The Bank of England (BoE) has published the Bank Resolution Standards Instrument: The Technical Standards (Simplified Obligations) Instrument 2025 revoking UK Commission Delegated Regulation (EU) 2019/348, containing technical standards on simplified obligations (SO-UKTS). Following the UK's withdrawal from the EU, the UK retained the EU Framework for determining the level of information required within recovery and resolution plans. This included the process in the SO-UKTS to determine whether 'Simplified Obligations' (SO) can be imposed in respect of such plans. The BoE has found that the assessment prescribed in the SO-UKTS identifies the same firms as the process that results in the setting of a preferred resolution strategy of modified insolvency. Accordingly, the BoE has determined that it can achieve the same outcomes using this more efficient, existing process instead of the duplicative SO-UKTS process. The ability to apply SO and any consequential benefits to firms from SO will not be affected; the Bank only proposes to simplify the process whereby a firm is designated as eligible for SO. The updated webpage confirms that the BoE did not receive any formal responses or queries on its December 2024 consultation and consequently is proceeding with the revocation as consulted on. The instrument came into force on 30 April.

The European Banking Authority (EBA) has issued a consultation paper on draft regulatory technical standards (RTS) amending Delegated Regulation (EU) 2023/206, supplementing Regulation (EU) No 575/2013 (CRR). The EBA is mandated by Article 124(11) of the CRR to draft RTS which specify: (i) the types of factors to be considered by national authorities in assessing the appropriateness of the risk weights for exposures secured by immovable property; and (ii) the conditions to be considered for the assessment of the appropriateness of minimum loss given default values for exposures secured by immovable property. The proposed amendments aim to align the RTS with the revised CRR (CRR3) framework. The deadline for comments on the consultation is 30 May. The final report on the RTS is due by 10 January 2026.

The Basel Committee on Banking Supervision (BCBS) has published a revised version of its principles for the management of credit risk, which serve as guidelines for banking supervisory authorities to assess banks' credit risk management processes. The updated principles, published alongside a press release, reaffirm the guidelines first established in 2000 while making limited technical amendments to align with the current Basel Framework and recent Committee guidance. The principles focus on four key areas: (i) establishing a suitable credit risk environment; (ii) operating under a sound credit-granting process; (iii) maintaining an appropriate credit administration, measurement and monitoring process; and (iv) ensuring adequate controls over credit risk. The update to the guidelines follows a review mandated by BCBS in July 2023, confirming the ongoing relevance of the credit risk principles, and incorporates feedback from a consultation held earlier this year (for background, please see our update). The update is not intended to change the content of the principles or cover new topics.

The Prudential Regulation Authority (PRA) has issued a consultation paper (CP10/25) and draft updates to the supervisory statement 3/19. The consultation aims to enhance supervisory expectations on the management of climate-related risks by banks and insurers due to the growing impact of climate change. This consultation was also announced in a speech given by David Bailey, Executive Director of Prudential Policy at the BoE, at the Climate Financial Risk Forum. The proposals cover: Governance. Enhancing existing governance expectations in SS3/9, clarifying the applications of these policies for climate-related risk and emphasising the board's responsibility to set and own the overall business risk appetite for climate. The proposals include new expectations to ensure alignment between a firm's strategy and meeting its own climate targets that have been adopted, and on setting the internal controls environment.

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The European Parliament's Committee on Economic and Monetary Affairs (ECON) has published a draft report on safeguarding and promoting financial stability amid economic uncertainties. The draft report emphasises the importance of financial stability as a cornerstone of the EU's economic resilience, particularly in the face of geopolitical uncertainty, heightened market volatility and structural changes. It calls for a well-integrated Capital Markets Union (CMU) to enhance investment flows and economic resilience while balancing these benefits with adequate safeguards to mitigate potential risks. There are several macro-financial risks identified, including rising sovereign debt levels, exposure to external shocks and vulnerabilities in the non-bank financial intermediation (NBFI) sector. To address these concerns, it stresses the need for robust crisis preparedness mechanisms, enhanced financial supervision, effective coordination between macro-prudential supervisors, access to granular data and an ability to respond quickly to emerging risks. It also advocates stronger cooperation with international financial bodies to manage cross-border risks and ensure a coordinated response to financial instability.

The European Securities and Markets Authority (ESMA) has published its final report on the guidelines on supervisory practices for National Competent Authorities (NCAs) to prevent and detect market abuse under the Market in Crypto Assets Regulation (MiCAR), together with a press release. The guidelines are based on Article 92(3) of MiCAR and outline general principles for supervisory practices, drawing on the experience gained under the Market Abuse Regulation. They require supervisory activity to be risk-based and proportionate, aiming for NCAs to foster a common supervisory culture specific to cryptoassets through open dialogue with the industry and collaboration among other NCAs. The guidelines also consider the specific features of crypto trading, such as its cross-border nature and the intensive use of social media. The guidelines will be translated into all EU languages and published by ESMA, becoming effective three months later. ESMA advises NCAs to begin implementing the principles immediately. Competent authorities must notify ESMA within two months of the guidelines being published in all EU languages, on whether they (i) comply, (ii) do not comply, but intend to comply or (iii) do not comply and do not intend to comply with the guidelines.

The European Securities and Markets Authority (ESMA) has published official translations of the guidelines, on the enforcement of sustainability information under the Transparency Directive (for background, please see our update). The guidelines are based on Article 28d of the Transparency Directive and aim to establish consistent and effective supervisory practices for all competent authorities to ensure that sustainability information provided by issuers, who have securities admitted to trading on a regulated market and who are required to publish sustainability information under the Accounting Directive, comply with the requirements of Article 24(4) of the Transparency Directive. The guidelines cover, among other things: (i) the objective of enforcement, (ii) ensuring an effective enforcement process, (iii) sustainability information prepared under equivalent third country sustainability reporting requirements, (iv) enforcers maintaining adequate independence from all stakeholders, and (v) the choice of enforcement actions. The guidelines shall apply to the enforcement of sustainability information published from 1 January. Competent authorities must notify ESMA within two months whether they (i) comply; (ii) do not comply, but intend to comply, or (iii) do not comply and do not intend to comply with the guidelines, along with their reasons for not complying.

The European Commission (EC) has adopted a Delegated Regulation supplementing Regulation (EU) 2023/1114 on markets in cryptoassets (MiCAR), with regard to regulatory technical standards (RTS) specifying the arrangements, systems and procedures for persons to prevent, detect and report market abuse, the templates to be used for reporting suspected market abuse and the coordination procedures between competent authorities for the detection and sanctioning of market abuse in cross-border market abuse situations. Article 92(1) of MiCAR mandates that persons professionally arranging or executing transactions (PPAETs) in cryptoassets must have effective arrangements, systems and procedures to prevent and detect market abuse. These persons are required to report any reasonable suspicion of market abuse to the competent authority. This includes suspicions regarding an order or transaction, as well as other aspects of the functioning of the distributed ledger technology, where there may be indications that market abuse has been committed, is being committed or is likely to be committed. The Council of the EU and the European Parliament will now scrutinise the Delegated Regulation. The Delegated Regulation will 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 updated its webpage summarising feedback to its consultation paper, CP24/8, on extending the sustainability disclosure requirements (SDR) and labelling regime to portfolio managers. This follows a previous update from the FCA, which announced it would no longer publish a policy statement this year. Key feedback to the consultation paper covers proposals on scope, implementation deadlines, labelling portfolios, naming and marketing and disclosures. While there is broad support for the proposals, the feedback highlights the need for more time to address practical challenges and ensure effective implementation of the regime before introducing requirements. As such, the FCA has decided it is not the appropriate time to finalise the rules on extending SDR to portfolio management. The FCA will instead prioritise the multi-firm review into model portfolio services to ensure compliance with the consumer duty and improve good outcomes from model portfolio services. Firms are also reminded to adhere to the anti-greenwashing rule, effective from 31 May 2024.

The UK Financial Conduct Authority (FCA) has released an engagement paper, together with a press release, on proposals to launch AI live testing as part of the AI Lab. AI live testing will be open to all firms who have established proofs of concept and provide and support financial services in the UK, with voluntary participation based on prescribed competitive selection criteria. The aim is to promote the safe and responsible adoption of AI in UK financial services. The live testing service will enable firms to collaborate with the FCA to check that their new AI tools are ready for use, while also providing the FCA with valuable insights into the potential impacts of AI on UK financial markets. The proposed live testing service would run for 12 to 18 months. The engagement paper reports that the FCA proposes to commence AI live testing in summer 2025, with the application process opening in early summer. The accompanying press release suggests a launch in September. The deadline for comments is 10 June.

The HM Treasury (HMT) has published a draft of The Financial Services and Markets Act 2000 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025, together with an accompanying policy note. The policy note explains that the draft statutory instrument:

• Amends the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 ("the RAO") to (i) define "qualifying cryptoassets" and "qualifying stablecoin", and classify them as specified investments under the Financial Services and Markets Act 2000 ("FSMA"); and (ii) specify certain activities related to these assets as regulated activities, such that persons carrying on those activities need to be authorised for that activity by the FCA.

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The International Organization of Securities Commissions (IOSCO) and the Committee on Payments and Market Infrastructures (CPMI) has published a report, alongside a press release, evaluating the EU's implementation of the Principles for Financial Market Infrastructures (PFMI) for systemically important payment systems (PSs), central securities depositories (CSDs) and securities settlement systems (SSSs), collectively referred to as "financial market infrastructures" (FMIs). The report sets out conclusions using a level 2 peer assessment to determine whether, and to what degree, the contents of the EU's legal, regulatory and oversight framework are complete and consistent with the PFMI. Due to the distinct regulatory frameworks for PSs in the euro area and Sweden, which differ from the EU-wide regime for CSDs/SSSs, they were assessed individually. The report concludes that the EU's legal, regulatory and oversight frameworks are complete and consistent with the PFMI in most aspects for PSs, although identified areas for improvement, particularly in risk and governance principles relating to CSDs and SSSs. The assessment reflects the status of implementation as of 30 October 2019, although Annex C to the report discusses the EU's amendments to the CSR Regulation (CSDR Refit) and concludes that this leads to an even greater consistency of the EU regulatory framework with the PFMI and will help authorities address some of the gaps identified in this assessment.

The HM Treasury (HMT) has published a draft statutory instrument introducing new rules requiring banks and payment service providers (PSPs) to give customers at least 90 days' notice before closing their account or terminating a payment service—an increase from the two months currently required. The draft Payment Services and Payment Accounts (Contract Termination) (Amendment) Regulations 2025 is accompanied by an explanatory memorandum, and aims to protect customers from arbitrary account closures and ensures they receive a clear, written explanation, allowing them to challenge decisions through the Financial Ombudsman Service. The new rules will also support small businesses by providing more time to find alternative banking solutions, reinforcing the government's commitment to economic growth and security under the Plan for Change. Subject to Parliamentary approval, the legislation is expected to come into force in April 2026 and will apply to all PSPs terminating payment service contracts without a definite expiry date, including bank account closures, for contracts agreed from and including 28th April 2026. Certain exceptions will apply, for example, to enable PSPs to comply with their obligations under financial crime law.

The Bank of England (BoE) has published key elements to its 2025 Stress Test of UK Central Counterparties (CCPs), along with a spreadsheet containing the relevant market stress scenarios. This exercise, the fourth of its kind, aims to assess the financial resilience of UK CCPs by simulating severe market stress scenarios, including the default of two or more of its members. The test will be centred on a bespoke baseline stress scenario, which is an extreme but plausible hypothetical scenario, equivalent to a one-in-3,500 event. It will also include three additional 'multiplier' scenarios for sensitivity and reverse stress testing purposes and will further consider the impact on the wider financial system via initial margin and variation margin calls. This year's exercise will not include a full liquidity stress test but will explore and assess liquidity risks with firms in a more qualitative manner. The BoE will also be exploring a wider range of hypothetical scenarios, including more extreme scenarios and those that break historic correlations, and will use its own independent 'desk-based' modelling to undertake the revaluation of clearing member and client positions in these scenarios. CCPs must submit the necessary data for the 2025 Stress Test to the BoE using data templates and instructions provided privately to them. The results, which will be published in Q4 2025, will support and inform the BoE's supervisory and regulatory activities to address potential areas of risk.

The European Banking Authority (EBA) has issued its final report on draft regulatory technical standards (RTS) amending Commission Delegated Regulation (EU) 2018/1108, on the criteria for the appointment of central contact points for electronic money issuers and payment service providers and with rules on their functions under Article 45(10) of Directive (EU) 2015/849 (MLD4). The draft RTS extend the amended Delegated Regulation to define when cryptoasset service providers (CASPs) must appoint a central contact point. A central point contact can help to ensure compliance with local Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) obligations in cases where a CASP authorised in one EU Member State is providing services to another EU member state. The RTS set out: (i) the conditions under which CASPs should appoint a central contact point; and (ii) the roles and responsibilities of that central contact point. The draft RTS will be submitted to the Commission for endorsement, following which it will be put to the European Parliament and the Council for scrutiny, before being published in the Official Journal of the European Union.

The European Banking Authority (EBA) has released an ESG dashboard, accompanied by a press release, establishing a comprehensive framework to improve the monitoring of climate-related risks within the EU/EEA banking sector. This tool provides centralised access to climate risk indicators and benchmarks, enhancing the assessment and oversight of both transition and physical climate-related risks based on data disclosed by banks through their Pillar 3 ESG disclosures in line with Commission Implementing Regulation (EU) 2021/637. The dashboard includes indicators related to: (i) climate-related transition risk, (ii) physical risk, (iii) exposures secured by immovable property collateral, and (iv) the alignment of EU and EEA banks with the EU Taxonomy. The EBA plans to regularly update and evolve the indicators over time and reflect ongoing revisions to the Pillar 3 disclosure templates in future updated versions.

The European Commission (EC) has launched a dedicated channel for reporting barriers to financial market integration within the EU Single Market. This initiative, which announced in the Savings and Investments Union (SIU) Communication adopted in March, invites market participants, individuals or businesses to provide information on any existing obstacles that affect the functioning of the single market for savings and investments. This includes issues that affect the seamless flow of cross-border capital, reduce the ease of doing business across the EU or impose excessive red tape and complex regulatory settings. Issues that may be reported include, but are not limited to, market fragmentation, divergent supervisory practices, licensing and freedom of doing business (including discriminatory practices) and overly burdensome or repetitive reporting requirements. Feedback is invited via a designated email and the EC commits to regularly monitor the feedback and use it to tackle existing obstacles to financial market integration and free movement of capital, with the aim of further advancing the SIU. The EC notes that this channel is not a formal complaint submission mechanism and stakeholders should not expect to receive an individual reply or feedback from the EC.

The UK Financial Conduct Authority (FCA) has announced it will no longer be issuing and publishing portfolio letters from 30 April. Instead, these will be replaced with a small number of market reports. The market reports will include communications relevant to different types of firms and insights from the FCA's supervisory work. This change aligns with the FCA's Consumer Duty Requirements Review, which aims to streamline supervisory priorities to support the FCA's commitment to smarter, more effective regulation. Many existing portfolio letters and Dear CEO letters which pre-date the FCA's strategy 2022-25 will be withdrawn at the end of April and clearly marked as 'historical' and no longer current on the FCA website. Historical documents will remain publicly accessible at existing links. The FCA advises that until market reports are published later this year, firms should continue to refer to relevant portfolio petters and Dear CEO letters for guidance. The FCA will still use Dear CEO Letters to notify senior managers about significant issues that require action.

The UK Financial Conduct Authority (FCA) has published a consultation paper (CP25/10), along with a press release and an updated webpage, proposing to remove all references to the UK Capital Requirements Regulation (UK CRR) from the definition of regulatory capital, also known as 'own funds', that applies to FCA investment firms within MIFIDPRU 3. The aim is to reduce regulatory burden and enhance clarity, making the framework more accessible for investment firms and easier for them to apply the requirements. The proposals do not change the rules about how much capital firms must hold but focus on simplifying and consolidating the existing rules about what qualifies as regulatory capital. The changes would reduce the volume of legal text by 70% with clear application for investment firms. The FCA also outlines its plan to establish a more integrated approach to prudential regulation by simplifying the own funds rules and incorporating them into the FCA Handbook. This involves: (i) consolidating requirements into MIFIDPRU 3, (ii) removing provisions that are only relevant for banks, and (iii) making requirements clearer and more accessible. A draft of the instrument that would make the proposed changes to MIFIDPRU and the Glossary, the Definition of Capital for Investment Firms Instrument 2025, is set out in Appendix 1 to CP25/10. The deadline for comments is 12 June, with final rules expected to be published in H2 2025 and the new framework expected to come into force on 1 January 2026.

The Financial Stability Board (FSB) has published a letter, along with a press release and webpage, from its Chair, Klaas Knot, to G20 finance ministers and central bank governors ahead of their meeting on 23-24 April. The letter addresses the progress made in tackling global challenges to financial stability and outlines priorities for the future to prevent instability, enhance the resilience of the global financial system and support growth. The key areas of progress are:

• Ensuring financial stability through periods of turmoil. The FSB will continue to learn from vulnerabilities caused by previous events such as the banking stress of March 2023 and the COVID-induced market turmoil of March 2020, to ensure effective monitoring of the financial system. The FSB recognises the importance of strengthening the resilience non-bank financial intermediation (NBFI) and aims to deliver policy recommendations in July to the G20, to address financial stability risks arising from leverage in NBFI.

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The UK Financial Conduct Authority (FCA) has published a new webpage for international wholesale firms seeking authorisation to operate in the UK under the Financial Services and Markets Act 2000 (FSMA). The page seeks to signpost firms to relevant resources and issues to consider, including the minimum standards for authorisation and the FCA's expectations of and approach to international firms.

The European Commission (EC) has adopted a Delegated Regulation supplementing the Capital Requirements Directive IV (CRD IV), containing regulatory technical standards (RTS) specifying the general conditions for the functioning of supervisory colleges, and repealing Commission Delegated Regulation (EU) 2016/98. Article 116 of CRD IV sets out provisions requiring consolidating supervisors to establish colleges of supervisors to facilitate certain supervisory tasks and to ensure appropriate coordination and cooperation with relevant third-country supervisory authorities. In addition, the competent authorities supervising an institution with significant branches in other Member States are, pursuant to Article 51(3) of CRD IV required to establish and chair colleges of supervisors where Article 116 is not applicable. Article 51(4) of the CRD IV empowers the Commission to adopt delegated acts specifying the general conditions for the functioning of colleges of supervisors. This Delegated Regulation repeals and replaces Delegated Regulation 2016/98 to account for amendments to CRD IV (e.g., in relation to the authorisation of certain financial holding companies and mixed financial holding companies, the establishment of intermediate EU parent undertakings, and removal of investment firms from the scope of CRD IV). It also includes new articles on the exchange of information with the observers of the supervisory college, specifically with resolution colleges and anti-money laundering (AML) and counter-terrorism financing (CFT) colleges, to enhance cooperation and information exchange with these authorities. The Council of the EU and the European Parliament will now scrutinise the Delegated Regulation. The Delegated Regulation enters into force on the twentieth day following its publication in the Official Journal of the European Union.

The European Commission (EC) has adopted a Delegated Regulation supplementing the Capital Requirements Regulation (No 575/2013) (CRR), containing regulatory technical standards (RTS) of the conditions and indicators that the European Banking Authority (EBA) is to use when determining extraordinary circumstances under Articles 325az(5) and 325bf(6) of the CRR have occurred. In accordance with Articles 325bf(6) and 325az(5) of the CRR, as amended by CRR 3 (Regulation EU) 2024/1623), competent authorities may permit institutions to derogate from certain requirements of the regulatory framework for the use of internal models, or apply a softer version of those requirements, where, in the opinion of the EBA, a situation of extraordinary circumstances has occurred. In accordance with Article 325az(9) of the CRR, the occurrence of extraordinary circumstances shall be determined by the EBA, which must issue an opinion to that effect. The Delegated Regulation contains RTS which set out a framework for the EBA to follow when identifying a situation of extraordinary circumstances. The RTS specify that such circumstances could be recognised where there is a situation of significant cross-border financial market stress, or a major regime shift associated with a similar level of stress (e.g., a liquidity crisis), that can render the outcome of the back-testing and profit and loss attribution requirements inappropriate. The RTS also contain a non-exhaustive list of indicators that the EBA is to use to assess whether a situation of extraordinary circumstances has occurred. The Council of the EU and the European Parliament will now scrutinise the Delegated Regulation. The Delegated Regulation will enter into force on the twentieth day following its publication in the Official Journal of the European Union.

The UK Prudential Regulation Authority (PRA) has published its consultation paper (CP9/25) on the Markets in Financial Instruments Directive Organisational Regulation (MiFID Org Reg). The PRA proposes to restate the current firm-facing requirements from the MiFID Org Reg into the PRA Rulebook before HM Treasury (HMT) begins the revocation of the MiFID Org Reg under the Financial Services and Markets Act 2023 (FSMA 2023), to prevent gaps from arising in the PRA's ability to enforce key components of its systems and controls requirements. The PRA's proposals aim to maintain existing firm-facing requirements without introducing new obligations. The PRA's proposals cover the following Articles of the MiFID Org Reg: (i) general organisational requirements, (ii) outsourcing, (iii) record keeping, (iv) compliance and internal audit, (v) risk management, and (vi) technical standards regulation. The PRA proposes the implementation date for the changes resulting from this consultation paper would be H2 2025. The proposed rules and guidance are set out in Appendix 1 and Appendix 2. As the PRA has not made substantive changes to the rules, the consultation period is 8 weeks and so the deadline for responses is 23 June.

The UK Financial Conduct Authority (FCA) has published a summary of its AI Sprint, a two-day event that was hosted in January which discussed the opportunities and challenges of AI in financial services. 115 participants took part, discussing how AI may develop in financial services over the next five years, and the FCA's role enabling firms to embrace the benefits of AI while also managing the risks. Four common themes came from participants' discussions and suggestions:

• Regulatory clarity. Participants emphasised the importance of firms understanding how current regulatory frameworks apply to AI. Teams proposed specific areas where the FCA could clarify or expand on existing requirements to help firms understand regulatory expectations and to support beneficial innovation.

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The UK Prudential Regulation Authority (PRA) has published a policy statement on the identification and management of step-in risk (PS5/25). The policy statement provides feedback on responses to consultation paper (CP) 23/23 which, among other things, proposed to: (i) introduce new rules where firms are required to develop their own step-in risk policies and procedures based on the relevant Basel Committee on Banking Supervision's (BCBS) guidelines; and (ii) introduce an accompanying supervisory statement also based on the BCBS guidelines, detailing factors that firms are expected to consider when identifying potential step-in risk and in deciding, where necessary, on potential mitigating action. 

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The Bank of England (BoE) has updated its stress testing webpage, announcing it has published two stress test scenarios for use by banks and building societies that are not participants in its concurrent stress testing exercise. These scenarios have been drawn from the 2025 Bank Capital Stress Test scenario published on 24 March to support concurrent stress testing of the largest UK banks and building societies. The scenarios serve as a template and severity benchmark for firms to support their own internal capital adequacy assessment process (ICAAP) stress testing scenario design processes. The intention behind publishing two different scenarios is to encourage firms to evaluate the type, characteristics and severity of stress their business model may be vulnerable to when designing their own stress testing scenarios. The BoE refers firms to the Supervisory Statement on the ICAAP and the supervisory review and evaluation process (SREP) for guidance on the role of stress testing within the framework for setting banks' and building societies' capital requirements. The BoE explains that firms should use the scenarios as a starting point to build and accurately calibrate their own scenarios under Pillar 2, noting that any single scenario designed for firms with diverse business models and risks has its limitations. Therefore, it expects firms to select scenarios that robustly challenge their business and, ultimately, be responsible for creating their own scenarios to test resilience.

The UK Prudential Regulation Authority (PRA) has announced it is withdrawing the modification by consent (MbC) for third country covered bonds in the Liquidity Coverage Ratio (LCR) part of the PRA Rulebook, which it had previously offered on 8 April. The decision to pause the process and withdraw the MbC is due to the PRA receiving several technical comments and requests for clarification, which the PRA seeks to consider and address appropriately. Once the process is complete, the PRA will clarify its approach. The MbC was intended to modify Article 11 (1)(d)(ii) of the LCR part of the PRA Rulebook, to allow firms the inclusion of certain third country covered bonds in their Level 2A high-quality liquid assets (HQLA) up to a maximum value, determined at 31 January 2025 (the reporting date). During the pause in the process, firms do not need to amend their approach to recognising third country covered bonds under the Liquidity Coverage Ratio (CRR) and Liquidity (CRR) Parts of the PRA Rulebook.

The UK Financial Conduct Authority (FCA) has published issue 55 of its Primary Market Bulletin (PMB 55). In PMB 55, the FCA: (i) provides feedback on its consultation in PMB 53, finalises 44 technical and procedural notes, and deletes 1 technical note and 1 procedural note (FG25/1); (ii) consults (GC25/1) on further proposed changes to guidance in its Knowledge Base for the listing regime. This follows the implementation of the new UK Listing Rules (UKLR), which came into force on 29 July 2024 (PS24/6). 

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The UK Financial Conduct Authority (FCA) has published a consultation paper (CP) proposing the removal of reporting and notification requirements as part of its strategy to prevent unnecessary collection of data to reduce regulatory burden and costs. The consultation paper is accompanied by a press release and an updated webpage. The FCA seeks feedback on the proposals, which include:

• eliminating the requirement to provide data relating to: (i) FSA039 – Client money Assets; (ii) Section F of the 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; and
• entirely removing forms that are already included in the Annexes to SUP 16.

As the FCA is using a shortened consultation period of four weeks, the deadline for responses is 14 May. The FCA is currently reviewing other data collections and expects to be able to consult on the removal of further returns later in 2025.

The Directive (EU) 2025/794, amending the EU Corporate Sustainability Reporting Directive (CSRD) and EU Corporate Sustainability Due Diligence Directive (CSDDD), was published in the Official Journal of the EU (OJ), implementing the "stop-the-clock" proposal discussed under the EU Omnibus I package. The Directive entered into force on 17 April. Member states must transpose the Directive by 31 December.

The Directive postpones:

• by two years, the application of CSRD reporting requirements to large companies that have not yet started reporting and SMEs. These entities will now have to report in 2028 and 2029, respectively, for financial years starting on or after 1 January 2027 and 1 January 2028 (as applicable); and
• by one year, the transposition deadline and first phase of application of certain due diligence provisions under CSDDD. EU Member States will now have until 26 July 2027 to transpose CSDDD, and the first companies will not have to apply the first phase of measures until 26 July 2028.

The proposal is part of the 'Omnibus I' package adopted by the Commission at the end of February, which aims to simplify EU sustainability-related legislation.

The UK Financial Conduct Authority (FCA) has published a consultation paper together with a related press release and webpage setting out further proposals on product information for Consumer Composite Investments (CCIs). The consultation paper follows the FCA's December 2024 consultation paper on a new product information framework for CCIs, which closed on 20 March.

The regime will apply in respect of a CCI which is or may be distributed to a retail investor in the UK and seeks to help consumers understand the products they are buying while giving firms flexibility to innovate. The proposals include: (i) removal of the requirement for firms to calculate and disclose implicit transaction costs as part of their CCI cost disclosures; (ii) alignment for CCI products of the pre- and post-sale cost disclosure requirements under the FCA Handbook Conduct of Business (COBS) rules derived from the MiFID Org Reg, to ensure no duplication or conflict in respect of investments within the scope of the CCI rules; (iii) proposed drafting on transitional provisions granting firms flexibility to move across to the new CCI regime when they are ready; and (iv) proposed consequential amendments to the FCA Handbook.

The CCI regime will replace the onshored Packaged Retail and Insurance-Based Investment Products regime. Responses to the consultation paper should be submitted by 28 May 2025.

The UK Financial Conduct Authority (FCA) has announced its first-ever establishment of a presence in the United States (US) and Asia-Pacific (APAC) region as part of its new strategy to support growth. The FCA representatives will be based in Washington DC in the US and Australia in APAC. The aim of the expanded presence is to support the export of UK financial services internationally and attract more inward investment from third countries into the UK.

The Financial Stability Board (FSB) has published its finalised Format for Incident Reporting Exchange (FIRE), together with a press release and updated webpage. FIRE provides a standardised format for financial institutions to report cyber and other operational incidents to national regulators. It is intended to provide a foundation upon which to build for jurisdictions which do not currently have standardised reporting formats, and to be interoperable with existing systems for those jurisdictions with existing frameworks. National regulators are free to decide the extent to which they wish to adopt FIRE, if they do at all. The framework specifies the information items to be included in reports, identifying items which are essential and optional, as well as a baseline view of the reporting of individual information items against each reporting phase. The FSB will hold a workshop with industry and authorities two years after FIRE is finalised (e.g., in 2027) to take stock of their experiences with FIRE, including implementation challenges.

The European Securities and Markets Authority (ESMA) has published its final draft regulatory technical standards (RTS) relating to liquidity management tools (LMTs) under the Alternative Investment Fund Managers Directive (AIFM) and the Undertakings for the Collective Investment in Transferable Securities Directive (UCITS). The draft RTS will apply to Alternative Investment Fund Managers managing open-ended Alternative Investment Funds (AIFs) and UCITS. The final draft RTS under the AIFMD are detailed in Annex IV of the report, while those under the UCITS Directive are outlined in Annex V. The draft RTS have been submitted to the European Commission (EC) for adoption, which has three months to decide whether to adopt them.

ESMA has also published its final guidelines for national competent authorities and fund managers on LMTs of UCITS and open-ended AIFs, providing guidance on how managers should select and calibrate LMTs for liquidity risk management and mitigating financial stability risks. The guidelines, set out in Annex III of the report, will now be translated into the official EU languages and published on ESMA's website. National competent authorities and financial market participants must make every effort to comply with the guidelines. Within two months after the date of publication on ESMA's website, national competent authorities must notify ESMA whether they comply or do not comply, together with their reasons for not complying (if applicable). Financial market participants are not required to report on compliance. The Guidelines will apply upon the application date of the RTS on the characteristics of the LMT's. ESMA previously consulted on both the draft guidelines and draft RTS in July—for further background please see our update.

The European Commission (EC) has published its targeted consultation on the integration of EU capital markets under its savings and investments union (SIU) strategy, accompanied by a press release and updated webpage. The consultation seeks feedback on issues and possible measures to address: (i) barriers to the integration and modernisation of trading and post-trading infrastructures, the distribution of funds across the EU and efficient cross-border operations of asset management; and (ii) barriers specifically linked to supervision, with respondents invited to indicate any areas in which regulatory simplification would be appropriate in line with the simplification Communication. The questions have been split into six key topics: (i) simplification and burden reduction; (ii) trading; (iii) post trading; (iv) horizontal barriers to trading and post-trading infrastructures; (v) asset management and funds; and (vi) supervision. The consultation is a crucial step in the implementation of the SIU, with insights that are collected helping shape measures to be presented in a comprehensive package in the fourth quarter of 2025. The deadline for responses is 10 June.

The European Banking Authority (EBA) has issued its latest report on remuneration and gender pay gap benchmarking for institutions and investment firms, together with a press release. The report covers information on remuneration trends and practices from 2021 to 2023 and highlights a material gender pay gap found within EU institutions and investment firms. The data collected shows that, on average, female staff in institutions earned 24.48% less in 2023 than their male counterparts. The pay gap was even more pronounced in investment firms, with female staff earning 32.0% and female-identified staff earning 31.74% less than their male colleagues. This was mainly caused by an underrepresentation of women in higher paid positions. The EBA emphasises the need for entities to address these disparities with the data raising concerns about the application of the obligation to ensure equal opportunities and pay equity for staff.

The Financial Services Regulatory Initiatives Forum (the Forum) has published the Regulatory Initiatives Forum Grid (the Grid), with the UK Financial Conduct Authority (FCA) also updating its webpage. The previous Grid was due to be published in May 2024 but was postponed due to the General Election, meaning the Forum published only an interim update in October 2024.

The 2025 Grid sets out the regulatory pipeline for the next 24 months and reflects the reprioritisation that has taken place since the new government came into power. Notable initiatives include:

• motor finance commission review: the FCA intends to confirm, within six weeks of the Supreme Court's decision on past use of discretionary commission arrangements by motor finance firms, whether it will propose a redress scheme;
• liquidity risk management in funds: the FCA will consult on refined proposals regarding liquidity risk management in funds to implement FSB and IOSCO guidelines;
• Consumer Composite Investments (CCI) Regulation: the FCA published a second consultation paper on the new CCI regime on 16 April (see our update) and plans to issue a Policy Statement with final rules in late 2025;

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The UK Financial Conduct Authority (FCA) has published a webpage summarising the findings of its multi-firm review on retail banks' treatment of customers in vulnerable circumstances involving bereavement and power of attorney (PoA). The webpage is accompanied by a press release. The Consumer Duty requires firms to deliver good outcomes for all customers, including those in vulnerable circumstances. The multi-firm review makes a series of findings, including on:

• policies and procedures: the FCA calls for firms to make guidance for staff accessible and policies to be clear that staff should adapt to customers' needs and recognise when matters should be escalated.
• identifying and responding to customer needs: the FCA encourages firms to identify signs of vulnerability and seek information from consumers to address their needs. The FCA also wants firms to establish feedback loops to enable continuous improvement of staff and processes based on previous errors.

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The European Payments Council (EPC) has issued Version 7.0 of the Adherence Guide to the EPC Payment Schemes, together with an updated webpage. The updated guide provides guidelines and template application forms for payment service providers (PSPs) seeking to adhere to one or more of the EPC managed payment schemes (namely, the SEPA Credit Transfer Scheme, the SEPA Instant Credit Transfer Scheme, the SEPA Direct Debit Core Scheme, the SEPA Direct Debit Business-to-Business Scheme and the One-Leg Out Instant Credit Transfer Scheme). The Guide sets out: (i) detailed instructions for completing adherence documents; (ii) the eligibility criteria; and (iii) the adherence process to be followed.

The UK Financial Conduct Authority (FCA) has published a webpage summarising the findings from its multi-firm review of trading apps, together with a press release. The FCA notes that this is a growing sector allowing more retail investors easier access to a wider range of investments which can help to improve financial lives. Some trading apps, though, offer high-risk investments that were traditionally aimed at wholesale markets. The FCA's review made a series of findings, including on:

• business models: trading app firms operate in various ways. The FCA stresses that regulated firms must ensure they understand the Handbook's requirements for manufacturers and distributors, regardless of their business model, and that firms with overseas affiliates must clearly inform customers that their trading agreement is with the overseas entity and disclose any potential loss of asset protection.
• target markets: firms are likely to be both manufacturers of a trading app and distributors of products sold on it, and therefore should consider the relevant rules under PRIN 2A.3 and PROD 3 on the need to identify a target market for the products and services they manufacture and distribute. The FCA found some firms had not specified their target market at a sufficiently granular level and, in some cases, offered lower-risk and less complex products alongside more complex or high-risk ones.

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The Bank of England (BoE) has published a series of documents regarding its work on implementing the digital pound. The Digital Pound Experiment Report on Offline Payments assesses the technical feasibility of implementing an offline payment functionality for a digital pound to ensure that the digital pound can be used without an internet connection, enhancing its accessibility and resilience. While it might be technically feasible, there are trade-offs, particularly around user experience and preventing double spending and counterfeiting, that make implementing it challenging. No final decision has been made yet on whether an offline payment functionality will be implemented. The minutes of the CBDC Engagement Forum (November 2024) sets out continued stakeholder discussions on the progress of the digital pound, highlighting the benefits for consumers and merchants, such as innovation and cost efficiency, but also the challenges, including ensuring strong performance at all levels of payment volume, operational costs and security and network connectivity issues. The Intermediary Roles and Scheme Rulebook Design Note outlines the roles and responsibilities of digital pound intermediaries and a preliminary conceptual framework for a digital pound rulebook (or similar document) to support the proper management of the digital pound if launched.

The Prudential Regulation Authority (PRA) has published a consultation setting out proposals for its fees for 2025/26. The proposals would make amendments to the Fees Part of the PRA Rulebook (Appendix) and include: (i) the fee rates to meet the PRA's 2025/26 Annual Funding Requirement (AFR); (ii) the introduction of a cost allocation to fund the PRA's activities in the Future Banking Data project; (iii) changes to internal model application fees, the model maintenance fee, the Special Project Fee for restructuring, the minimum fee and the new firm authorisation fee for Type 3 applications; (iv) changes to the fees rules for firms applying to cancel before the start of the fee year; (v) how the PRA intends to allocate the surplus from the 2024/25 AFR (Chapter 3); and (vi) the retained penalties for 2024/25 (Chapter 4). The PRA's proposed Total Funding Requirement for 2025/26 is £342.5 million, a decrease of £10.5 million (3%) from 2024/25 (£353.0 million). This consultation closes on 9 May.

The UK Financial Conduct Authority (FCA) has announced the conclusion of its six-week policy sprint aimed at improving consumer investment decisions to support its key objective of supporting growth. With only 9% of UK consumers taking regulated financial advice last year, the sprint focused on developing targeted support to bridge the gap between bespoke financial advice and guidance. For the first time, the sprint tested future rules before formal consultation involving industry, consumer groups and other members of the regulatory family, such as the Financial Ombudsman Service and the Information Commissioner's Office, with its aim to accelerate final policy proposals by June. The sprint is part of the work being carried out in relation to the Advice Guidance Boundary Review and other initiatives aiming to change how consumers interact with retail investments.

The European Securities and Markets Authority (ESMA) has published a trends, risks and vulnerabilities (TRV) risk analysis report on ESG-related changes to fund names and their impact on investment flows. The report examines whether the fund managers decision to incorporate environmental, social, governance or sustainability-related (ESG) terms into their funds' names leads to more investor interest. If so, this has the potential to incentivise greenwashing behaviour, undermine investor trust and hinder efforts to promote sustainability within EU financial markets.

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The UK Financial Conduct Authority (FCA) has published an update on the Private Intermittent Securities and Capital Exchange System (PISCES) sandbox, following the consultation in December 2024 (CP24/29). PISCES will be a new platform designed for intermittent trading of private company shares. The FCA confirms that no major changes to the proposals on its 'private plus' approach are planned, given that it was largely supported by consultation respondents. The FCA also sets out a table of post-consultation changes it is proposing to assist potential operators of a PISCES to develop their own rulebooks and engage with participants. The changes outlined include:

• Clarification of core disclosures (including on financial information, employee share schemes and director transactions);
• Narrowing certain disclosure requirements (including, among others, on directors' transactions, material contracts or agreements, significant changes and post-trade events); and
• Removal of certain disclosure requirements (including on litigation, sustainability and forward-looking information).

Further changes include refined expectations around operator oversights, complaints handling and access to historic disclosures. The FCA also proposes setting a discretionary threshold of up to 25% to PISCES operators for identifying major shareholders. Final rules for PISCES will be set out in a policy statement expected to be published in June. In the meantime, the FCA will provide pre-application support and welcomes requests from prospective PISCES operators for preliminary feedback on their proposed models and draft rulebooks.

The Prudential Regulation Authority (PRA) has published its Business Plan 2025/26 which sets out the workplan for and regulatory initiatives to advance its strategic priorities. This year's business plan is said to reflect the evolution of the PRA's priorities, and in particular the work it is doing to deliver its new secondary objective on competitiveness and growth. Specific initiatives include:

• Implementing the Basel 3.1 standards, where the PRA intends to publish its final rules, once Parliament has revoked the relevant parts of the Capital Requirements Regulation (CRR).
• Finalising and implementing the strong and simple framework for small domestic deposit takers. During 2025/26, the PRA will finalise the simplified capital regime and the additional liquidity simplifications. It intends to publish a policy statement on these in Q4.

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The Payment Systems Regulator (PSR) has published an update regarding next steps for its claims management consultation and its intention to adopt reporting standard B by December 2026. The claims management consultation was originally planned for April this year but is being delayed. The PSR notes how effective claims management and receiving quality compliance data are crucial components in its APP reimbursement policy, which went live on October 2024. Having considered stakeholder feedback, the PSR has updated the timing of the planned consultation to take into account the work being carried out in relation to the UK government's National Payments Vision (NPV) (for further background, please see our update). The PSR expects to consult within three to six months, subject to NPV developments. The additional time will enable Pay.UK and the wider industry to continue working on an effective common system that meets the needs of all its users. The future consultation will not propose placing a regulatory mandate on PSPs to use a particular system for managing claims or for meeting the Reporting Standard B requirements.

The European Securities and Markets Authority (ESMA) has published a final report in relation to certain changes being made as a result of the MiFID II/MiFIR review, together with an accompanying press release. The changes covered by this final report were part of the third consultation package following the MiFID II/MiFIR review, and relate to:

• A new set of implementing technical standards for investment firms notifying competent authorities when it gains the status of systematic internaliser or decides to opt-in to the systematic internaliser regime. ESMA confirmed that it is making some changes to the original proposals, including reducing the number of reporting fields in the notification template to ease the reporting burden and extending the notification period from two weeks to 20 calendar days. ESMA also confirmed it will discuss with competent authorities areas where further guidance is required.

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The European Securities and Markets Authority (ESMA) has published a final report in relation to the draft regulatory technical standards (RTS) specifying criteria for establishing and assessing the effectiveness of investment firms' order execution policies, accounting for whether the orders are executed on behalf of retail or professional clients. The report is accompanied by a press release. ESMA's mandate for developing the new RTS was included as part of the changes made to best execution requirements following the EU MiFID II/MiFIR review. During the review, areas for improvement were identified including insufficiently documented and demonstrated satisfaction of best execution processes. In addition, feedback from competent authorities and other stakeholders evidenced that further clarification of order execution policy requirements would be helpful. 

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