The House of Lords Financial Services Regulation Committee has launched a call for evidence as part of its inquiry into regulatory sandboxes in UK financial services. The inquiry will examine the purpose, effectiveness and wider impact of regulatory sandboxes, including the UK Financial Conduct Authority (FCA)'s Regulatory Sandbox and Digital Sandboxes, as well as the Digital Securities Sandbox operated jointly with the Bank of England. The Committee is seeking views on whether sandboxes promote innovation, offer wider public benefits and value for money, shape markets through their selection of firms, and help to produce good regulatory policy, particularly for emerging technologies. The inquiry will also consider firms' experiences of participation, the use of sandboxes to test agentic AI, and how the UK's approach compares with those adopted in other jurisdictions and sectors.

The UK Financial Conduct Authority (FCA) has published policy statement PS26/18, setting out its final perimeter guidance on the new regulated cryptoasset activities introduced under the upcoming UK cryptoassets regime (PERG 18). The guidance seeks to clarify the scope of those activities, the regulatory perimeter, and when authorisation and permissions may be needed.

Following the April consultation, the FCA has proceeded largely as consulted on, with a number of targeted clarifications following feedback, including on the application of the "by way of business" test, the territorial scope of the regime, the distinction between qualifying cryptoassets and specified investment cryptoassets, the treatment of cryptoassets that are solely records of rights or value and of hybrid token structures, and the distinction between activities that do amount to arranging and activities that are unlikely to do so.

The government has also laid a further statutory instrument (SI) before Parliament amending the Cryptoasset Regulations 2026. The FCA states that the guidance in PS26/18 does not yet reflect the new SI. The FCA plans to consult in early Q4 on further PERG amendments addressing the new SI, with final amended guidance expected in early 2027.

The Financial Services and Markets Act 2000 (Cryptoassets) (Miscellaneous Amendments) Regulations 2026 were laid before Parliament, accompanied by a draft explanatory memorandum. The Regulations were previously consulted on in April and make targeted amendments to the UK cryptoassets regulatory framework established by the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026.

Amongst other amendments and additions, the Regulations:

• Exclude activities involving UK qualifying stablecoins by an authorised person under FSMA for the activity of issuing such stablecoins from the regulated activities of dealing in qualifying cryptoassets as principal, dealing as agent, and arranging deals in qualifying cryptoassets.
• Exclude the temporary holding of UK qualifying stablecoins from the cryptoasset safeguarding activity, where they are being held in connection with a payment transaction.
• Clarify the regulatory perimeter for issuing UK qualifying stablecoins and exclude backing asset arrangements for those stablecoins from the relevant safeguarding regulated activities.
• Introduce targeted exemptions for certain cryptoasset proprietary trading, market making, technical services, and central securities depository activities.
• Make related changes to the financial promotion regime, including clarifying the regulatory perimeter for stablecoin issuance and backing asset arrangements and mirroring the exemptions in the FSMA (Regulated Activities) Order 2001 for certain proprietary trading, market making and central securities depository activities.
• Create a new controlled activity for the purposes of the financial promotion restriction (issuing qualifying stablecoin) and consequently a new controlled investment (qualifying stablecoin).
• Bring forward the commencement of provisions that provide that assets backing qualifying stablecoins are not treated as collective investment schemes, alternative investment funds or electronic money.

The changes are intended to remove overlapping or disproportionate regulatory requirements and unnecessary regulatory barriers, while maintaining high standards of regulation for activities that present material risks to consumers or market integrity. Firms excluded from regulation by this instrument continue to have obligations under other legislation, including anti-money laundering requirements.

The UK Financial Conduct Authority (FCA) has published a call for input on whether tokenisation could improve the trading, transfer, mobilisation and use of gold as collateral while maintaining market integrity and consumer protection. The call follows feedback received in response to the FCA's and Bank of England's joint call for input on tokenisation, recognising gold as a significant potential use case given the international strength of the London spot gold market, and the increase in tokenised gold and other gold-related products in recent years.

In terms of scope, the FCA acknowledges a number of key questions around the regulatory perimeter and the status of gold as a commodity, and states that its objective is not to regulate segments of the gold trading market that fall outside the FCA's current remit. The call focuses on gold products that confer ownership rights in underlying physical gold which are clearly defined and have reliable redemption arrangements.

The call for input considers the legal, regulatory and operational conditions needed to support the safe and effective use of tokenised gold, including its incorporation in wholesale market use cases, and the development of industry-led market standards to improve interoperability. Like many recent initiatives from the UK government and regulators, it highlights the increasing momentum behind the development of tokenised asset markets and the importance that industry places on unlocking the use of tokenised securities and commodities in particular for collateral and settlement purposes. As tokenised gold may engage multiple regulatory regimes depending on the use case and participants involved, the FCA is seeking views on areas that may present challenges.

In addition to collateral and settlement, another specific area the FCA seeks feedback on is whether uncertainty around the collective investment scheme and alternative investment fund regimes regulatory perimeter may affect the development of certain use cases for tokenised gold, and whether regulatory clarification or alternative policy measures may be appropriate. The regulator raises two policy options that could be pursued: the first being clarification of the existing regulatory perimeter; and the second being a potential targeted exemption from those regimes for the benefit of gold market infrastructure.

The deadline for comments is 23 October. Alongside this call for input, the FCA, together with the Bank of England, published a feedback statement setting out their joint ambition to support tokenisation in the UK's wholesale financial markets. We cover this in more detail in the securities section below.

The UK Financial Conduct Authority (FCA) and the Bank of England (BoE) have published a feedback statement on tokenisation in UK wholesale financial markets, summarising responses to their May joint call for input. Respondents were largely supportive of the authorities' vision and recognised that industry and regulators would need to work together to tokenise wholesale markets. The most frequently raised themes included:

• A desire for faster progress, with clear timelines and implementation milestones in the forthcoming tokenisation roadmap.
• A move beyond sandboxes and pilots towards full production, scale and permanence.
• Clarity on the prudential treatment of tokenised assets and the eligibility of tokenised assets as collateral (in both central bank operations and for central clearing at central counterparties), with tokenised Money Market Funds frequently mentioned by buy-side firms.
• Access to insolvency protections under the settlement finality regulations for blockchain-settled transactions, and the use of stablecoins as settlement assets.
• Prioritisation of regulatory work on interoperability, encompassing legal, regulatory and cross-jurisdictional dimensions.
• A preference for aligning custody rules for relevant specified investment cryptoassets (RSICs) broadly with CASS 6, with targeted overlays for blockchain-specific risks such as private key management.

The FCA and BoE confirm they will publish a tokenisation roadmap later in the year setting out detailed workstreams and target dates. Key commitments include progressing work on tokenised collateral, with a supervisory statement and discussion paper on central counterparties collateral due later this year, and consulting on rules for the safeguarding of RSICs in the first half of 2027.

Alongside the feedback statement, the FCA has issued a call for input on tokenised gold.

Commission Delegated Regulation (EU) 2026/1221 was published in the Official Journal of the European Union (OJ). The Regulation makes targeted amendments to the EU prudential framework for banks' market risk, specifically the Fundamental Review of the Trading Book (FRTB) under the Capital Requirements Regulation (CRR).

While most Basel III reforms have applied since 1 January 2025, the FRTB has been deferred on several occasions, most recently to 1 January 2027 in response to uncertainty around implementation timelines and potential deviations from the Basel standards in other major jurisdictions.

This Delegated Regulation sets out amendments intended to support a level playing field for EU banks competing internationally in trading activities by offsetting the negative capital impact of the FRTB for a period of three years – until 31 December 2029, in aspects of the framework where deviations in other jurisdictions have been identified or are likely, including:

• The profit and loss attribution test (PLAT): to allow banks to calculate the PLAT only for monitoring purposes during the three-year period, with no direct impact on the own funds requirements.
• The non-modellable risk factors (NMRFs) framework: to modify the conditions on the number of verifiable price observations needed for a risk factor to be considered modellable and hence be capitalised under the expected shortfall calculation.
• Internal default risk model requirements: applying a multiplier equal to 0 to the probability of default of issuers/obligors that attract a 0 % risk-weight under the alternative standardised approach (allowing banks under the internal model approach to treat exposures to those issuers identically to how those exposures would be treated under the alternative standardised approach).
• The expected shortfall risk measure and the stress scenario risk measure calculations: allowing banks under the alternative internal model approach to temporarily calculate and disclose the values of the regulatory expected shortfall risk measure and stress scenario risk measure on a weekly rather than daily basis.
• Exposures to Collective Investment Undertakings: allowing and specifying thresholds for a partial look-through, while requiring a more conservative treatment for the part that cannot be looked through.
• The residual risk add-on (RRAO): applying multipliers for instruments that have future realised volatility as an underlying, that are options that can be exercised on a finite number of dates, or that are options on the difference between two constant maturity swap rates denominated in the same currency, where those instruments attract an RRAO charge only for those reasons.
• Default risk under the alternative standardised approach: recognising economic hedges between an equity derivative and a cash position of the same underlying.
• The output floor: limiting the phase-in of the own funds requirements for market risk under the alternative standardised approach, and allowing banks that apply the simplified standardised approach to similarly benefit from the phase-in.
• Additional proportionality for banks with small trading book businesses: allowing use of the simplified standardised approach for their non-trading book positions subject to foreign exchange risk and commodity risk.
• Limiting capital impacts: allowing credit institutions adversely impacted by the implementation of the new market risk rules, even after applying the targeted amendments, to limit that capital impact for the three-year period.

The Regulation entered into force on 12 September, with the amendments applying from 1 January 2027.

The European Commission (EC) has adopted a Delegated Regulation amending the regulatory technical standards (RTS) laid down in Commission Delegated Regulation (EU) 2018/1108 under the Fourth Anti-Money Laundering Directive (Directive (EU) 2015/849) (MLD4). The amending RTS set out the criteria for the appointment of central contact points for cryptoasset service providers (CASPs) and rules on their functions. The RTS amend Delegated Regulation (EU) 2018/1108 to extend its application to CASPs, reflecting amendments made to MLD4 by the Wire and Cryptoasset Transfer Regulation ((EU) 2023/1113), which extended the scope of MLD4 to cover CASPs. The RTS set out the criteria for determining the circumstances where CASPs should appoint a central contact point, a local representative in a host European Union country when operating across borders, and the functions that the central contact point should perform.

The amending Delegated Regulation is based on the European Banking Authority's (EBA) final draft RTS published in April 2025. The Council of the EU and the European Parliament will scrutinise the Delegated Regulation. If neither object, it will be published in the Official Journal of the European Union and will enter into force 20 days following its publication.

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 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 Financial Action Task Force (FATF) has published a targeted report on the regulatory challenges posed by decentralised finance (DeFi). The report highlights the rapid growth of DeFi and its increasing exploitation by illicit actors, including fraudsters, ransomware operators, professional money laundering networks and proliferation financing actors. The report found that approximately 93% of surveyed reporting jurisdictions have not yet implemented the FATF Standards in relation to qualifying DeFi arrangements and that only two jurisdictions have licensed or registered a DeFi arrangement in practice. FATF reiterates that DeFi arrangements fall within scope of the FATF Standard covering virtual assets—Recommendation 15—where a natural or legal person exercises control or sufficient influence over the arrangement.

The report emphasises that effective implementation of the FATF Standards in the DeFi context requires a functional and risk-based approach. It identifies a list of on-chain and off-chain indicators of control and sets out recommendations to help jurisdictions, as well as financial institutions, virtual asset service providers, and DeFi arrangements aimed at protecting the integrity of the financial system, while also preventing and mitigating the criminal abuse of the DeFi ecosystem. It also includes case studies of good practice. The report emphasises that jurisdictions with more significant DeFi activity should allocate more resources to understanding, supervising and developing approaches to mitigate the illicit finance risks associated with DeFi arrangements.

HM Treasury has published the recommendations of the UK-U.S. Transatlantic Taskforce for Markets of the Future, to strengthen cooperation between the UK and U.S. on digital assets and capital markets. In the digital assets space, the recommendations include establishing an industry-led group to test and share best practices on cross-border tokenisation use cases, identifying common approaches to the regulatory treatment of tokenised assets, supporting the development of a cross-border stablecoin market, and coordinating on international standards for the prudential treatment of cryptoassets at the Basel Committee on Banking Supervision. Alongside the recommendations, the UK and the U.S. published a joint statement on stablecoins, underscoring a joint commitment to the digitalisation of finance.

The taskforce's capital markets recommendations focus on reducing cross-border frictions through greater cooperation between UK and U.S. authorities in areas including capital raising, consolidated tapes, audit standards and supervisory cooperation. Progress on the delivery of the recommendations will be reported through the UK-U.S. Financial Regulatory Working Group, to ensure they translate into practical outcomes for businesses and consumers on both sides.

HM Treasury (HMT) has published a consultation on modernising the UK's payment services and electronic money regulatory framework. Given the pace of innovation in new technologies, the government wants to ensure the existing framework under the Payment Services Regulations 2017 (PSRs) and Electronic Money Regulations 2011 (EMRs) can facilitate new forms of payment safely and securely. The Cross Border Payments Regulation and the SEPA Regulation are also within scope of the reforms while the Interchange Fee Regulation 2015 and the Payment Card Interchange Fee Regulations 2015 are out of scope, reflecting ongoing work on card fees.

The consultation considers updates to the PSRs and EMRs, including the extent to which responsibility for setting firm-facing requirements should be delegated to the UK Financial Conduct Authority (FCA). Having found that strong customer authentication standards (SCA), while reducing fraud, created burdensome customer friction, the government has already committed to revoking the SCA-related authentication provisions in the PSRs so that the FCA can adopt more outcomes-based authentication rules. The consultation also sets out the government's approach to the long-term regulatory framework for open banking.

The deadline for responses is 6 October.

HM Treasury (HMT) has published a report (the first of two) from the Wholesale Digital Markets Champion, Chris Woolard, together with its terms of reference. This first report sets out a framework for developing a tokenised UK wholesale financial markets system and the steps needed to implement the government's Wholesale Financial Markets Digital Strategy. It reviews the current innovation landscape, examines key policy considerations, other jurisdictions' approaches, and the impacts of cross-border issuance and international interoperability.

It identifies immediate industry priorities and corresponding actions for HMT and the authorities to take, shaped by ten identified priorities to be driven over the next 12 months by the Digital Markets Champion Industry Taskforce ("the Taskforce"). To achieve this, the Taskforce will establish action groups across nine areas, with further details on appointments to follow by September. Views on the report are invited by 4 September.

The UK Financial Conduct Authority (FCA) has published an information document for firms seeking authorisation under the forthcoming Financial Services and Markets Act 2000 (FSMA) cryptoasset regime. The document outlines the information that firms will need to provide in the cryptoasset authorisation application form when the application gateway opens on 30 September. The FCA notes that the form is still being finalised and will be available through its online system from that date. While it does not expect the structure and content of the form to change, there may be changes to the detail of the wording of the question and the level of explanation required.

Applications will cover both standard authorisation requirements and cryptoasset-specific requirements tailored to the regulated activities being undertaken. While all the cryptoasset-specific sections and questions are included in this document, firms will only need to complete those that are required for their business model. The document will also assist existing FSMA-authorised firms seeking a variation of permission to undertake new regulated cryptoasset activities.

The FCA states that the document is provided on a best endeavours basis for information only and does not constitute guidance or legal advice. Firms remain responsible for ensuring the accuracy and completeness of their applications. The FCA also published an updated financial data template, which firms must complete as part of the application process.

For further background, you may wish to read our blog post titled "Final rules for new UK crypto regime".

The European Securities and Markets Authority (ESMA) has announced it is launching a common supervisory action (CSA) on the digital operational resilience of crypto-asset service providers (CASPs), with a particular focus on custody services. The CSA will assess the maturity of CASPs' operational resilience frameworks in relation to custody activities, focusing on risks inherent to distributed ledger technology (DLT). These include governance arrangements, key and storage management, transaction controls, incident detection and response, smart contract risks, and reliance on third-party providers.

National competent authorities will conduct the review on a risk-based sample of authorised CASPs between the second half of this year and the first half of 2027. ESMA will consolidate the findings into a final report for its board of supervisors following completion of the exercise in the second half of 2027.

The Bank of England's (BoE) Financial Policy Committee (FPC) has published its July financial stability report alongside the record of its 26 June meeting. The FPC meets to identify risks to financial stability and agree policy actions aimed at safeguarding the resilience of the UK financial system.

Key topics covered include:

• Markets: Vulnerabilities in risky asset valuations, sovereign debt markets and risky credit markets, including private credit, remain and some have become more pronounced since the December 2025 financial stability report. Notably, there has been a substantial increase in the use of leverage in equity markets.
• AI-related risks: The FPC examined the macro financial risks arising from the AI transition across a range of sectors. It also notes that recent rapid advances in frontier AI capabilities have increased financial stability risks related to cyber and operational resilience.
• Countercyclical capital buffer (CCyB): The FPC maintained the UK CCyB rate at its neutral setting of 2%.
• Private markets: The FPC welcomed the BoE's publication of the stress scenario for the private markets system wide explanatory scenario (SWES). The FPC expects to use the SWES to improve its understanding of how banks and non-banks active in private markets would respond to a severe but plausible global downturn.
• Bank capital reform: Following its review of bank capital requirements, the FPC announced that it will work with the UK Prudential Regulation Authority (PRA) to modernise the capital framework. The proposed reforms aim to improve the usability of capital buffers and make leverage ratio requirements more proportionate and effective while maintaining overall financial system resilience. 
• Stablecoins and money market funds (MMFs): The FPC welcomed the BoE's policy statement and consultation on the draft code of practice for systemic sterling-denominated stablecoins and recent statements by HM Treasury and the UK Financial Conduct Authority on their plans to strengthen the resilience of MMFs.

The EU Anti-Money Laundering Authority (AMLA) has launched a consultation on draft implementing technical standards (ITS) establishing a common EU-wide format for reporting suspicious transactions and activities under the Anti-Money Laundering Regulation (EU) 2024/1624. Currently, the way suspicions and transaction records are reported differs from one country to another. This makes it harder for companies operating across borders to know what is expected from them, and harder for Financial Intelligence Units (FIUs) to exchange information with each other and with their partners. The proposed ITS would introduce a harmonised set of data points and reporting templates for obliged entities, while allowing for sector-specific reporting requirements, with the aim of improving consistency across member states, reducing reporting complexity for cross-border firms, and enhancing information sharing and processing by FIUs. The deadline for responses is 20 September. A public hearing will be held on 9 September.

The Bank of England (BoE) has updated the Digital Securities Sandbox Dashboard to confirm that, going forward, certain stablecoins can be acceptable settlement assets. The change in scope will allow digital securities depositories to settle the cash leg of transactions using approved stablecoins issued in the UK or overseas.

UK-issued stablecoins pegged to any currency will be permitted, as long as: (i) before 25 October 2027, the issuer will have to have demonstrated that they will be able to comply with the incoming requirements for UK issuers of qualifying stablecoins and are registered with the UK Financial Conduct Authority (FCA) for the purposes of the money laundering regime; or (ii) after 25 October 2027, the issuer will need to be authorised to issue a qualifying stablecoin. Overseas issued stablecoins will also be permitted if they are pegged to a non-GBP currency.

To be used as settlement assets in the sandbox, the stablecoins will need to meet minimum requirements which mirror the criteria used for stablecoins in the FCA's regime for UK-issued qualifying stablecoins. The minimum requirements relate to:

• Universal rights of redemption for all holders.
• Backing assets comprised of those required for UK issuers by the FCA's final rules and subject to appropriate risk management in relation to composition and redemption.

Read more.

The Bank of England (BoE) and the UK Financial Conduct Authority (FCA) have published their joint approach document on the regulation of systemic stablecoin issuers. Under the regime, the FCA will regulate all UK-issued qualifying stablecoins and, in future, their use in payments. However, HM Treasury (HMT) may bring a stablecoin issuer within the joint regulatory framework of the BoE and the FCA by recognising the issuer as systemic. The consultation builds on the BoE's recent proposals in its June publication and the FCA's final stablecoin issuance rules in PS26/10.

For jointly regulated systemic stablecoin issuers, the regulators are splitting supervisory responsibilities across three key areas:

• Areas where the FCA is the lead authority, and where the FCA rules apply—examples include the consumer duty, conduct and the market abuse regime.
• Areas of overlapping responsibility, where both the FCA rules and the BoE's code of practice (which is currently still in draft) apply—examples include operational resilience, record keeping, and issuance, legal claim and redemption.
• Areas where the BoE is the lead authority, and where the BoE's code of practice applies—examples include backing assets, capital and reserve requirements, safeguarding, and failure arrangements. In the case of overlapping responsibilities, the regulators expect to be able to manage these with tools they have experience using, including coordination of supervision and escalation mechanisms.

Read more.

The UK Financial Conduct Authority (FCA) has published a package confirming the final policy position for the main aspects of the new UK cryptoasset regime which is coming into effect on 25 October 2027. The rules build on a new licensing regime introduced by the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, which extend the regulatory perimeter to include the activities of issuing qualifying stablecoins, safeguarding cryptoassets, operating a qualifying cryptoasset trading platform, dealing (and arranging deals) in qualifying cryptoassets, and staking.

The package includes five final policy statements and three sets of finalised guidance:

• PS26/9: Admissions & Disclosures and Market Abuse Regime for Cryptoassets.
• PS26/10: Stablecoin Issuance.
• PS26/11: Regulated Cryptoasset Activities.
• PS26/12: Prudential Regime for Cryptoasset Firms, including additional consultations on related guidance on COREPRU and CRYPTOPRU rules.
• PS26/13: Application of the FCA Handbook to Cryptoasset Activities.
• FG26/5: Application of the Consumer Duty to cryptoasset firms.
• FG26/6: Cryptoasset operational resilience.
• FG26/7: Approach to international cryptoasset firms.

For more information on this week's developments, you may wish to read our blog post titled "Final rules for new UK crypto regime".

The European Banking Authority (EBA) has published a consultation paper setting out a draft methodology for the imposition of fines under the Markets in Crypto-Assets Regulation (MiCAR). The proposed framework is intended to ensure that fines imposed on issuers of significant asset-referenced tokens (ARTs) and e-money tokens (EMTs) are consistent, proportionate and transparent, and support effective compliance with the regime. Under MiCAR, the EBA is responsible for supervising issuers of tokens designated as significant, and the draft methodology outlines how fines may be calculated where infringements are committed negligently or intentionally by issuers or members of their management bodies. The deadline for comments is 28 September, with a public hearing scheduled for 16 July.

Separately, the European Commission has announced it has extended the deadline for input to its consultation on EU crypto-asset rules by one month to 30 September.

The Digital Regulation Cooperation Forum (DRCF) has issued a call for input under its Thematic Innovation Hub on the theme of "authentication and trust", exploring how regulators can help innovators achieve public trust in new technologies and systems. The Hub enables regulators to better understand emerging risks and opportunities and to engage earlier with innovators developing complex new technologies.  The call focuses on the opportunities and challenges associated with two key sub-themes: (i) digital verification, including where these services may support or intersect with open finance and wider smart data frameworks. The DRCF makes clear that this term refers solely to private-sector use cases and focuses exclusively on the verification of identity attributes, rather than the government's ongoing work on digital identity; and (ii) synthetic media and deepfakes, including AI-generated content that may pose risks to authentication, consumer trust and intellectual property rights. Responses are intended to merely inform the DRCF's future cross-regulatory work, and the DRCF does not intend to provide advice or guidance in response to questions raised through the call for input. The deadline for input is 14 August. The DRCF may engage further with respondents through webinars and/or roundtables.

The European Securities and Markets Authority (ESMA) has issued a public statement clarifying its expectations ahead of the end of the transitional period on 1 July for authorisation under the Markets in Crypto-Assets Regulation (MiCAR). ESMA calls on crypto-asset service providers (CASPs) that are not MiCAR-authorised to cease operations and implement an orderly wind down of their EU activities while safeguarding client interests. ESMA expects unauthorised CASPs to:

• Immediately stop onboarding new EU clients, opening new client relationships or accounts, and carrying out marketing or solicitation activities.
• Limit the provision of services to those necessary to sell or transfer crypto-assets, reallocate assets, or close positions, and custody arrangements for a period strictly required to support an orderly exit.

Read more.

The Bank of England (BoE) has published a final policy statement setting out its regulatory framework for sterling-denominated systemic stablecoins, alongside a consultation on the draft code of practice for issuers. This follows the November 2025 consultation.

Under the regime, which will be established through amendments made by the Financial Services and Markets Act 2023 to the Banking Act 2009, the UK Financial Conduct Authority (FCA) will regulate the issuance, custody and admission to trading of UK-issued qualifying stablecoins and, in due course, their use in payments, while systemic stablecoins recognised by HM Treasury will be regulated jointly by the BoE and the FCA.

Following consultation feedback, the BoE has made several changes to the final policy. Key changes include:

• Revising the backing asset composition from a 60/40 to a 70/30 split between short‑term UK government debt and unremunerated central bank deposits (overnight repo and reverse repo transactions using eligible government securities with a residual maturity of six months will be permitted).
• Replacing proposed holding limits with a temporary GBP40 billion issuance "guardrail", which the BoE considers significantly less complex to implement.

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HM Treasury has published the terms of reference for the newly appointed Wholesale Digital Markets Champion, Chris Woolard CBE, setting out how Mr Woolard will work in partnership with industry and government to accelerate the digitalisation of UK wholesale financial markets. Mr Woolard will also provide leadership to co-ordinate the sector's wider implementation of digital as outlined in the Wholesale Financial Markets Digital Strategy published as part of the Leeds Reforms.

The Champion's key responsibilities include: (i) establishing a cross-industry taskforce, with representatives from across the market ecosystem, to provide input and support; (ii) delivering a report (by July 2027) to the Chancellor, developed with the sector, covering how UK wholesale markets can best adopt tokenisation and other related technologies, as well as how the sector and government can ensure DLT interoperability; (iii) promoting the delivery of the strategy across the sector; and (iv) coordinating with the Chairs of other related reform workstreams (including delivering T+1 settlement and removing paper shares). Mr Woolard will provide an initial forward plan, including plans to establish the industry taskforce by July. Mr Woolard has been appointed for 18 months.

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/19, proposing targeted amendments to its Decision Procedure and Penalties Manual (DEPP) to ensure that its penalty framework and decision-making processes remain up-to-date, transparent and effective. The proposals also reflect the introduction of the market abuse regime for cryptoassets.

Key proposals include:

• Market abuse. Increasing the minimum initial disciplinary penalty level for serious market abuse committed by individuals from GBP100,000 to GBP150,000 to account for inflation.
• Deterrence. Making clear that the FCA has the ability to increase penalties for wealthier individuals for deterrence, having regard to income and assets.
• Relevant income. Clarifying how to treat deferred income, including bonuses, pay and shares, in line with recent Upper Tribunal decisions.

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Read more.

The UK Financial Conduct Authority (FCA) has published its first external publication of the emerging technology horizon scan 2026. It is intended to inform debate and support industry collaboration, rather than to provide formal regulatory guidance or predictions.

The report identifies key trends:

• Technological convergence is accelerating, changing the way financial systems operate and serve consumers, creating new opportunities and risks.
• Personalised intelligence could help consumers navigate their lives. Where AI becomes the primary interface between consumers and firms, this could improve financial decision-making and access to tailored products. However, it also highlights issues around autonomy, digital exclusion and customer protection.
• Synthetic crime is rapidly evolving and will impact how the FCA tackles financial crime. Synthetic media is also making it increasingly difficult to distinguish between real and manipulated content. This may erode trust and expose consumers and firms to new forms of fraud and deception.
• Programmable finance could support growth. Distributed ledger technology, tokenisation, central bank digital currencies, stablecoins and smart contracts are becoming mainstream, and these developments can increase speed and efficiency.

The Money Laundering and Terrorist Financing (Amendment) Regulations 2026 have been made and laid before Parliament, alongside an explanatory memorandum. The Regulations make amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) to implement the government's consultation response to its 2024 consultation on improving the effectiveness of the MLRs. The amendments aim to strengthen the UK's anti-money laundering and counter-terrorist financing regime and ensure continued compliance with Financial Action Task Force standards.

Key changes include:

• Refining due diligence requirements so that enhanced measures focus on higher risk transactions and jurisdictions.
• Converting thresholds from EUR to GBP.
• New provisions governing pooled client accounts.
• Bringing the service of selling an off-the-shelf firm within scope of trust or company service provider services.
• Strengthening the regime for cryptoasset businesses.
• Changes to the scope of trust registration requirements.
• Improving information-sharing between supervisory authorities and other regulatory bodies.

Read more.

The UK Financial Conduct Authority (FCA) has published quarterly consultation paper No. 52, inviting feedback on proposed amendments to its Handbook.

Proposed changes include:

• Simplifying product-level climate and sustainability disclosure requirements for asset managers, life insurers and pension providers, while maintaining the original policy intent under PS21/24.
• Aligning FCA fees to set regulated income as the tariff base for cryptoasset firms and inserting new fee categories to account for new regulated crypto activities.
• Consequential amendments to reflect the revocation of UK Capital Requirements Regulation provisions.
• Allowing certain authorised funds to hold cryptoasset exchange traded notes subject to a limit of 10% of scheme property.
• Deleting the requirement for approvers of qualifying cryptoasset financial promotions to submit notifications following certain approvals.
• Updating section M of the Retail Mediation Activities Return (RMA-M) and related guidance.

The deadline for comments is 13 July.

The House of Lords (Financial Services Regulation) Committee has published a report following its inquiry into the growth and proposed regulation of stablecoins in the UK. Among other things, the report examines the Bank of England (BoE) and UK Financial Conduct Authority's (FCA) proposed regulatory regimes for systemic and non systemic stablecoins and assesses whether they are measured and proportionate. The Committee finds that the UK is lagging behind the U.S. and EU in developing its regulatory framework and urges regulators to adhere to existing timelines to avoid delay.

While broadly supportive of the proposals, the report highlights aspects which require re-consideration. It notes there are several elements which diverge from international approaches, particularly proposals relating to unremunerated backing assets requirements, the stablecoin holding limits and the restrictions on commercial bank issuance. The report calls for: further BoE analysis on the impact of holding limits on high-value cases; greater clarity from HM Treasury (HMT) on how it will determine whether stablecoins are systemic; and re-consideration by the FCA of the proposed k-factor requirement for stablecoin issuers. It also notes HMT's intention to bring stablecoins into the payments regulatory perimeter but highlights the lack of detail on scope.

The Committee further calls on HMT and the UK regulators to assess whether existing legal frameworks adequately address risks from unhosted and unregulated wallets, and to be prepared to legislate where necessary. It urges the government and UK regulators to consider its recommendations on how the proposed regulations may need to be re-adjusted to bring certainty and confidence.

The UK Financial Conduct Authority (FCA) has published Q&A responses from its 2026 webinar on the UK anti money laundering (AML) framework for cryptoasset firms. They clarify how the current Money Laundering Regulations 2017 (MLRs) will operate alongside the forthcoming cryptoasset regime under the Financial Services and Markets Act 2000 (Cryptoassets Regulations) 2026, which commences on 25 October 2027.

Topics addressed include:

• Applications under the Financial Services and Markets Act 2000 (FSMA) regime.
• MLR registration will remain the route for firms providing in scope cryptoasset services until the new regime commences, but firms will need to obtain FSMA authorisation to continue operating under the new regime, with no automatic conversion. Current FSMA authorised firms must apply to vary their permissions if they wish to undertake the new cryptoasset regulated activities when the regime commences. Applications for the new regime will open on 30 September until 28 February 2027. Firms should consider the impact of when they submit their application. Firms are encouraged to prioritise securing FSMA authorisation over MLR-registration (with more guidance set out in an earlier webpage) and undertake early gap analyses against threshold conditions and proposed rules.

Read more.

The European Commission has launched consultations on the review of the Markets in Crypto Assets Regulation (MiCAR). The framework, implemented in 2024, establishes a harmonised regime covering crypto assets, including asset referenced tokens and e money tokens, as well as their issuers and crypto asset service providers. The consultation involves: (i) a public consultation on general views in relation to the different types of digital assets and the associated services industry used by individual retail users; and (ii) a targeted consultation covering more technical and legal questions for stakeholders on whether MiCAR remains fit for purpose in light of evolving market and international developments. Of particular interest in the targeted consultation is the section on topics beyond the initial scope of MiCAR, which covers questions on decentralised finance and prediction markets and perpetual futures.

Feedback will inform the EC's report on the application of MiCAR and the latest developments in markets crypto-assets, mandated by Articles 140 and 142 of the Regulation. The report may, if needed, be accompanied by a new legislative proposal to amend and complement this regulation. The deadline for feedback on both consultations is 31 August.

The UK Financial Services Regulatory Initiatives Forum has published the tenth edition of the Regulatory Initiatives Grid, setting out the ongoing and upcoming initiatives impacting the UK financial services sector. The Grid provides an overview of the current state of play as opposed to launching new initiatives, and is also used to communicate timing updates on deliverables where relevant. The grid includes a multi-sector section which covers cross-cutting and omnibus topics such as sustainable finance and operational and financial resilience. There are further sector specific sections including in relation to: banking, credit and lending; payment services and cryptoassets; investment management; retail investment; and wholesale financial markets.

The grid includes a number of UK developments in relation to other items in this week's update, including those mentioned in the King's speech, and the prospective changes in the Financial Services and Markets Bill. Further information is detailed in those specific items covered this week. Separate press releases announcing the Grid have also been published by the UK Financial Conduct Authority and the Bank of England.

Readers are also invited to provide feedback on the Grid and its usefulness in enabling planning for regulatory initiatives and any suggested improvements.

The UK Prudential Regulation Authority (PRA) has issued a Dear CEO letter setting out updated expectations on the prudential treatment of tokenised assets, stablecoins and other cryptoasset exposures. This replaces the 2022 guidance which set out interim expectations when cryptoasset markets were less developed and international standards were still under development.

The PRA reaffirms that firms should apply the full prudential framework to cryptoasset exposures, including the Fundamental Rules, Pillar 1 and Pillar 2 requirements, and the Internal Capital Adequacy Assessment Process. It emphasises the need to maintain strong governance and risk management, including by carefully assessing whether the characteristics of these assets are sufficiently captured within existing frameworks.

It confirms that a conservative capital treatment remains appropriate for most cryptoassets, including a 100% capital requirement for unbacked cryptoassets, while recognising that certain newer forms of cryptoassets may warrant a more risk-sensitive approach. The PRA also clarifies that tokenised traditional assets should generally receive the same prudential treatment as their non-tokenised equivalents where legal rights and underlying risks are comparable, in line with a "same risk, same regulatory outcome" principle.

Read more.

The UK Financial Conduct Authority (FCA) and Bank of England (BoE) have published a joint call for input on the development of tokenisation in UK wholesale financial markets. Tokenisation – being the representation and ownership of assets using distributed ledger technology (DLT) – has the potential to transform how assets are issued, traded and settled. The paper seeks feedback on how existing rules and market infrastructure may support or constrain the adoption of tokenisation and includes the following content.

• A potential framework to consider the future use of tokenisation in wholesale markets, covering both the long-term end state and the transition towards it.
• Identification of the key infrastructure, policy and regulatory principles and operational considerations proposed to feature in future policy and regulation.
• Proposals on the regulatory regime for issuing and exchanging digital assets, prudential and collateral treatment, and central bank money settlement of digital asset transactions.
• An initial roadmap of initiatives that will support market evolution, to help industry engagement.

The deadline for responses is 3 July. A feedback statement is due in summer, with a final cross-authority roadmap for the digitalisation of wholesale markets to follow later in the year.

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.

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The King's speech was delivered to Parliament, setting out a number of legislative measures relevant to financial services and the wider economic regulatory framework. The speech is accompanied by briefing notes, which outline the legislation to be brought forward. In the context of financial services, one of the bills announced is the Enhancing Financial Services Bill.

Key measures under this include:

• Reforming the UK Financial Ombudsman Service, as confirmed by HM Treasury (HMT) in its March consultation response to modernise the financial redress system.
• Abolition of the UK Payment Systems Regulator and integration into the UK Financial Conduct Authority (FCA), as confirmed by HMT in its April consultation response.
• Reducing administrative burden in the Senior Managers and Certification Regime, as confirmed by HMT in its April consultation response.
• Enabling credit unions to expand, as confirmed by HMT in its March call for evidence response on reforms to the credit union framework.

Read more.

The European Securities and Markets Authority (ESMA) has published a compliance table under the Markets in Cryptoassets Regulation (MiCAR) setting out member state compliance with its guidelines on when a third-country firm is deemed to solicit clients established or situated in the EU, and the supervision practices to detect and prevent circumvention of the reverse solicitation exemption under MiCAR. This follows an earlier compliance table published on 5 May, setting out member state compliance with ESMA's guidelines on procedures and policies (including client rights) in the context of cryptoasset transfer services under MiCAR on investor protection.

The UK Financial Conduct Authority (FCA) has announced that from 11 May, cryptoasset firms preparing for the new UK cryptoasset regime will be able to request pre‑application meetings through the FCA's pre‑application support service (PASS). The meetings are free of charge and are intended to allow firms to discuss proposed business models and regulatory expectations with the FCA and to raise questions ahead of applying for authorisation or a variation of permission. Meetings will take place from July, before the authorisation gateway opens on 30 September. The new cryptoasset regulatory regime scheduled to commence on 25 October 2027. For further background on the regime, you may wish to watch our webinars which are available here.

The FCA published has final policy statement PS26/7, setting out its final rules and guidance to support the adoption of tokenisation of authorised funds as part of its wider digital assets and growth agenda. Following feedback to the October 2025 consultation, the FCA finalised Handbook guidance confirming that authorised fund managers may use distributed ledger technology (DLT) to operate unitholder registers, with on-chain records capable of constituting the primary books and records of unit dealings. Firms are not required to maintain a full off‑chain duplicate of those records, provided they have appropriate resiliency arrangements in place. The guidance applies to the use of both private and public DLT networks. Additional guidance is also set out on rules on share classes, where units within a class are recorded on multiple blockchains.

In addition, the FCA introduces an optional direct‑to‑fund dealing model for authorised funds, allowing investors to deal directly with the fund itself, rather than with the authorised fund manager as principal. This aims to simplify fund operations and support faster, more automated settlement, regardless of whether the fund is a traditional or tokenised structure. Following feedback, the FCA decided not to proceed with its proposal to require use of client money accounts for unattributable cash in connection with direct dealing, instead introducing enhanced reconciliation requirements for umbrella‑level cash accounts. The new rules and guidance apply immediately upon publication, with further work on fund tokenisation expected later this year.

HM Treasury (HMT) has published the draft Financial Services and Markets Act 2000 (Cryptoassets) (Amendment) Regulations 2026 and a policy note proposing targeted changes to the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026. The draft statutory instrument (SI) seeks to address unintended consequences of the cryptoasset regime and support the interim use of UK‑issued qualifying stablecoins (UKQS) for payments ahead of wider payments services reforms announced in a related press release. The reforms are expected to bring UKQS payment services into the regulated payments perimeter.

Read more.

The UK Financial Conduct Authority (FCA) has published a speech by Jessica Rusu, chief data, information and intelligence officer, setting out how the FCA intends to support fintech firms in the next phase of innovation amid rapid advances in AI and the emergence of "agentic commerce".

The FCA highlighted its principles-led, outcomes focused approach to AI regulation and announced the next phase of its AI Lab, including: (i) an extended partnership with NVIDIA and NayaOne; (ii) a second cohort of firms entering AI Live Testing, which will conclude by the end of the year, with an evaluation report expected in Q1 2027; (iii) the scaling of the Supercharged Sandbox, giving more UK fintechs access to data and Nvidia compute to build their products, with a second intake opening on 5 May; and (iv) confirmation that the FCA will not introduce new AI specific rules at this stage, but will instead publish examples of good and poor practice later in the year. In parallel, the FCA emphasised the role of its recently published open finance roadmap and announced that its Scale Up Unit is now open for expressions of interest from solo regulated firms to support them in scaling and entering new markets.

The UK Financial Conduct Authority (FCA) has published its innovation insights 2025 report, setting out key trends in UK fintech innovation, evolving regulatory risks and lessons from firms' engagement with the FCA's innovation services. By sharing insights, the FCA aims to support earlier and clearer regulatory engagement and strengthen evidence-led policy and supervision.

The report notes that while global fintech investment exceeded USD130 billion in 2025, funding has become more selective, concentrating on fewer, more mature firms, with the UK ranking second globally for disclosed investment. It highlights a shift in the key challenge faced by firms, from product development to understanding how regulation applies to them, with demand for FCA support increasing significantly. This includes a 49% rise in applications to the Regulatory Sandbox and Innovation Pathways in 2025, particularly in relation to AI, distributed ledger technology, and open banking and open finance. In the report, the FCA also summarises steps taken in 2025 to expand its innovation services. Looking ahead, the FCA signals a focus in 2026 on clearer guidance, more structured testing pathways, broader engagement with incumbent firms, and supporting UK competitiveness and international growth.

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/13, proposing changes to the Perimeter Guidance Manual (PERG) within the FCA Handbook to clarify the scope of the new regulated cryptoasset activities and when permissions will be required. In addition, the consultation paper aims to provide clarity for firms transitioning from the FCA's current cryptoasset regime (under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017) (MLRs) to the new cryptoasset activities under the Financial Services and Markets Act 2000 (FSMA).

The proposed new chapter in PERG will contain guidance on how to determine whether an activity is within the perimeter, and guidance on the new specified investments and new regulated cryptoasset activities, including which permissions may be required for certain business models and how specific exclusions operate and other related issues. The FCA also clarifies that, as outlined by HM Treasury in the explanatory memorandum accompanying the Cryptoasset Regulations 2026, FSMA authorised cryptoasset firms will not need to register as "cryptoasset exchange providers" or "custodian wallet providers" under the MLRs but instead will only need to notify the FCA. However, these firms will still need to comply with the MLRs. The proposed guidance in full is set out in the draft Perimeter Guidance (Regulated Cryptoasset Activities) Instrument 2026, in Appendix 1 of the consultation paper.

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The UK Financial Conduct Authority (FCA) has published its open finance roadmap, setting out its vision for open finance in the UK from now until 2030. The FCA explains that the roadmap draws on lessons from open banking and international experience and takes a phased evidence-led and collaborative approach.

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The Digital Regulation Cooperation Forum (DRCF) has published an insights paper (dated 26 March) on smart data frameworks, providing an international review and comparative analysis to inform the UK's implementation of cross sector smart data schemes under the Data (Use and Access) Act 2025 (DUAA). The paper notes a global shift away from single sector models, such as open banking, towards economy wide frameworks, while highlighting significant divergence in how jurisdictions have implemented them. The DRCF identifies three main approaches: (i) regulator mandated models, which provide legal certainty and consistent standards, but risk high compliance costs and reduced flexibility; (ii) market facilitated models, which support innovation, but often suffer from uneven adoption and unclear liability; and (iii) public infrastructure led approaches, which support interoperability but require significant upfront investment and sustained political commitment.

The paper outlines potential insights and considerations for the UK as it implements the DUAA, including:

• Establishing a central smart data governance body to coordinate scheme development across sectors, set baseline technical and security standards, ensure interoperability and provide a clear strategic direction.
• Introducing smart data schemes using a phased approach, prioritising sectors with clear consumer benefits and policy alignment (for example, energy and Net Zero), and tailoring implementation models depending on their digital maturity, market structure and regulatory landscape context.

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The UK Financial Conduct Authority (FCA) has published a new webpage for cryptoasset firms who are considering applying for registration under the Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs), ahead of the new UK crypto regime which is due to come into force on 25 October 2027. The FCA states that the webpage is not relevant to cryptoasset firms that will still need to be registered with the FCA under the MLRs but will not require authorisation under the new Financial Services and Markets Act 2000 (FSMA) crypto regime, as for these firms, the MLR gateway will continue to operate as normal.

The webpage covers:

• The requirement to be registered under the MLRs: Firms who provide in-scope cryptoasset services in the UK are required to be MLR-registered before trading, until the new FSMA regime starts. Once the FSMA regime applies, firms carrying out regulated cryptoasset activities will require FSMA authorisation, including firms already registered under the MLRs. Applications for FSMA authorisation will open on 30 September. Firms may apply for registration at any time before the new regime begins on 25 October 2027. However, they should only do so if they are confident that they can be registered early enough for it to be worthwhile before the new regime starts.

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The draft Money Laundering and Terrorist Financing (Amendment) Regulations 2026 were laid before UK Parliament, alongside a draft explanatory memorandum. The draft Regulations propose amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) to implement the government's consultation response to its 2024 consultation on improving the effectiveness of the MLRs. The amendments aim to strengthen the UK's anti-money laundering and counterterrorist financing (AML/CTF) regime and ensure maintained compliance with Financial Action Task Force standards.

Following feedback to the technical consultation on the draft Regulations in September 2025, the government has made a number of targeted changes, including:

• Pooled client accounts (PCAs): clarifying that banks may continue to apply a simplified, risk-based approach to PCAs where the PCA holder is: (i) subject to the MLRs or equivalent overseas regimes; (ii) the business relationship with the PCA-holder presents a low risk of money laundering and terrorist financing; and (iii) information on the identity of the underlying customers is available on request to the PCA-holder. Additional clarifications are also made.

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The UK Financial Conduct Authority (FCA) has published its regulatory priorities report for the payments sector. These reports replace the FCA's previous portfolio letters and will now be published annually for each industry sector. The report is directed at firms authorised or registered under the Payment Services Regulations 2017 and the Electronic Money Regulations 2011. In the report, the FCA sets out four key priority areas for the next 12 months:

• Preparing for the future to support effective competition, innovation and growth: The FCA will continue policy work on open banking, stablecoins, and modernising payments regulation. It will support industry in establishing a Future Entity for open banking. It will also support HM Treasury (HMT) in introducing legislation to grant the FCA powers to set new rules for the long-term open banking regulatory framework. The FCA will work with HMT to future-proof payments regulation, including consideration of whether changes to or the development of regulation is needed to support agentic AI payments. It will also work with the sector to consider how stablecoins and other tokenised payment instruments can be brought into regulated payments.

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The UK Financial Conduct Authority (FCA) has published its regulatory priorities report for the retail banking sector. These reports replace the FCA's previous portfolio letters and aim to provide a clearer and more consistent articulation of regulatory expectations.

In the report, the FCA notes that retail banking is undergoing significant change as customers use branches less and rely more on digital channels. Business models are also diversifying, with increased fintech activity and the continued development of open banking and new payment types.

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

• Access to cash and essential banking services: As firms pursue digital first transformations, the FCA emphasises that firms must ensure these do not create foreseeable harm, particularly for customers with lower digital capability. Alternative services must be in place before any branch closures. The FCA will continue to monitor firms' approaches under its branch closures or conversions guidance and the consumer duty and will intervene where necessary.
• Good outcomes from products and services: Firms are expected to continue improving the data they use to monitor customer outcomes so they can identify where further action is needed. The FCA will take targeted action where it identifies poor outcomes, including poor value or issues affecting vulnerable customers.

Read more.