The UK Financial Conduct Authority (FCA) has published its minimum expectations for firms making full and final settlement offers while the motor finance redress scheme is partially suspended following a legal challenge. The expectations are intended to help firms ensure that consumers are provided with clear, fair and not misleading information when deciding whether to accept an offer and to promote a consistent approach across firms.

The FCA states that, where a consumer voluntarily enters into a settlement agreement after receiving appropriate information, it would ordinarily expect the related complaint to be treated as withdrawn. This is on the basis that the lender can demonstrate that the offer reflects no less than the maximum redress available under the scheme (i.e. the amount calculated for the individual consumer under the scheme methodology, including relevant adjustments and caps). The FCA expects offer letters to make clear that the FCA has not reviewed the terms of any individual settlement offer and not to suggest or imply that it has approved the specific offer. Firms should also give consumers at least one month to respond.

The FCA sets out further expectations for the content of offers, including: the context in which the offer is being made; an explanation that the amount offered is at least equal to the maximum redress available under the scheme; the consumer's choice between accepting the offer or waiting for the outcome of the legal challenge; what accepting a "full and final settlement" means in practice; and the treatment of mixed complaints. Firms should also signpost consumers to the FCA's published FAQs. The FCA also sets out minimum expectations for the letter appendix setting out the remedy and amount of redress due, including the basis of liability, the amount payable and how it has been calculated, and how the firm has ensured that the offer is no less than the maximum redress available under the scheme.

The UK Financial Conduct Authority (FCA) has published findings from its supervisory work on how consumer finance firms assess, evidence and monitor fair value under the consumer duty’s price and value outcome. The publication is accompanied by a blogpost. The FCA found positive examples of firms taking structured and proportionate approaches to assessing fair value but also identified recurring areas for improvement where some firms:

• did not fully account for fees and charges when assessing the expected total price customers might pay
• did not clearly explain how their fair value conclusions were supported by the evidence available or how the price paid by customers compared with the benefits they could reasonably expect to receive
• relied heavily on assumptions, narrative statements or management information that lacked sufficient detail or supporting evidence
• gave limited consideration to non-financial costs (such as consumers’ time and effort), how value might change over time or outcomes for different customer groups, including customers with characteristics of vulnerability
• did not communicate fees and charges clearly, prominently or at the right time to support informed customer decision-making
• did not adequately monitor repeat or cumulative charges or assess their impact on customer outcomes
• could not demonstrate that their controls were appropriately designed, operating effectively or reducing the risk of causing foreseeable harm, particularly for customers experiencing financial difficulty.

Firms are advised to consider the FCA's findings and assess how they may inform their approach to meeting their consumer duty obligations. The FCA will continue to monitor this area and where it identifies significant risks of consumer harm, it will take appropriate action.

The UK Financial Conduct Authority (FCA) has published findings from a multi-firm review of how small and medium-sized enterprises (SMEs) in the defence sector experience banking services. The publication is accompanied by a blogpost.

The FCA found that there is no regulatory barrier preventing banks from supporting lawful defence businesses. Even so, some defence SMEs have found the process of opening a bank account unnecessarily long and complex. The evidence points to friction and delay, rather than widespread exclusion. The FCA expects firms to take prompt action, including to:

• ensure that decisions to reject applications from defence SMEs are made on reasonable, properly considered grounds and demonstrate that they are proportionate, risk-based and consistently applied
• complete compliance checks efficiently and, where additional checks are necessary, keep applicants informed of progress and likely decision timescales (where legally permissible and appropriate)
• adopt approaches to offering and servicing accounts that reflect the specific circumstances and risks associated with individual defence businesses, and avoid blanket restrictions where a more tailored approach is possible
• ensure that reputational and environmental, social and governance-related considerations are clearly defined, consistently applied and supported by appropriate governance, noting that there are no sustainability rules preventing firms from serving defence customers
• consider whether they can identify and monitor defence SME customers with enough accuracy, including across wider supply chains and dual-use activity to understand how defence SME customers are being treated.

The FCA has written to firms that provide banking services to SMEs to share these findings and its expectations. It will monitor firms' responses through its supervision and will intervene where necessary. Firms should treat the report as a "point in time" publication, which the FCA will consider retired by December 2028.

The UK Financial Conduct Authority (FCA) has updated its webpage to announce that the Upper Tribunal has extended the hearing of the legal challenges to its motor finance redress scheme. The hearing, originally listed for 16 to 26 February 2027, will now run from 16 February to 3 March 2027. This follows the FCA’s earlier announcement in October, which also included guidance for lenders.

The UK Financial Conduct Authority (FCA) has published a new webpage setting out examples of good practice and areas for improvement to support the safe and responsible adoption of AI in financial services. The examples are drawn from industry engagement and are illustrative and non-exhaustive, which will evolve as practice develops. They are relevant to a variety of AI use cases, such as those using machine learning, generative or agentic AI. They do not create new requirements, prescribe a single model or replace firms' responsibility for deciding what is appropriate and proportionate for their own AI use cases, risks and potential impact. While the FCA identified positive practices, it also identified key areas for improvement, including:

• Consumer duty and consumers in vulnerable circumstances: the FCA found that some firms built AI tools without establishing the consumer problem, target market or foreseeable harms. Some used guardrails that addressed one risk but created another. Some excluded consumers in vulnerable circumstances by default without providing another way for them to get support. The FCA reminds firms that they remain responsible for consumer outcomes where they deploy AI-supported tools and refers firms to its consumer duty guidance (FG22/5) and guidance on the fair treatment of vulnerable consumers (FG21/1).
• Governance and accountability: to govern effectively, firms need to have proportionate oversight, clear accountability and risk-based controls across the AI lifecycle. The FCA found that some firms had informal approval processes or generic governance arrangements, with control functions not involved enough. Some firms took a retrospective approach, designing and deploying AI use cases before considering how to govern them. Others had unclear responsibility for AI systems. Monitoring was sometimes narrow, reactive or static, and oversight functions sometimes lacked AI-specific capability. Further issues included poor documentation and delegating responsibility entirely to technical teams without sufficient understanding or effective challenge. The FCA states that firms remain responsible for the AI systems they develop, procure and deploy, including their outputs and outcomes.
• Operational resilience: the FCA found that some firms did not appropriately consider their use of AI, or their dependence on AI models, in their operational resilience plans. Others relied on vendors' assurances without challenging or testing them. Some relied too heavily on hard-to-replace AI providers and were dependent on a single platform without exit options. The FCA reminds firms that while they can outsource AI services, they remain responsible for them.

On the same date, the FCA also published a speech delivered by Jessica Rasu, chief data, information and intelligence officer at the FCA, on building the future of finance in the age of AI.

The UK Financial Conduct Authority (FCA) has published a feedback statement (FS26/3) to its discussion paper (DP25/3) on how its rules and regulatory framework could better support consumers investing without an adviser and setting out its next steps. The discussion paper was part of a set of publications forming the "landmark package to boost UK investment culture". The FCA has confirmed in its feedback statement that it does not intend to take forward every potential reform at once. Instead, it will prioritise the areas where further work can make the greatest difference to consumer outcomes, while giving firms and the market time to prepare for change. The FCA's next steps include:

• reviewing its financial promotions rules for high-risk investments and working with stakeholders to assess the harm caused by any current inconsistencies, including those highlighted in the feedback statement. The FCA still considers, despite some feedback that peer-to-peer investments should fall in the restricted mass market investment category
• consulting on its rules and guidance on risk warnings in financial promotions for mainstream investments in H1 2027, supported by consumer testing
• reviewing how the appropriateness assessment works in practice, including the impact of the current model and the merits of alternatives. The FCA plans to engage with stakeholders in early 2027
• engaging with HM Treasury on the need for legislative change to address concerns about the number of consumers being inappropriately opted out of protections.

Separately, the FCA has already begun a multi-firm review of how firms manufacturing model portfolio services are achieving good outcomes for consumers and expects to publish its findings by Q1 2027. The FCA also reminds firms that the consumer composite investments regime will come into full force on 8 June 2027 and it plans to publish final rules on simplifying consumer investment disclosures by the end of the year.

The UK Financial Conduct Authority (FCA) has published its findings from a May survey assessing firms' actions in response to its November 2025 multi-firm review of contract for difference (CFD) providers' compliance with the consumer duty price and value outcome. Most firms had made or planned changes, but many of the changes were relatively minor and did not make a material difference. The FCA expressed disappointment at the pace of progress and highlighted the following key concerns:

• Fair value assessments: firms should not treat these merely as a tick-box exercise and should focus more on consumer outcomes and potential harm.
• Communications: firms do not explain their costs prominently enough in the client journey, often including them only in terms and conditions or key information documents (KIDs). Overnight charges are not always shown as a projected annual percentage. Firms should consider if they could produce better consumer outcomes with earlier and more prominent signposting to information about pricing and overall fair value.
• Overnight funding charges: the level of these charges and the way firms apply them may not be consistent with price and value obligations under the duty. Some firms' charges seem high in the context of prevailing base rates and peer comparisons.

The FCA strongly recommends that firms review the good practice and areas of concern and consider whether they should change anything to meet their price and fair value obligations. It expects firms to be able to show that they have reviewed their charges and will follow up with them individually where it has concerns.

The UK Prudential Regulation Authority (PRA) and UK Financial Conduct Authority (FCA) have published policy statement PS19/26 / PS26/20 confirming changes to the loan-to-income (LTI) flow limit rule for mortgage lending. The regulators are removing the firm-level 15% cap on high-LTI lending. This is in line with the Financial Policy Committee (FPC) recommendation made in 2025 that the regulators amend implementation of the FPC LTI flow limit to allow lenders flexibility to set their own high-LTI strategies in line with their risk appetite and business models, while aiming to ensure the aggregate flow remained at a level consistent with the FPC-recommended 15% limit.

Key points from the final policy include:

• Following consultation feedback, individual firms' high-LTI flows and any adjustments required, will be measured on a rolling four-quarter basis. As consulted on, the aggregate flow will be monitored on a single-calendar-quarter basis to judge consistency with the FPC limit.
• The PRA will publish the aggregate high-LTI flow on its website each quarter. The FCA will publish information on its website when it expects adjustments. Following consultation feedback, the regulators have decided that alongside this, they will publish additional information to provide lenders with more visibility of trends in the mortgage market.
• The regulators' expectations on governance and risk management for high-LTI lending are set out in a new PRA supervisory statement (SS2/26) and new FCA non-Handbook guidance (FG26/11), which replaces the existing guidance. Both will take effect on 28 October.

The regulators also received responses regarding the calibration of the FPC's definition of high LTI (an LTI ratio of 4.5x) and the 15% aggregate flow limit. The regulators treated these points as outside the scope of the consultation. They have passed them to the FPC to consider in its next review of housing policies.

The UK Financial Conduct Authority (FCA) has published Market Watch 86, setting out its observations from supervisory visits to UK retail brokerage firms on the systems, controls and governance arrangements they use to identify and report potential market abuse. All of these firms used automated surveillance systems, but the FCA found material weaknesses in how their arrangements had been designed, implemented and operated in practice. Key findings include: 

• Too high a threshold for reasonable suspicion: several firms set the bar of reasonable suspicion too high. The FCA reminds firms that they do not need proof of market abuse before they submit a suspicious transaction and order report.
• Poorly tailored alert calibration: several firms had not properly calibrated their alert models in line with the nature of their client base, the financial instruments traded, and relevant market abuse risks.
• Insufficient understanding of surveillance systems: some firms appeared to rely on system settings provided by third-party vendors, which increased the risk that weaknesses in surveillance arrangements would not be identified or challenged. Calibration testing was also often limited.
• Weak governance and oversight: some senior managers had limited understanding of key surveillance activities. In some firms where surveillance responsibilities were split across different functions, no single individual had oversight of end-to-end activities. The FCA also found examples of firms with limited or no formal quality assurance process.
• Market abuse risk assessments lacking granularity: some firms had not considered all relevant characteristics of their business model; for example, they did not differentiate between institutional and retail clients. Others wrongly assumed that having an alert in place was evidence of an effective control capable of mitigating risk.

All firms are advised by the FCA to consider these findings and check whether changes to their surveillance arrangements are required. The FCA will continue to monitor this area.

The UK Financial Conduct Authority (FCA) has published a statement confirming that the Upper Tribunal will hear legal challenges to its motor finance redress scheme from 16 to 26 February 2027. While the scheme remains partially suspended pending the outcome of the litigation (meaning firms are not currently required to calculate or pay compensation), the FCA reiterates that lenders must continue to prepare for the scheme and progress complaints as far as possible. The statement provides advice for both lenders and consumers.

The FCA advises that lenders must continue to comply with the rules that remain in force, including by sending letters to consumers who are not owed compensation under the scheme. Lenders should also plan for a range of potential outcomes, including the possibility that, if the scheme or parts of it are quashed, there may be no motor finance redress scheme and no complaint handling pause. In that scenario, lenders would need to be operationally and financially ready to resolve complaints through the usual complaint-handling process and within the usual statutory timescales. The FCA expects lenders to plan rigorously for this possibility, make the necessary financial provisions and engage with their auditors. Firms that have questions are requested to contact the FCA.

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/35 on fair redemption terms for authorised funds investing in illiquid assets. The proposals apply primarily to non-UCITS retail scheme (NURS) funds invested predominantly in inherently illiquid assets, meaning funds where at least 50% of scheme property is invested in such assets, and that offer regular liquidity.

The FCA proposes the reforms to retail investment fund rules so that a fund’s redemption terms reflect the time it typically takes to sell illiquid assets in the portfolio. Key proposals include:

• broadening the scope of the funds investing in inherently illiquid assets (FIIA) regime by amending the definition of inherently illiquid assets
• limiting the frequency of dealing days (when the fund manager redeems or cancels investors’ units in the fund) to no more than one per month
• minimum 90-day notice periods for redemptions
• aligning the minimum redemption terms with the long-term asset fund (LTAF) regime
• enhancing investor disclosures, including updated risk warnings and prospectus disclosure requirements for funds with limited redemption arrangements
• permitting authorised fund managers (AFMs) of all NURS funds to introduce limited redemption arrangements to align the fund’s redemption terms better with its liquidity profile
• extending deferral powers to all NURS funds operating limited redemption arrangements
• allowing LTAF investors to revoke redemption requests during the notice period if the fund manager is satisfied it would not be unfair to other investors.

The deadline for feedback is 11 December, and final rules are anticipated in H1 2027. The FCA proposes a two-year implementation period for existing NURS funds that would fall within the amended scope of the FIIA regime for the first time. AFMs of these NURS funds newly brought in scope and their depositaries must comply with existing FIIA rules from 1 year after the new rules are made (aside from the risk warning rules).

The European Securities and Markets Authority (ESMA) has published its 2027 work programme, setting out its priorities for strengthening, simplifying and integrating EU capital markets. It marks a decisive shift from analysis and groundwork to implementation and concrete delivery, building on the foundations laid in 2025 and 2026 and bringing key strategic cycles to completion. Key areas of work for 2027 include:

• Growing supervisory mandates: ESMA will advance its supervision of consolidated tape providers and external reviewers of European Green Bonds, and will process the applications and begin the supervision of environmental, social and governance (ESG) rating providers. ESMA will also adapt to its expanded responsibilities for benchmark administrators. It will carry out oversight of critical ICT third-party service providers and continue monitoring and promoting compliance with the Digital Operational Resilience Act (DORA) across all of its supervisory mandates. ESMA will also review the impact of EMIR 3 reforms and continue cooperation with national competent authorities, including on the supervision of cryptoasset service providers under the Markets in Crypto-Assets Regulation (MiCAR).
• Delivering more efficient financial markets: ESMA will prepare for changes to its mandates and responsibilities arising from the proposed Market Integration and Supervision Package (MISP), and support implementation of the European Single Access Point and the transition to T+1 settlement. It will also continue work on investor protection by supporting the implementation of the Retail Investment Strategy and promoting clear, accessible information for investors. ESMA has also stated that its simplification initiatives on transaction reporting, funds reporting, the retail investor journey and risk-based supervision will enter a new phase in 2027.
• Harnessing data and technological innovation: ESMA will further enhance its use of data and technology, including AI-based supervisory tools. It will also strengthen cybersecurity capabilities and continue its work on cryptoassets and the impact of AI on financial markets. Tokenisation will also remain a priority.

A Corrigendum to Directive (EU) 2023/2225 on credit agreements for consumers and repealing Directive 2008/48/EC (CCD2) has been published in the Official Journal of the European Union, correcting a number of drafting and cross-reference errors in the Directive.

The amendments include:

• a correction to the list of provisions referenced in Article 2(7), replacing a reference to Article 21(1), first subparagraph, point (r) (which refers to rights in relation to linked credit agreements) with point (s) (which refers to the early repayment provisions in Article 29)
• an amendment to Article 3(20)(a), which defines linked credit agreement, clarifying that the credit itself, rather than the credit or services, must exclusively finance the relevant supply agreement
• a correction to Article 10(5)(d) in relation to pre-contractual information for credit agreements providing different ways of drawdown with different charges or borrowing rates, that the relevant assumption is that set forth in Annex III, Part II, point (c) (not point (b))
• a clarification in Article 16(2)(a) in relation to consumer information around the provision of advisory services concerning recommendations made by the firm, and specifically whether they are based on a firm's own product range or a broader market assessment.

The Corrigendum makes technical corrections only and does not introduce substantive policy changes to the consumer credit framework.

The House of Commons Treasury Committee has published a report containing the government's and the UK Financial Conduct Authority's (FCA's) responses to the Committee's inquiry report on HM Treasury's (HMT) financial inclusion strategy. In its response, the government agreed with the Committee on the importance of a robust evidence base for financial inclusion policy, including evidence that enables government to assess whether interventions are improving outcomes for people experiencing financial exclusion and are reaching those most in need. However, the government rejected calls to publish a separate quantitative analysis of financial exclusion specifically, stating that this would duplicate ongoing work already undertaken in developing the strategy and would largely reproduce publicly available evidence that has already been assembled and assessed. The response also noted that, as set out in the strategy, HM Treasury will conduct a review within two years to assess the impact of the strategy's interventions. In addition, both the government and the FCA confirmed their view that a broad firm-level financial inclusion metrics regime was not necessary, and the FCA response stated that such a regime would not be the most effective or proportionate means of improving financial inclusion outcomes.

The responses also highlighted a number of new data collection initiatives, including detailed Product Sales Data for consumer credit agreements, which it states will be used alongside advanced analytics to better understand barriers to access. The FCA in addition referred to its new annual Retail Banking Business Models Data return covering mortgages, personal banking, personal lending and small business banking which will help with providing both market-wide and firm-level information about the provision of banking services to consumers and small and medium-sized enterprises.

The UK Financial Conduct Authority (FCA) has published a feedback statement (FS26/2) from its review into whether regulation affects small and medium-sized enterprises' (SMEs) ability to access finance. The review found no evidence that FCA regulation is a major barrier to SME lending, but instead, found that many of the challenges relate to the wider market, information and capability. This is particularly the case for microbusinesses, who face issues such as limited awareness of finance options, complex application processes, duplicated customer checks and difficulties obtaining finance where businesses have limited collateral or predominantly intangible assets.

To reduce friction and support growth, the FCA has identified three priority areas for further work: (i) supporting a more proportionate regulatory framework through reform of the Consumer Credit Act; (ii) advancing open finance with SME lending as a priority use case; and (iii) monitoring industry work to explore whether digital verification could reduce duplication in customer checks, while maintaining effective financial crime controls.

The UK Financial Conduct Authority (FCA) has published findings from its review of how payments and e-money firms are supporting consumers in vulnerable circumstances under the consumer duty. The review assessed firms' approaches to identifying vulnerability, providing tailored support and monitoring customer outcomes. The FCA found many examples of positive practice but also identified specific areas for improvement, including:

• Some firms identified very few or no customers in vulnerable circumstances, despite having customer bases where characteristics of vulnerability may reasonably be expected.
• There was limited testing or assurance to assess how effectively identification policies were being implemented in practice.
• Approaches on support arrangements were not always applied consistently across the customer journey, and some firms could not clearly evidence how vulnerability information translated into tailored support for customers.
• Communications relied primarily on standard formats, with limited tailoring for customers with different needs, and limited assessment on whether communications were understood and effective in practice.
• The frequency and quality of management information provided to senior management and boards could be improved. Boards at certain firms received limited insight beyond annual consumer duty reporting, and vulnerability data and outcomes information were not consistently recorded, reducing firms' ability to identify trends and take corrective action.
• Understanding the impact of distribution arrangements on consumer outcomes.

Firms are advised to consider these findings when assessing their own arrangements. The FCA will continue to engage with firms in this area and intervene where necessary.

The UK Financial Conduct Authority (FCA) has published its quarterly consultation paper No. 53 inviting feedback on proposed amendments to its Handbook across financial promotion rules, banking conduct of business requirements, the new cryptoasset regime, complaints reporting, money market fund (MMF) reporting and the consumer composite investment (CCI) rules.

Key proposals include:

• Amending the financial promotion rules applicable to fractional shares, by amending the readily realisable security definition to include fractional shares that meet specified conditions.
• Removing an expired reference to the British Bankers' Association/Building Societies Association Code of Conduct for the Advertising of Interest Bearing Accounts in BCOBS 2.3.9G and replacing the reference in BCOBS 2 Annex 1, Note 1, to the latest Annual Equivalent Rate practice note published by UK Finance and the Building Societies Association.
• Making deferral arrangements for parts of the new cryptoasset regime (effective 25 October 2027), including relating to the admission process of qualifying cryptoassets on UK qualifying cryptoasset trading platforms, the execution venue requirements on UK-authorised dealers and arrangers, and the execution policy requirement for these firms.
• Correcting complaints data reporting rules by removing a duplicate data point on claims management fee cap redress in the Consumer Credit Return and clarifying the Handbook Glossary definition of "firm" for the purposes of DISP 1.10 and DISP 1.10A to ensure that payment services and e-money firms are within scope of these requirements.
• Removing the reference in DISP to the two-stage complaints process for the Society of Lloyd's.
• Updating MMF reporting requirements to ensure a proportionate approach that allows for effective monitoring of financial stability risks and is integrated into wider funds reporting requirements.
• Making minor amendments to the CCI rules in the DISC and COBS sourcebooks following feedback to PS25/20.

The deadline for comments is 12 October, and the proposed amendments are set out in draft instruments contained in the appendices to the consultation.

The European Commission (EC) has published a call for advice (dated 30 July) to the European Securities and Markets Authority (ESMA) requesting technical advice to assist in developing level 2 measures implementing the retail investment strategy (RIS) package. The package takes the form of a directive containing targeted amendments to a number of EU directives in the area of financial services, including the Markets in Financial Instruments Directive (MiFID II), the Solvency II Directive, the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive and the Alternative Investment Fund Managers Directive (AIFMD) (the Omnibus Directive), and a regulation amending the Packaged Retail And Insurance-Based Investment Products (PRIIPs) Regulation.

A provisional agreement was reached on the RIS package on 18 December 2025 and approved by the Council of the European Union on 5 June and by the European Parliament on 23 June. The adopted legislative texts are still subject to lawyer-linguists' review, but the EC does not expect any substantive changes. The completion of the lawyer linguists work is expected at the latest in September. Final votes by the Council and the Parliament are expected in Q4, which means the publication of the RIS package in the Official Journal of the EU should occur at the latest in January 2027.

Member States will have 24 months to transpose the Omnibus Directive from the date it enters into force. They will have to apply the provisions of the legal text as from July 2029, assuming that the Omnibus Directive is published in January 2027 and that a 30-month implementation period will apply following the date of entry into force. Level 2 measures will also need to be transposed into national laws and regulations by Member States.

The EC is seeking ESMA's technical advice on certain delegated acts to supplement or specify specific provisions of MiFID II, UCITS Directive and AIFMD. To simplify the adoption of the proposed Level 2 measures, ESMA is requested to group the mandates in two delegated acts, a delegated regulation and a delegated directive, for each of the sectoral legislative frameworks. ESMA must submit its advice to the EC by 1 October 2027.

The UK Financial Conduct Authority (FCA) has published a new webpage with examples of good and poor practice identified from its review of motor finance firms' implementation plans for the motor finance redress scheme. After the scheme rules were published, the FCA asked in-scope firms to submit implementation plans, explaining how they would deliver fair, consistent and timely outcomes for consumers. Overall, most firms demonstrated a good understanding of the scheme's requirements, but many plans remained high level without sufficient detail on delivery. The FCA assessed firms' plans against key areas including operational readiness, population identification, group-based decision making, redress calculation and payment, quality assurance and oversight, and multiple representative issues.

The FCA identified several recurring weaknesses across firms' plans, including:

• Plans that repeated scheme requirements without explaining how the firm would deliver them.
• Limited detail on systems, workflows, staffing models or procedures needed to process cases at scale.
• Population figures provided without explanation of methodology, assumptions or validation.
• References to calculators without explaining how they work or how they have been validated.
• Governance structures described without clear quality assurance arrangements.
• Limited processes for identifying duplicate or unclear representation.

The FCA expects all firms to review these examples and make any necessary changes to their own plans, controls and oversight arrangements, and to keep named motor finance supervisors updated on material developments. The FCA stated that it will continue to engage with firms where concerns remain, and that some firms may receive individual feedback or be asked to provide further detail where their plans do not demonstrate sufficient readiness.

The UK Financial Conduct Authority (FCA) has published policy statement PS26/17 confirming its final rules and guidance which make amendments to the liquidity risk management framework for authorised fund managers (AFMs) of UK Undertakings for Collective Investment in Transferable Securities (UCITS) schemes and non-UCITS retail schemes (NURS). The measures follow the December consultation and are intended to strengthen investor protection and promote effective liquidity risk management.

Key changes include:

• Requiring AFMs to have anti-dilution tools available for use, to better protect investors from the risk of their holdings being diluted by the costs incurred by other investors entering and exiting the fund.
• Strengthening the rules governing how an AFM assesses and monitors the ongoing liquidity risk of transferable securities.
• Introducing new Handbook guidance on liquidity risk stress testing, alongside: (i) an updated UK version of the European Securities and Markets Authority's liquidity stress testing guidelines; and (ii) a separate annex on good liquidity risk management practices for UCITS schemes and NURS.
• Removing the "listed asset presumption". An AFM will no longer be able to presume that because a transferable security is admitted to trading on an eligible market, its liquidity would not compromise the AFM's ability to redeem units.

Following consultation feedback, the FCA has also confirmed that the existing derogation from the eligible market test for recently issued securities will be retained but shortened from one year to 20 business days.

The final rules and guidance do not propose any changes to the scope of the rules with respect to money market funds (MMFs). Where new guidance has been added, this will not apply to MMFs. The FCA anticipates that future work on UK MMF regulatory reform will consider how changes to the rules and guidance will apply to MMFs.

The new rules and guidance will come into force on 1 February 2027, with transitional provisions for some rules applying until 1 August 2027. This is to give firms additional time to update fund prospectuses and comply with the shorter derogation period for the eligible market test for recently issued securities. The FCA has also confirmed that it will consult separately on wider liquidity proposals for authorised retail funds that invest in inherently illiquid assets, in particular daily-dealt property funds.

The UK Financial Ombudsman Service (FOS) has published its policy statement on the next phase of its service reforms to streamline and modernise the complaints process. Following its joint consultation with the UK Financial Conduct Authority (FCA), the FOS has confirmed that it will introduce changes to its operations to allow it to focus its resources on the cases it was set up to resolve as a quick and informal alternative to the courts. The reforms include:

• An amendment to DISP 3.6.4R to provide greater clarity that FOS decisions are based on the standards applicable at the time of the act or omission complained about and will not be applied retrospectively, providing a foundation for proposed legislative changes to the "fair and reasonable" remit currently progressing through Parliament. Although the rule change will take effect from 1 October, it will apply to all current and future complaints given the change is clarificatory only.
• New powers, which will come into effect on 1 October, to dismiss complaints that are better suited to the courts, law enforcement, other dispute resolution processes or where no financial loss or material distress has been suffered.
• The introduction of a new registration stage from next year to ensure complaints are within scope and ready for investigation before allocation to a caseworker, with further consultation on differential case fees planned for later this year.

The final rules implementing the amendments to DISP concerning dismissal of cases and the fair and reasonable test are set out in the Redress Reforms (No 2) Instrument 2026 which comes into force on 1 October. Later this year, the FOS will also publish the first of its joint thematic reviews with the FCA to provide more insight on the types of complaints it sees and its approach to resolving them. The reforms are part of wider steps that the FOS has taken to modernise its service including: (i) an updated memorandum of understanding with the FCA to ensure its decisions are aligned with regulatory rules; (ii) charges for professional representatives to refer cases to ensure fairer costs and better evidenced cases; and (iii) changes to the interest rate applied to some of the awards that it makes to better reflect present economic conditions.

ESMA's Securities and Markets Stakeholder Group (SMSG) has published an own initiative report on the future of EU financial markets supervision in the context of the ongoing Level 1 discussions on the European Commission's proposed Market Integration and Supervision Package (MISP). The report supports the objective of strengthening EU-level supervision and recognises the case for expanding ESMA's direct supervisory and supervisory convergence powers to address market fragmentation, cross-border activity and regulatory arbitrage. However, it stresses that any reforms should be proportionate, evidence-based and accompanied by a clear allocation of responsibilities between ESMA and national competent authorities to avoid duplication and inefficiencies. The SMSG highlights the importance of maintaining investor protection while supporting the competitiveness, attractiveness and growth of EU capital markets, including through a proposed "Competitiveness and Attractiveness Check", and key performance indicators as part of the accountability process of ESMA's chair. However, the report emphasises that retail investors must remain at the centre of ESMA's strategic priorities and also proposes retail investor impact assessments for ESMA measures so that investor protection considerations are not subordinated in practice to competitiveness arguments.

The UK Financial Conduct Authority (FCA) has published Handbook Notice 143, outlining amendments to its Handbook made through various instruments made at its June and July board meetings including:

• Numerous instruments relating to the UK's upcoming regulatory framework for cryptoassets which come into force on 25 October 2027 and, amongst other things, insert three new sourcebooks into the Handbook, two new chapters in the client assets sourcebook and new sections in the conduct of business sourcebook and supervision manual.
• Definition of Capital for Investment Firms Instrument 2026, which entered into force on 31 July. This instrument makes a minor technical amendment to MIFIDPRU 3.6A.1R to correct an unintended consequence following PS25/14, ensuring that the prohibition on non-cash distributions on own funds instruments operates as originally intended.
• Enforcement (Digital Markets, Competition and Consumers Act 2024) (Supplementary Amendments) Instrument 2026, which entered into force on 30 July and Enforcement Guide (Amendment) Instrument 2026, which entered into force on 31 July. Following consultation in chapter 9 of CP26/8, these instruments make supplementary amendments to the Glossary, ICOBS, CONC, UNFCOG, ENFG and DEPP sourcebooks to reflect changes in consumer protection legislation, describe the FCA's general approach to the use of its powers under the Digital Markets, Competition and Consumers Act 2024, and make clarificatory changes to its description of the use of non-FSMA and FSMA powers in the context of market abuse.
• Prospectus Rules: Admission to Trading on a Regulated Market (Clarificatory Amendments) Instrument 2026. This gives proper effect to aspects of the Public Offers and Admissions to Trading regime, which came into force on 19 January.
• Data Reporting Services (Amendment) Instrument 2026 and Technical Standards (Data Reporting Services) Instrument 2026. Following consultation in CP25/31, these instruments amend the Glossary, MAR 9, DEPP and ENFG sourcebooks, and make changes to Commission Delegated Regulation (EU) 2017/577, to establish the main regulatory obligations of the equity consolidated tape provider (CTP) and key regulatory requirements for the operation of the UK equity consolidated tape. It also establishes obligations for trading venues and approved publication arrangements to provide information to the CTP.

Feedback to the various consultations behind this Handbook Notice is set out in chapter 3 of the notice.

The UK Financial Conduct Authority (FCA) has published findings from its review of firms' approaches to monitoring consumer outcomes under the consumer duty, identifying good and poor practices. The FCA aims to help firms understand what is happening across the customer journey, identify poor outcomes or emerging risks, and take appropriate action.

In relation to strategy and frameworks, the FCA identified several areas for improvement. These included high-level frameworks that do not clearly define good and poor outcomes across key customer journeys or explain the thresholds used to assess them, as well as weak links between operational metrics (such as conversion rates or review completion) and actual customer outcomes. The FCA also found limited evidence of firms assessing whether outcomes differ across customer groups, including customers in vulnerable circumstances.

On data, management information (MI) and testing, some firms relied on a narrow or reactive set of indicators and could not consistently demonstrate how they used MI to anticipate issues, monitor outcomes or assess the impact of changes. Firms often relied heavily on lagging indicators and lacked clear thresholds or forward-looking metrics. Although many firms had set specific thresholds, they did not always explain how these were used to identify good or poor outcomes. The FCA also found that, while some firms identified friction in customer support journeys and agreed remedial actions, certain issues remained unresolved.

In relation to governance, oversight and culture, the FCA found that although firms generally described clear governance structures, practices were not consistent across the firms reviewed. In particular, it was not always evident how governance arrangements operated end-to-end, from identifying issues to testing whether remedial actions had improved outcomes. While boards typically receive regular updates on customer outcomes and are described as central to oversight, it was not clear how this information was used. Similarly, firms were often able to demonstrate that they identified issues and took action but provided less detail on the root causes of those issues or whether the actions taken successfully addressed them.

The FCA states that firms should use these findings to review their own approach to outcomes monitoring and consider whether the information they collect gives them a clear enough view of customer outcomes.

The UK Financial Ombudsman Service (FOS) has published its consultation response to HM Treasury's (HMT) call for evidence on the independent review into access to banking services. Drawing on its complaints data, the FOS highlighted the continued importance of in-person banking services, particularly for vulnerable customers, those requiring support with complex or sensitive issues, and certain groups that may face barriers to using digital channels. The FOS notes that reduced access to face-to-face banking can create difficulties for consumers who need tailored support, reasonable adjustments, assistance resolving urgent account issues, or protection from fraud and financial abuse.

It also observed that some micro-enterprises and small businesses continue to rely on physical access to bank branches, particularly for cash-related services. While recognising that branch closures may be a legitimate commercial decision, the FOS states that firms are expected to comply with the FCA's requirements when implementing branch and ATM closures. Where the firm has not met its obligations, the FOS would consider whether the firm should compensate the consumer for any distress or inconvenience they have experienced as a result. The FOS will continue to monitor complaint trends and share relevant insights, including where it sees evidence of increased consumer detriment or changes in complaint volumes or themes.

The European Banking Authority (EBA) has published four consultation papers under the revised Deposit Guarantee Schemes Directive (EU) 2026/804 (DGSD3), aimed at strengthening depositor protection, preserving financial stability and further harmonising depositor protection standards across the EU.

The four consultation papers include:

• Draft implementing technical standards (ITS) on depositor information, setting out harmonised content and formats for depositor information sheets provided at account opening and on a regular basis. They also establish requirements for communications to depositors in specific situations, such as bank mergers or failures.
• Draft ITS on information exchange, introducing standardised procedures, templates and minimum requirements for information exchange in bank failure scenarios. They also enhance reporting from deposit guarantee schemes (DGSs) to the EBA on covered deposits and available financial means, define information to be reported by authorities on bank failures, and improve transparency on the use of DGS funds.
• Draft regulatory technical standards (RTS) on the treatment of client funds, establishing rules to ensure DGSs receive the data needed to identify and reimburse clients whose funds are held in intermediary accounts, clarifying: (i) when reimbursement should be made directly to clients or via the account holder; and (ii) how to prevent duplicate payouts.
• Draft guidelines on the investment of available financial means, setting out how DGSs should invest their funds to ensure diversification, low risk and sufficient liquidity.

The deadline for comments on all of the four consultation papers is 23 October, with a public hearing scheduled for 24 September.

The UK Competition and Markets Authority (CMA) has published updated guidance on the unfair contract terms provisions in Part 2 of the Consumer Rights Act 2015 (CRA), which protect consumers from unfair contract terms and notices used between businesses and consumers. This follows the consultation in January, which focussed on simplification, presentation, style and readability. The CMA confirmed in its consultation that it would not be substantively revising its interpretation of the law, though it did set out developments in case law. The provisions apply to contracts entered into, and relevant notices issued, on or after 1 October 2015 across the UK. The guidance was published alongside a technical note and an updated webpage reflecting the changes.

The guidance is intended to help businesses comply with unfair contract terms law and assist advisers, enforcers and consumers in understanding which contract terms and notices may be unlawful or unfair. It also states that the CMA will have regard to the guidance when exercising its direct consumer enforcement powers under the Digital Markets, Competition and Consumers Act 2024, although any assessment of whether a term or notice is unlawful will continue to be made on a case-by-case basis. The accompanying technical note explains the legislative background to the regime and its interaction with other consumer protection legislation, while the updated webpage provides businesses with practical guidance on drafting fair and transparent consumer contracts.

The UK Financial Conduct Authority (FCA) has published findings from a multi-firm review of approaches to the consumer duty products and services outcome, identifying good and poor practices. The review was conducted across the banking, insurance, payments, asset management, consumer investments, funeral plans and consumer finance sectors.

Areas for improvement in relation to product and design include generic or overly simplistic target market assessments that fail to adequately reflect customer needs or product risks, and firms describing processes for identifying vulnerable customers without demonstrating how products and services had actually been adapted to meet their needs.

On monitoring and review, while many firms had improved the data they collect to assess customer outcomes, some firms did not use management information effectively to trigger reviews.

On distribution and third parties, some firms provided only generic explanations of their distribution strategies or focused on third-party due diligence without demonstrating how they assessed the suitability of distribution channels. The FCA states that firms should use these findings to reflect on their own products and services and identify where they should make improvements.

The UK Financial Conduct Authority (FCA) has published its second edition of its Enforcement Watch newsletter, explaining how it is using supervision and enforcement to drive compliance with the consumer duty. The FCA notes that nearly three years after the duty's implementation, it has opened 11 investigations into potential breaches, up from six reported in the first edition. These investigations span the insurance, pensions, wealth management, consumer investments, peer-to-peer lending and claims management sectors.

The FCA uses this edition to help shine a light on the threshold between assertive supervision (intervening where concerns are identified) and taking enforcement action. The FCA states that where interventions are sufficient to address the harm, there may be no need for a formal enforcement investigation.

A key focus of the FCA's 11 open investigations is whether consumers received fair value in accordance with the FCA's Handbook rules and the consumer duty. The FCA emphasises that fair value is not solely a question of price; products that fail to meet customer needs, cause foreseeable harm or provide little meaningful benefit are unlikely to represent fair value. Given the overlap between the duty's outcomes, the FCA may also examine whether products were designed for an appropriate target market, met that market's needs, were communicated clearly to consumers throughout the product lifecycle, and consumers were given support when issues arose.

The FCA also outlines the types of investigations it has opened and notes that it has "taken the unusual step" of publicly announcing two investigations in the motor finance claims sector to enable affected customers to consider their options, including whether to complain. The FCA expects firms to maintain high standards, proactively identify and prevent consumer harm, and demonstrate good consumer outcomes. While the FCA will work pragmatically with firms that do the right thing, it emphasises that it will take enforcement action where necessary.

The UK Financial Conduct Authority (FCA) has published the findings of a mystery shopping exercise assessing how effectively firms promoted awareness and helped consumers access basic bank accounts (BBAs), outlining good and poor practice. The FCA found that while firms delivered good outcomes, inconsistent and poor practices are still widespread. Specifically, three themes stood out:

• Firms did not consistently mention and discuss BBAs early enough in the conversation.
• For consumers who did not have standard identification or a fixed address, staff often did not clearly explain what alternative evidence of identification consumers could use or what next steps they needed to take.
• Staff often did not recognise and respond to characteristics of vulnerability or adapt their approach for consumers who needed help to complete a standard or digital journey.

The FCA states that this creates a risk of firms preventing people from getting an appropriate account which can deepen financial exclusion. In response, the FCA has required firms to implement remedial plans and, through UK Finance, the firms have agreed a clear commitment to: (i) improve the identification and promotion of BBAs; (ii) reduce barriers for consumers with non-standard identification or no fixed address; and (iii) recognise and enhance support for vulnerable customers. The FCA will monitor progress through firm-specific oversight and sector-wide reviews and has indicated that it may take further action if sufficient improvements are not achieved.

The UK Financial Conduct Authority (FCA) has published The Mills Review report, based on an independent review led by Sheldon Mills, Executive Director, Consumers and Competition at the FCA, examining the potential impact of AI on retail financial services by 2030 and beyond. The review concludes that AI is likely to drive a transition from human-led financial activity to increasingly AI-enabled and delegated services, with firms embedding AI across a wide range of functions and consumers making greater use of AI tools and agents to manage their finances. The review identifies four key systemic shifts arising from AI adoption: the transformation of AI becoming core to firms; the emergence of AI-led consumer journeys; changes to competition and market power; and the amplification of financial crime and cyber risks.

While it considers the UK's existing outcomes-based regulatory framework, including the consumer duty, senior managers and certification regime and operational resilience requirements, to be broadly fit for purpose, it highlights the need for them to evolve to keep pace with AI developments.

To support the FCA, the review sets out seven priority recommendations for consideration, including:

• Securing and adapting the regulatory perimeter.
• Strengthening system-wide coordination and oversight.
• Monitoring the transition to autonomous models and adapting regulatory frameworks.
• Scaling up the FCA's AI Lab to support AI models and system innovation in financial services.
• Enabling the foundations for agentic finance.
• Building and adopting an AI-enabled agentic supervisory model.
• Developing a trusted public-interest AI-enabled financial capability service.

The UK Financial Conduct Authority (FCA) has published a statement announcing that the Upper Tribunal has made an order suspending parts of its motor finance redress scheme while legal challenges brought by several parties are considered. The order was made on terms agreed between the FCA and the challengers, with the partial suspension enabling firms to continue preparing for the scheme while avoiding duplication of work if the challenges succeed. The Tribunal is scheduled to hear the challenges on 14-18 December or 16-26 February 2027. Firms are still expected to comply with all rules that are not suspended and a list of retained scheme rules has been published

Under the suspension, firms are currently not required to calculate, communicate or pay compensation under the scheme timetable; however, they must continue preparatory work, including identifying relevant complaints and gathering data. Firms must also notify complainants who are not entitled to compensation under the scheme within the scheme deadlines, subject to limited exceptions. If a firm requires more time to notify consumers, the FCA will not treat it as non-compliant or take enforcement action as long as consumers are notified within seven weeks of the relevant scheme deadline.

Firms are expected to update complainants to explain when the legal challenge will be heard, what the partial suspension means, and the likely impact on the timetable for dealing with complaints and paying any compensation owed.

The FCA reiterates that it considers the scheme the quickest and fairest route to consumer redress and intends to defend it. If the scheme is ultimately upheld, compensation payments are expected to begin in 2027. If it is overturned, the FCA may instead require firms to resolve complaints through the standard complaints process, which could result in greater involvement from the UK Financial Ombudsman Service. The FCA expects firms to plan for the event of no scheme and to be operationally and financially ready for a complaint-led and supervisory approach to resolve historical liabilities, in line with the default statutory timelines.

In the interim, while the legal challenges are ongoing, the FCA will continue to take a pragmatic approach as previously set out in its May statement.

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/24 proposing reforms to streamline consumer investment disclosure requirements across the Markets in Financial Instruments Directive (MiFID), Insurance Distribution Directive (IDD) and non-MiFID investments business. The proposals would align cost disclosure requirements with the Consumer Composite Investments (CCI) regime, which replaced the prescriptive requirements in the Packaged Retail and Insurance-based Investment Products and Undertakings for Collective Investment in Transferable Securities disclosure documents with a new CCI "product summary". The regime allows firms flexibility over how they present information in line with the consumer duty.

Following a review of MiFID derived requirements, the FCA intends to make changes to align Conduct of Business Sourcebook (COBS) disclosure rules with the CCI regime on a conceptual and technical level, and apply the same duty-driven approach, focusing on consumer engagement and understanding.

Proposals include:

• Aligning COBS more closely with the CCI regime and making cost disclosures more consistent throughout the investment journey, so that the pre-sale presentation of product costs aligns with the CCI disclosure framework.
• Removing the MiFID-derived cumulative effect illustration pre-sale and post-sale and instead requiring firms to show how costs have impacted returns in regular post-sale reporting.​

Read more.

The UK Prudential Regulation Authority (PRA) has published a new webpage reminding firms of their obligations under the Depositor Protection Part of the PRA Rulebook regarding the identification, marking and reporting of Financial Services Compensation Scheme (FSCS) protected deposits, following industry queries. The PRA highlights that, under rules 43.1(1) and (2), firms must include in their class A tariff base both covered deposits and the total balance of deposits where the account holder is not absolutely entitled or which constitute safeguarded funds, unless the firm has confirmed that such deposits are not covered deposits.

Where a firm lacks sufficient information to determine eligibility, the PRA expects such deposits to be included. Amounts must be calculated consistently with the single customer view and exclusions view requirements in Chapter 12. The PRA also reminds international branches to reflect these requirements when calculating total potential FSCS liability for branch returns, noting this is a factor in its assessment of branch operations under Supervisory Statement SS5/21. Firms are expected to ensure compliance ahead of year-end reporting for 2026 and to engage with supervisors where necessary.

The European Banking Authority (EBA) has published its final amending product oversight and governance (POG) guidelines for retail banking products, having consulted on them in July 2025. The guidelines make targeted amendments clarifying how firms should address environmental, social and governance (ESG) considerations and greenwashing risks throughout the product lifecycle. The EBA considers the update necessary in light of its June 2024 greenwashing report, which identified growing risks across the financial sector, and to align with recent amendments to the Capital Requirements Directive (CRD) and Capital Requirements Regulation (CRR) on ESG risk management.

Following feedback, the EBA clarifies various provisions and adjusts some of the wording proposed in the consultation, making ESG and greenwashing considerations more explicit within the current requirements where products are offered and sold to consumers. The guidelines adjust only a limited number of existing requirements, relating to the subject matter, the manufacturer's internal control functions, the target market, distribution channels, information for distributors, and information and support for the manufacturer's arrangements.

The EBA also makes consequential updates to reflect wider regulatory developments, including revisions to its Founding Regulation, the internal governance guidelines under the CRD and the sound management of third-party risk regarding non-information communication technology services.

The guidelines are expected to be published in all EU official languages this year and will apply from 11 January 2027. Competent authorities must report whether they comply with the guidelines within two months of the publication of the translations.

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/23 on the changes to the scope and proportionality of the consumer duty. This follows recent developments in response to calls for clarity on the application of the duty in the context of wholesale markets and complex distribution chains, and the FCA's commitment to address these concerns. For further background on this, you may be interested in our webinar titled "Ahead of the Curve: Consumer duty" is the future brighter for wholesale firms?.

The proposals relate to the FCA rules and guidance, including non-handbook guidance. The key proposed changes are as follows:

• Application of the duty limited to retail market business with UK customers. This would amend the current approach where the duty is applied in accordance with sector-specific conduct rules, meaning that if those sector-specific conduct rules apply to cross-border services, so does the duty. The proposal seeks to reduce complexity and cost in potentially applying overlapping regimes for cross-border activity. Note, however, that certain exclusions apply, for example in relation to Crown servants living overseas, pre-paid UK funeral plans and regulated or ancillary activities for UK pensions.
• Clearer delineation of six key concepts which are used by firms to work out how the duty is meant to apply, those concepts being: (i) retail market business; (ii) relevant exclusions depending on the nature of the business; (iii) product definition; (iv) distribution chain; (v) specific disapplication depending on the firm's role; and (vi) material influence.

Read more.

The European Banking Authority (EBA) has published a roadmap setting out how it will deliver its mandates under the revised EU Deposit Guarantee Schemes Directive 2026/804 (DGSD3). The reforms are part of a package seeking to strengthen the EU bank crisis management framework by opening the possibility to use DGS funds in resolution. The EBA will develop 12 regulatory products over the next three years, structured in phased batches, to support implementation of DGSD3 ahead of its application in May 2028. These relate to matters such as:

• Improving depositor information.
• Ensuring faster repayment in both domestic and cross border bank failures.
• The calculation of DGS funds and contributions, and the process to reach the target level.
• Conditions when the cap on contributions of DGS funds to resolution can be lifted.
• Enhancing cooperation between national deposit guarantee schemes and authorities.
• Strengthening stress testing frameworks to ensure crisis preparedness.
• Conditions for the use of DGS in preventative measures.

The UK Financial Conduct Authority (FCA) has published Handbook Notice No. 142 which covers changes on which the FCA consulted on (among other proposals) in its quarterly consultation paper No. 51 and its consultation CP25/37 on targeted clarifications of Handbook materials.

The notice confirms the implementation of changes included in quarterly consultation paper No. 51 in relation to:

• The UK equity transparency regime, which moved provisions from UK RTS 1 to MAR 11A.
• The UK market abuse regime, where clarification has been made by introducing new provisions in MAR 1A.2 confirming where breaches of MAR do not give rise to a private right of action under section 138D of the Financial Services and Markets Act 2000.
• The UK authorised fund regime, with changes to the COLL rules in line with amendments to the revised 2025 statement of recommended practice for authorised funds.

Read more.

The UK Financial Conduct Authority (FCA) has published an updated webpage providing information for firms on motor finance complaints in the context of the ongoing legal challenge to the redress scheme. The FCA notes that there remains uncertainty regarding the scheme's requirements while the legal proceedings are ongoing. The FCA is engaging with the Tribunal and the parties involved in the legal challenge on the possibility of suspending certain elements of the scheme. Firms are reminded to continue carrying out work that can be undertaken now and will be required in all circumstances.

But otherwise, it will take a pragmatic approach and, for the time being, will not require firms to communicate with customers or make payments in accordance with the scheme timetable. Neither will it enforce compliance with the requirement to submit monthly reports. The FCA will keep the position under review as the Tribunal timetable becomes clearer and will engage with lenders and consumer groups on whether further customer communications, scheme preparation measures or contingency planning guidance may be appropriate.

The U.S. Office of Foreign Assets Control (OFAC) and the UK Office of Financial Sanctions Implementation (OFSI) have published joint guidance providing a comparative overview of their respective economic sanctions frameworks. The guidance highlights key similarities and differences across terminology and structure in areas such as sanctions lists, licensing, recordkeeping and reporting requirements. The aim of the guidance is to help private sector firms understand and comply with their obligations under both regimes. The OFSI published a blog, on the same day, to announce the publication and detail its shared objectives with OFAC.

The UK Financial Conduct Authority (FCA) has published a document to help firms understand and prepare for the motor finance redress scheme. The document reflects common queries received by the FCA and is intended to address issues of wider relevance. It should be read in the context of the ongoing legal challenge to the scheme. The FCA notes that it may update the document or take further action in relation to the scheme's rules or guidance as that challenge progresses, and firms should monitor FCA announcements closely.

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/18 as part of its mortgage rule review, proposing targeted reforms to improve access to mortgage lending for first-time buyers and underserved consumers. The proposals follow the June 2025 discussion paper on the future of the mortgage market and the FCA's feedback statement.

The proposals seek to:

• Widen access to interest-only and part interest-only lending.
• Make it easier to raise mortgage finance in later life.
• Lower barriers for firms that want to lend to consumers with irregular income.
• Encourage lenders to take a more individualised approach when assessing the creditworthiness of customers with impairment in their credit history, rather than declining them based on a definition designed for debt consolidation and reporting purposes.
• Lower barriers for firms that want to lend in a foreign currency or to consumers with a foreign income.
• Increase flexibility for borrowers who want bridging finance, which can help break a lengthy sales chain or fund a renovation.
• Increase the scope for firms to offer mortgages with different features and therefore, different risks.

The FCA's proposals take into account the potential for adverse outcomes for some consumers, and also consider the risk that consumers may need to rent for longer if they cannot purchase a home. The deadline for comments is 28 July. Feedback will be considered and a final policy statement is expected in the second half of the year.

The UK Financial Conduct Authority (FCA) has published a response letter (dated 8 June) to a letter from the House of Commons Treasury Committee sent in May, setting out the status of the motor finance redress scheme and the implications of ongoing legal challenges.

The FCA's view is that the scheme remains the quickest and most effective way to deliver redress to affected agreements but confirms that challenges brought by certain lenders and a claims entity will delay implementation. The FCA emphasises that firms must continue preparing operationally and financially, including identifying in-scope agreements and holding adequate capital, while warning of supervisory and enforcement action where preparedness is insufficient. The letter highlights significant concerns about misconduct in the claims management sector, including misleading marketing, multiple representation and potential fraud risks exacerbated by delays, and notes ongoing regulatory intervention and cross-authority cooperation to address these issues. The FCA also welcomes ideas from firms and consumer organisations on how, despite the legal challenges, firms who want to can start paying fair redress now.

Read more.

The UK Financial Ombudsman Service (FOS) has published its response to the UK Financial Conduct Authority's (FCA) consultation on simplifying pensions and investment advice rules. The FOS broadly supports the proposed shift from prescriptive requirements to greater reliance on a more principles-based framework and does not expect this shift to undermine its ability to determine complaints. However, it notes that greater reliance on high-level principles may increase the scope for differing views on how these principles should be applied, making clear regulatory guidance increasingly important. The FOS is also concerned that limited firm engagement on price and value assessments under the consumer duty could make complaint resolution more contentious, and it calls for further FCA guidance, including case studies and examples of good and poor practice.

The FOS further acknowledges that complaints may become more nuanced and consistency will be harder to demonstrate. However, it seeks to address this through close collaboration with the FCA and clear FCA guidance. Overall, it does not expect the reforms to have a material impact on its complaint-handling role or outcomes. The FOS will continue to monitor complaints in this area and share insights with the FCA.

HM Treasury has published a call for evidence for the independent review into access to banking services, assessing the impact of the decline in face-to-face services across the UK. The review will consider: (i) which services are important or essential for customers to be able to access; (ii) which groups of customers may need access to in-person banking services; and (iii) whether the decline in access is causing detriment to customers, and the materiality of the detriment caused. It will focus on those who require access (such as vulnerable customers), rather than those who simply desire or prefer in-person banking services. It will also consider the needs of both individual retail customers and organisations, including small businesses, non-profit and community groups.

The review is limited to banking services that currently lack statutory protections and excludes cash withdrawal and deposit services, which are already covered by legislation. The deadline for comments is 20 July and the evidence gathered will help inform the chair's recommendations to government.

The Digital Regulation Cooperation Forum (DRCF) has published a call for input under its "consumer interest and AI" project, project, seeking views on consumer attitudes to, and the management of risks arising from, generative and agentic AI. The call for input is structured in two phases. The first phase focuses on consumer attitudes to the risks associated with generative and agentic AI adoption, including what risks consumers feel they may be exposed to, and to what extent they are, and are not, prepared to tolerate risks in exchange for benefits of AI adoption. The deadline for responses on the first phase is 3 July. The second phase focuses on the tools, governance frameworks and regulatory approaches available to policymakers, regulators and firms to mitigate AI-related harms and deliver effective consumer protection. The deadline for responses on the second phase is 2 September. The DRCF states that responses will inform its ongoing policy work and broader engagement, including future workshops and its Responsible AI Forum, with a view to shaping the debate on proportionate, outcomes-focused regulation of AI across sectors. It does not plan to provide advice or guidance.

The UK Financial Conduct Authority (FCA) has published a press release highlighting that some firms, when approving financial promotions, should be doing more to protect consumers in line with the consumer duty. The FCA carried out a review that assessed ten authorised firms that approve financial promotions for businesses which are not authorised by the FCA, looking at firms who were approving financial promotions for buy-now, pay-later (also now referred to as deferred payment credit), crowdfunding and corporate finance firms. The new rules on authorised firms approving promotions for unauthorised firms came into force on 7 February 2024. The FCA's review focussed on sampling promotions that had been approved since the firm was authorised.

The FCA found that the strongest firms were applying the consumer duty from the start of their processes and were able to make sure that every promotion approved was accurate, clear and reached the right audience. However, some firms approved adverts with unsubstantiated claims or allowed retail investors to see promotions intended for professional clients. In some cases, firms relied on third-party templates instead of doing the checks themselves. As a result of the FCA's work, one firm has already had to conduct a remediation exercise, and some websites have been blocked to retail customers. The FCA will continue to monitor compliance and hold firms to account if they fall short.

The House of Commons Treasury Committee has published a letter addressed to the UK Financial Conduct Authority (FCA) seeking further clarification on its motor finance redress scheme. This is following the FCA's announcement that the scheme is subject to legal challenges. The letter raises questions in relation to the consequences of the legal challenges, the additional administration caused by the legal challenges, the potential impact of any changes needed as a result of the challenges, the conduct of market participants more broadly, and the FCA's powers.

More specifically, key points of examination include: (i) current advice to consumers, the impact on complaint handling and compensation timelines, and potential risks such as fraud; (ii) details on the costs incurred by the FCA to date, additional costs arising from the litigation, and any impact on ongoing regulatory workstreams; (iii) how changes to or failure of the scheme could affect consumers, firms and the UK Financial Ombudsman Service; (iv) how lenders, claims management companies and law firms have responded to the scheme and the effect of their conduct on consumers; and (v) the adequacy of the FCA's powers to implement a compensation scheme and any lessons for Parliament. The Committee has requested the FCA to respond by 4 June.

The UK Financial Conduct Authority (FCA) has published a notice and terms of reference for a market study into claims management services. The study will examine the causes of potentially harmful practices, their impact on competition and consumer outcomes, and whether intervention is required. It will cover practices observed by FCA-regulated claims management companies (CMCs) and lead generators, as well as legal professionals. The FCA will be working closely with the Solicitors Regulation Authority as it carries out the market study.

The work will focus on claims management services provided in relation to financial services and financial products claims and housing disrepair claims. The deadline for comments is 19 June, with information requests to be issued to firms from June. The FCA intends to share early findings and consult on possible measures later this year, and will publish its final report by 19 May 2027.

The Financial Services and Markets Bill, first introduced in the King's speech as the "Enhancing Financial Services Bill", has had its first reading in the House of Lords. The text of the Bill was published with accompanying explanatory notes. It proposes significant amendments to primary legislation, including the Financial Services and Markets Act 2000, the Consumer Credit Act 1974 and the Financial Services (Banking Reform) Act 2013, as part of the government's growth and competitiveness strategy for the financial services sector.

Key proposals include: (i) modernising the Consumer Credit Act 1974 and reforming the UK Financial Ombudsman Service; (ii) consolidating the regulatory framework with the abolition of the UK Payment Systems Regulator; (iii) improving the operational effectiveness of the UK Financial Conduct Authority and the UK Prudential Regulation Authority; (iv) creating a new 'provisional licences' authorisation regime; (v) amendments to the appointed representatives regime including a requirement for principals to have specific permission to act as principal; (vi) creating a framework for HM Treasury to establish overseas recognition regimes for any financial services activity; (vii) reducing the burden of the Senior Managers and Certification Regime including repealing rules on the senior manager statements of responsibilities and the certification regime; (viii) updating the statutory framework underpinning the ring-fencing regime; and (ix) reforming the supervision of anti-money laundering / counter-terrorism financing.