Policy statement 8/26
The PRA has finalized the Financial Services Compensation Scheme (FSCS) Management Expenses Levy Limit (MELL) for 2026/27 at £113 million, effective April 1, 2026. This policy statement confirms the proposed budget following consultation, establishing the maximum amount that FSCS-levy-paying firms must fund for the compensation scheme's operating costs, with implications for all PRA and FCA-authorized firms across banking, insurance, and investment sectors.
What Changed
- The final MELL for 2026/27 comprises:
- Management expenses budget: £108 million (£4.4 million increase from 2025/26, broadly in line with inflation)
- Unlevied reserve: £5 million (for unforeseen costs without requiring further consultation)
- Total MELL: £113 million
Budget allocation details:
- Investment budget: £5.5 million (10% increase from 2025/26) supporting the FSCS' new five-year strategy launching in 2026/27
Suggested Considerations
- *Immediate compliance actions for affected firms:
- *Budget planning: Incorporate the £113 million MELL into financial forecasting and levy allocation models for the 2026/27 financial year (April 1, 2026 onwards)
- *Levy calculation: Ensure systems are updated to reflect the new budget allocation across PRA and FCA funding classes (detailed in Appendix 4 of CP1/26)
- *Reserve provisioning: Account for the £5 million unlevied reserve in contingency planning, recognizing FSCS may levy additional funds at short notice for unforeseen costs
- *RCF cost allocation: Confirm whether your firm is subject to the expanded RCF cost allocation (particularly relevant for credit unions, which raised concerns during consultation)
Key Dates
- Consultation Paper CP1/26 published
- Consultation deadline
- Policy Statement PS8/26 issued
- MELL 2026/27 effective date; FSCS financial year begins
- MELL 2026/27 expires; FSCS financial year ends
Compliance Impact
Urgency: HIGH
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BankInsuranceAsset Manager We are going ahead with a scheme to compensate motor finance customers who were treated unfairly. Courts have found that firms broke the law by failing to disclose important information to customers. An industry-wide scheme is the quickest and most cost effective way to deliver fair compensation.We had over 1,000 consultation responses and engaged extensively with consumer groups, professional representatives, firms, manufacturers, investors and industry bodies. While most respondents support...
The FCA has confirmed an industry-wide redress scheme to compensate motor finance customers for unfair treatment due to inadequate disclosure of commissions and ties between 6 April 2007 and 1 November 2024, following court rulings on law-breaking practices. This matters as it imposes up to £9.1 billion in costs on lenders, mandates proactive customer identification and payouts, and aims for rapid resolution while providing finality for firms and market stability.
What Changed
- - Tightened eligibility: Excludes minimal commission agreements (£120 or less pre-1 April 2014; £150 or less post), zero APRs, unused DCAs, and contractual ties where lenders prove visible...
- Two schemes: Separate for 6 April 2007-31 March 2014 and 1 April 2014-1 November 2024 to mitigate legal challenges on pre-2014 powers.
- Compensation adjustments: Reflects higher 2007-2014 losses; capped in ~1/3 cases to avoid over-compensation.
- Streamlined operations: Lenders contact only complainants or eligible non-complainants; no recorded delivery required, cutting delivery costs >40%.
- Scope expansion: Covers DCAs, high commissions, and contractual ties under Consumer Credit Act 1974 ss.140A-C; includes deceased consumers.
Suggested Considerations
- Identify all in-scope agreements (2007-2024 with broker commissions); assess eligibility against tightened criteria (e.g., undisclosed DCA/high commission/tie).
- Contact complainants within 3 months post-implementation; eligible non-complainants within 6 months; invite scheme participation (6-month consumer response window).
- Calculate redress per formula (commission-based, capped, with interest); pay promptly, allowing set-off against customer debts where applicable.
- Gather records now (FCA expectation pre-rules); handle exclusions/exceptions with explanations; prepare for FOS challenges on time-bars.
- Brokers: Respond to lender information requests.
Key Dates
1 November 2024; Scope of agreements eligible for compensation
Cut-off for excluding high commission cases if clearly disclosed (firms must explain and allow FOS challenge)
Millions compensated
End of implementation for 1 April 2014+ loans; lenders then have 3 months to notify complainants of redress
End of implementation for 6 April 2007-31 March 2014 loans; lenders then have 3 months to notify complainants and 6 months for eligible non-complainants
Compliance Impact
Urgency: Critical – Firms face immediate preparation needs (e.g., data gathering) ahead of mid-2026 implementation, with £9.1bn costs, mass customer outreach, and legal risks from dual schemes/challenges. Non-compliance risks enforcement, as FCA expects prompt action for market finality; delays could exceed £6bn in alternative complaint/court costs.
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BankFintechAll Firms
We sympathise with former members of the British Steel Pension Scheme (BSPS) who lost money after they were given unsuitable advice from people they trusted. Complaints are a valuable source of feedback which help us improve and learn. There have also been 4 independent reports into the BSPS since 2018, which have helped us learn lessons. We have accepted several of their recommendations and implemented improvements, including those below.We now have much closer collaboration between the FCA,...
The FCA's response to the Complaint Commissioner's report on the British Steel Pension Scheme addresses systemic failures in pension transfer advice that affected approximately 7,700 members, with 47% receiving unsuitable advice. This statement demonstrates the FCA's acknowledgment of regulatory shortcomings and outlines remedial measures implemented to prevent similar harm, including enhanced inter-agency collaboration, stricter product governance rules, and a £106 million redress scheme now benefiting 1,870 affected members.
What Changed
- The FCA has implemented the following regulatory and operational changes in response to BSPS failures:
- Enhanced inter-agency collaboration: Closer coordination between the FCA, The Pensions Regulator, Pension Protection Fund, and Money and Pensions Service to improve intelligence sharing on defined...
- Data collection and monitoring: Expanded collection of pension transfer data from advisory firms to proactively identify emerging risks and market trends
- Contingent charging ban: Prohibition of contingent charging arrangements for DB pension transfers to eliminate conflicts of interest where adviser compensation depends on transfer completion
- Consumer transparency tool: Development of a self-assessment mechanism enabling consumers to identify whether they may have received unsuitable DB pension transfer advice
Suggested Considerations
- *For firms that provided DB pension transfer advice:
- *Conduct retrospective suitability reviews of all DB pension transfer advice provided, particularly during 2015-2018, identifying unsuitable recommendations
- *Calculate and pay redress to affected customers to restore them to their pre-transfer financial position, with reference to the FSCS redress methodology
- *Implement enhanced governance for DB pension transfer advice, including:
- Documented suitability assessments with clear rationale
Key Dates
- FCA received initial intelligence about poor pension transfer advice quality
- FCA published initial findings showing less than 50% of reviewed advice was suitable
- FCA directed 45 firms to conduct suitability assessments (Past Business Reviews)
- FCA imposed asset retention rules for DB pension transfers
- BSPS redress scheme formally introduced, requiring firms to review advice suitability and pay redress
Compliance Impact
Urgency: HIGH
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Wealth ManagerAsset ManagerAll Firms
Policy statement 10/26
PS10/26 finalizes PRA proposals to raise the Resolution Assessment threshold from £50 billion to £100 billion in retail deposits and reduce recovery plan review frequency for Small Domestic Deposit Takers (SDDTs) from annually to biennially, enhancing proportionality in resolution and recovery frameworks post-financial crisis. These changes reduce regulatory burden on smaller firms while maintaining safety and soundness, directly supporting PRA objectives of competitiveness and growth. Compliance teams must assess scope changes immediately to align reporting and planning cycles.
What Changed
- - Resolution Assessment Threshold: Increased from £50 billion to £100 billion in retail deposits, limiting reporting and disclosure requirements under the Resolution Assessment Part of the PRA...
- Recovery Plans Review Frequency: For SDDTs and SDDT consolidation entities, reduced from at least annually to at least every two years, aiming for higher quality plans with less frequent reviews.
- Rulebook and Guidance Updates: Amendments to Resolution Assessment Part (Appendix 2), Recovery Plans Part (Appendix 3), and Supervisory Statement SS9/17 – Recovery planning (Appendix 4); no...
- PRA Review Commitment: Threshold will be reviewed periodically (e.g., after reporting cycles or significant changes), but not indexed to GDP or on a fixed schedule as some respondents suggested.
Suggested Considerations
- Scope Assessment: Immediately review retail deposits as of 1 April 2026; firms newly in-scope (≥£100bn) await PRA communication on first report/disclosure dates and prepare accordingly.
- Recovery Plans: SDDTs/SDDT groups update review cycles to biennial starting 1 April 2026; ensure plans meet SS9/17 standards for quality.
- Reporting/Disclosure: In-scope firms align internal processes with Rulebook amendments (Appendices 2-4); test systems for new threshold.
- Governance: Document compliance with updated frameworks; monitor for PRA threshold reviews and related PS9/26/PS11/26 implementations.
- Monitoring: Track retail deposits quarterly to anticipate scope changes; engage PRA if nearing threshold.
Key Dates
Effective date for PS10/26 changes, including new £100bn threshold and biennial recovery plan reviews for SDDTs
Expected submission date for first Resolution Assessment reports for in-scope firms (as previously communicated by PRA)
Expected publication date for first disclosures under amended threshold
Compliance Impact
Urgency: High – Effective 1 April 2026 (imminent from March 2026), with first reports due 2 October 2026; firms between £50-100bn retail deposits gain immediate burden relief (exiting scope), while largest firms face no new burdens but must confirm ongoing compliance. Matters due to proportionality aligning with PRA growth objectives, reducing costs for mid-tier banks/building societies amid economic pressures, but requires swift deposit recalibration to avoid inadvertent non-compliance.
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Bank
Policy statement 11/26
PS11/26 finalizes PRA rules enhancing Pillar 3 disclosures on resolvability resources (MREL), capital distribution constraints (CDCs), and disclosure basis for UK banks and building societies. It matters because it standardizes information to boost market discipline, user comparability, and confidence in orderly resolution, directly impacting financial stability and compliance reporting. No substantive changes from CP16/25 consultation, with minor clarifications only.
What Changed
- - Standardized MREL disclosure templates: Replaces free-form disclosures with four new templates aligned to Basel BCBS TLAC formats (adapted for UK), expanding scope to more firms for consistency on...
- Qualitative CDC narrative: Added to UK CC1 template for firms subject to CDCs, enabling market assessment of restriction impacts; removes obsolete Systemic Risk Buffer (SRB) disclosure post-O-SII...
- Disclosure basis statement: Firms must specify their Pillar 3 regime (e.g., resolution entity, O-SII, large institution), frequency, and details like reference date, currency, LEI, accounting...
- Minor amendments: Reflects HMT's revocation of CRR Article 92a; updates to Disclosure (CRR) and Reporting (CRR) Parts of PRA Rulebook, with semi-annual key metrics for certain firms.
- No substantive policy changes post-consultation; costs/benefits assessment unchanged.
Suggested Considerations
- Update Pillar 3 processes to use new MREL templates (Annex XXVII instructions), UK CC1 with CDC narrative, and basis statement (e.g., reference date, LEI, scope).
- For CDC-subject firms: Prepare qualitative narrative on restriction impacts.
- Ensure semi-annual disclosure of key metrics (Article 447 points a-g) where required.
- Integrate into consolidated reporting for UK parents; test templates/instructions from appendices.
- Review for alignment with broader CRR changes (e.g., Article 92a revocation).
Key Dates
- PS11/26 and accompanying rule instruments (e.g., Disclosure (CRR) Instrument 2026) published
- Policy effective date; rules apply from this date
- First disclosures under new policy published, covering period ending **31 December 2026** (annual/semi-annual as applicable)
Compliance Impact
Urgency: High – Effective 1 January 2027 requires immediate template/system updates for H1 2027 disclosures (year-end 2026 data), with standardized formats limiting flexibility and raising non-compliance risks to market discipline objectives. Impacts reporting teams, resolution planning, and investor relations; proportional design minimizes burden but demands proactive gap analysis given no transition grace beyond effective date.
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original PRA source
before acting. Full disclaimer.
BankBroker DealerAll Firms
Policy statement 9/26
PS9/26 finalizes targeted amendments to MREL reporting templates, including changes to MRL001 and MRL003 data elements and the deletion of MRL002, reducing reporting burdens while maintaining resolution planning oversight. This matters for compliance teams as it streamlines processes under the PRA's Future Banking Data programme, with implementation from 1 January 2027, enabling firms to reallocate resources efficiently.
What Changed
- - Amendments to data elements in the MREL resources template (MRL001) and MREL debt template (MRL003), with full deletion of the MREL resources forecast template (MRL002).
- Consequential updates to reporting instructions (Appendix 2) and Supervisory Statement SS19/13 (Appendix 3), including relocation of instrument scope descriptions to reporting instructions for...
- No changes to quarterly reporting frequency for MRL001/MRL003, despite industry requests for semi-annual alignment, to ensure monitoring of loss-absorbing capacity.
- PRA to publish updated reporting taxonomy shortly.
Suggested Considerations
- Review and update internal reporting systems to incorporate revised MRL001/MRL003 templates and deleted MRL002 by 1 January 2027.
- Implement updated reporting instructions and SS19/13 amendments, including clarified scope of instruments in MRL templates.
- Prepare for Q4 2026 data submission in February 2027 using new taxonomy (to be published shortly by PRA).
- For firms with deleted COREP13 templates, cease submissions from April 2026 cycle.
- Conduct gap analysis against SS19/13 changes and test processes for quarterly MREL reporting continuity.
Key Dates
- Partial revocation of UKTS 2018/1624 (COREP13), deleting certain templates ahead of April 2026 cycle for period ending 31 December 2025
- PS10/26 effective (related: Resolution Assessment threshold amendments, reports due 2 October 2026)
- Revised MRL001 and MRL003 templates effective; first submissions of 2026 Q4 data (ending 31 December 2026) due in **February 2027**
- PS11/26 effective (related: disclosures from 2027 H1 for period ending 31 December 2026)
Compliance Impact
Urgency: Medium – Changes reduce burden (net simplification, ~25% per industry feedback) but require system updates before 1 January 2027 submissions; non-compliance risks resolution planning scrutiny, though lead time mitigates immediate pressure. Matters for maintaining accurate MREL monitoring amid PRA's FBD efficiency drive.
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Bank
We will set out our approach on motor finance redress shortly after markets close on Monday 30 March, having consulted on a compensation scheme in October 2025.
The FCA is scheduling its announcement on a proposed motor finance redress scheme—addressing historical commission disclosure failures in car loans—for shortly after markets close on Monday, 30 March 2026, following a consultation launched in October 2025. This matters because it signals imminent final rules that could impose up to GBP11 billion in costs on lenders, affecting millions of consumers and requiring urgent operational preparations to ensure timely payouts in 2026.
What Changed
- - Introduction of a 3-month implementation period for most firms, extendable to 5 months for older motor finance agreements, to handle the scheme's scale and complexity.
- Streamlined consumer journey: Pre-scheme complainants no longer need to opt out; lenders must notify them of owed compensation within 3 months post-implementation, with immediate acceptance options...
- Removal of mandatory recorded delivery for customer communications, allowing flexible channels with fraud safeguards.
- No final decision yet on proceeding, but likely modifications based on over 1,000 consultation responses, including backlash from lenders.
Suggested Considerations
- Review and prepare systems: Firms must gear up for redress calculations, notifications, and payouts within the 3-5 month implementation window; voluntary early processing encouraged.
- Monitor complaints: Advise customers to complain directly (avoiding CMCs to prevent 30%+ fee losses); process pre-scheme complaints under forthcoming rules.
- Assess provisions: Quantify exposure (e.g., GBP11 billion industry-wide estimate) and update financial reserves, as done by Santander/Lloyds.
- Compliance checks: Ensure communication channels meet fraud safeguards; cease non-compliant practices per FCA interventions.
- Stakeholder engagement: Track the 30 March announcement (confirmed date forthcoming) and respond to any residual consultation feedback.
Key Dates
Consultation on compensation scheme launched
announcement) - End of standard implementation period; lenders notify consumers of redress
Extended implementation deadline
implementation) - Consumers informed of compensation amounts
FCA to publish final rules/approach on motor finance redress
Compliance Impact
Urgency: High – With the announcement just 6 days away (as of 24 March 2026), firms have minimal time to finalize preparations amid GBP11 billion cost risks, market disruption warnings, and lender pushback; delays could amplify redress delays, fines, or consumer harm claims.
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
BankPayment ProviderAll Firms
We are reminding regulated firms they need to undertake proper checks when dealing with unregulated lenders, safe custody providers, money brokers and financial leasing companies – also known as 'Annex 1' firms. There are around 1,200 of these firms registered with us for solely anti-money laundering purposes. Our powers are currently limited to looking at how these firms are meeting their anti-money laundering obligations and they are not subject to our wider rulebook. This regime is based o...
The FCA statement reminds regulated firms to perform robust due diligence on 'Annex 1' firms—unregulated lenders, safe custody providers, money brokers, and financial leasing companies registered solely for AML purposes—due to their limited oversight and heightened financial crime risks. This matters because Annex 1 firms (approx. 1,200) are not subject to FCA's full rulebook, conduct rules, or protections like the Financial Ombudsman Service, exposing regulated firms to contagion risks if they fail to manage interactions properly. Non-compliance could lead to regulatory scrutiny, enforcement, or reputational damage amid FCA's ongoing AML focus.
What Changed
No new rules or legislative changes are introduced; this is a supervisory reminder reinforcing existing obligations under the Money Laundering Regulations 2017 (MLRs). It emphasizes enhanced due diligence on Annex 1 firms, referencing the 2025 National Risk Assessment (NRA) for risk management. The FCA highlights proactive engagement, including a 2024 letter to CEOs and follow-up with 300 firms in late 2025, signaling intensified supervision without altering the registration-only regime under the Financial Services and Markets Act.
Suggested Considerations
- Verify Annex 1 registration status directly from the firm and via independent checks (e.g., FCA Register).
- Understand the Annex 1 firm's business model, products, and risks, aligning with MLRs and 2025 NRA.
- Manage identified risks, such as AML deficiencies or consumer encouragement into limited company structures for unregulated lending.
- Document due diligence to demonstrate compliance, integrating into broader financial crime frameworks (e.g., BWRA/CRA per FCA findings).
Key Dates
FCA letter to CEOs of Annex 1 firms raising AML concerns.; - **Late 2025 - FCA follow-up engagement with 300 Annex 1 firms.**
Compliance Impact
Urgency: High – This amplifies existing AML due diligence requirements amid FCA's 2025-30 financial crime strategy, with evidence of supervisory action (2024 letter, 2025 follow-ups). Failure risks enforcement, as Annex 1 interactions could facilitate financial crime or consumer harm without FOS protections; firms should audit exposures immediately to align with BWRA/CRA expectations and avoid findings like those in FCA's risk assessment review.
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BankPayment ProviderAll Firms
We have opened an enforcement investigation into Market Financial Solutions Limited (MFS). MFS is an Annex 1 business, which is solely registered with and supervised by us for its compliance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.Annex 1 registered firms are not authorised or subject to wider FCA regulation.MFS entered administration on 25 February 2026.
The FCA has opened an enforcement investigation into Market Financial Solutions Limited (MFS) following the firm's entry into administration on 25 February 2026, amid allegations of serious financial irregularities, fraud, and double-pledging of collateral. This investigation is significant because it represents regulatory scrutiny of an Annex 1 business—a firm with limited FCA oversight—whose collapse exposed structural weaknesses in private credit markets and raised questions about due diligence practices across the financial sector.
What Changed
- The FCA's enforcement investigation does not introduce new regulatory requirements but rather represents the regulator's response to alleged breaches of existing obligations.
- Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017: MFS's primary regulatory obligation as an Annex 1 registered firm.
Suggested Considerations
- *For MFS and its Administrators:
- Cooperate fully with the FCA enforcement investigation
- Preserve all documentation related to AML/CTF compliance, customer due diligence, and transaction monitoring
- Provide access to bank accounts, transaction records, and compliance files to investigators
- Respond to FCA information requests within specified timeframes
Key Dates
- MFS entered administration
- FCA enforcement investigation opened (current date context)
for investigation completion or enforcement action
Compliance Impact
Urgency: CRITICAL
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before acting. Full disclaimer.
BankAll Firms
Policy statement 7/26
PS7/26 finalizes PRA rules for standardized reporting of operational incidents and material third-party (MTP) arrangements, responding to CP17/24 consultation feedback by reducing firm burden through simplified templates and exclusions. This matters for compliance professionals as it enhances PRA oversight of operational resilience risks amid rising threats and third-party reliance, aligning with international standards like DORA and FSB FIRE while supporting identification of critical third parties (CTPs).
What Changed
- - MTP Reporting: Amended notification rule for clarity; scope excludes credit unions with <£50m assets and all third-country branches; separated register and notification templates with reduced data...
- Operational Incident Reporting: Merged three-phased reports (initial, interim, final) into one simplified, aligned template across PRA/FCA/Bank; removed fields, made more optional; clarified...
- Guidance Enhancements: Updated SS2/21 with MTP identification examples; SS1/26 clarifies threshold interpretation, early-stage assessments, and systemic impact expectations.
- Alignment: Full harmonization with FCA/Bank and international standards (DORA, FSB FIRE).
| Aspect | CP17/24 Proposal | PS7/26 Final Policy |
|--------|------------------|---------------------|
|...
Suggested Considerations
- Identify and notify MTP arrangements via FCA Connect (excluding exemptions); maintain annual register with reduced fields.
- Monitor/assess operational incidents against clarified thresholds (e.g., contagion, reputation); submit single report if met, within specified timelines.
- Update policies per SS1/26 (thresholds) and SS2/21 (MTP identification).
- Align reporting with PRA/FCA/Bank templates; use data for resilience prioritization.
- For insurers: Integrate with ongoing operational resilience post-SS1/21 milestone (31 March 2025).
Key Dates
- CP17/24 consultation published
- Final PRA/FCA rules on operational incident and third-party reporting effective (per industry analysis)
incident resolution; - Submit final incident report update (extendable to 60 working days in complex cases)
- MTP register reporting (exact date not specified; aligns with notifications)
Compliance Impact
Urgency: High - Mandates new reporting infrastructure and processes amid rising operational threats; non-compliance risks supervisory action on resilience vulnerabilities. Reduced burden from CP mitigates costs, but timely implementation critical for PRA oversight and CTP identification; benefits (e.g., thematic analysis) outweigh costs per PRA.
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original PRA source
before acting. Full disclaimer.
BankInsuranceAll Firms
Policy statement 6/26
PS6/26 finalizes the PRA's policy on recognized exchanges (REs) under Article 4(1)(72)(c) of the UK CRR, shifting responsibility to firms for assessing exchange and asset liquidity conditions while restating main indices in the PRA Rulebook and revoking SS20/13. This matters for PRA-regulated firms as it enables more dynamic, risk-sensitive capital treatments for traded assets, potentially expanding eligible REs and supporting competitiveness without PRA pre-approval.
What Changed
- - New Recognised Exchanges (CRR) Part in the PRA Rulebook: Specifies conditions for REs focusing on (i) exchange/market structure risk (e.g., operational robustness of clearing/settlement) and (ii)...
- Restatement of main indices: List from Commission Implementing Regulation 2016/1646 moved to PRA Glossary without policy changes.
- Amendment to 'higher risk equity exposure' definition: Aligns with Basel 3.1 near-final rules, excluding qualifying listed equities from higher risk weights under the standardized approach (ties to...
- Revocation of SS20/13: Deletes the supervisory statement on third-country equivalence and REs; consequential amendments to Counterparty Credit Risk (CRR), Credit Risk Mitigation (CRR), and SDDT –...
- Minor clarifications: Edits to scope and assessment of clearing/settlement mechanisms for overseas exchanges.
Suggested Considerations
- Assess exchanges/assets: From 1 July 2026, evaluate overseas exchanges against new conditions (market structure, liquidity); document processes and update periodically; align with internal credit risk models.
- Update policies/systems: Revise credit risk, counterparty credit risk, and CRM frameworks to incorporate firm-led RE assessments; remove references to revoked SS20/13.
- Review exposures: Reassess equity exposures for Basel 3.1 alignment; test industry-shared assessments for accuracy and own-accountability.
- Governance: Embed in risk management; prepare for PRA thematic reviews on implementation.
- Reporting: No new forms, but ensure CRR disclosures reflect updated RE treatments.
Key Dates
- Consultation deadline for CP3/25 (closed; feedback incorporated in PS6/26)
- Implementation date for new RE rules, main indices restatement, SS20/13 revocation, and related Rulebook amendments
- Proposed implementation for Basel 3.1 changes, including higher risk equity exposure amendments (alongside broader standards)
Compliance Impact
Urgency: High – Effective 1 July 2026 (approx. 4 months from now), requiring immediate gap analysis, policy updates, and assessor training to avoid capital miscalculations or supervisory findings. Impacts prudential calculations directly, with flexibility reducing PRA burden but increasing firm accountability and review risks.
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
Bank
We'd also streamline the scheme, so millions get compensation in 2026. We're considering over 1,000 responses to our proposals for a compensation scheme for motor finance customers who were treated unfairly.If we proceed with a scheme, we are likely to make several changes. If we do go ahead, we expect to publish final rules in late March. The timing of publication will be outside market hours and we'll confirm the date in advance. Final decisions on the scheme have not yet been made. But to ...
The FCA is implementing a **streamlined motor finance compensation scheme** to address unfair commission disclosure practices, with final rules expected in late March 2026 and scheme launch in early 2026. This represents a major regulatory intervention affecting approximately 14 million motor finance agreements with estimated total redress costs of £8.2 billion, requiring immediate operational preparation by all lenders and finance providers.
What Changed
- The FCA's streamlined approach introduces several material modifications to the original compensation scheme proposal:
Process Streamlining
- Automatic opt-in for prior complainants: Customers who complained before scheme launch will no longer be asked to opt out.
- Immediate acceptance of offers: Consumers can accept redress offers immediately rather than waiting for final determinations.
- Flexible communication channels: Firms are no longer required to use recorded delivery; alternative channels with fraud safeguards are permitted.
Implementation Timeline
- Three-month standard implementation period from scheme launch, with up to five months for older agreements to allow adequate data review and calculation accuracy.
Suggested Considerations
- *Immediate Priorities (Q1 2026):
- *Data Integrity Assessment: Conduct comprehensive audit of historic motor finance agreements to identify eligible customers and validate transactional data completeness, particularly for older agreements.
- *Redress Calculator Development: Build auditable, validated redress calculators capable of:
- Repricing loans based on proposed APR reductions
- Calculating compensatory interest at BoE base rate + 1%
Key Dates
– Scheme implementation begins (exact date dependent on final rules publication)
– FCA to publish final scheme rules (timing to be confirmed in advance, outside market hours)
– Motor finance complaints handling pause lifts; firms must be ready to respond to complaints outside the scheme
– Record retention deadline for all relevant scheme documentation
– Standard implementation period for lenders to contact prior complainants and provide compensation notifications
Compliance Impact
Urgency: CRITICAL
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
BankFintechAll Firms
We are bringing forward a review of some aspects of the UK Listing Rules to consider how they apply to specific types of investment entities. As part of the Primary Markets EffectivenessReviewwe explored which types of investment entities could be eligible to be listed. Since introducing the new listingruleswe have heard from stakeholders that these eligibility criteria, particularlyregardingrisk-spreading, may be unduly restrictive. We will use this review to assess if changes should be made...
The FCA is conducting a targeted review of UK Listing Rules applicable to investment entities, with particular focus on whether current risk-spreading eligibility criteria are unduly restrictive and how rules support shareholder rights and conflict management. This review represents a potential material shift in listing accessibility for alternative investment funds and closed-ended investment vehicles, with final proposals expected by end-2026.
What Changed
The FCA's review addresses three primary areas:
Risk-Spreading Eligibility Criteria
Stakeholders have flagged that current risk-spreading requirements in the new listing rules may be overly restrictive for certain investment entity types. The FCA will assess whether modifications are warranted to broaden eligibility for investment entities seeking primary market access.
Shareholder Rights and Board Governance
The review will examine how listing rules, in conjunction with company law, ensure boards adequately support shareholder rights, facilitate shareholder engagement, and manage conflicts...
Suggested Considerations
- *Immediate (Q1 2026):
- *Monitor FCA consultation announcements for publication of the consultation paper on listing rules modifications
- *Assess current compliance posture against existing risk-spreading criteria to identify potential gaps or restrictive elements
- *Document shareholder engagement frameworks and conflict-of-interest management procedures to prepare for governance review
- *During consultation period:
Key Dates
- FCA to complete review and issue final rules
- Consultation paper publication (FCA indicates "proposals in a consultation paper" without specific date, but typical FCA consultation windows are 8-12 weeks)
- Final rules expected following consultation period
Compliance Impact
Urgency: HIGH
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
Asset ManagerHedge Fund
The Securities and Exchange Commission today adopted final rule and form amendments to reflect the requirements of the recently enacted Holding Foreign Insiders Accountable Act (HFIA), which will increase transparency into the holdings and transactions…
The SEC adopted final rules on February 27, 2026, implementing the Holding Foreign Insiders Accountable Act (HFIA), which extends Section 16(a) beneficial ownership reporting requirements to directors and officers of foreign private issuers (FPIs) with Exchange Act Section 12-registered equity securities, effective March 18, 2026. This aligns FPI insiders' disclosure obligations with those of U.S. domestic issuers, enhancing market transparency while exempting >10% holders from reporting. Compliance professionals must prioritize preparation as the deadline approaches in two weeks from today (March 3, 2026).
What Changed
- - Extension of Section 16(a) Reporting: Directors and officers of FPIs must now file Forms 3 (initial beneficial ownership), 4 (changes in ownership), and 5 (annual summary) electronically and in...
- Rule Amendments:
- Rule 3a12-3(b): Removes full Section 16 exemption for FPI insiders; retains exemptions only for Section 16(b) short-swing profits and Section 16(c) short-selling prohibitions....
- Form Updates: Forms 3, 4, and 5 amended to include non-U.S. issuers and reporters; technical changes to instructions for EDGAR support contacts and paper filing addresses.
- Exemptive Authority: SEC may exempt persons/securities/transactions if foreign laws impose "substantially similar" requirements, but no exemptions granted yet; staff evaluating.
Suggested Considerations
- For FPIs and Insiders: Identify all directors/officers subject to Section 16; implement processes for electronic/English-language filings via EDGAR; file initial Form 3 by March 18, 2026 (or sooner for new appointees); establish transaction monitoring for prompt Form 4 filings.
- Training and Policies: Update insider trading policies, provide training on forms/reporting timelines; designate EDGAR filers with proper contacts.
- Systems Preparation: Integrate with trading/brokerage systems for real-time ownership tracking; prepare for Form 5 annual reconciliations.
- Monitor Exemptions: Watch for SEC exemptive relief based on foreign law equivalency; assume compliance required absent announcement.
Key Dates
HFIA enacted into law
SEC adopts final rules (ahead of 90-day mandate)
Effective date; directors/officers of existing FPIs must file initial Form 3; new directors/officers file within 10 days of appointment; ongoing Forms 4 within 2 business days of transactions
Annual Form 5 for unreported transactions; adopting release published in Federal Register (date TBD)
Compliance Impact
Urgency: Critical – With the March 18, 2026, effective date just two weeks away (as of March 3, 2026), non-compliance risks SEC enforcement, including public disclosure failures and potential civil penalties under Section 16. This materially heightens governance burdens for FPIs, demands immediate system/process overhauls, and aligns foreign insiders with U.S. standards to prevent opacity in cross-border listings.
AI-generated analysis. May contain errors or omissions — verify with the
original SEC source
before acting. Full disclaimer.
All Firms
The Payments Vision Delivery Committee (the Committee) has published the Payments Forward Plan (the Plan). Read the Plan on GOV.UKThe Committee comprises:HM TreasuryBank of EnglandFinancial Conduct AuthorityPayment Systems RegulatorThe Plan sets out upcoming initiatives across retail and wholesale payments, including elements of digital assets. Recent publications on open banking, stablecoins and contactless limits, alongside the initiatives in the Plan, show the high level of activity across...
The Payments Vision Delivery Committee—comprising HM Treasury, Bank of England, FCA, and Payment Systems Regulator—has published the **Payments Forward Plan**, a three-year regulatory roadmap for retail, wholesale payments, and digital assets, aligning with the UK's National Payments Vision for a trusted, innovative ecosystem. This matters for compliance teams as it provides sequencing and milestones for multiple initiatives, enabling proactive planning amid high regulatory activity, including PSR consolidation into FCA and infrastructure upgrades. It signals coordinated efforts to boost competition, resilience, and innovation while minimizing sector capacity strain.[FCA publication]
What Changed
- No immediate binding regulatory changes are imposed by the Plan itself; it is a forward-looking roadmap outlining planned initiatives rather than new rules. Key elements include:
- Modernisation of payments framework: Consolidation of PSR into FCA, with HMT consultation response in Q1 2026; data/operational enhancements to Faster Payments and Bacs by end-2026.
- Infrastructure upgrades: Short-term resilience improvements to Faster Payments and Bacs (end-2026); exploration of regulated stablecoins for on-chain settlement (H1 2026).
- Safeguarding enhancements: FCA Supplementary Regime effective May 2026, with engagement Jan-Apr 2026.
- Standards and open banking: Industry input on standards body (Feb-Mar 2026 assessment); HMT Data (Use and Access) Act SI in Q4 2026.
Suggested Considerations
- Review the full Plan on GOV.UK (https://assets.publishing.service.gov.uk/media/699f2bc6c497bac082bc76bc/Payments_Forward_Plan_.pdf) and map initiatives to your firm's operations, prioritizing safeguarding, infrastructure, and stablecoins.
- Engage proactively: Provide FCA views on standards body (by Feb 2026); participate in Jan-Apr 2026 safeguarding engagement; prepare for VRP rollout (live payments expected Q1 2026).
- Stablecoin firms: Submit sandbox applications by 18 Jan 2026.
- Monitor and plan: Track Regulatory Initiatives Grid for 2027; assess capacity for sequenced initiatives; ensure compliance readiness for May 2026 safeguarding rules and end-2026 infrastructure changes.
- Internal audit: Evaluate current adherence to PSRs/EMRs, especially safeguarding, ahead of consolidation.
Key Dates
HMT consultation response on PSR consolidation into FCA
HMT update on Consumer Credit Act reform
Deadline for stablecoin issuers to apply to FCA regulatory sandbox; (related push for innovation)
FCA Supplementary Regime for safeguarding comes into force
Bank/FCA exploration of regulated stablecoins for on-chain settlement
Compliance Impact
Urgency: Medium. This is a planning document, not enforceable rules, but its milestones trigger near-term actions (e.g., Q1 2026 engagements, May 2026 safeguarding). It matters because it coordinates high-activity areas like PSR-FCA merger and stablecoins, reducing surprises but demanding resource allocation for innovation/resilience amid sector capacity constraints. Firms delaying review risk missing input opportunities or readiness gaps, especially with VRP/stablecoin momentum.
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
Payment ProviderFintechBank
We have signed a Memorandum of Understanding (MoU) with the Independent Football Regulator (IFR). The MoU establishes how the 2 organisations will work together and support effective regulation where football and financial services intersect.It also sets out a high-level framework for principles for cooperation between the IFR and the FCA.Read the MoU (PDF)
The FCA has signed a Memorandum of Understanding (MoU) with the newly established Independent Football Regulator (IFR) to define cooperation on regulating intersections between football clubs and financial services, such as ownership suitability, licensing, and financial sustainability. This matters for compliance professionals as it formalizes information sharing and joint oversight, potentially impacting firms involved in football-related financing, investments, or consumer credit products tied to sports. It supports the Football Governance Act 2025 framework, enhancing regulatory alignment where financial misconduct could affect club operations.[https://www.fca.org.uk/news/statements/mou-independent-football-regulator-fca]
What Changed
- - Establishes a high-level framework of principles for cooperation between FCA and IFR, focusing on effective regulation at the football-financial services nexus.
- Outlines how the organizations will work together, including information sharing on matters like club owners' financial dealings, licensing compliance, and enforcement where financial services...
- Builds on prior MoUs (e.g., FCA-UKGC models) by addressing regulatory overlaps, with IFR gaining powers for investigations, enforcement sanctions, and revenue distribution resolutions under the...
Suggested Considerations
- Review and map exposures: Firms should assess football-related client portfolios for IFR overlap (e.g., loans to clubs, owner financing) and prepare for dual FCA-IFR scrutiny.
- Enhance information sharing protocols: Update compliance policies to respond promptly to IFR requests for data on regulated activities (e.g., under IFR's clause 65 powers), mirroring FCA's existing MoU frameworks.[https://www.fca.org.uk/news/statements/mou-independent-football-regulator-fca]
- Incorporate IFR factors in due diligence: For owner suitability, align with IFR tests (fit/proper custodians, resource adequacy); flag potential divestment risks in advisory services.
- Monitor joint enforcement: Participate in escalation procedures if disputes arise, ensuring internal records of regulatory remit discussions.
Key Dates
Football Governance Act 2025 enactment; Establishes IFR statutory powers, including provisional/full club licensing from this date onward
IFR licensing rollout; Clubs transition from provisional to full licenses once threshold conditions (e.g., financial resources, owner suitability) met; no fixed end-date
Compliance Impact
Urgency: Medium – This MoU does not impose new binding rules or deadlines but signals heightened cross-regulator focus on football finances post-Football Governance Act 2025, risking enforcement overlaps or info requests. It matters for firms with niche exposures (e.g., sports financing) to avoid gaps in owner due diligence or financial promotions, potentially amplifying AML/conduct risks amid IFR's divestment powers.
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
BankFintechPayment Provider
ESMA simplifies MiFID II/ MiFIR obligations on market data 23 February 2026 Guidelines and Technical standards Market data Trading The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has withdrawn its guidelines on the MiFID II/ MiFIR obligations on market data , effective immediately, reflecting its ongoing commitment to simplifying rules and reducing unnecessary compliance burdens for market participants. The decision aligns the framewo...
ESMA has immediately withdrawn its guidelines on MiFID II/MiFIR market data obligations to align with the new Regulatory Technical Standards on making market data available on a reasonable commercial basis (RTS on RCB), reducing compliance burdens for market participants. This simplifies the regulatory framework by eliminating overlapping soft-law guidance, focusing firms on binding RTS requirements for data transparency, non-discrimination, and cost-based pricing. It matters as it streamlines operations amid broader MiFID II/MiFIR reviews, lowering costs while maintaining market integrity.
What Changed
- - Withdrawal of ESMA's previous guidelines on MiFID II/MiFIR market data obligations, effective immediately on 23 February 2026, to avoid overlap with binding rules.
- Full alignment with RTS on RCB, which sets criteria for transparency, non-discrimination, and reasonable commercial basis pricing of market data by trading venues and approved publication...
- Firms must now rely solely on RTS legal text for interpreting data provision, disclosure, and fee structures, without legacy interpretive guidance.
Suggested Considerations
- Review and map internal policies, procedures, and data disclosure practices directly to RTS on RCB criteria for transparency, non-discrimination, and cost-based pricing.
- For market data providers authorised before 23 November 2025: Use the transition period (until 22 August 2026) exclusively to renegotiate and align existing contractual arrangements, including pricing schedules, data packages, and service-level clauses, with RTS requirements.
- Document compliance with RTS across asset classes and distribution channels; cease reliance on withdrawn guidelines.
- Contact ESMA at RCB@esma.europa.eu for issues on RTS application or interpretative uncertainties.
Key Dates
- RTS on RCB enters into force
- Withdrawal of legacy ESMA guidelines takes effect immediately
- End of transition period for pre-authorised market data providers to align contracts with RTS on RCB
Compliance Impact
Urgency: High - Immediate guideline withdrawal requires prompt policy updates to avoid supervisory misalignment, though the 22 August 2026 transition eases contract changes for legacy providers. This matters as it reduces ambiguity and burdens in a simplifying regulatory environment, but non-compliance risks enforcement under binding RTS amid MiFID II/MiFIR reviews; proactive alignment prevents future disruptions.
AI-generated analysis. May contain errors or omissions — verify with the
original ESMA source
before acting. Full disclaimer.
Broker Dealer
Policy statement 5/26
PRA Policy Statement PS5/26 finalizes rules permitting UK credit unions to invest in Credit Union Service Organisations (CUSOs), expanding from the CP13/25 proposals to foster innovation, collaboration, and growth while managing prudential risks through safeguards like due diligence and investment caps. This matters as it enables credit unions—often smaller mutuals—to access shared services (e.g., HR, IT, compliance) via CUSOs, leveling the playing field against larger competitors and supporting the PRA's safety/soundness and competitiveness objectives.
What Changed
- - Investment permission and cap increase: Credit unions can now invest in CUSOs using own capital, with the cap raised from 5% to 7.5% of total capital across all CUSOs (clarifications added on...
- Expanded CUSO scope: CUSOs can now serve other UK-regulated mutuals (with Part 4A permission) beyond just credit unions; partnerships with non-credit unions permitted as owners, subject to safeguards.
- Supervisory expectations in SS2/23: New chapter requires due diligence, risk analysis, limited liability to investment amount, legal/operational separation, conflict of interest policies, and...
- Other updates: Chapter 17 of SS2/23 amended due to deletion of SS20/15; six-month implementation window for SS2/23 CUSO expectations.
Suggested Considerations
- Review and update policies: Credit unions must conduct due diligence/risk assessments before any CUSO investment/use; implement conflict of interest policies, especially for non-credit union partnerships.
- Ensure structural safeguards: Limit liability to investment amount; maintain legal/operational separation between credit union and CUSO; monitor aggregate investments ≤7.5% of capital.
- Governance alignment: Decisions must prioritize member benefits per legislative objects; update internal investment rules to comply with amended PRA Rulebook (Credit Unions Part).
- Implementation planning: Within six months, integrate SS2/23 expectations into operations; non-engaging credit unions need no action but should monitor for opportunities.
- Reporting/oversight: Prepare for PRA supervision on CUSO risks; consider CBA updates if significantly impacting mutuals.
Key Dates
- Consultation response deadline for CP13/25
- Publication date of PS5/26 (final policy)
- Implementation deadline for SS2/23 CUSO expectations (six months from PS5/26 publication)
Compliance Impact
Urgency: High – Credit unions eyeing CUSOs for growth (e.g., shared services) must act promptly within the six-month window to avoid supervisory breaches, as this expands opportunities but introduces new prudential risks (e.g., ownership misalignment, capital exposure). Non-compliance risks heightened PRA scrutiny, especially post-PS26/25 mutual sector review; benefits justify costs only for opt-in firms, but proactive preparation ensures safety/soundness.
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
BankFintechAll Firms
Our clarification about forbearance following the introduction of the new Public Offers and Admissions to Trading Regulations (POATRs) regime. On 19 January 2026, the Public Offers and Admissions to Trading Regulations (POATRs) regime and associated changes to our listing processes in the UK Listing Rules (UKLR) came into force. These changes introduced a requirement in the Prospectus Regime Manual (PRM 1.6.4R) for issuers to notify a Regulatory Information Service (RIS) of any admission to t...
The FCA's statement clarifies forbearance on overlapping notification requirements for admissions to trading under the new POATRs regime effective 19 January 2026, addressing confusion from removed block listing exemptions in UKLR. It matters because it provides temporary relief from duplicative RIS notifications for frequent issuers, preventing unintended supervisory burdens while the FCA consults on rule amendments.
What Changed
- - POATRs and UKLR Updates: Effective 19 January 2026, PRM 1.6.4R requires issuers to notify a Regulatory Information Service (RIS) of any admission to trading within 60 days, allowing grouping of...
- Overlapping UKLR Rules: Provisions in UKLR 6.4.4R(4), 13.3.20R(4), 14.3.17R(4), 16.3.16R(4), and 22.2.17R(4) require "as soon as possible" RIS notifications for new equity issues or public offers,...
- Forbearance Policy: FCA will not take enforcement action for non-compliance with the "as soon as possible" rules for securities under prior block listings (unissued/offered before 19 January 2026,...
- Upcoming Consultation: FCA intends to consult "shortly" on removing the conflicting UKLR provisions, aligning solely with PRM 1.6.4R's 60-day requirement.
Suggested Considerations
- Review ongoing/future issuances against former block listing criteria: confirm securities unissued pre-19 January 2026 and same purpose to rely on forbearance.
- Implement PRM 1.6.4R: Notify RIS within 60 days of any admission to trading, grouping where possible.
- Monitor FCA announcements for consultation launch and updates; prepare responses if issuing frequently.
- Document reliance on forbearance (e.g., internal memos linking to original block listing) for audit trails.
- No immediate "as soon as possible" notifications needed under forbearance for qualifying cases.
Key Dates
- POATRs regime and UKLR changes effective, including PRM 1.6.4R (60-day RIS notification) and deletion of UKLR 20.6 block listings
- Cut-off for securities under former block listings to qualify for forbearance (must not have been issued/offered prior)
- FCA consultation on removing UKLR 6.4.4R(4) and equivalents (no exact date specified)
Compliance Impact
Urgency: Medium - Forbearance reduces immediate risk of enforcement for qualifying issuers, but ongoing POATRs compliance (60-day notifications) is mandatory. Matters for operational efficiency, as misalignment could lead to duplicative reporting costs; non-qualifying issuances risk breaches until consultation resolves.
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
All Firms
We have signed an Exchange of Letters with the International Financial Services Centres Authority (IFSCA). IFSCA is the unified regulator for financial institutions operating in Gujarat International Finance Tec-City (GIFT City), India’s first international financial services centre.This agreement affirms both authorities’ commitment to develop our regulatory relationship.Download our letter (PDF)The letters set out the intention to share regulatory knowledge and best practice to support the ...
The FCA has signed an Exchange of Letters with India's IFSCA, the regulator for GIFT City, to foster regulatory cooperation, knowledge sharing, and stronger links between UK financial markets and GIFT City. This matters for compliance professionals as it signals expanding cross-border ties, potentially easing market access and harmonizing standards for firms operating between the UK and India, amid the FCA's broader global outreach strategy. No binding rules are imposed, but it sets the stage for future alignment in areas like fintech and financial services.
What Changed
- There are no direct regulatory changes or new requirements imposed by this Exchange of Letters. It is a non-binding agreement focused on:
- Sharing regulatory knowledge and best practices.
- Supporting financial services development in both jurisdictions.
- Promoting links between GIFT City and UK markets.
The letters affirm commitment to developing the regulatory relationship, with an additional step of posting an FCA Financial Services Attaché to the...
Suggested Considerations
- binding nature. Recommended proactive steps for compliance teams:
- Review and download the full Exchange of Letters (PDF available via FCA site) to understand shared priorities.
- Assess current India/GIFT City exposures and prepare for potential future information-sharing requests or aligned standards.
- Monitor FCA news for follow-up developments, such as joint guidance on fintech or market access https://www.fca.org.uk/news.
- Engage with FCA international teams if planning cross-border activities in GIFT City.
Key Dates
- Posting of FCA Financial Services Attaché to British Deputy High Commission in Mumbai to support regulatory relationship development [FCA publication]
Compliance Impact
Urgency: Low - This is a cooperative MoU-style letter exchange without immediate rules, penalties, or obligations, posing minimal disruption risk. It matters strategically for long-term planning, as it could lead to simplified compliance for UK-India activities (e.g., reduced dual-regulation friction) and aligns with FCA's pattern of global pacts that indirectly shape supervisory expectations. Firms with India exposure should note it for horizon scanning, but no urgent resourcing is needed.
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
BankFintechAll Firms
FCA v Huobi Global S.A. and Others. On 21 October 2025, the FCA commenced proceedings in the Chancery Division of the High Court against the following parties:HUOBI GLOBAL S.A.(a company incorporated in Panama)PERSONS UNKNOWN (who are the owner of, controller and/or the persons currently in control of all or part of www.htx.com and/or its associated mobile applications (“the HTX Exchange”))PERSONS UNKNOWN (who are the legal and/or natural persons defined as the HTX Operators in the HTX Platfo...
The FCA has initiated civil proceedings in the High Court against Huobi Global S.A. (HTX, formerly Huobi) and multiple categories of "Persons Unknown" for unlawfully promoting cryptoasset services to UK consumers without authorisation, breaching the financial promotions regime. This action underscores the FCA's aggressive enforcement against unauthorised crypto entities targeting UK retail investors, signaling heightened scrutiny on overseas platforms. Compliance teams must note this as evidence of the regulator's willingness to pursue novel legal strategies like "Persons Unknown" claims to enforce compliance extraterritorially.[https://www.fca.org.uk/news/statements/htx-huobi-legal-proceedings]
What Changed
This is not a policy change but an enforcement action highlighting existing requirements under the UK's financial promotions regime (effective October 2023 for cryptoassets), which mandates FCA registration under anti-money laundering (AML) rules and compliance with promotion standards for all firms—domestic or foreign—marketing to UK consumers. Key elements include prohibitions on unauthorised promotions, with the FCA now using High Court proceedings to target operators, owners, controllers, and even future controllers up to 31 October 2028.
Suggested Considerations
- Immediate audit: Review all crypto-related promotions, websites, apps, and social media for UK targeting (e.g., IP geo-fencing, language, consumer references); cease any unauthorised activity.
- Self-identification: If potentially a "Person Unknown," contact FCA at [email protected] for documents (Claim Form, Particulars, etc.).
- Compliance checks: Ensure AML registration and promotions regime adherence; authorised firms must verify third-party partnerships.
- Social media monitoring: Halt or geoblock UK access for listed platforms; document controls.
- Reporting: Disclose to FCA if operating in UK; apply for authorisation via FCA team if intending regulated activities.
Key Dates
- Particulars of Claim dated (note: precedes claim form, likely preparatory)
- FCA commences proceedings via Claim Form in Chancery Division, High Court
- Application Notice for service out of jurisdiction/alternative means
- High Court (Deputy Master Dovar) grants permission to serve proceedings out of jurisdiction and by alternative means
- Cut-off for "Persons Unknown" category covering new owners/controllers/promoters.[https://www.fca.org.uk/news/statements/htx-huobi-legal-proceedings]
Compliance Impact
Urgency: High - This sets a precedent for extraterritorial enforcement via "Persons Unknown" claims, extending liability to unidentified/future actors, which amplifies risks for non-UK crypto firms. It matters because post-October 2023 rules have seen positive compliance from most, but FCA vows action against outliers, potentially leading to injunctions, fines, or asset freezes; authorised firms face contagion risks via associations.[https://www.fca.org.uk/news/statements/htx-huobi-legal-proceedings]
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
Crypto ExchangeFintech
We have published a letter to trade associations to provide an update in the development of a Future Entity (FE) for open banking. The letter confirms the appointment of KPMG to provide an independent assessment of proposals to establish a standards-setting body for UK open banking APIs that is capable of becoming the Future Entity. It explains the purpose and scope of the assessment, the respective roles of the FCA, industry, trade associations and the independent assessor, and how firms can...
The FCA has appointed KPMG to conduct an independent assessment of proposals for establishing a **Future Entity** – a standards-setting body for UK open banking APIs that will replace Open Banking Limited. This initiative is critical because it establishes the governance framework for open banking ahead of new legislative powers the FCA will receive under the Data (Use and Access) Act 2025, with a statutory instrument expected by end-2026.
What Changed
- The regulatory landscape for UK open banking is undergoing fundamental restructuring:
- Transition of regulatory authority: The FCA is becoming the primary regulator for open banking, replacing the Joint Regulatory Oversight Committee (JROC).
- Future Entity establishment: A new standards-setting body will become the primary UK standard-setting organization for open banking APIs, responsible for setting and maintaining common standards for...
- Independent assessment process: KPMG will evaluate competing proposals from industry participants to determine which organization should lead the Future Entity establishment.
- Legislative framework: HM Treasury will introduce legislation granting the FCA new rulemaking powers for open banking under the Data (Use and Access) Act 2025.
Suggested Considerations
- *For industry participants and trade associations:
- *Engage with the assessment process: Participate in the independent assessment by submitting proposals or supporting existing proposals for Future Entity leadership
- *Arrange FCA Q&A sessions: Organizations interested in leading Future Entity establishment should contact the FCA directly to schedule one-hour Q&A sessions ahead of the independent consultancy process launch
- *Coalesce behind proposals: Industry should decide which proposal option should lead the next phase of work, with the FCA commissioning assessment of either multiple proposals or a single industry-supported proposal
- *Prepare for VRP implementation: Ensure systems and processes are ready for live Variable Recurring Payments transactions expected in Q1 2026
Key Dates
– Final design of Future Entity expected; live transactions expected through VRP scheme
– FCA expected to consult on Long-Term Regulatory Framework; statutory instrument for Open Banking expected to be laid by HM Treasury
– Independent assessment process begins; KPMG commences evaluation of proposals
– FCA's Open Finance roadmap due for publication
– KPMG delivers final assessment report; FCA publishes on its website
Compliance Impact
Urgency: HIGH
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
BankPayment ProviderFintech The FCA and Solicitors Regulation Authority (SRA) are warning claims management companies and law firms (representatives) involved in motor finance claims to make sure clients don’t have multiple representatives for the same claim and are not charged excessive termination fees We have seen some clients with up to 4 different representatives for the same claim. They risk being charged termination fees, which could be deemed excessive, should they try to cancel duplicate agreements.
The FCA and SRA have issued a joint warning to claims management companies (CMCs) and law firms handling motor finance commission claims, addressing multiple client representations (up to 4 per claim observed) and excessive termination fees, which risk unfair consumer treatment. This matters because regulators are intensifying scrutiny amid a paused complaints-handling period (ending May 2026) and a forthcoming redress scheme, with enforcement actions already underway against non-compliant firms.
What Changed
This is a non-binding joint message reinforcing existing obligations under FCA's Consumer Duty, Claims Management Conduct of Business Sourcebook, Consumer Rights Act 2015 (CRA), and SRA standards, rather than introducing new rules. Key emphases include mandatory robust onboarding due diligence to prevent multiple representations, clear upfront disclosure of termination fees, and justification of any fees charged (especially if onboarding was inadequate).
Suggested Considerations
- Engaging clients and other representatives to confirm client wishes and establish single representative.
- Notifying respondent firms promptly of the sole representative.
- Supporting file transfers with client consent and considering no-charge resolutions if onboarding was poor.
- Robust onboarding checks (e.g., confirm no prior representation).
- Entering new agreements only after prior termination and informed consent.
Key Dates
- FCA letter to CMCs on related expectations
- FCA expected to finalize redress scheme rules (per consultation responses). (https://www.akingump.com/en/insights/alerts/fca-consultation-paper-on-motor-finance-redress-published)
- Snapshot of SRA's 89 open HVCC investigations and 7 firm closures
- FCA launches consumer advertising campaign warning of scammers (post-dated relative to publication)
- FCA to publish final rules on proposed Motor Finance Consumer Redress Scheme (CRS)
Compliance Impact
Urgency: High - Immediate risk of enforcement; FCA/SRA using CRA/DMCA 2024 powers (e.g., info requests from 9 law firms), 5 CMCs paused onboarding, 1 under investigation, SRA closed 7 firms. Matters due to paused complaints (ending soon), impending CRS, consumer harm from fees/delays, and proactive monitoring signaling broader crackdown on HVCC misconduct like excessive fees or poor due diligence.
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
Payment ProviderAll Firms
We’re working closely with the Office of Financial Sanctions Implementation (OFSI), UK law enforcement, and our regulatory partners to tackle the abuse of cryptoassets and associated money‑laundering activities. Read the full blog on the OFSI’s website.
Crypto ExchangeFintechPayment Provider We have signed a contract with Etrading Software (ETS) to deliver the UK bond consolidated tape. A high-quality tape will provide investors with a comprehensive overview of the bond market and support price formation and liquidity. It will help maintain the UK’s position as a highly competitive and compelling place to invest and grow.ETS has now launched a website that sets out key milestones and provides technical information for data contributors and users. We will continue to support ETS a...
Broker DealerAsset ManagerBank The latest Accelerated Settlement Taskforce (AST) report updates on the significant progress made towards the move to T+1. Read the AST report.Jamie Bell, head of capital markets at the FCA, said:'T+1 marks a major milestone in our drive to support growth and innovation. Faster settlement cycles will reduce risk, free up capital for faster reinvestment and align with other major markets.'We are delighted to see the great progress made last year highlighted in the AST’s report. By the end of t...
Broker DealerBankAsset Manager We have issued a joint statement with the Payment Systems Regulator (PSR) giving clarity on open banking pricing models. We and the PSR have issued the following statement (PDF).This confirms we will not, at this stage, prioritise a Competition Act 1998 (CA98) investigation into the centralised ‘access fee’ pricing model being developed by the UK Payments Initiative (UKPI) for commercial Variable Recurring Payments (cVRPs). cVRPs are an emerging open banking technology that allow consumers to...
The FCA and PSR have jointly confirmed they will not prioritize a Competition Act 1998 investigation into the UK Payments Initiative's (UKPI) centralized access fee pricing model for commercial Variable Recurring Payments (cVRPs), with the CMA's concurrent agreement. This regulatory clarity provides temporary certainty for cVRP development ahead of anticipated legislation by end-2026, creating a critical window for firms to develop compliant commercial models in this emerging open banking technology.
What Changed
- The regulatory statement establishes the following key positions:
- Non-prioritization of CA98 investigation: The FCA, PSR, and CMA have jointly confirmed they will not prioritize competition law enforcement against UKPI's centralized access fee model for Phase...
- Scope limitation: The regulatory clarity applies only to Phase 1/Wave 1 of UKPI's cVRP scheme, specifically addressing lower-risk payment use cases including regulated financial services, utilities,...
- Temporary framework: This is explicitly a temporary measure pending legislative implementation under the Data (Use and Access) Act 2025 or other relevant legislation.
- Regulatory monitoring obligations: During the interim period, the FCA and PSR will monitor market developments, review pricing methodology changes, and require UKPI to submit finalized governance...
Suggested Considerations
- *For UKPI and participating firms:
- *Governance documentation: Submit finalized governance documents to FCA/PSR as required during the interim period
- *Pricing methodology transparency: Maintain detailed records of access fee pricing methodology and be prepared to demonstrate compliance with the agreed model; notify regulators of any material changes
- *Phase 1/Wave 1 compliance: Ensure all cVRP offerings remain within the defined scope of lower-risk use cases during Phase 1/Wave 1
- *Market engagement: Participate in FCA industry consultations throughout 2026 regarding progress, service delivery, and identified blockers
Key Dates
- Expected first live UKPI cVRP payments
- Government anticipated to introduce legislative framework granting FCA new open banking powers
- FCA and PSR wrote to CMA setting out their non-prioritization position
- CMA confirmed alignment with FCA/PSR position on CA98 prioritization
- Joint FCA/PSR statement issued on open banking pricing models
Compliance Impact
Urgency: HIGH
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
The FCA and PSR have issued a joint statement providing clarity on open banking pricing models, specifically regarding the centralised 'access fee' pricing model for commercial Variable Recurring Payments (cVRPs). This statement confirms that they will not prioritize a Competition Act 1998 investigation into this model at this stage. The goal is to support the development of cVRPs, giving consumers more control over their payments and lowering processing fees for businesses.
What Changed
The FCA and PSR have clarified their enforcement position on the UKPI's proposal for a commercial model for cVRPs, indicating they will not prioritize a Competition Act 1998 investigation at this stage.
Suggested Considerations
- Monitor market developments and updates on the legislative framework for open banking
- Review and understand the implications of the centralised 'access fee' pricing model for cVRPs on your business operations
- Ensure compliance with existing competition laws and regulations
Key Dates
Expected implementation of the government's legislative framework for open banking
End of the temporary measure if the legislative framework is not implemented
Potential Consequences
Enforcement action, fines, or other regulatory penalties for non-compliance with competition laws and regulations
Related Regulations
Competition Act 1998Payment Services Directive (PSD2)
Confidence: high
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
BankFintechPayment Provider Policy statement 1/26
PS1/26 represents the UK Prudential Regulation Authority's final implementation framework for the Basel 3.1 international banking standards, effective 1 January 2027 (with market risk internal models delayed to 1 January 2028). This policy statement establishes mandatory capital, credit risk, operational risk, and market risk requirements for UK-regulated banks, building societies, and investment firms, addressing post-financial crisis shortcomings in risk-weighted asset (RWA) calculations and capital adequacy frameworks.
What Changed
- Credit Risk Framework
- Implementation of restrictions on Internal Ratings-Based (IRB) approach scope, effective 1 January 2027, with firms required to reclassify certain exposures (e.g., slotting approach IPRE exposures)...
- Minor clarifications and amendments to the Standardised Approach and credit risk mitigation techniques.
Operational Risk
- Updated Business Indicator Component (BIC) calculation methodology requiring inclusion of the current financial year in the three-year average calculation (or an estimate if unavailable).
- Clarifications on legal risk treatment and loss data set dates.
Market Risk (Fundamental Review of the Trading Book – FRTB)
Suggested Considerations
- *Immediate (by mid-2026)
- *Conduct impact assessment: Quantify RWA changes under Basel 3.1 across credit risk, operational risk, and market risk frameworks.
- *Review IRB permissions: Identify exposures requiring reclassification (e.g., IPRE to HVCRE) and prepare permission amendment applications.
- *Assess FRTB-IMA readiness: For firms with existing IMA permissions, evaluate transition strategy for out-of-scope positions moving to ASA/SSA during interim period (2027–2027).
- *Arrange board-level assurance: Establish governance framework for board oversight of RWA calculation accuracy and Basel 3.1 implementation.
Key Dates
– PRA publishes PS1/26 (final rules)
– Must include Basel 3.1/SDDT impact assessment
– Effective date for Basel 3.1 implementation (credit risk, operational risk, reporting/disclosure, IRB scope restrictions, SDDT regime)
– Interim period begins for FRTB-IMA transition; existing IMA permissions retained; out-of-scope positions move to ASA/SSA
– FRTB-IMA implementation effective date
Compliance Impact
Urgency: HIGH
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The Prudential Regulation Authority (PRA) has published the final rules for the implementation of Basel 3.1 standards in the UK, with an effective date of January 1, 2027. The rules aim to enhance the resilience of banks and improve the stability of the financial system. Firms must review and update their policies and procedures to ensure compliance with the new requirements.
What Changed
The PRA has introduced new rules for the calculation of risk-weighted assets, including changes to the credit risk standardised approach, market risk framework, and operational risk requirements. The rules also include amendments to the definitions of probability of default, loss given default, and conversion factor.
Suggested Considerations
- Review and update credit risk policies and procedures to ensure compliance with the new standardised approach
- Assess the impact of the new market risk framework on trading book positions and capital requirements
- Update operational risk management frameworks to reflect changes to the Business Indicator and subcomponents
Key Dates
Basel 3.1 rules take effect
Internal model approach for market risk takes effect
Potential Consequences
Non-compliance with the new rules may result in enforcement action, fines, or other regulatory penalties
Related Regulations
Basel 3.1Capital Requirements Regulation (CRR)Financial Services and Markets Act (FSMA) 2023
Confidence: high
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BankBroker DealerAsset Manager
Policy statement 3/26
PS3/26 is the PRA's final policy statement restating the remaining provisions of the UK Capital Requirements Regulation (CRR) into the PRA Rulebook and related policy materials, effective 1 January 2027. This represents a critical step in the UK's transition away from assimilated EU law, consolidating fragmented regulatory requirements into a unified domestic framework while introducing targeted amendments to securitisation rules and External Credit Assessment Institution (ECAI) mapping.
What Changed
- Restatement of CRR Provisions
The PRA is transferring remaining CRR requirements from the UK CRR into the PRA Rulebook without material changes to policy substance, except for targeted securitisation...
- New: SS4/24 (Credit risk: Internal Ratings Based Approach), SS3/24 (Credit risk definition of default), SoP6/25 (Internal Model Method permissions), SoP7/25 (Securitisation waivers and permissions),...
- Amended: SS15/13 (Groups), SS9/13 (Securitisation: Significant Risk Transfer), SS10/18 (Securitisation: General requirements), and SS10/13 (Credit risk: Standardised Approach)
ECAI Mapping...
Suggested Considerations
- *Immediate (by Q2 2026):
- *Review applicability: Determine whether your firm falls within the scope of PS3/26 (banks, building societies, designated investment firms, or financial holding companies)
- *Assess impact: Analyse how the restatement affects your current compliance framework, particularly regarding credit risk (IRB and standardised approaches), securitisation, and ECAI mapping
- *Identify policy changes: Review the new and amended supervisory statements (SS3/24, SS4/24, SoP6/25, SoP7/25, SoP8/25) to understand expectations for permissions, waivers, and model approvals
- *Medium-term (by Q3 2026):
Key Dates
- PS19/25 (near-final policy) published
- PS3/26 final policy statement published
- All policies take effect; HM Treasury commencement regulations revoke relevant CRR provisions and replace them with PRA Rulebook rules and policy materials
Compliance Impact
Urgency: HIGH
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The Prudential Regulation Authority (PRA) has published a policy statement (PS3/26) that restates the remaining relevant provisions in the Capital Requirements Regulation (CRR) within the PRA Rulebook and other policy materials. This change aims to ensure that the PRA's rules and policies are consistent with the UK's withdrawal from the EU. The policy statement is relevant to PRA-authorised banks, building societies, and other financial institutions.
What Changed
The PRA has restated the remaining relevant provisions in the CRR within the PRA Rulebook and other policy materials, including amendments to supervisory statements and the introduction of new statements of policy. The changes include updates to the securitisation requirements and the introduction of new rules on credit risk and internal ratings-based approaches.
Suggested Considerations
- Review and update internal policies and procedures to ensure compliance with the restated CRR provisions
- Ensure that risk management practices are aligned with the updated rules on credit risk and internal ratings-based approaches
- Review and update securitisation policies and procedures to ensure compliance with the amended requirements
Key Dates
The restated CRR provisions take effect
Potential Consequences
Failure to comply with the restated CRR provisions may result in enforcement action, fines, or other regulatory penalties
Related Regulations
Capital Requirements Regulation (CRR)Basel 3.1Solvency II
Confidence: high
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BankBroker DealerAsset Manager
Policy statement 4/26
PS4/26 finalizes the **simplified capital regime for Small Domestic Deposit Takers (SDDTs)**, a tailored prudential framework designed to reduce regulatory burden while maintaining capital resilience for smaller, domestically-focused UK banks and building societies. This represents the completion of Phase 1 of the PRA's "Strong and Simple" initiative and introduces materially lighter capital, liquidity, and reporting requirements for qualifying firms, with implementation effective January 1, 2027.
What Changed
- Simplified Capital Framework
The final policy introduces a dedicated capital regime for SDDTs that descopes them from standard CRR Firms requirements.
- Deletion of SoP3/23 (Interim Capital regime) effective January 20, 2026
- Removal of SDDTs from scope of SS31/15 and SoP5/15 (standard ICAAP/SREP and Pillar 2 methodologies)
- Modified consolidation group certification processes, with responsibility shifting to SDDT consolidation entities
Suggested Considerations
- *Immediate (by January 20, 2026):
- *Assess SDDT eligibility – Determine whether your firm meets all seven qualification criteria, particularly the £20bn asset threshold and domestic asset location requirement
- *Review consolidation group structure – If part of a group, confirm which entity will serve as the SDDT consolidation entity responsible for certification
- *Implement SoP2/23 changes – Adopt updated operating procedures for the SDDT regime
- *Update ICAAP/ILAAP processes – Implement new frequency requirements for capital and liquidity adequacy assessments
Key Dates
– PS4/26 published; changes to SoP2/23 and ICAAP/ILAAP frequency requirements take effect
– Revocation of ICR firm/consolidation entity definitions and deletion of SoP3/23 effective
– Simplified capital regime for SDDTs takes effect; SS4/25 brought into effect in full; SDDTs removed from SS31/15 scope
Compliance Impact
Urgency: HIGH
AI-generated analysis. May contain errors or omissions — verify with the
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before acting. Full disclaimer.
The Prudential Regulation Authority (PRA) has introduced a simplified capital regime for Small Domestic Deposit Takers (SDDTs) to reduce regulatory complexity while maintaining adequate capital. The new regime will take effect on 2027-01-01. This change aims to simplify capital requirements for smaller banks and building societies.
What Changed
The PRA has introduced a new simplified capital regime for SDDTs, which includes changes to the PRA Rulebook, supervisory statements, and statements of policy. The regime also introduces new reporting templates and instructions.
Suggested Considerations
- Review and update capital adequacy assessments to ensure compliance with the new simplified capital regime
- Implement new reporting templates and instructions for SDDTs
- Update internal policies and procedures to reflect changes to the PRA Rulebook, supervisory statements, and statements of policy
Key Dates
Publication of the final policy statement
Early implementation of changes to ICAAP updates and reverse stress-testing
The SDDT capital regime takes effect
Potential Consequences
Enforcement action, fines, or license revocation for non-compliance with the new simplified capital regime
Related Regulations
CRRBasel 3.1
Confidence: high
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Bank
The FCA, Bank of England and Prudential Regulation Authority have together signed a Memorandum of Understanding (MoU) with the European Supervisory Authorities to enhance cooperation and oversight of critical third parties (CTPs) that fall under the UK’s CTP regime.The MoU establishes a framework for coordinating and sharing information on the oversight of CTPs under the UK regime and critical third party providers (CTPPs) under the EU’s Digital Operational Resilience Act (DORA), including du...
The FCA, Bank of England (BoE), and Prudential Regulation Authority (PRA) have signed a Memorandum of Understanding (MoU) with the European Supervisory Authorities (ESAs) to coordinate oversight of critical third parties (CTPs) under the UK's CTP regime and critical third party providers (CTPPs) under the EU's Digital Operational Resilience Act (DORA). This matters because it enhances cross-border information sharing and cooperation during incidents like cyber-attacks, reducing regulatory duplication while bolstering financial stability and operational resilience for firms reliant on these providers.
What Changed
- - Establishes a framework for timely information sharing, coordination of oversight activities, and joint responses to incidents affecting CTPs/CTPPs, including power outages or cyber-attacks.
- Defines principles for cooperation on mutually designated CTPs/CTPPs, including notifications of investigations and best endeavors to share material information where legally and operationally...
- Complements the UK's CTP regime (effective 1 January 2025), which requires designated CTPs to provide regular assurance, conduct resilience testing, and report major incidents, without altering...
- Supported by a tripartite MoU among UK regulators for coordinated oversight via a joint CTP Consultation and Coordination Forum (CCF).
Suggested Considerations
- For CTPs/CTPPs: Once designated, implement regular assurance reporting to regulators, conduct resilience testing (e.g., scenario testing), and report major incidents promptly; prepare for cross-border information requests under the MoU.
- For financial firms/FMIs: Continue managing operational resilience and third-party risks per existing outsourcing rules (e.g., identify dependencies on potential CTPs); monitor HMT designations and enhance incident response coordination with regulators.
- Regulators' internal actions: Use CCF for coordination; notify counterparts of investigations or material developments per MoU Article 3 and 12.
- Firms should review contracts with third parties for compliance alignment and conduct gap analyses against CTP requirements.
Key Dates
UK CTP rules came into effect, applying to CTPs designated by HMT
2025); HMT designation process for CTPs, with regulators recommending based on concentration and materiality criteria; no fixed end date specified
EU CTPPs oversight under DORA aligns with UK regime; MoU signed to ensure compatibility (exact DORA timeline not in publication but supports post-2024 implementation)
Compliance Impact
Urgency: High – The MoU operationalizes the live UK CTP regime (effective January 2025), with designations underway, amplifying risks of non-compliance for firms using critical ICT providers amid rising cyber and resilience threats. It matters for cross-border firms as it enables regulator-to-regulator data sharing, potentially exposing gaps in outsourcing arrangements and increasing enforcement scrutiny without fines on CTPs yet possible future powers.
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BankPayment ProviderAll Firms
A growing number of investment schemes are being promoted unlawfully, are high risk and may even be scams. We've identified a growing number of investment schemes in holiday lodges and holiday homes being promoted to UK consumers by companies that are not FCA authorised.They may be unregulated collective investment schemes, where several investors invest their money. The schemes are being promoted unlawfully, are high risk and may even be scams. We remind consumers that if you invest in an un...
The FCA has issued a consumer warning about unregulated investment schemes in holiday lodges and holiday homes, which are often promoted unlawfully by unauthorised firms, posing high risks or outright scams. These schemes typically involve collective investments without FCA authorisation, breaching UK financial promotion and collective investment scheme (CIS) rules. This matters for compliance professionals as it signals heightened FCA scrutiny on unauthorised promotions, potential enforcement actions, and the need for firms to review marketing materials and client referrals to avoid facilitation risks.
What Changed
- This is not a formal rulemaking or policy change but a consumer alert and enforcement signal under existing regulations. Key reminders include:
- Unauthorised firms cannot lawfully promote collective investment schemes (CIS) under section 21 of the Financial Services and Markets Act 2000 (FSMA).
- Holiday park schemes pooling investor funds for lodge purchases and management often qualify as unregulated CIS, making promotions illegal.
- No new requirements are introduced, but the FCA emphasises its ongoing monitoring and willingness to intervene, including via the Financial Promotions Regime (effective from 7 October 2023 for all...
Suggested Considerations
- Immediate verification: Check client-facing promotions, websites, and advisor scripts for any reference to holiday lodge/park schemes; ensure no endorsement of unauthorised products.
- Client communication review: Audit advice processes to flag and reject high-risk, unregulated collective schemes; document refusals.
- Training and monitoring: Update firm-wide training on CIS definitions (per COLL sourcebook) and unauthorised promotion risks; enhance surveillance of emails, social media, and third-party referrals.
- Internal reporting: Escalate any suspected unauthorised promotions to the FCA via Connect or the unauthorised firms reporting form (https://www.fca.org.uk/consumers/report-scam-unauthorised-firm).
- Due diligence: For authorised firms, implement pre-approval checks under the financial promotions regime (PERG 8 guidance) to confirm partner schemes are not CIS.
Compliance Impact
Urgency: High. This alert indicates active FCA enforcement priority on consumer-facing scams in property-linked investments, with risks of fines, bans, or asset freezes for non-compliance (e.g., similar to past actions against mini-bond issuers). Firms face heightened supervisory visits or thematic reviews; inaction could lead to principal liability for facilitating unauthorised activities, especially post-2023 promotions regime. Prioritise within 30 days to align with FCA's "buyer beware" stance shifting to proactive gatekeeping.
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Wealth ManagerAsset ManagerAll Firms
We confirm that the FCA has opened an investigation into WH Smith PLC. The investigation concerns potential breaches of UK Listing Principles and Rules and Disclosure and Transparency Rules in relation to the matters announced by WH Smith PLC on 19 November 2025.
The FCA has launched an investigation into WH Smith PLC for potential breaches of UK Listing Principles and Rules, as well as Disclosure and Transparency Rules (DTRs), stemming from announcements made by the company on 19 November 2025. This underscores the FCA's heightened scrutiny of listed companies' disclosure practices and adherence to market conduct standards. Compliance professionals should note this as a signal of enforcement risk in timely and accurate market disclosures, potentially setting precedents for similar cases.
What Changed
- This is not a policy change or new rule; it is an enforcement investigation announcement with no immediate regulatory amendments. It highlights ongoing enforcement of existing rules:
- UK Listing Principles and Rules: These require listed issuers to act with integrity, provide accurate and timely information, and maintain effective systems for compliance (e.g., Principle 2 on...
- Disclosure and Transparency Rules (DTRs): Specifically, DTR 4 mandates inside information disclosures via Regulatory Information Service (RIS), DTR 5 on periodic financial reporting, and DTR 2 on...
Suggested Considerations
- For WH Smith PLC: Cooperate fully with FCA requests for documents/interviews; conduct internal review of disclosure processes; prepare for potential enforcement outcomes (e.g., financial penalties under FSMA s.91 for listing rule breaches or DTR violations).
- For other listed firms:
1. Review disclosure policies against DTR 4 (inside information) and Listing Rule 9; stress-test recent announcements (post-19 Nov 2025).
- announcement sign-off processes involving legal/compliance/IR.
- plan profit warnings or material updates, documenting decision trails.
Key Dates
WH Smith PLC announcement triggering the investigation; (reference point for alleged breaches)
Compliance Impact
Urgency: High. This matters due to the FCA's aggressive enforcement posture on market abuse/disclosures (e.g., post-SPPF reforms emphasizing individual accountability). Breaches can lead to multimillion-pound fines (e.g., 10% of annual revenue), director bans, and reputational damage, amplified by public naming. For listed firms, it signals rising risk in a volatile economic environment where trading updates are frequent; non-compliance could cascade to shareholder claims or delisting risks.
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All Firms
No description available.
The CFTC approved a final rule on December 18, 2025, that codifies existing staff no-action positions and eliminates duplicative business conduct and documentation requirements for swap dealers and major swap participants. This rule resolves over a decade of regulatory uncertainty, reduces operational costs, and harmonizes CFTC requirements with SEC and Municipal Securities Rulemaking Board standards.
What Changed
The final rule introduces the following substantive amendments:
Exceptions for Swaps Intended to be Cleared (ITBC Swaps)
Swap dealers and major swap participants are exempted from certain External Business Conduct Standards and swap trading relationship documentation requirements when executing swaps that are intended by the parties to be cleared contemporaneously with execution.
Suggested Considerations
- *Immediate Actions (Pre-Implementation)
- *Implementation Actions (Upon Effective Date)
- trade disclosure systems to remove PTMMM generation and delivery requirements
- based operations, review implications of superseded Staff Letter No. 23-01
- *Ongoing Compliance
Key Dates
- CFTC Staff Letter 25-09 issued, establishing no-action position on PTMMM requirement
- CFTC issued further amended exemptive order permitting JSCC to clear interest rate swaps
- CFTC issued Notice of Proposed Rulemaking (comment period opened)
- Comment period deadline (ISDA and SIFMA submitted comments on this date)
- CFTC approved final rule (subject to pre-publication technical corrections)
Compliance Impact
Urgency: HIGH
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Broker DealerBank
We're expanding the significant work we had planned to improve standards in the home and travel insurance markets, following Which?’s super complaint. Read our response to Which? (PDF)While 79% of consumers who make an insurance claim are satisfied with how it was handled, our work shows there's room for improvement - with 3 in 10 (31%) saying there isn’t enough information to judge the quality of different policies. Over the next year, we will do more to: Improve claims handling, by reviewin...
The FCA is expanding its planned supervisory work in home and travel insurance markets in response to a Which? super complaint, focusing on improving claims handling, information provision, and overall standards. This matters for compliance professionals as it intensifies scrutiny under Consumer Duty, requiring firms to demonstrate better consumer outcomes amid ongoing simplification of insurance rules. It signals heightened FCA expectations for evidence-based improvements in customer satisfaction and transparency.
What Changed
- This statement announces an expansion of existing planned work rather than new rules, with specific emphases over the next year on:
- Improving claims handling through reviews of firms' processes.
- Enhancing information available to consumers for judging policy quality (addressing the 31% dissatisfaction rate).
- Building on prior simplification efforts, such as risk-based product reviews (replacing annual mandates), removal of prescriptive CPD requirements (e.g., 15 hours), and reduced data returns, as...
Suggested Considerations
- Review and enhance claims handling processes to ensure efficiency and fairness, preparing evidence for FCA supervisory reviews.
- Improve pre-sale information on policy quality, addressing gaps where 31% of consumers lack sufficient data.
- Adopt risk-based product and distribution reviews (per PS25/21), documenting rationale for frequency based on harm risks; align with co-manufacturers.
- Embed Consumer Duty via outcomes monitoring, data-driven MI on customer behavior/complaints, and vulnerability support; shift from process compliance to evidenced effectiveness.
- Retain records, respond to FCA data requests, and invest in governance/MI for supervision.
Key Dates
- FCA to conduct expanded reviews on claims handling, information provision, and standards improvement
- FCA to decide on changes to GAP insurance product-specific rules
- FCA consultation on removing non-UK customers from Consumer Duty scope, with parallel review of ICOBS and PROD application
- FCA consultations on Consumer Duty amendments for distribution chains and UK customer focus
- Conduct Rules (COCON) expand to non-financial misconduct
Compliance Impact
Urgency: High - This expands active FCA supervision in 2026, overlapping with Consumer Duty embedding and insurance simplification; non-compliance risks intensified reviews, enforcement, or redress schemes (as seen in motor finance). Firms gain flexibility but face accountability for outcomes, with scrutiny on data quality and vulnerability handling amplifying risks in a trust-based regime.
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Insurance
The FCA welcomes the Government’s consultation on a new benchmarks regime for the UK. Since the introduction of the current regulatory framework, the financial landscape has evolved significantly. We now have an opportunity to build a regime that is more targeted to current market conditions and to reduce unnecessary burdens on industry, without compromising high standards. We are working with the Government to reform the current benchmarks regime to ensure that the regulatory framework remai...
The FCA welcomes HM Treasury's consultation on reforming the UK Benchmarks Regulation (BMR) to create a narrower, risk-based **Specified Authorised Benchmarks Regime (SABR)**, reducing regulatory scope by 80-90% to target only systemically important benchmarks and administrators while easing burdens on industry. This matters for compliance professionals as it shifts from broad regulation of all benchmarks to targeted oversight, requiring firms to reassess benchmark usage, prepare for transition, and adapt to FCA rules on risk management, enhancing UK competitiveness post-FSMA 2023 repeal of assimilated laws.
What Changed
- - Narrower scope: Regulation limited to benchmarks/administrators designated by HM Treasury (HMT) on FCA advice, based on criteria like systemic impact on UK financial integrity, consumers, or...
- FCA-led firm-facing rules: HMT delegates requirements (governance, conflicts, oversight, methodology transparency, record-keeping) to FCA Handbook; removes legislative obligations on users to only...
- Overseas benchmarks: Replaces equivalence/endorsement with Overseas Recognition Regime (ORR); designated overseas administrators may avoid dual regulation if ORR-eligible.
- No opt-in: Non-designated benchmarks/administrators unregulated; contributor obligations shift to FCA rules.
- Enhanced FCA powers: Potential extension to intervene/wind-down designated benchmarks and direct firms to restrict usage; may cover non-price data like ESG metrics.
Suggested Considerations
- Review current benchmarks for potential designation risk (systemic impact criteria) and map usage across portfolios.
- Participate in HMT consultation (responses via gov.uk) and prepare for FCA consultation on rules.
- Develop/revise policies for benchmark risk management, including cessation/wind-down plans for regulated/non-regulated benchmarks per future FCA guidance.
- Assess transition from current authorisation (if non-designated, prepare for deregistration); overseas firms evaluate ORR eligibility.
- Update governance/conflicts frameworks for any designated activities; monitor ESG data inclusion in rules.
Key Dates
- HM Treasury publishes consultation on benchmarks regime reform
- Reforms take initial effect; UK becomes only jurisdiction regulating all local benchmarks pre-reform; EU BMR reforms effective, highlighting UK divergence
- FCA consults on regulatory requirements for designated administrators/users
- FCA expected to publish updated guidance on critical benchmarks and implement SABR refinements
Compliance Impact
Urgency: High - Significant scope reduction eases burdens but introduces transition risks, new FCA rules, and designation uncertainty; firms must act now on consultation (post-Dec 2025) and prep for 2026 FCA changes to avoid non-compliance during shift, especially with 1 Jan 2026 milestone amplifying competitiveness pressures.
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Asset ManagerBankBroker Dealer An update on our investigation into Mirabella Advisors LLP. On 4 May 2021, we announced that we had opened an investigation into the oversight of Greensill Capital Securities Limited, an appointed representative, by its principal, Mirabella Advisors LLP. Our investigation reviewed the nature, conduct and scope of Mirabella’s business. We did not identify breaches by Mirabella that require further action. The investigation has therefore now closed. Mirabella applied to have its authorisation c...
The FCA has closed its investigation into Mirabella Advisors LLP's oversight of its appointed representative (AR), Greensill Capital Securities Limited, finding no breaches warranting further action. This closure, announced after reviewing Mirabella's business nature, conduct, and scope, signals effective AR oversight in this high-profile case tied to the Greensill collapse, while Mirabella voluntarily cancelled its authorisation effective 12 September 2025. It matters for compliance professionals as it reinforces FCA expectations on principal-AR relationships without imposing new penalties or rules, but underscores ongoing scrutiny in trade finance and supply chain finance sectors.
What Changed
There are no new regulatory changes, requirements, or rules introduced by this publication. The statement solely announces the closure of an existing investigation with no identified breaches by Mirabella, maintaining the status quo on AR oversight obligations under FCA rules such as SUP 12 (Appointed Representatives). The FCA reserves the right to reopen if new information emerges, but no policy shifts or guidance updates are provided.
Key Dates
- FCA announced opening of investigation into Mirabella's oversight of Greensill Capital Securities Limited as AR
- Mirabella's authorisation cancelled; firm no longer provides financial services
Compliance Impact
Urgency: Low - This is a positive closure with no findings of misconduct, new rules, or enforcement, reducing immediate compliance burdens. It matters indirectly by exemplifying robust AR oversight meeting FCA standards amid Greensill fallout, offering reassurance for similar firms while signaling continued vigilance (e.g., potential reopening). Compliance teams should note it for precedent in AR due diligence but prioritize higher-risk areas like ongoing FCA trade finance financial crime probes.
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
Asset ManagerBroker DealerAll Firms
Policy statement 27/25
PS27/25 finalizes the PRA's policy to delete 37 redundant banking regulatory reporting templates (34 FINREP, 2 COREP, and PRA109) as the first phase of the Future Banking Data (FBD) programme, aiming to reduce reporting burdens while maintaining supervisory data quality. This matters for PRA-regulated banks as it delivers immediate cost savings and signals broader regulatory simplification, aligning with the PRA's secondary competitiveness and growth objective.
What Changed
- - Deletion of 37 whole reporting templates identified as duplicative, outdated, or low-value: 34 FINREP templates, 2 COREP templates (C05.01 and C05.02, now obsolete), and PRA109.
- Consolidation of remaining FINREP scoping provisions into a single section of the PRA Rulebook (new Chapters 5A–5F of the Reporting (CRR) Part), with clarifications to unclear or duplicative...
- Alignment of FINREP remittance deadlines to 30 business days for reports under Article 430(3), Article 11(2), and new Chapters 5A–5F.
- Updates to Supervisory Statement SS34/15 – Guidelines for completing regulatory reports to reflect deletions and consolidations.
- Refinements to the waiver framework for individual UK FINREP reporting in UK consolidation groups (excluding ring-fenced groups), allowing waivers if a single entity contributes 90-95% of group...
Suggested Considerations
- Review and update internal reporting systems, processes, and controls to cease submission of the 37 deleted templates for reference dates from 31 December 2025 onwards.
- Confirm applicability of consolidated FINREP scoping rules (Chapters 5A–5F) and adjust scoping for remaining templates, incorporating clarified conditions.
- Assess eligibility for individual FINREP waivers under the updated framework if part of a UK consolidation group; apply to PRA if criteria met (90-95% asset contribution).
- Update compliance policies and training to reflect SS34/15 amendments and aligned remittance deadlines.
- Review Pillar 3 disclosure obligations for any ongoing requirements tied to deleted templates and prepare for potential future changes.
Key Dates
- Q3 2025 remittance deadline (precedes PS publication, so no concession for early non-reporting)
- Publication of PS27/25, finalizing policy and responses to CP21/25 consultation
- Effective date for revised rules, amended SS34/15, and deletions; applies to reporting reference dates falling on or after this date (avoids 2025 Q4 submissions where relevant)
Compliance Impact
Urgency: Medium – Changes are simplificatory (deletions reduce burden), with immediate effect from 31 December 2025, but no new requirements or penalties for non-compliance with deleted items; firms must act promptly to decommission processes and avoid erroneous submissions. This matters as it lowers ongoing costs (especially for larger reporters) and sets precedent for FBD phases targeting further efficiencies, but smaller firms see limited benefit without broader reforms.
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
Bank
Policy statement 26/25
The Prudential Regulation Authority (PRA) has issued PS26/25, finalizing the withdrawal of Supervisory Statement (SS) 20/15, which previously set prescriptive expectations for building societies' treasury and lending activities, effective immediately upon publication on 5 December 2025. This deregulatory move reduces administrative burdens, enhances proportionality across deposit takers, and promotes competition by aligning building societies more closely with banks, while relying on existing tools like the PRA Rulebook, SMCR, and routine supervision for risk management. It matters for compliance teams as it eliminates specific guidance often misinterpreted as binding requirements, freeing firms to tailor risk frameworks but requiring vigilance on broader prudential expectations.
What Changed
- - Full deletion of SS20/15: Removes all expectations on treasury and lending activities, including the "Treasury Approaches" framework, without replacement.
- Consequential amendments: Updates SS31/15 (Internal Capital Adequacy Assessment Process and Supervisory Review and Evaluation Process) to excise references to SS20/15.
- Alignment with broader policy: Addresses inconsistencies with PRA's approach for banks, improved sector risk management maturity, and proportionality for smaller firms; supports objectives of safety,...
- No new rules imposed: PRA deems existing tools sufficient, including Building Societies Act 1986 restrictions, PRA Rulebook, SMCR, and supervision; derivatives permitted only for risk management...
Suggested Considerations
- Review and update policies: Building societies must confirm internal treasury/lending frameworks align with remaining requirements (e.g., PRA Rulebook, Building Societies Act 1986, ICAAP/SREP under amended SS31/15); remove any SS20/15-specific references or processes.
- Assess risk management: Evaluate use of derivatives or treasury tools for compliance with non-prescriptive expectations; ensure SMCR accountability and board oversight.
- Update governance documents: Revise ICAAP/SREP processes per SS31/15 amendments; document rationale for tailored approaches to demonstrate proportionality.
- Engage supervisors: No immediate reporting mandated, but proactive dialogue recommended for firms previously on extensions or complex approaches.
- Monitor related reforms: Track Strong and Simple framework (e.g., PS4/26, PS20/25) for SDDT capital/liquidity simplifications referencing this change.
Compliance Impact
Urgency: Medium – Effective immediately (5 December 2025), but deregulatory nature reduces burdens rather than imposing new obligations; critical for year-end 2025/early 2026 planning to avoid legacy SS20/15 misapplication. Matters as it shifts from prescriptive "hard limits" (often treated as rules) to principles-based supervision, enabling flexibility but heightening reliance on firm-specific risk assessments amid PRA's focus on competition and growth; non-compliance risks arise from over-reliance on withdrawn guidance or inadequate tailoring.
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
Bank
Policy statement 25/25
PS25/25 is the PRA's policy statement providing feedback on CP10/25 and issuing updated Supervisory Statement SS5/25, which replaces SS3/19 to enhance banks' and insurers' management of climate-related financial risks through strengthened governance, risk management, scenario analysis, data quality, and disclosures. It matters because it sets a higher regulatory bar for embedding climate risks proportionately into core processes like ICAAP, ILAAP, ORSA, and financial reporting, promoting resilience and strategic decision-making amid evolving climate threats.
What Changed
- The main changes in SS5/25 from SS3/19 and CP10/25 responses include:
- Proportionate application clarification: New 'Overarching aims' section in Chapter 3 explains how firms should tailor expectations to their climate risk exposure, business size, and complexity via a...
- Governance strengthening: Boards and senior management must actively oversee climate risks, embedding them in strategy and ensuring accountability.
- Risk management enhancements: Integrate climate risks into existing frameworks/risk registers (supplementary sub-registers allowed); 'accept, manage, avoid' is suggestive, not mandatory; aligns with...
- Climate scenario analysis (CSA) advancements: Firms must use CSA strategically for decisions; flexibility on number/type of scenarios, reverse stress/sensitivity analysis, and longer horizons...
Suggested Considerations
- Conduct gap analysis against SS5/25 within 6 months and remediate (e.g., update governance, risk frameworks, CSA processes).
- Integrate climate risks into board oversight, strategy, risk registers, ICAAP/ILAAP (banks), ORSA/stress testing (insurers), and financial reporting.
- Perform CSA exercises commensurate with exposures, using suitable scenarios to inform decisions; enhance data quality and disclosures.
- Document proportionate application (two-step process: materiality assessment, risk response); leverage existing structures where robust.
- Ensure senior accountability and alignment with standards like SS1/21.
Key Dates
- PS25/25 and SS5/25 published; SS5/25 effective immediately, replacing SS3/19
- Firms assess gaps against new expectations and develop remediation plans (industry guidance)
- Forward-looking, strategic implementation proportionate to risks; PRA may request progress evidence
Compliance Impact
Urgency: High – Effective immediately (3 Dec 2025), requiring significant uplift to existing approaches; non-compliance risks supervisory scrutiny, as PRA expects ambitious, ongoing progress and may request evidence. Matters for capital/liquidity planning, resilience, and strategic viability amid maturing climate risk landscape.
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
BankInsurance
Policy statement 23/25
PS23/25 from the PRA and FCA finalizes amendments to Binding Technical Standards (BTS) 2016/2251 under UK EMIR, introducing an indefinite exemption for single-stock equity options and index options from bilateral margin requirements, removing IM obligations on legacy contracts for firms falling below thresholds, and allowing alignment with third-country jurisdictions' timelines for IM assessments. These changes reduce operational burdens and enhance competitiveness for UK firms trading non-centrally cleared derivatives, following feedback from CP5/25, while maintaining prudential standards.
What Changed
- - Indefinite exemption for equity options: Single-stock equity options and index options are permanently exempted from UK bilateral initial margin (IM) and variation margin (VM) requirements,...
- Legacy contracts relief: Firms falling below the Average Aggregate Notional Amount (AANA) threshold no longer need to exchange IM on outstanding legacy non-centrally cleared derivatives contracts.
- Third-country alignment: UK firms can adopt another jurisdiction’s threshold calculation periods and entry-into-scope dates for IM requirements when trading with counterparties subject to that...
- Minor drafting tweaks for consistency between PRA and FCA instruments, including FCA adding text on releasing collected IM, with no policy impact.
Suggested Considerations
- Review and update internal policies, procedures, and systems to cease IM/VM exchange for exempted single-stock equity options and index options post-27 November 2025; confirm no ongoing obligations for legacy contracts if below AANA thresholds.
- Assess cross-border transactions: Document use of third-country jurisdictions’ timelines for IM thresholds where applicable, ensuring compliance with UK rules remains intact.
- Conduct gap analysis on margin calculations, collateral management, and reporting; train front-to-back office teams on changes.
- Retain records of AANA calculations and threshold monitoring to justify exemptions or relief.
- For firms with collected IM on now-exempt legacy positions, evaluate release options per updated FCA instrument language.
Compliance Impact
Urgency: High – Effective immediately since 27 November 2025 (over a month ago as of current date), firms risk non-compliance if systems still enforce outdated IM/VM for exemptions; operational fixes are needed urgently to avoid breaches, fines, or disputes, especially with phase-out of temporary equity options relief approaching 4 January 2026. Impacts cost savings but requires swift policy recalibration for ongoing UK EMIR adherence.
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
BankBroker DealerAsset Manager
Policy statement 24/25
The PRA's PS24/25 finalizes rules increasing Financial Services Compensation Scheme (FSCS) depositor protection limits from £85,000 to £120,000 and temporary high balances (THB) from £1 million to £1.4 million for firm failures on or after 1 December 2025, responding to consultation feedback in CP4/25. This matters for PRA-authorized deposit-takers as it enhances consumer protection amid inflation but requires urgent system and disclosure updates to avoid FSCS payout delays or regulatory breaches. Firms must prioritize single customer view (SCV) readiness and phased disclosure revisions to comply efficiently.
What Changed
- - Increased Protection Limits: Standard FSCS deposit limit rises from £85,000 to £120,000; THB limit from £1 million to £1.4 million, applying to failures from 1 December 2025.
- SCV System Updates: Firms must update SCV systems (used by FSCS for rapid compensation) to reflect new limits from 1 December 2025, including accurate contact details.
- Disclosure Materials:
- Update information sheets on FSCS cover to reflect new limits and improve clarity/accessibility; provide to depositors as soon as practicable post-1 December 2025, by 31...
- Rulebook Amendments (DPP Rules): Exclude FSCS sticker/poster display in branches without in-person depositor dealings; tighten "third-party premises" scope (e.g., banking hubs); other clarifications.
- Supervisory Updates: SS18/15 and SoP1/15 amended for new rules, effective 1 December 2025, with guidance on third-party premises.
Suggested Considerations
- Immediate (pre-1 Dec 2025): Test and prepare SCV systems for new limits; review current contact data accuracy.
- By 1 Dec 2025: Implement SCV updates; apply amended SS18/15 and SoP1/15.
- Post-1 Dec 2025 to 31 May 2026: Revise and distribute updated information sheets, compensation stickers/posters (excluding non-in-person branches), and simplified exclusions lists; no proactive customer notification required but provide on request/in relevant circumstances.
- Ongoing: Ensure disclosures remain clear/accessible; monitor for PRA feedback on banking hub models.
- Document changes for audit trails; consider regtech for SCV automation.
Key Dates
- New deposit (£120,000) and THB (£1.4 million) limits apply to firm failures on/after this date; SCV systems must be updated; SS18/15 and SoP1/15 effective
- Provide updated information sheets, stickers/posters, and exclusions lists to depositors (encouraged immediately to avoid confusion)
- Firm deadline for all disclosure material updates and provision to depositors (six-month transition ends)
Compliance Impact
Urgency: High – SCV updates are mandatory by 1 December 2025 with no transition, risking delayed FSCS payouts and enforcement if unprepared; disclosure changes allow six months but PRA emphasizes early action to prevent depositor confusion. Impacts operational resilience and conduct risk; non-compliance could trigger supervisory action, especially for firms with outdated systems. Cost-benefit analysis shows minimal PRA impact but higher potential FSCS payouts in failures.
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
Bank
Policy statement 22/25
The PRA's PS22/25 finalizes an increase in the retail deposits threshold for the leverage ratio requirement from £50 billion to £75 billion, introducing a three-year averaging mechanism for calculations, effective 1 January 2026. This adjustment reflects nominal UK GDP growth since 2016 to maintain the Financial Policy Committee's original risk appetite while smoothing cliff-edge effects for firms like building societies. It matters for major UK banks and similar firms as it alters capital planning and leverage ratio applicability, potentially reducing immediate compliance burdens for those nearing the old threshold.
What Changed
- - Retail deposits threshold raised from £50 billion to £75 billion, adjusted upward from the CP2/25 proposal of £70 billion to account for further GDP growth to Q2 2025 (rounded to nearest £5...
- Introduction of a three-year moving average for calculating retail deposits metric, replacing point-in-time values to mitigate volatility and aid capital planning, particularly for building societies.
- Non-UK assets threshold remains unchanged at £10 billion.
- Modifications by consent disapplying leverage ratio rules during review will cease on 30 June 2026.
These changes are implemented via updates to the Leverage Ratio – Capital Requirements and Buffers...
Suggested Considerations
- Review and update internal retail deposits calculations to incorporate three-year moving average methodology starting 1 January 2026.
- Assess current and projected retail deposits against £75 billion threshold (and £10 billion non-UK assets) to determine leverage ratio applicability and adjust capital planning accordingly.
- Prepare to meet 3.25% leverage ratio minimum plus buffers if thresholds breached, including systems updates for averaging and reporting.
- For firms with modifications by consent: Plan transition back to full leverage ratio rules by 30 June 2026, including any necessary capital raises or disclosures.
- Update governance, risk models, and board reporting to reflect changes; conduct gap analysis against PRA Rulebook appendices in PS22/25.
Key Dates
- PRA publishes Consultation Paper CP2/25 proposing £70 billion threshold
- Consultation response deadline
- PRA issues PS22/25 with final policy
- Final policy takes effect, applying new £75 billion threshold and three-year averaging
- Cessation of modifications by consent disapplying leverage ratio rules
Compliance Impact
Urgency: High – With effectiveness just after today (1 January 2026), firms near £50-75 billion in retail deposits face immediate recalibration of leverage exposures and capital buffers to avoid breaches, amplified by the shift to averaging which requires historical data reconstruction. Non-compliance risks PRA enforcement, heightened scrutiny, or capital inadequacy findings, but the higher threshold and averaging provide planning relief versus the status quo.
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
BankPayment ProviderAll Firms
The Financial Policy Committee (FPC) welcomes today the Prudential Regulation Authority’s (PRA’s) policy statement 20/25 – The Strong and Simple Framework: The simplified capital regime for Small Domestic Deposit Takers (SDDTs) – near-final.
The Financial Policy Committee (FPC) welcomes the Prudential Regulation Authority's (PRA) Policy Statement (PS) 20/25, which finalizes the second phase of the "Strong and Simple Framework" by introducing a simplified capital regime for Small Domestic Deposit Takers (SDDTs), alongside liquidity simplifications. This matters because it reduces regulatory burdens, enhances competition among smaller UK banks and building societies, and maintains resilience without full Basel 3.1 standards, with implementation on 1 January 2027.
What Changed
- - Pillar 1 simplifications: Adoption of Basel 3.1 standardised approaches to credit and operational risk; disapplication of due diligence for credit risk, simplifications to market risk, removal of...
- Pillar 2A methodologies: Simplifications for credit risk, credit concentration risk (CCoR), and operational risk; amendments to single-name concentration monitoring (cluster limit tightened to 200%,...
- Capital buffers: Introduction of a new Single Capital Buffer (SCB) replacing the Capital Conservation Buffer (CCoB), Countercyclical Capital Buffer (CCyB), and PRA buffer; removal of CCyB adjustment...
- Stress testing and reporting: Replacement of cyclical stress testing with non-cyclical framework; increased descoped reporting templates from 38 to 51, plus SDDT-specific versions of four templates.
- Revocation of Interim Capital Regime (ICR): Firms opting into ICR must transition to full Basel 3.1 on 1 January 2026 or SDDT regime on 1 January 2027.
Suggested Considerations
- Assess SDDT eligibility: Confirm if firm meets scope criteria from PS15/23; decide between SDDT regime or full Basel 3.1.
- Update capital frameworks: Implement Pillar 1/2A simplifications, SCB, and reporting changes; recalibrate risk-weighted assets, buffers, and stress testing.
- ICR transitions: If applicable, prepare for 1 January 2026 Basel 3.1 shift or 1 January 2027 SDDT entry; cease ICR reliance.
- Policy and process revisions: Revise ICAAP/ILAAP per 20 January 2026 changes; adapt reporting (51 descoped templates).
- Supervisory engagement: Monitor CCoR cluster limits (200% trigger); engage PRA on Pillar 2A via CP12/25.
Key Dates
Deadline for comments on related CP14/24
Publication of near-final PS20/25
Full Basel 3.1 standards apply to ICR opt-in firms (ICR revoked); some changes to SoP2/23, ICAAP/ILAAP update frequencies effective from PS4/26 publication
Publication of final PS4/26 confirming PS20/25; effective date for ICAAP/ILAAP updates (including reverse stress-testing)
Simplified capital regime for SDDTs takes full effect
Compliance Impact
Urgency: High – With full implementation on 1 January 2027 (less than 12 months from today), SDDTs face tight timelines for capital recalibrations, ICR exits, and reporting overhauls; missing deadlines risks supervisory intervention or full Basel 3.1 compliance costs. This significantly eases burdens (e.g., simpler buffers, reduced reporting) but requires proactive gap analysis to leverage simplifications while ensuring resilience.
AI-generated analysis. May contain errors or omissions — verify with the
original BoE source
before acting. Full disclaimer.
BankFintech
Policy statement 19/25
**PS19/25** is the PRA's near-final policy statement finalizing how remaining Capital Requirements Regulation (CRR) provisions will be restated into the PRA Rulebook, effective January 1, 2027. This represents a critical step in the UK's transition away from assimilated EU law, giving the PRA expanded rule-making authority over UK banks, building societies, and investment firms while introducing targeted policy changes to securitisation, credit risk treatment, and ECAI mapping.
What Changed
- The near-final policy confirms and finalizes the following substantive amendments:
Securitisation Requirements
- Largely preserves current requirements and supervisory expectations with targeted policy changes
- Introduces a new formulaic p-factor for the standardised approach to securitisation
- Establishes new capital rules for certain mortgage exposures
- Clarifies supervisory expectations for unfunded credit protection in synthetic Significant Risk Transfer (SRT) securitisations by adding expectations to SS9/13
Level of Application of CRR...
Suggested Considerations
- *Review the final policy statement when published in Q1 2026 to understand specific rule changes applicable to your firm's business model
- *Assess securitisation impacts: If your firm engages in securitisation activities, particularly synthetic SRT structures with unfunded credit protection, evaluate compliance with clarified supervisory expectations in SS9/13
- *Evaluate mortgage capital treatment: Firms with significant mortgage lending should assess impact of new capital rules for certain mortgage exposures
- *Update ECAI mapping processes: Firms relying on external credit assessments must prepare for amendments reflecting Basel 3.1 implementation
- *Establish implementation timeline: Develop a project plan for January 1, 2027 implementation, including:
Key Dates
- PRA published near-final policy statement PS19/25
- PRA intends to publish final policies and rule instruments alongside or shortly after final Basel 3.1 package publication
- Implementation date for certain proposals finalized in PS12/25 (limited scope)
- Implementation date for policies and requirements in PS19/25 (primary implementation date)
Compliance Impact
Urgency: HIGH
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
BankBroker Dealer
Policy Statement 20/25
**PS20/25** represents the second and final phase of the PRA's "Strong and Simple Framework," establishing a significantly simplified capital regime for Small Domestic Deposit Takers (SDDTs) while maintaining their resilience. This near-final policy statement, published on 28 October 2025, fundamentally restructures capital requirements, liquidity rules, and operational frameworks for SDDTs—a critical development for smaller deposit-taking institutions seeking regulatory relief from disproportionate compliance burdens.
What Changed
- The simplified capital regime introduces structural changes across all three pillars of capital requirements:
Pillar 1 (Risk-Weighted Assets)
- SDDTs must apply Basel 3.1 standardised approaches for credit risk and operational risk, with specific simplifications.
- Due diligence requirements in the standardised approach to credit risk are disapplied for SDDTs.
- Counterparty credit risk (CCR) for derivatives and credit valuation adjustment (CVA) risk are disapplied (with minor exceptions).
- Market risk framework is simplified, with SDDTs applying the credit risk approach to trading book positions and removal of foreign-exchange and commodity risk capital requirements.
Suggested Considerations
- *For SDDTs Currently Operating or Considering Entry:
- *Notification Decision – Determine whether to enter the SDDT regime and submit notification to the PRA by 31 March 2026 if seeking to benefit from simplified rules.
- *Policy Review – Conduct comprehensive review of PS20/25, related policy statements (PS18/25, PS19/25, PS8/25, PS14/25), and supporting methodologies (SoP5/25, SS4/25, amendments to SoP2/23).
- *Capital Calculation Transition – Prepare systems and processes to transition from current capital calculation methodologies to Basel 3.1 standardised approaches with SDDT simplifications, including:
- Removal of CCR and CVA calculations for derivatives
Key Dates
– PRA to make final rules and policy covering the entire Basel 3.1 package once HM Treasury makes commencement regulations to revoke relevant CRR provisions
– Deadline for firms wishing to enter the SDDT regime to notify the PRA and benefit from the simplified framework at implementation
– Implementation date for the simplified capital regime for SDDTs; the Interim Capital Regime will no longer apply
– PRA to implement restatement of CRR requirements (PS19/25)
Compliance Impact
Urgency Rating: HIGH
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
Bank
Policy statement 17/25
PS17/25 establishes the **Matching Adjustment Investment Accelerator (MAIA) framework**, enabling PRA-regulated insurers to regularize and expand their use of matching adjustment (MA) in calculating capital requirements for certain long-duration insurance liabilities. This framework is significant because it provides a structured pathway for firms to optimize capital efficiency while maintaining prudential safeguards through exposure limits, eligibility assessments, and breach remediation mechanisms.
What Changed
- The MAIA framework introduces the following regulatory requirements:
Permission and Eligibility Framework
- Firms must obtain explicit MAIA permission from the PRA to use the accelerator
- Permission grants authority to regularize previously non-compliant MA assets and apply MA to new eligible assets within defined parameters
Exposure Limits
- Firms receive fixed monetary exposure limits calibrated using the Best Estimate of Liabilities (BEL) of the MA portfolio, net of reinsurance, at the time of permission grant
- Limits remain fixed until the next formal variation of MAIA permission
Asset Eligibility and Assessment
Suggested Considerations
- *Immediate (Q4 2025 - Q1 2026):
- *Assess eligibility for MAIA permission by reviewing current MA portfolio and prospective assets
- *Develop MAIA policy documenting asset eligibility criteria, governance structure, and risk management approach
- *Establish contingency plans for scenarios where MAIA assets become ineligible
- *Prepare MAIA permission application if pursuing the framework
Key Dates
- PS17/25 final rules and policy material took effect; firms could begin applying for MAIA permission
- Implementation deadline for changes to MALIR reporting template
end; - Annual MAIA use report submission deadline (ongoing, annually)
- Deadline to rectify breaches to avoid MA benefit reduction
Compliance Impact
Urgency: HIGH
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
Insurance
Policy statement 21/25
PS21/25 implements reforms to PRA remuneration rules for banks, building societies, and PRA-designated investment firms, simplifying Material Risk Taker (MRT) identification, aligning deferral periods with international standards (4 years for non-SMF MRTs and 5 years for SMFs), and enhancing links to individual accountability under the Senior Managers Regime (SMR). These changes matter as they reduce regulatory burden, increase flexibility in bonus structures (e.g., marginal deferral rates and cash payments), and promote competitiveness while maintaining risk alignment, potentially reversing trends toward higher fixed pay.
What Changed
- - MRT Identification: Simplified quantitative threshold to the top 0.3% of earners (assessed against risk impact); qualitative criteria unchanged; raised proportionality threshold for disapplying...
- Deferral Periods: 4-year minimum for non-SMF MRTs (previously varied); reduced to 5 years for SMFs (from 7 years); aligns with FCA and international practice.
- Deferral Rates: Marginal system—40% deferral on first £660,000 of variable remuneration, 60% above; replaces cliff-edge approach for proportionality.
- Upfront Cash Flexibility: Removed equal cash/instrument split requirement (Remuneration 15.16 deleted); deferred portion should have higher instrument share as good practice (new SS2/17 para 5.44B);...
- Individual Accountability: New rules/expectations for adjusting remuneration up the management chain for adverse outcomes; senior management accountable against PRA priorities; Remuneration...
Suggested Considerations
- Review and update MRT identification processes, applying simplified top 0.3% threshold and new proportionality exemptions.
- Revise remuneration policies for deferral (4/5 years, marginal rates), upfront cash flexibility, and instrument expectations; update bonus award calculations.
- Embed SMR-linked adjustments: Define criteria for chain-wide pay reductions on adverse outcomes; align Remuneration Committee oversight with PRA priorities and risk events.
- For dual-regulated firms: Transition to PRA-cross-referenced FCA rules (SYSC 19D).
- Optional early adoption for specified changes on 2025/unvested awards; document governance for RemCo approvals and board policies.
Key Dates
Preceding joint consultation (CP16/24/PRA, CP24/23/FCA) closed prior to PS
Publication date; some changes (e.g., deferral periods, pro-rata vesting) may apply to ongoing 2025 performance year and unvested prior awards at firm discretion
Final rules and updated SS2/17 take effect; apply to performance years starting after this date (e.g., mandatory from 1 January 2026 for calendar-year firms)
Compliance Impact
Urgency: High – Mandatory from performance years post-16 October 2025 (e.g., 2026 for most), with immediate opt-in possible; impacts 2026 bonus cycles, requiring swift policy rewrites amid year-end planning. Matters due to simplified but ownership-heavy MRT processes, SMR-pay linkages raising accountability risks, and flexibility needing robust justification to avoid supervisory challenge; non-compliance risks enforcement under PRA accountability regimes.
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
BankAsset ManagerAll Firms
Policy statement 16/25
PS16/25 is the PRA's policy statement restating firm-facing organisational requirements from the MiFID Org Reg (e.g., outsourcing, record-keeping, risk management, compliance, internal audit, and governance) into the PRA Rulebook, with no material changes, to align with HMT's revocation of the EU regulation under FSMA 2023. This matters because it ensures continuity of prudential oversight for PRA-authorised firms post-revocation, preventing enforcement gaps in systems and controls while adapting provisions (e.g., supervisory function) to UK governance structures.
What Changed
- - Restatement of requirements: Provisions from MiFID Org Reg Articles on outsourcing, record-keeping, control procedures, risk management, compliance, internal audit, and governance are transferred...
- Supervisory function adjustment: Following consultation feedback, PRA retained Article 25 provisions but substituted "governing body" for "supervisory function" to fit UK firm structures, preserving...
- Technical standards update: Minor amendment to algorithmic trading technical standards, replacing references to revoked MiFID Org Reg Article 23(2) with new PRA Rulebook rule 2.2D.
- No policy or scope changes; adjustments mainly reflect PRA drafting style and respond to feedback for clarity.
Suggested Considerations
- Review and map existing MiFID Org Reg compliance processes against restated PRA Rulebook provisions (e.g., update policies on outsourcing, risk management, governance).
- Confirm governing body oversight aligns with adapted Article 25 requirements; document any adjustments for UK structures.
- Update internal references in algorithmic trading governance documents to new rule 2.2D.
- Conduct gap analysis and training on minor clarifications; prepare for dual FCA/PRA alignment if applicable.
- Monitor HMT commencement order; if delayed, reassess implementation plans.
Key Dates
- PRA publishes PS16/25 with final rules and feedback to CP9/25 consultation
- New PRA rules and technical standards come into force, coinciding with HMT's anticipated revocation of MiFID Org Reg via commencement order (FCA rules align on same date)
- HMT expected to lay second Statutory Instrument revoking remaining MiFID Org Reg provisions; PRA may delay/revoke rules if not made
Compliance Impact
Urgency: High – Firms must act promptly as rules take effect on 23 October 2025 (past deadline as of current date), with no transition period; non-compliance risks enforcement gaps in core systems/controls post-revocation. Impact is low for substance (restatement only) but requires documentation updates to avoid supervisory scrutiny, especially for governance and outsourcing.
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
BankBroker DealerAll Firms
Policy statement 15/25
PS15/25 introduces **new liquidity risk reporting requirements for major UK insurance firms**, closing data gaps identified during the March 2020 "dash for cash" and September 2022 LDI crisis. The policy mandates four new reporting templates for firms with significant derivatives or securities lending exposure, with implementation deferred to **30 September 2026** to allow adequate preparation time.
What Changed
- The PRA's final policy establishes the following regulatory framework:
New Reporting Templates
Four new liquidity reporting templates have been introduced to capture previously unavailable data:
- Annual committed facilities template
- Monthly cash-flow mismatch template (short form)
- Monthly cash-flow mismatch template for ring-fenced funds, matching adjustment portfolios, and remaining parts
- Additional supervisory reporting requirements
Scope and Thresholds
Firms are subject to liquidity reporting if they meet both of the following conditions:
Suggested Considerations
- *Immediate Actions (by Q2 2026):
- *Threshold Assessment: Determine whether your firm meets the £10 billion derivatives or £1 billion securities lending thresholds
- *RFF Mapping: If applicable, identify ring-fenced funds with £500 million+ gross notional derivatives exposure
- *System Readiness: Begin implementing technical infrastructure for monthly and daily reporting submissions
- *Data Governance: Establish processes to capture and validate liquidity data in the required templates
Key Dates
- PRA published PS15/25 (policy statement)
- Original implementation deadline (now superseded)
- **Final implementation date for all liquidity reporting requirements**
- Firms meeting threshold conditions must commence reporting
- Threshold for ceasing reporting once firms fall below thresholds
Compliance Impact
Urgency: HIGH
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
Insurance
Asset management The AMF has postponed the effective date of the authorisation withdrawal of the asset management company Nestadio Capital
The Autorité des Marchés Financiers (AMF) postponed the effective date of the authorization withdrawal for Nestadio Capital, a portfolio asset management company, to allow time for fund transfers or liquidation following repeated non-compliance with authorization terms. This matters for compliance professionals as it illustrates AMF's enforcement approach to regulatory breaches in asset management, emphasizing orderly wind-downs to protect investors while signaling risks of judicial intervention if issues persist. The case culminated in judicial liquidation by 2022, highlighting long-term consequences for non-compliant firms.
What Changed
- - Initial authorization withdrawal decided on 17 December 2019 due to Nestadio Capital's failure to comply with authorization terms, including capital requirements, with original effective date at...
- Multiple postponements: 9 June 2020 and 8 December 2020 extended to 30 June 2021; 8 June 2021 further extended to 31 December 2021 to facilitate fund sales and liquidation.
- 7 December 2021 postponement tied withdrawal effect to full fund liquidation or judicial liquidation closure, triggered by commercial court judgment on 17 December 2021 opening judicial liquidation...
- AMF appointed an administrator (Nathalie Baudry) initially, later a provisional administrator, and requested court appointment of PMR Partners as fund liquidator on 17 February 2022.
- Nestadio Capital's appeal to Conseil d'Etat rejected on 4 October 2021.
No new broad regulatory requirements; this is a firm-specific enforcement action under Article L.
Suggested Considerations
- For Nestadio Capital (historical): Cease non-essential activities under administrator control; complete fund transfers/liquidation; comply with court-appointed liquidator.
- For investors: Monitor liquidator updates at https://www.pmrpartners.com/fonds-nestadio/ and AMF communications; pursue claims via judicial process if needed.
- For industry peers: No immediate actions, but review internal compliance on authorization terms (e.g., capital adequacy); prepare contingency plans for potential AMF interventions like administrator appointments.
- AMF referrals to courts underscore need for firms to self-report issues early to avoid escalation.
Key Dates
- AMF Board decides authorization withdrawal
& **8 December 2020** - Postponements to **30 June 2021**
- Original latest effective date for withdrawal (or fund transfer/liquidation)
- Postponement to **31 December 2021** for fund sales/liquidation
- Conseil d'Etat rejects Nestadio's appeal
Compliance Impact
Urgency: low - This is a resolved 2019-2022 enforcement case with no ongoing deadlines or new rules as of 2026; Nestadio is in judicial liquidation. It matters as a precedent for AMF's phased withdrawal process, protecting investors via extensions and liquidators, but warns asset managers of severe outcomes for breaches like capital shortfalls—review governance and capital monitoring to mitigate similar risks.
AI-generated analysis. May contain errors or omissions — verify with the
original AMF source
before acting. Full disclaimer.
Asset Manager