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 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 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 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 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 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.

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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.

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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 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.

HM Treasury (HMT) has published a policy statement on the reform of the Consumer Credit Act 1974 (CCA), setting out its response to the phase 1 consultation. HMT confirms plans to modernise the regime by aligning it with the Financial Services and Markets Act 2000 (FSMA) and transferring much of the detailed conduct regulation to UK Financial Conduct Authority (FCA) rules. The original proposals involved a phase 2 consultation; however, HMT considers that it has sufficient evidence to proceed without a further consultation. The related legislative proposals are in the Financial Services and Markets Bill which was published this week, including an enabling power for HMT to make secondary legislation on the transitional provisions to support a smooth transition.

The FCA rules will not replicate the CCA exactly but will be designed in line with the FCA's objectives and existing framework, including the consumer duty. Certain provisions will remain in legislation where necessary to preserve key rights, or where they cannot be replicated due to complexity. The government intends to repeal most prescriptive CCA information disclosure requirements and replace them with FCA rules (subject to consultation) and statutory sanctions, such as unenforceability and disentitlement to interest and fees, in favour of the FCA's supervisory and enforcement framework, but retain criminal offences as a deterrent.

The FCA has also published a statement setting out its approach to CCA reform and highlighting some of the existing rights and protections it will consider as part of its policy work.

For more detail on the reforms, you may wish to read our blogpost titled "Phase 2? We don't need phase 2 where we're going...".

The UK Prudential Regulation Authority (PRA) has issued a Dear CEO letter on innovations involving deposit-takers, e-money and regulated stablecoins. The letter supersedes the 2023 letter and provides clarification in light of recent developments including the UK cryptoassets regulatory framework. It should be read alongside the PRA's Dear CEO letter on the prudential treatment of banks' cryptoasset exposures.

The PRA's core expectations remain unchanged but the letter clarifies how firms should manage risks arising from innovation, especially as regards retail customers. In particular, the letter confirms that while deposit-takers may innovate within deposit structures (including tokenised deposits), any issuance of e-money or stablecoins within groups should take place through separate, non-deposit-taking and insolvency-remote entities, with clearly distinct branding and presentation. This should be supported by disclosures, warnings, on-boarding, and customer education, but should not be relied upon as the sole means of mitigating the risk of confusion.

Read more.

HM Treasury has announced the launch of an independent review into access to banking, assessing the impact of declining face to face banking services across the UK. This is in light of the shift towards digital banking and ongoing bank branch closures. The review will gather evidence on the real world effects of reduced in person services, identify affected groups and communities (including vulnerable consumers and small businesses), and consider whether further action is required to safeguard access to banking. Its findings and recommendations, expected by October, will inform the government's proposed powers to intervene where necessary to protect access to banking services. The announcement is accompanied by terms of reference which set out the review's scope and objectives.

The UK Financial Conduct Authority (FCA) has announced a review into how investment firms support bereaved customers, following research indicating that only 47% felt they received adequate support. The review will focus on firms advising on, managing, or administering investments (including platforms, advisers and wealth managers), and will assess the end-to-end customer experience from notification of a death through to the settlement or transfer of investments. In particular, the FCA will examine firms' communication practices, treatment of vulnerable customers, service standards and handling of fees on bereaved accounts. The initiative builds on previous FCA findings where bereaved customers experienced delays, unclear processes and inconsistent support, and forms part of the FCA's broader consumer duty and consumer investments priorities. The FCA will begin contacting selected firms this month and intends to publish its findings, including examples of good practice and areas for improvement, later in the year.

The UK Financial Conduct Authority (FCA) has published a statement providing an update on the legal challenges to its motor finance redress scheme. The FCA confirms that, despite ongoing litigation (with a hearing unlikely before October), it continues to view the industry-wide scheme as the quickest and most effective route to deliver fair compensation and intends to defend it. It will provide a further update as soon as possible. In the meantime, firms are expected to continue preparatory work for implementation, including: (i) identifying relevant complaints; (ii) gathering data on commission arrangements and disclosure practices; (iii) working with claims companies to resolve instances where consumers are represented by more than one party; (iv) cooperating with the UK Financial Ombudsman Service (FOS) on any existing complaints that have been referred to it; and (v) submitting implementation plans (without formal attestations required) by 12 May. At the same time, the FCA is also considering whether, where complaints include both elements within the scheme and elements unrelated to motor finance commission, firms should progress the unrelated elements. Complaints that fall entirely outside the scope of the scheme should continue to be progressed in the usual way.

Read more.

The UK Financial Conduct Authority (FCA) has published a statement announcing it is launching a review of the claims management market, prompted by concerns that some claims management companies (CMCs) and law firms are delivering poor consumer outcomes. The review will examine the root causes of poor practices across the market, including aggressive marketing, misleading advertising, unfair exit fees, and instances where consumers are being signed up without their consent or by multiple firms, leading to confusion and delaying compensation. While these issues in relation to motor finance claims have been brought into sharper focus, the FCA has also noted concerns about the handling of other claims.

Working with the Solicitors Regulation Authority and other regulatory partners, the FCA will examine: (i) whether consumers receive fair value, and whether existing price caps are still fit for purpose; (ii) financial incentives and whether these create potential conflicts of interest; and (iii) review whether the full end-to-end consumer journey, including lead generation, marketing and advertising, delivers good consumer outcomes. The review will also consider whether different approaches across different regulatory regimes affect firm behaviour and if some firms are failing to secure the appropriate permissions. The FCA expects full and open cooperation from all firms in the review and indicates that it, together with its regulatory and enforcement partners, may take robust action where this is not the case. It will also make recommendations to the government for any potential legislative reform, including whether CMCs and law firms should be subject to stronger compensation mechanisms if they cause harm.

The UK Financial Conduct Authority has announced the creation of a joint regulatory taskforce—with the Solicitors Regulation Authority, Information Commissioner's Office and Advertising Standards Authority—to tackle poor practices in the handling of motor finance claims by certain claims management companies and law firms. The taskforce will coordinate intelligence sharing and take targeted, coordinated actions using the full extent of their powers to mitigate harm to consumers. Regulatory actions will be progressed, with outcomes communicated jointly, signalling a unified regulatory response and clear expectations for market behaviour. The taskforce will focus on addressing misleading advertising and sign-up processes, meritless claims, multiple representation and unfair exit fees. It will also look at firms' financial and operational resilience including, but not limited to, the quality and integrity of accounting and audit practices. The taskforce will run for a minimum of six months followed by a progress review.

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

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

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

The UK Financial Conduct Authority (FCA) has published Handbook Notice No. 140, outlining amendments to the FCA Handbook resulting from the following statutory instruments:

• Financial Services Compensation Scheme (FSCS) (Management Expenses Levy Limit 2026/2027) Instrument 2026, entering into force on 1 April. This amends the FEES manual to reflect the approved levy cap for 2026/27.
• Short Selling Rules Sourcebook Instrument 2026, entering into force on 13 July. This introduces a new short selling sourcebook, which replaces the assimilated EU short selling regime and establishes a new UK framework.
• Individual Accountability (SMCR Review) Instrument 2026, with most changes having entered into force on 24 April while certain provisions come into force later in July and September. This implements the Phase 1 reforms of the Senior Managers and Certification Regime, aimed at improving proportionality and efficiency.

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

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

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The final report from the Risk Warnings Review has been published. The report was commissioned by HM Treasury as part of the Leeds Reforms and sets out recommendations to improve the communication of investment risk to retail consumers.

The report advises moving away from the widespread use of standardised risk warnings which may be misunderstood by less experienced investors and disregarded by more experienced investors. Instead, it recommends rebalancing risk communications towards clearer, more contextual explanations of how investments can rise and fall, presented alongside potential benefits and relevant time horizons, which are seen as more likely to encourage positive actions.

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The UK Financial Conduct Authority (FCA) has published an updated webpage with newly issued directions, setting out the process for firms to register for the temporary permission regime (TPR) for deferred payment credit (DPC), formerly known as buy now, pay later. The directions came into force the same day.

DPC will be regulated by the FCA from 15 July ("regulation day"). Firms which were carrying on DPC activity on 15 July 2025 may continue operating under the TPR while their authorisation applications are considered. To enter the TPR, firms must notify the FCA using the prescribed form during the notification window, which runs from 15 May to 1 July, and pay the registration fee of GBP280. Firms granted temporary permission will be able to submit their substantive authorisation applications from 8 July.

Firms that were not carrying on DPC activity on 15 July 2025, or do not intend to continue after regulation day, do not need to register. Firms without authorisation or temporary permission may also continue to service DPC agreements that were taken out before regulation day as these agreements will remain exempt.

The UK Financial Ombudsman Service (FOS) has published its response (dated February) to the FCA's Mills Review on the long‑term impact of AI on retail financial services. The response focuses on two areas: the increasing use of AI by consumers and professional representatives in complaint submissions; and financial firms' use of AI.

The FOS observes an increase in consumers using AI, noting that AI can help consumers organise complaints, overcome language barriers and present clearer cases—especially consumers who are vulnerable and have difficulty expressing themselves in writing. However, there are also concerns where generative AI is used excessively or inaccurately, leading to lengthy, incoherent submissions and "hallucinations". The FOS reports early indications from a small sample analysis that AI may have contributed to around 35% of responses to initial assessments, which can lead to a disproportionate amount of time spent on verifying accuracy. The FOS welcomes the FCA's focus on AI in retail financial services and calls for consistent guidance to firms and consumers as AI use evolves in the complaint process, offering to provide its own insights to support this work.

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The UK Financial Conduct Authority (FCA) and UK Prudential Regulation Authority (PRA) have published consultation papers (CP26/12 / CP6/26), proposing changes to the loan to income (LTI) flow limit rule in mortgage lending. The regulators propose to remove the firm level 15% cap on high LTI lending (mortgages with an LTI ratio of 4.5 or above), while retaining the 15% limit in aggregate across the market, giving individual lenders greater flexibility to set their own high LTI strategies. This follows interim measures introduced in July 2025, under which PRA firms were permitted, via a modification by consent, to disapply the firm level cap, while FCA firms could seek individual guidance to lend above 15%, pending completion of the policy review.

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The UK Financial Ombudsman Service (FOS) has announced that the UK Financial Conduct Authority (FCA) has confirmed increases to FOS' award limits for the 2026/27 financial year, in line with inflation measured by the Consumer Prices Index. From 1 April, the maximum award the FOS can require a firm to pay will increase to GBP455,000 for complaints relating to acts or omissions occurring on or after 1 April 2019 (an increase of GBP10,000 on the previous year), and to GBP205,000 for complaints relating to acts or omissions before that date (a rise of GBP5,000 over the previous year). The different limits set annually continue to apply depending on when the relevant complaint was brought to the FOS, with more information available on the FOS webpage on understanding compensation.

The UK Financial Ombudsman Service (FOS) has published its final plans and budget for 2026/27, setting out its priorities for the next 12 months. The FOS expects to receive 199,000 new complaints in 2026/27 (down from nearly 306,000 in 2024/25 and around 210,000 in 2025/26), a decline which it attributes to fewer motor finance commission cases and fewer complaints from professional representatives. It does expect an increase in credit card and consumer credit complaints, however, because of cost of living pressures. It plans to resolve 266,500 cases over the year (covering both new and existing cases).

On its funding, the FOS states that while case fees and levies were held flat for two years at significantly reduced levels, increases are now needed due to inflationary challenges, reduced reserves and the cost of implementing reforms. Therefore, as consulted on in its November plans and budget consultation, from 1 April it will set the compulsory levy at GBP86 million, charge respondent firms GBP680 per case and introduce charges for professional representatives—GBP80 for cases they refer that are found in favour of the consumer and GBP260 where the case is found in favour of the firm (in which case the firm's case fee reduces to GBP500).

The UK Financial Conduct Authority (FCA) has published policy statement PS26/3 on the motor finance redress scheme, following the UK Supreme Court ruling on 1 August 2025. This follows the October 2025 consultation, which we cover in more detail in our blogpost titled "FCA consultation on motor finance redress scheme". Following feedback, the FCA will proceed with the scheme although with several material changes, including:

• Splitting the originally proposed single scheme into two separate schemes, covering agreements from 6 April 2007 to 31 March 2014 and from 1 April 2014 to 1 November 2024, to mitigate the risk of a legal challenge delaying redress for later-period consumers. This means if the earlier period is subject to a legal challenge, redress for consumers with agreements from April 2014 shouldn't be delayed.
• Tightening eligibility criteria so only consumers treated unfairly are compensated. Inadequate disclosure of one or more of the following will give rise to a presumption of unfairness: (i) discretionary commission arrangements (DCAs), where the broker could adjust the interest rate offered to a customer to obtain a higher commission; (ii) a high commission arrangement; and (iii) certain contractual ties that gave a firm exclusivity or a right of first refusal, except where the lender can prove there were visible links between the lender, manufacturer and franchised dealer.

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The UK Financial Conduct Authority (FCA) has announced the launch of a joint regulatory taskforce with the UK Solicitors Regulation Authority, Information Commissioner's Office and Advertising Standards Authority to tackle poor practices in motor finance claims handling by some claims management companies and law firms. The taskforce will share intelligence and take coordinated enforcement action to mitigate harm to consumers, including by tackling unsolicited and misleading advertising, meritless claims, multiple representation and unfair exit fees. The announcement comes as the FCA published its final policy statement on the motor finance redress scheme. 

The UK Financial Conduct Authority (FCA) and the Information Commissioner's Office (ICO) have published a joint statement clarifying regulatory expectations on the use and sharing of vulnerability related data. The statement explains how firms should approach this in delivering good outcomes for retail consumers under the consumer duty, while complying with UK data protection law.

Firms are expected to understand and identify indicators of vulnerability within their customer base, design products, communications and support that respond appropriately to those needs, and put in place systems that allow consumers to disclose relevant circumstances so that support can be delivered consistently and fairly. Firms are also expected to apply and demonstrate compliance with the UK GDPR principles when processing customers' personal information.

In relation to sharing data across distribution chains, manufacturers (such as lenders and payment networks) and distributors (such as intermediaries and financial advisers) are expected to work collaboratively and share relevant vulnerability‑related information, where necessary to avoid foreseeable harm. They are also expected to apply ICO's data sharing code of practice on how to share personal information in compliance with data protection law.

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The UK Financial Conduct Authority (FCA) has published Handbook Notice No. 139, outlining amendments to the FCA Handbook resulting from the following statutory instruments:

• Redress Reforms Instrument 2026, which partially entered into force on 17 March with the remaining provisions coming into force on 1 June. This clarifies when firms should report emerging issues to the FCA and to improve the operational efficiency of the UK Financial Ombudsman and the Financial Services Compensation Scheme by streamlining processes and reducing the operational costs ultimately met by levy-paying firms.
• Notification of Third Party Arrangements and Operational Incident Reporting Instrument which comes into force on 18 March 2027. This makes changes to the Handbook to enhance incident and third party risk management, strengthen firms' operational resilience and minimise harm.

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The UK Financial Conduct Authority (FCA) has published its annual work programme for 2026/27 setting out its planned activity for the second year of its five-year strategy. The programme is structured around the following four strategic priorities:

• Being a smarter regulator: to improve regulatory efficiency and proportionality, the FCA will continue to invest in digital, data and AI capabilities, reduce administrative burdens by simplifying rules and streamlining data returns (including removing three regular returns in April), and improve the authorisation process by further reducing authorisation timelines and continuing to report against new, shorter voluntary targets. In a press release published on the same day, the FCA announced it is developing a new internal AI-enabled authorisation tool, integrated into its existing systems. The FCA will also use generative AI to review documents received from firms, which, following successful testing, it will begin rolling out more widely across authorisations and supervision.

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The UK Financial Conduct Authority (FCA) has published consultation paper CP26/10 on simplifying rules relating to providing pensions and investment advice to consumers. With the targeted support rules now in place, the FCA's focus is on completing its outstanding policy work so that the market can develop and deliver a wide range of support for consumers. The consultation delivers on two separate commitments: (i) to consolidate, simplify and reframe the advice rules; and (ii) to review the FCA's existing rules relating to financial advisers' ongoing services. These changes will complement targeted support and enable firms to provide a range of services to meet different consumer needs.

Key proposals include:

• Consolidating the suitability requirements in the Code of Business Sourcebook (COBS) 9 and COBS 9A into one set of common rules and expectations.
• Clarifying the existing flexibility in the FCA's suitability rules to offer different advice services and different recommendations to different clients, by replacing the rule requirement to consider "necessary" information with an expectation that advisers consider "sufficient" information when assessing suitability.
• Clarifying that firms do not always need to assess a customer's knowledge and experience before making a recommendation, where the type of product the firm envisages recommending is one reasonably identified as having a target market that includes clients with no experience in investing.

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The UK Financial Conduct Authority (FCA) has published a statement confirming the timing of its announcement on its planned approach to the motor finance redress scheme, initially consulted on in October 2025. The statement follows an earlier FCA announcement on 4 March, in which it indicated that it was proposing to make several changes to the planned scheme. The FCA states that it intends to set out its approach shortly after markets close on Monday 30 March.

The UK Financial Conduct Authority (FCA) has published a new webpage setting out good and poor practice to support firms when designing consumer segments under the new targeted support regime. The FCA emphasises that firms have flexibility in how they comply with the FCA's rules and that these examples are illustrative only; they should not be treated as a template nor as an exhaustive list of the things firms should consider when designing their segments.

Key points to note include:

• Defining common characteristics: firms must judge how to design consumer segments at a sufficiently granular level while not comprehensively considering the consumer's circumstances or characteristics. The complexity of a situation is likely to be relevant to the type and/or number of common characteristics needed to ensure that segments are sufficiently granular to ensure a ready-made suggestion is suitable for an individual in the consumer segment. More complex situations will usually require a higher number, or more detailed set, of common characteristics to define suitable ready-made suggestions. Where a firm cannot define a suitable suggestion without undertaking a comprehensive consideration of a consumer's circumstances or characteristics, it is likely that the consumer will be in a situation that cannot be addressed through targeted support.

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The UK Financial Conduct Authority (FCA) has published a call for input seeking views on how its regulatory framework can better support small- and medium-sized enterprises (SMEs) in accessing finance. The FCA considers this part of its commitment to make sure businesses have better access to capital and its strategic priority of supporting growth. The work is intended to help the FCA design its regulatory approach, prioritise future work and complement the joint initiatives being undertaken by HM Treasury with the Bank of England on access to finance for "high potential growth firms" and by the Department for Business and Trade on demand and supply side barriers for SME finance through their call for input.

The FCA aims to understand how regulation affects SME access across debt, equity, hybrid and alternative finance, including any regulatory barriers, opportunities for improvement and sector specific challenges, particularly in high growth sectors. While focused on regulated products and services, the FCA will also consider impacts on services offered to SMEs which are outside the regulatory perimeter but offered by regulated firms.

The FCA seeks views from both SMEs on their experience of applying for finance, as well as from finance providers and distributors on any regulatory blockers or opportunities they have seen. The deadline for responses is 17 April. The FCA will engage with SME representatives and trade associations in March, hold a stakeholder roundtable in May, and later in 2026 publish a summary of insights from this engagement and research commissioned into the approach in comparable international jurisdictions, together with an update on next steps. Potential outcomes could include a review of the FCA's rules or clarifying specific requirements.

The UK Financial Conduct Authority (FCA) has published its regulatory priorities report for the consumer finance sector. These reports replace the FCA's previous portfolio letters and aim to provide a clearer and more consistent articulation of regulatory expectations. The FCA highlights that the credit sector is one of the UK's most varied markets, fuelling consumption and supporting economic growth. While consumer credit lending continued to grow throughout 2025 and interest rates have eased slightly, household budgets remain under pressure. This reinforces the need for responsible lending and early, effective support for consumers in financial difficulty.

The FCA sets out three priority areas for the next 12 months:

• Access to credit that meets consumers' needs: Firms are expected to lend responsibly, providing well-designed credit that offers fair value and meets consumers'. The FCA encourages firms to consider how to support consumers excluded from credit—whether through innovation, new product design, budgeting tools, eligibility checks for grants and benefits, or appropriate referrals.

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The UK Financial Conduct Authority (FCA) and the UK Financial Ombudsman Service (FOS) have jointly published CP26/9 on modernising the redress system. It should be read alongside HM Treasury's (HMT) confirmation of its final plans for reform of the FOS, published on the same day.

CP26/9 sets out in Chapter 2 proposed measures possible within the existing framework, including initial implementation of the new registration stage, amendments to the dismissal grounds and proposed updates to the 'fair and reasonable' test. It also serves as a policy statement finalising elements of CP25/22 including the criteria for considering whether an issue is a mass redress event, the introduction of a lead complaints process, guidance clarifying when firms should report emerging issues to the FCA and amendments to COMP and DISP sourcebooks intended to improve the Financial Services Compensation Scheme's operational efficiency.

The amendments to COMP and minor amendments to DISP 1 came into force on 17 March. Other rule changes stemming from CP25/22 come into force on 1 June. The deadline for comments to the proposals in Chapter 2 of CP26/9 is 11 May.