/25) alongside a press release, finalising the updates to Supervisory Statement 5/21 (SS 5/21) and branch reporting requirements for international firms operating in the UK. In response to feedback on its July 2024 consultation, the PRA has made several adjustments to the draft policy.

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European Parliament's Committee on Economic and Monetary Affairs has adopted a proposal to amend the Central Securities Depositories Regulation (CSDR), introducing a shorter settlement cycle for transferable securities transactions within the EU, with related press release. The CSDR amendment will reduce the settlement period under CSDR from two business days after trading takes place (T+2) to one business day (T+1), with the aim of promoting settlement efficiency, improving the liquidity of capital markets and eliminating costs linked to the misalignment of settlement cycles between the EU and other jurisdictions.

The ECON proposal has included a requirement for the European Securities and Markets Authority (ESMA) to publish a report on settlement efficiency during the move to T+1 and on the feasibility of further shortening the settlement cycle to T+0. The final text will be subject to negotiations with the European Council which has already adopted its position. The new regulation will apply from 11 October 2027.

Martin Moloney, Deputy Secretary General of the Financial Stability Board (FSB), has delivered a speech at the International Council of Securities Associations' Annual General Meeting on the potential for reforming financial regulation in a way that supports, rather than stifles, economic growth. Mr Moloney placed particular emphasis on pursing sustainable economic growth, supported by stable financial markets, for effective regulatory reform and warned against cycles of deregulation and re-regulation. He urged policymakers to critically assess and streamline existing regulatory regimes, noting that both legislative and rule-making processes often fall short in designing optimal regulatory frameworks.

Mr Moloney outlined three key challenges with effective regulatory redesign:

• Complexity of objectives. Regulatory tools must now serve multiple goals, which can make it difficult to calibrate them proportionately.
• Industry consultation. While essential, industry feedback tends to gravitate toward consensus on the 'lowest common denominator', not necessarily reflecting the changes that industry would most benefit from.
• Global interdependence. Regulatory reform is constrained by the need for international consistency as jurisdictions cannot diverge significantly from global norms when creating national-based legislation without facing cross-border consequences.

The European Banking Authority (EBA) has published part 1 of its 2024 annual report, with a press release, reflecting on key regulatory and supervisory achievements under its work programme over the past year. These include: (i) progress in the implementation of the Basel III reforms; (ii) the further integration of ESG considerations into regulatory frameworks, via the issuance of guidelines and reports on ESG risks, greenwashing and scenario analysis; (iii) the assessment of financial stability amid high interest rates and geopolitical uncertainties, supported by two risk assessment reports; (iv) the enhancement of regulatory data infrastructure through the EUCLID platform; (v) the development of oversight and supervisory capacity for firms subject to the EU Digital Operational Resilience Act (DORA) and the EU Markets in Crypto-Assets Regulation (MiCAR); and (vi) an enhanced focus on innovation and consumers (including access to financial services) while preparing for the transition to the new anti-money laundering and counter-terrorist financing (AML/CFT) framework.

HM Treasury (HMT) has published a response to its 2024 consultation on regulating Buy-Now, Pay-Later (BNPL) products and laid the draft secondary legislation (Financial Services and Markets Act 2000 (Regulated Activities etc) (Amendment) Order 2025), to implement the proposed regime before Parliament. The consultation response is accompanied by an updated webpage and press release. The proposed regulatory framework aims to bring BNPL products under the UK Financial Conduct Authority's (FCA) oversight, ensuring consumers receive clear information, undergo affordability checks, have access to the Financial Ombudsman Service and benefit from the protections of section 75 of the Consumer Credit Act (CCA)—which imposes liability upon a creditor for breaches by a supplier—should something go wrong with their purchases.

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Regulation (EU) 2025/914 amending the EU Benchmarks Regulation has been published in the Official Journal of the EU. The amending Regulation amends the scope of the rules for benchmarks, the use of benchmarks provided by a third-country administrator and certain reporting requirements. Further information can be found in our Financial Regulatory Developments update, EU provisional agreement on regulation amending the Benchmarks Regulation. The regulation will enter into force on 8 June and will apply from 1 January 2026.

The International Organization of Securities Commissions (IOSCO) has published final reports on finfluencers, online imitative trading practices and digital engagement practices, accompanied by a press release. These reports are part of IOSCO's Roadmap for Retail Investor Online Safety to enhance retail investor protection from fraud, excessive risk taking and misinformation, in the digital age.

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HM Treasury (HMT) has published Phase 1 of its two-part consultation on reforming the Consumer Credit Act 1974 (CCA), accompanied by an updated webpage. The proposals aim to modernise the CCA to better align with new financial products and technology while promoting a competitive consumer credit market which supports the growth of the UK economy. The new regime will repeal many of the CCA provisions, to be replaced with rules in the UK Financial Conduct Authority (FCA) Handbook as part of a more flexible, outcomes-based approach. Further details can be found in our client bulletin, Goodbye old friend? HM Treasury consultation on Consumer Credit Act 1974 reform.

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The European Banking Authority (EBA) has repealed its guidelines on the specification of types of exposures to be associated with high risk. The decision follows the application of the revised Capital Requirements Regulation (CRR 3) which no longer includes the high-risk exposure class and now only refers to subordinated debt exposures. As a result, the guidelines are no longer applicable.

The UK Payment Systems Regulator (PSR) has published an update on what it has seen since the implementation of its authorised push payment (APP) fraud reimbursement scheme in October 2024. The data covers UK payments made via the Faster Payments system from the start of the reimbursement policy (7 October 2024) to the end of 2024.

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The European Central Bank (ECB) has announced that the amendment to the TARGET Guideline, which would allow non-bank payment service providers (non-bank PSPs) to participate in TARGET is postponed. This has resulted from delays in some euro area countries in transposing the required amendments to the Settlement Finality Directive and revised Payment Services Directive (PSD2) into their national legislation. The amendment, outlined in Decision ECB/2025/2, is now expected to enter into force in October.

A corrigendum to Commission Delegated Regulation (EU) 2024/1774, which supplements the Regulation on digital operational resilience for the financial sector (DORA), was published in the Official Journal of the European Union (OJ). Commission Delegated Regulation (EU) 2024/1774 contains regulatory technical standards (RTS) specifying ICT risk management tools, methods, processes and policies and the simplified ICT risk management framework. It reflects mandates under Articles 15 and 16(3) of DORA. The corrigendum replaces a reference to Article 15 of Commission Delegated Regulation (EU) 2024/1772 in Article 22 of the Delegated Regulation (ICT-related incident management policy) with a reference to Article 8(2) of that Delegated Regulation.

The UK Bank Resolution (Recapitalisation) Act 2025 has received royal assent and was published. The Act makes provision for recapitalisation costs in relation to the special resolution regime under the Banking Act 2009, in particular in so far as the regime is applied to smaller banks which do not hold MREL (a minimum requirement for own funds and eligible liabilities). It: (i) expands the statutory functions of the Financial Services Compensation Scheme (FSCS), requiring it to provide funds to the Bank of England upon request which could be used to meet certain costs arising from the use of the resolution regime to manage the failure of a bank, building society or Prudential Regulation Authority (PRA) authorised investment firm; (ii) allows for the FSCS to use its levy-raising powers to recover any funds provided to the Bank of England after a failure event through imposing levies on the banking sector; (iii) extends the Bank of England's ability, through explicit provision, to require the issuance of shares in connection with a resolution, to facilitate the Bank's use of the funds provided by the FSCS to meet a failing bank's recapitalisation costs; and (iv) makes a number of minor and consequential amendments to legislation to support the measures outlined above and ensure FSCS funds can be used effectively in a resolution. The provisions of the Act are expressed to come into force on such day as HM Treasury may appoint by statutory instrument.

The UK Property (Digital Assets etc) Bill has completed its third reading in the House of Lords with no further amendments and passed to the House of Commons for consideration. The Bill will give effect to recommendations of the Law Commission to confirm in statute that a thing that is digital or electronic in nature is not prevented from being personal property. The Bill had its first reading in the House of Commons on 12 May and it has now been referred to a Second Reading Committee.

The Cross Market Operational Resilience Group's (CMORG) AI Taskforce has released its AI Baseline Guidance Review (dated January 2025), accompanied by a press release. The CMORG AI Taskforce conducted a baseline review of existing guidance on the mitigation of generative-AI (Gen-AI) risks and developed materials on good practice in the financial sector.

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The UK Financial Services and Markets Act 2023 (Private Intermittent Securities and Capital Exchange System Sandbox) Regulations 2025 were published, alongside an explanatory memorandum. The Regulations largely reflect the draft Regulations published in November 2024. The Regulations establish the Private Intermittent Securities and Capital Exchange System (PISCES) Sandbox, a new innovative market for trading private company shares, using the Financial Market Infrastructure powers in the Financial Services and Markets Act 2023. The Regulations set the framework for potential PISCES operators to apply to the Financial Conduct Authority (FCA), to operate intermittent trading events for participating private companies and investors.

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The European Parliament's Committee on Economic and Monetary Affairs (ECON) has released a draft report (dated 14 May) and motion for a European Parliament resolution on the impact of artificial intelligence (AI) on the financial sector. The report highlights the broad adoption of AI and its benefits across the EU financial services sector, including in fraud detection, anti-money laundering and personalised financial advice, among other areas. While acknowledging risks with AI-usage related to data quality and cybersecurity, ECON is of the view that these are already addressed through multiple pieces of sectoral legislation at both national and EU level, including the EU AI Act. With concerns of regulatory overlaps and legal uncertainties—which can limit the use of AI and complicate compliance for financial institutions— ECON advocates for responsible use of AI instead of new restrictive legislation. The motion for a resolution calls on the European Commission to: (i) provide clear guidance on how existing financial regulations apply to AI, ensuring consistent definitions and a simplified regulatory framework to avoid duplicative requirements; (ii) refrain from introducing new sector-specific AI regulation that can add complexity and uncertainty to already established sectoral rules, potentially creating barriers in cross-border markets; and (iii) support industry measures to enhance the understanding and responsible use of AI and provide clearer guidance with regard to the EU AI Act's requirements for financial institutions to comply with AI literacy requirements.

The European Parliament's Committee on Economic and Monetary Affairs (ECON) has published a draft report (dated 13 May) and motion for a European Parliament resolution on improving access to finance for SMEs and scale-ups. The motion for a resolution has regard to various recent European Commission (EC) communications, including on the Savings and Investment Union (SIU) and competitiveness compass, and other key publications and reports such as the Draghi report and Letta report.

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The European Banking Authority (EBA) has published an updated report, together with a press release, on the monitoring of the liquidity coverage ratio (LCR) and the net stable funding ratio (NSFR) in the European Union. This report provides updated guidance following the March 2023 banking turmoil, which highlighted the need for enhanced supervision of liquidity aspects resulting from changes in interest rates and related trends in deposit behaviour and concentrations.

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The Ninth Commencement Regulations–the Financial Services and Markets Act 2023 (Commencement No. 9) Regulations 2025–under the Financial Services and Markets Act 2023 (FSMA 2023) were made and have been published. The Ninth Commencement Regulations continue the process provided for in FSMA 2023 of revoking laws relating to financial services which were derived from EU law and replacing them, for the most part, with regulators rules. For more information see our briefing on FSMA 2023. In particular, these regulations make the following changes, among others:

• Revoke UK Commission Delegated Regulation (EU) 2017/58, which contains regulatory technical standards (RTS) supplementing the UK Markets in Financial Instruments Regulation (600/2014) (UK MiFIR) relating to transparency requirements for trading venues and investment firms in respect of bonds, structured finance products, emission allowances and derivatives.
• Revoke the Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014 (SI 2014/894) (Capital Buffers Regulations). In September 2024, HM Treasury published a draft version of a statutory instrument restating the Capital Buffers Regulations.

The revocations came into force on 14 May, except in respect of the Capital Buffers Regulations, which will be revoked on 31 July.

The Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision (BIS), met to discuss the implementation of Basel III and its work on climate-related financial risks. The GHOS members unanimously reaffirmed their expectation to implement Basel III in full and consistently and as soon as possible, noting that approximately 70% of member jurisdictions have now implemented, or will shortly implement, the standards. The GHOS tasked the Committee with continuing to monitor and assess the full and consistent implementation of Basel III. GHOS members also discussed the Committee's proposed Pillar 3 disclosure framework for climate-related financial risks. The Basel Committee will publish a voluntary disclosure framework for jurisdictions to consider. In addition, the GHOS discussed the Committee's broader work on climate-related financial risks and tasked the Committee with prioritising its work to analyse the impact of extreme weather events on financial risks.

The UK Financial Conduct Authority (FCA) has published a final policy statement (PS25/4), together with an updated webpage and press release, on final rules extending the new payment optionality for investment research to pooled investment funds. The rules were consulted on previously and will allow fund managers to pay for investment research using a joint payment option for research and execution services, subject to a set of guardrails. The feedback was largely positive, although respondents recommended more flexibility around guardrails. In response, the FCA has amended its proposed guardrails on written policies, research budgets, cost allocation and disclosure.

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The European Commission (EC) has launched a call for evidence on fostering integration, scale and efficient supervision in the single market as part of its savings and investments union (SIU) strategy. The SIU is a key initiative to improve the way the EU financial system channels savings to productive investments. It seeks to offer EU citizens broader access to capital markets and better financing options for companies, to foster citizens' wealth, while boosting EU economic growth and competitiveness.

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The European Commission has adopted Delegated Regulation (EU) 2025/878 amending regulatory technical standards (RTS) on technical details of back-testing and profit and loss attribution requirements, the criteria for assessing the modellability of risk factors, and the treatment of foreign-exchange risk and commodity risk in the non-trading book. The amendments are being made to reflect amendments made to Regulation (EU) No 575/2013 (CRR) which introduced a number of remaining BCBS requirements which are yet to be implemented and some clarifications, including changes to ensure alignment with BCBS international standards. Key amendments include: (i) updated criteria for classifying trading desks and the removal of the aggregation formula for back-testing and profit and loss attribution requirements; (ii) adjusting documentation requirements to support competent authorities on whether institutions can use market data provided by third-party vendors in the assessment of modellability of risk factors; and (iii) clarifying the calculation of own funds requirements for market risk related to non-trading book positions. The regulation shall enter into force on the twentieth day following its publication in the Official Journal of the European Union.

The UK Financial Conduct Authority (FCA) has published findings of its review of smaller asset managers and alternatives business models, together with a press release. The review formed part of the FCA's alternatives supervisory strategy as outlined previously in 2022 in a portfolio letter. The FCA publication includes examples of good practice, to help new market entrants, smaller firms and growing organisations benchmark sound risk management practices and better understand regulatory expectations to manage risks and enhance consumer protection.

The FCA's findings focused on three topics where areas for improvement were identified:

• High-risk investments (HRIs). Most firms offering HRIs were able to clearly categorise their products, while some firms did not have sufficient processes in place to ensure HRIs were only sold to clients if they are appropriate. The findings included specific commentary in relation to financial promotions, product, investor and client categorisation and investor assessments and controls.

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The Prudential Regulatory Authority (PRA) has published a consultation paper (CP/11/25) proposing the deletion of supervisory statement (SS) 20/15, which outlines the supervision of building societies' treasury and lending activities. SS20/15 sets out the PRA's expectations for building societies to comply with the Building Societies Act 1986, the Financial Services and Markets Act 2000, the PRA Rulebook and SS24/15. The PRA conducted a review and concluded that SS20/15 is inconsistent with its broader policy approach and creates a level playing field issue by imposing prescriptive expectations on building societies that banks do not face. In addition, risk management in the building societies sector has advanced since SS20/15 with the PRA now having various tools to supervise firms. As a result, the PRA is proposing to withdraw SS20/15.

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The European Commission has adopted delegated regulations amending the rules for data reporting service providers (DRSP) fines and fees to include consolidated tape providers (CTPs) in scope. Previously, the relevant requirements had only been applied to two types of DRSPs: approved publication arrangements and approved reporting mechanisms. The amendments are in line with the changes brought in as a result of the EU MiFID/MiFIR review changes which focussed on enhancing market data transparency and removing obstacles to the emergency of CTPs in the EU.

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The Council of the European Union has approved its position on the European Commission's (EC) proposal regarding a shorter settlement cycle, shortening the settlement period for transactions in transferable securities from two business days (T+2) to one business day after the trade date (T+1). The Council also amended the original proposal to provide for an exemption for securities financing transactions (SFTs) from the T+1 settlement cycle requirement due to their non-standardised nature and settlement periods. To prevent circumvention of the T+1 requirement, the exemption only applies if SFTs are documented as single transactions with two linked operations. Following this approval, trilogue negotiations with the European Parliament will begin. Once agreed, the new rules will apply from 11 October 2027.

The European Securities and Markets Authority (ESMA) has published its final report providing technical advice to the European Commission (EC) on changes made by the Listing Act to the Market Abuse Regulation (MAR) and the Markets in Financial Instruments Directive (MiFID II) in relation to small and medium enterprise (SME) growth markets. The Listing Act seeks to promote better access to public capital markets for EU companies, in particular SMEs, by simplifying requirements and reducing administrative burden. ESMA consulted on the advice in December 2024 and this final report includes feedback received in response to the consultation. Much of the MAR technical advice concerns the rules for disclosing inside information during a protracted process. It also covers the approach for identifying trading venues with a significant cross-border dimension under the new cross market order book mechanism (article 25a MAR). The MiFID technical advice concerns the category of multilateral trading facilities (MTF) labelled SME growth markets and the requirements that such an MTF (or MTF segment) must comply with under article 33 MiFID II. In giving its technical advice, ESMA suggests amendments to Commission Delegated Regulation 2017/565 (known as the MiFID Org Reg) or otherwise confirms its view where no amendments would be needed. The EC will adopt the delegated acts for which the technical advice was requested by July 2026.

The European Banking Authority (EBA) has published its final report on the draft implementing technical standards (ITS) on resolution planning reporting, together with a press release. Firms must provide necessary information to resolution authorities, as mandated by the Bank Recovery and Resolution Directive, to develop resolution plans. The ITS outlines procedures, standard forms and templates for the provision of information required by resolution authorities to draw up these plans. This comprehensive review of the ITS aims to achieve full harmonisation and simplification of EU reporting requirements, reducing compliance costs by avoiding duplication of data requests and eliminating data points that are either redundant or of limited value.

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The UK Financial Conduct Authority (FCA) has issued a final policy statement (PS25/3) on consumer credit regulatory returns, published together with an updated webpage. The FCA is introducing a new regulatory return for consumer credit firms engaging in one or more of the regulated activities of credit broking, debt adjusting, debt counselling services and providing credit information services. The rules were previously consulted on in September 2024 in CP24/19 (for further background on this, please see our update). The return aims to collect tailored data on firms' operations, consumer engagement and use of permissions to allow the FCA to achieve its strategic objectives and be more efficient and effective in regulating the sector. The feedback to the consultation was largely positive. Most comments focussed on the scope of the data elements and clarifying the FCA's expectations. In response to the feedback, the FCA has reduced the number of questions in the return by 27% and has made changes to the rules making them clearer and more effective. This includes: (i) removing questions requiring data from lenders; (ii) changing the data required from credit brokers from successful applications to total introductions; and (iii) allowing firms to annualise data for the first reporting period if they do not have all the required data for the whole year. The FCA intends to review and replace returns for firms undertaking other consumer credit activities but will be delaying the implementation of remaining phases. This will reduce the burden on firms and give the FCA time to assess the impact and value of the new return, together with the three new product sales data returns which have already been introduced.

The UK Financial Conduct Authority (FCA) has published a consultation paper (CP25/11) on simplifying its rules on mortgage lending and increasing flexibility, with an updated webpage and press release. This is the first set of proposals made through the Mortgage Rule Review (MRR), and forms part of the FCA's 5-year strategy. The FCA is proposing to amend its mortgage advice and selling standards, and its affordability rules for mortgage term reductions and remortgaging. The FCA also proposes to retire two pieces of non-handbook guidance (FG13/7 and FG24/2). Broadly, the proposals seek to make mortgage regulation simpler; reducing the different sources firms have to check to understand the regulatory expectations; and will streamline processes, reduce costs and promote competition. For consumers, it is hoped that the changes will make it easier to: (i) engage with mortgage providers; (ii) reduce mortgage terms, lowering the total cost of borrowing and reducing the balance of mortgage debt taken into later life; and (iii) access the cheapest products available when remortgaging. The deadline for comments is 4 June and the FCA aims to publish its policy statement in Q3 2025. In addition, the FCA plans to launch a public discussion on the future of the mortgage market in June, covering: (i) risk appetite and responsible risk taking; (ii) alternative affordability testing and product innovation; (iii) lending into later life; and (iv) consumer information needs.

The European Parliament has confirmed it has adopted the regulation amending the Benchmark Regulation (for background, please see our update). The regulation will apply to benchmarks defined as critical or significant, include certain commodity benchmarks, and EU Paris-aligned benchmarks and EU Climate Transition benchmarks. Other benchmarks which reach the EUR20 billion threshold will be subject to a voluntary supervision regime, which aims to promote the use of common standards for climate-related benchmarks. The regulation will enter into force on the twentieth day following its publication in the Official Journal of the European Union and will apply from 1 January 2026.

The Bank of England (BoE) has published a speech by Sarah Breeden, Deputy Governor for Financial Stability, at the Point Zero Forum. The subject of the speech was the digitalisation of money and assets, and in particular the BoE's focus on interoperability. In terms of general commentary, Ms Breeden highlighted the need to collaborate closely with international partners to ensure safe innovation and support for firms with cross-border transactions. She also emphasised the importance of enabling users to switch seamlessly between different forms of money and across asset classes. To drive interoperability, harmonised technical standards and working with the public sector is needed to understand further how to integrate these new, digital forms of assets and money into the wider financial system.

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The European Securities and Markets Authority (ESMA) has published a response to the European Commission's consultation on the functioning of commodity derivative markets and certain aspects of spot energy markets. ESMA provides its input on the issues identified in the consultation, including inefficiencies and overlaps in reporting under MiFIR, EMIR and REMIT. The response covers the following issues from the consultation paper:

• Data harmonisation. ESMA recalls the findings of the EC's 'Fitness Check of EU 2 Supervisory Reporting Requirements' which identified inefficiencies, lack of standardisation and duplications between EMIR, MiFIR and REMIT reporting obligations. ESMA agrees there is a need for streamlining the reporting frameworks.

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The Joint Committee of the European Supervisory Authorities (ESAs) has updated its consolidated Q&A on the EU packaged retail and insurance-based investment products (PRIIPs) key information document. The consolidated document combines responses given by the European Commission in relation to interpretation of Union law with responses given by the ESAs in relation to the application or implementation of the PRIIPs legislation. The Q&A take into account amendments to the legislation made by Commission Delegated Regulation (EU) 2021/2268. The consolidated Q&A also includes three new Q&As as of 5 May, which relate to: (i) MRM class determination; (ii) performance scenarios; and (iii) calculation of the summary cost indicators.

Commission Delegated Regulation (EU) 2025/855 amending regulatory technical standards (RTS) laid down in Delegated Regulation (EU) 2021/931 as regards the specification of the formula for calculating the supervisory delta of call and put options mapped to the commodity risk category, was published in the Official Journal of the European Union (OJ). The RTS specify the formula for calculating the supervisory delta of call and put options mapped to the commodity risk category. This is based on the approach taken in the Basel Framework (CRE52) and for the purposes of Article 279a(3) of the EU Capital Requirements Regulation (CRR) in the standardised approach for counterparty credit risk. CRR III expanded the scope of Article 279a(3) to cover commodity risk, which required amendment to the RTS. The regulation will enter into force on the twentieth day following its publication in the OJ.

The European Securities and Markets Authority (ESMA) has published a consultation paper on draft regulatory technical standards (RTS) on the transparency and integrity of environmental, social and governance (ESG) rating activities under Regulation (EU) 2024/3005. This was published together with a press release. The Regulation introduces a common regulatory approach to enhance the integrity, transparency, comparability where possible, responsibility, reliability, good governance and independence of ESG rating activities, and seeks to contribute to the transparency and quality of ESG ratings and to the sustainable finance agenda of the EU. ESMA is mandated to deliver draft RTS in relation to authorisation, recognition, separation of activities and disclosures. The draft RTS sets out the aspects that apply to ESG rating providers, including:

• The information that should be provided in the applications for authorisation and recognition.
• The measures and safeguards that should be put in place to mitigate risks of conflicts of interest within ESG rating providers who carry out activities other than the provision of ESG ratings.
• The information that they should disclose to the public, rated items and issuers of rated items, as well as users of ESG ratings.

The deadline for comments is 20 June. ESMA encourages responses from prospective ESG rating providers, financial market participants, ESG ratings users or rated entities. ESMA will consider the feedback received and expects to publish a final report in Q4 2025. ESMA expects to submit the draft RTS to the European Commission by the end of October.

The European Commission (EC) has published a call for evidence to inform the revision of the Sustainable Finance Disclosure Regulation (SFDR), which is planned for Q4 2025. The focus of the review will be to address burdens (including regulatory reporting burdens) and simplify and streamline requirements. This call for evidence follows a previous assessment of the SFDR, which included both a targeted and a public consultation, and will inform an impact assessment to support the review of the regulation. To date, feedback on the SFDR has identified areas for improvement, including: (i) legal certainty on key concepts; (ii) relevance of certain disclosure requirements; (iii) overlaps and inconsistencies with other sustainable finance requirements; and (iv) issues in relation to data availability. In addition, there is broad support for a revised SFDR that would (i) cater for different types of investors and financial product; (ii) facilitate retail investor understanding; (iii) consider international reach and exposure; and (iv) direct investment towards diverse sustainability-oriented aims while avoiding greenwashing. In terms of broader impact, by improving clarity and consistency and addressing data-availability issues, the review should reduce operational and compliance costs, to achieve the objectives of the legislation, and facilitate sustainable investing. The deadline for comments is 30 May.

The European Parliament's Committee on Economic and Monetary Affairs (ECON) has published a report proposing amendments to the European Commission's proposal to amend Regulation (EU) No 909/2014 (CSDR) as regards shortening the securities settlement cycle in the EU from T+2 to T+1. The ECON amendments seek to address potential liquidity risks and the feasibility of further shortening to the cycle to T+0 which some jurisdictions have already adopted. The ECON proposal includes amendments in relation to an exemption for securities financing transactions as defined in Regulation (EU) 2015/2365 (SFTR) given the non-standardised nature of this specific type of transaction. Please also see above on the approval of the Council's position regarding the move to T+1 which also includes amendments to provide for an exemption for securities financing transactions.

The UK Financial Conduct Authority (FCA) has published a discussion paper (DP25/1) on proposals for regulating cryptoasset activities, with a new webpage and press release. The FCA is seeking to develop a safe, competitive and sustainable crypto sector in the UK that enables innovation and is underpinned by market integrity, in light of the increasing popularity of cryptoassets with UK consumers. The proposals cover the following areas being brought within the FCA's regulatory remit, in line with the draft statutory instrument (SI) and policy note published previously:

• Cryptoasset trading platform. These are entities that will be authorised to operate a qualifying cryptoasset trading platform. The proposed policy has been informed by the current rules and obligations applied to trading venues in traditional financial markets.

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The UK Financial Conduct Authority (FCA) has published Handbook Notice 129 which sets out changes to the classes of derivatives subject to the derivatives trading obligation (DTO), following policy statement PS25/2 published in April (please see our update). The DTO requires certain financial and non-financial counterparties to trade specific standardised and liquid over-the-counter (OTC) derivatives on regulated trading venues or equivalent third-country venues. The FCA determines the classes of derivatives that are subject to the DTO. The FCA has decided to expand the classes of secured overnight financing rate overnight index swaps (SOFR OIS) to increase the benefits of on-venue trading. It also establishes a new framework to provide exemptions from the DTO for transactions arising from the use of post-trade risk reduction (PTRR) services. The PTRR services now expand beyond portfolio compression and exemptions have been extended so they are also not subject to best execution and trading venue authorisation obligations, in addition to the current DTO exemption. The changes are set out in the following draft instruments:

• Technical Standards (Markets in Financial Instruments Regulation) (Derivatives Trading Obligation and Transparency) (Amendment) Instrument 2025, amending Commission Delegated Regulation (EU) 2017/2417 with regards to regulatory technical standards on the trading obligation for certain derivatives.
• Markets in Financial Instruments Regulation (Post-trade Risk Reduction Services Rules) (Amendment) Instrument 2025, amending the glossary and GEN Sch 4 in the Handbook. It also introduces a new chapter MAR 12 containing the relevant rules.

Both instruments come into force on 30 June.

The European Central Bank (ECB) has published the results of its latest survey on credit terms and conditions in euro-denominated securities financing and over-the-counter (OTC) derivatives, with a press release. The survey is a qualitative survey conducted every three months among large banks and dealers active in the relevant euro-denominated markets. The results are from the March 2025 survey, which covered changes in credit terms between December 2024 and February 2025. Key findings include: (i) overall credit terms remained largely unchanged during the relevant period; (ii) financing rates/spreads and haircuts in securities financing transactions decreased across most asset classes; and (iii) demand for funding secured against domestic government bonds decreased for the first time since 2021. The survey also highlights there were no net changes to price terms, with only minor net changes to non-price terms, as well as a slight increase found in hedge funds with regards to the use of financial leverage. For the various types of non-centrally cleared OTC derivatives, few changes were recorded for initial margin requirements, credit limits and liquidity. However, respondents pointed out a change with regard to the duration and persistence of valuations disputes, which decreased across all types of derivatives.

The Bank of England (BoE) has announced the launch of the AI Consortium. The consortium will provide a space for public-private engagement to gather input from stakeholders on the capabilities, development, deployment and use of AI in UK financial services (for further background, please see our update). The terms of reference set out further information on how the platform will operate. It confirms that meetings will take place quarterly and members may propose forming workshops to conduct in-depth and/or technical examinations of specific subjects of relevance to the consortium. The BoE and UK Financial Conduct Authority (FCA) may publish summaries of discussions but not the workshop outputs. Workshop members can publish findings with prior permission from the BoE and FCA, though such permission does not imply endorsement. The Consortium will be co-chaired by senior officials from the BoE and the FCA, with no decision-making capacity. The BoE and FCA will not consider their own use of AI and will not be obliged to act on Consortium discussions or outputs.

The UK Payment Systems Regulator (PSR) has published its annual plan and budget for 2025/26. The foreword by Aidene Walsh, Chair of the PSR, references the government's announcement to incorporate the PSR into the FCA and how, while full transfer of responsibilities requires legislation, the PSR has where sensible already commenced the process of further alignment and consolidation with the FCA as it awaits the outcome of the consultation being run by HM Treasury (HMT) in the coming months. David Geale, Managing Director, reiterates that HMT has made it clear that the PSR retains its full suite of powers pending changes in legislation, and the PSR intends to use them to deliver against its work programme and commitments. This includes completing phase one of the rollout of variable recurring payments, completing an evaluation of its APP reimbursement requirements, implementing the remedies following its card reviews and working with industry to unlock innovation and growth. The PSR will work with the Bank of England to drive infrastructure upgrades, as per the direction set by the government in the National Payments Vision (NPV). You may like to see our article, "Payment Services and Payment Systems" in which we discuss, among other things, the NPV in more detail.

The UK Financial Conduct Authority (FCA) has published examples of good and poor practices following its review into international payment pricing transparency. Under the consumer duty, in line with the FCA's Handbook (PRIN 2A.5.3R), firms are required to communicate information to retail customers in a way which is clear, fair and not misleading. The FCA reviewed the websites of a sample of firms offering UK customers international money remittance and cross-border payments and found that only some firms clearly displayed the amount recipients would receive, along with detailed fees and charges. Many firms did not, making it difficult for customers to compare prices and make informed decisions. Transaction fees, additional intermediary bank fees and variable fees were also not usually clearly displayed. As a result of these findings, the FCA sets out examples of good and bad practices to help firms improve their communication practices with consumers and deliver better outcomes for retail customers. The FCA expects firms to comply with their obligations under the consumer duty by regularly monitoring the effectiveness of their communications, to assist consumers in understanding costs and making informed decisions. The FCA is likely to undertake future work in the area to understand what improvements have been made.

The Financial Markets Standards Board (FMSB) has published a spotlight review on ways to improve uncleared margin for over-the-counter (OTC) derivatives, along with a press release. It builds on findings from the Bank of England's Post-Trade Task Force, which highlighted multiple inefficiencies in its report 'Charting the Future of Post-Trade' published in April 2022. This review specifically focused on uncleared margin practices for bilaterally negotiated OTC traded derivatives, where clearing and settlement is also carried out noncentrally between the two parties. The working group generally agreed on the drivers of inefficiencies, but there were differences of opinion on the scale of these problems, and their potential solutions and viability. It conducted a survey to draw out the extent of agreement on a range of problems and their potential solutions to emphasise the specific topics which the industry may have the most success in taking forward in the future.

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The European Securities and Markets Authority (ESMA) has published its 2024 report, along with a press release, on the quality and use of data, showcasing significant increase in data use by authorities. The report covers datasets from the European Market Infrastructure Regulation (648/2012) (EMIR), the Securities Financing Transactions Regulation ((EU) 2015/2365) (SFTR), the Markets in Financial Instruments Regulation (600/2014) (MiFIR), the Securitisation Regulation (2017/2402/EU), the Alternative Investment Fund Managers Directive (2011/61/EU) (AIFMD) and the Money Market Funds Regulation ((EU) 2017/1131) (MMF Regulation). This edition also expands the scope to include the European Single Electronic Format (ESEF) data and short-selling data. The report is divided into different sections.

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The Financial Markets Standards Board (FMSB) has issued a Statement of Good Practice (SoGP) on the governance of sustainability-linked products (SLPs), along with a press release. SLPs are products where the financial and/or structural characteristics can vary depending on whether the user (i.e., borrower or issuer of, or counterparty to, SLPs) achieves specific sustainability or ESG objectives. They can be used for general corporate purposes, which allows many users (e.g., borrowers, issuers or counterparties to SLPs) to access the sustainable finance market in a more flexible way. With the growth of SLP issuances and accompanying concerns around the credibility of such instruments, the SoGP is intended to: (i) codify good practices for the governance of SLPs and (ii) support the adoption of consistent governance approaches across asset classes and jurisdictions. This is aimed to enhance the quality and integrity of SLPs; boost market confidence; help mitigate greenwashing risk; and support the development of a deeper, more robust sustainability-linked product market. The SoGP will apply to service providers (e.g., firms acting as sustainability-linked loan lenders, bookrunners or lead arrangers on a sustainability-linked bond issuance or counterparties to a sustainability-linked derivative) or users of SLPs in wholesale financial markets and to support, and be read in conjunction with, existing asset-class specific guidance (notably ICMA, LMA and ISDA principles).

The UK Financial Conduct Authority (FCA) has updated its webpage on supervisory correspondence in light of its recent announcement that it will no longer be issuing portfolio letters (for details, please see our update). The update provides a place holder for market reports that will be published annually and replace portfolio letters in detailing the risks and opportunities the FCA sees. Additionally, it confirms that most supervisory correspondence pre-dating April 2022 has been marked by the FCA as 'historical' and no longer current. The FCA does not expect firms to refer to these historical letters when interpreting the FCA's current supervisory expectations. But the page includes a link to these historical letters for reference.