FCA Regulatory Updates

What Changed

• - The FCA expects firms to regularly assess, test, understand, and evidence the outcomes retail customers are receiving under the Consumer Duty.
• Firms should use monitoring to identify whether any group of retail customers is experiencing different outcomes from another group for the same product and understand why those differences exist.
• Monitoring frameworks should define what good outcomes look like in practice and translate those outcomes into measurable indicators tied to the customer journey.
• Firms should not rely on broad or high-level MI alone; they must use information to challenge performance, identify risks, and drive improvements.
• Firms should be able to explain why metrics and tolerances were chosen and whether any actions taken have been tested and shown to reduce harm or friction.

Suggested Considerations

• Firms must establish and maintain a documented outcomes monitoring framework that defines good and poor customer outcomes for each relevant product or service.
• Firms must map metrics to the full customer journey, including product design, communications, customer support, and distribution arrangements.
• Firms must collect MI that can identify poor or potentially poor outcomes, root causes, and emerging risks before harm crystallises.
• Firms must document the rationale for each metric, threshold, and tolerance, including why those measures are appropriate for the customer population and product.
• Firms must maintain a clear audit trail linking MI, governance review, decisions, remediation, and outcome improvement testing.

Key Dates

References

• [1] fca.org.uk/publications/multi-firm-reviews/insurance-mult...
• [2] fca.org.uk/publications/corporate-documents/our-rule-revi...
• [3] tlt.com/insights-and-events/insight/the-fcas-expectations...
• [4] handbook.fca.org.uk/handbook/prin2a/prin2as9
• [5] youtube.com/watch?v=qEc9w7_EBsc
• [6] fca.org.uk/publication/finalised-guidance/fg22-5.pdf
• [7] square4.com/outcomes-monitoring-in-a-consumer-duty-world/
• [8] adoreboard.com/fca-consumer-duty-outcomes/

What Changed

• - The FCA explicitly highlights vertically integrated insurance business models (combining underwriting, distribution, premium finance and related services within one group) as a source of heightened...
• Ownership and financing relationships, including private and non-transparent arrangements within groups or between firms, are now clearly framed as potential conflicts drivers that must be assessed...
• The FCA reiterates that having conflicts of interest is not inherently unacceptable, but firms must actively identify, manage and evidence those conflicts through effective governance, senior...
• The FCA states that disclosure on its own is not sufficient; firms remain obligated to properly manage conflicts, and cannot rely solely on informing customers to discharge their duties.
• Firms are expected to review how they design products and panels, structure remuneration, and communicate with customers to ensure that commercial relationships and incentives do not distort customer...

Suggested Considerations

• Conduct a board-level review of the firm’s business model, focusing on vertical integration, ownership and financing relationships to identify where commercial incentives may misalign with customer interests and create conflicts of interest.
• Map the full insurance value chain (underwriting, distribution, premium finance, ancillary services) within the group or related parties, and document actual and potential conflicts of interest at each link and interaction point.
• Review and, where necessary, update the firm’s conflicts-of-interest policy and SYSC 10 framework to explicitly cover vertically integrated structures, premium finance arrangements, delegated authorities and any intra-group referrals.
• Establish or strengthen governance arrangements to ensure clear senior management accountability for conflicts-of-interest management, including allocation of responsibilities in Statements of Responsibilities and the Management Responsibilities Map.
• Assess product design, panel construction and distribution strategies to ensure they are not unduly influenced by internal group relationships or remuneration structures that could lead to poor customer outcomes or unfair value.

References

• [1] handbook.fca.org.uk/handbook/sysc10
• [2] fca.org.uk/news/blogs/managing-conflicts-interest-insurance
• [3] handbook.fca.org.uk/handbook/ICOBS/8/3.pdf
• [4] rrcompliance.com/post/understanding-fca-requirements-for-...
• [5] hfw.com/insights/fcas-consultation-paper-on-client-catego...
• [6] paradigm.co.uk/blog/blog-how-firms-should-manage-conflict...
• [7] mco.mycomplianceoffice.com/blog/fca-actions-conflicts-of-...
• [8] iomfsa.im/media/1900/cp1603coiforissue.pdf

What Changed

• - A new CTP oversight regime becomes operational on 13 July 2026, under which the Bank of England, PRA and FCA will jointly supervise certain technology and service providers whose failure could...
• HM Treasury has made the first formal CTP designations: Amazon Web Services EMEA SARL, Google Cloud EMEA Limited, Microsoft Ireland Operations Ltd and Oracle Corporation UK Limited.
• Designated CTPs must identify and manage risks to their critical services effectively, including governance, risk management and operational resilience arrangements specifically focused on services...
• CTPs are required to maintain open, timely communication with regulators and with firms that rely on them, particularly during major incidents, implying strengthened incident reporting,...
• The three regulators will jointly oversee CTPs under a proportionate regime focused on resilience of “critical services”, including assessing and mitigating system‑level risks and reducing the risk...

Suggested Considerations

• Review and update the firm’s operational resilience framework, including impact tolerances and scenario testing, to explicitly incorporate systemic risk arising from reliance on the designated CTPs and potential correlated failures affecting multiple services or regions.
• Re‑assess outsourcing and third‑party risk management policies to ensure they clearly distinguish between obligations placed on regulated firms and those placed directly on CTPs, while maintaining robust due diligence, ongoing monitoring and exit strategies for all CTP‑hosted services.
• Engage with designated CTPs (through account management, risk and security channels) to understand their approach to compliance with the CTP regime, including incident reporting arrangements, resilience testing, communication protocols and any new assurance artifacts they plan to provide.
• Update board and senior management reporting so that reliance on designated CTPs, associated systemic risk and regulatory developments under the CTP regime are regularly monitored and discussed at appropriate governance forums (e.g. risk committee, operational resilience committee).
• Review major incident management and crisis communication playbooks to ensure they include specific escalation paths, contact points and joint incident handling procedures with designated CTPs and relevant regulators.

Key Dates

References

• [1] riskledger.com/resources/critical-third-parties-regime-tprm
• [2] kempitlaw.com/insights/uk-critical-third-parties-regime-r...
• [3] fca.org.uk/news/statements/uk-and-eu-regulators-sign-memo...
• [4] escode.com/resources/the-uk-critical-third-party-ctp-regi...
• [5] bankofengland.co.uk/financial-stability/financial-market-...
• [6] fusionrm.com/blogs/critical-third-party-resilience-regula...
• [7] aws.amazon.com/blogs/industries/what-customers-need-to-kn...
• [8] fca.org.uk/publications/policy-statements/ps24-16-operati...

What Changed

• - FCA reinforces that product design must be explicitly based on evidenced consumer needs, characteristics and behaviours, rather than generic assumptions or internal commercial priorities.
• Firms are expected to define target markets at a granular level, avoiding broad or generic categories that mask differing needs or risks (especially for vulnerable customers).
• Product governance must be embedded into business‑as‑usual decision‑making with clear ownership, challenge and accountability, not treated as a one‑off Consumer Duty implementation project.
• Manufacturers and distributors must maintain robust, ongoing monitoring of consumer outcomes using a wide range of management information, including complaints, usage patterns, early cancellations...
• There must be a clear, demonstrable link between monitoring and remedial action; collecting data without acting on emerging risks is characterised as weak practice.

Suggested Considerations

• Review and update product governance frameworks to ensure they explicitly incorporate Consumer Duty outcomes, including structured consideration of customer needs, characteristics and objectives at every stage of product design and lifecycle.
• Define and document granular target markets for each retail product and service, clearly articulating which customer segments the product is designed for, and excluding groups for whom the product could cause foreseeable harm.
• Map products and services against vulnerable‑customer characteristics and update design, features, pricing and servicing models to mitigate risks and support good outcomes for vulnerable groups.
• Implement or enhance processes to collect comprehensive management information on consumer outcomes (complaints, customer feedback, usage patterns, lapse and cancellation data, arrears and forbearance metrics) for each product.
• Establish governance mechanisms to ensure that insights from monitoring and MI lead to timely, documented actions to improve products, pricing, communications or customer journeys where emerging risks or poor outcomes are identified.

Key Dates

References

• [1] fca.org.uk/publication/finalised-guidance/fg22-5.pdf
• [2] youtube.com/watch?v=gloUN--Svqw
• [3] kpmg.com/xx/en/our-insights/regulatory-insights/what-are-...
• [4] akingump.com/en/insights/alerts/new-fca-principle-12-cons...
• [5] harperjames.co.uk/article/fcas-new-consumer-duty/
• [6] regulationhub.co.uk/fca-consumer-duty
• [7] globalfinregblog.com/2023/04/the-fcas-consumer-duty-deter...
• [8] grantthornton.co.uk/globalassets/1.-member-firms/united-k...

What Changed

• - Parts of the FCA motor finance consumer redress scheme under PS26/3 are formally suspended by order of the Upper Tribunal, on terms agreed between the FCA and four challengers (Consumer...
• During the suspension, firms are not required to calculate redress, pay compensation, or send communications about compensation owed under the scheme according to the original timetable.
• All non‑suspended rules remain fully applicable, including duties to identify in‑scope complaints and agreements, gather commission and disclosure data (including from brokers), and maintain records.
• Lenders must continue to identify relevant complaints and agreements falling within scheme scope (motor finance agreements between 2007 and 2024 with potentially unfair commission arrangements).
• Firms must continue to gather data on commission arrangements and disclosure practices, including obtaining information from brokers and confirming where such information is not held.

Suggested Considerations

• Identify and maintain a complete inventory of motor finance complaints and agreements that fall within the scheme scope (regulated motor finance with relevant commission arrangements between April 2007 and 2024).
• Continue to gather, centralise and validate data on commission structures, commission levels, and disclosure practices for all in‑scope agreements, including by issuing targeted information requests to brokers and dealers.
• Implement internal workflows to ensure brokers respond to lenders’ information requests within one month, or formally confirm where requested documents or data are not held.
• Review and classify complaints to determine which consumers are not owed compensation under the scheme, including cases outside scope and those lacking discretionary, high or tied commission arrangements, and prepare appropriate communications.
• Assess complaints for time‑bar issues and apply the scheme’s limitation and out‑of‑time principles consistently, documenting rationale for any reliance on time‑bar to decline redress.

Key Dates

References

• [1] reuters.com/world/uk/uks-fca-says-parts-motor-finance-red...
• [2] fca.org.uk/publications/policy-statements/ps26-3-motor-fi...
• [3] paulhastings.com/insights/client-alerts/update-fca-confir...
• [4] content.govdelivery.com/accounts/UKFCA/bulletins/3fe085b
• [5] cliffordchance.com/insights/resources/blogs/regulatory-in...
• [6] aoshearman.com/en/insights/fca-consultation-on-motor-fina...
• [7] mpamag.com/uk/news/general/fca-motor-finance-redress-sche...

What Changed

• - A new governance and delivery model for UK retail payments infrastructure is being operationalised, with strategy set by the PVDC, design work led by the RPIB, and implementation by a new...
• The RPIB has launched a formal consultation on the design of the future retail payments infrastructure, seeking views on payment journeys, key design choices and priorities.
• The PVDC has published additional context to support stakeholders’ reading of the consultation, including expectations for the commercial model, consumer protection outcomes and financial crime...
• Responsibilities across the ecosystem are being reset, with clearer roles for public authorities (HM Treasury, Bank of England, FCA, PSR), Pay.UK, and industry participants in designing and...
• Next‑generation infrastructure is expected to support account‑to‑account payments at point of sale, enhanced cross‑border payments, and interoperability with new forms of digital money (including...

Suggested Considerations

• Assess and document your firm’s current and projected use of UK retail interbank payments (including Faster Payments, account‑to‑account, and cross‑border flows) to inform your response to the RPIB consultation.
• Prepare and submit a coordinated consultation response to the RPIB by 11 September 2026, covering your views on payment journeys, design choices, consumer protection needs and financial crime controls.
• Review your firm’s commercial and pricing models for interbank payments to understand how potential changes to the future infrastructure’s commercial model could affect revenue, costs and access.
• Map dependencies between your operational resilience framework and the existing UK retail payments infrastructure, and identify key risks and mitigants under a transition to the next‑generation infrastructure.
• Engage with industry bodies, Pay.UK and relevant trade associations to align positions on access, interoperability, fraud management, and technical standards for next‑generation retail payments.

Key Dates

References

• [1] gov.uk/government/publications/national-payments-vision/p...
• [2] finreg.aoshearman.com/uk-pvdc-strategy-for-future-retail-...
• [3] lewissilkin.com/en/insights/2026/03/05/payments-vision-de...
• [4] bankofengland.co.uk/news/2026/june/rpib-launches-consulta...
• [5] assets.publishing.service.gov.uk/media/690de7a247ad122f85...
• [6] fca.org.uk/news/statements/payments-vision-delivery-commi...
• [7] wiki.treasurers.org/wiki/Payments_Vision_Delivery_Committee
• [8] linkedin.com/posts/bank-of-england_the-retail-payments-in...

What Changed

• - UK stablecoin issuance will be subject to a dual regulatory regime: non‑systemic stablecoins will be supervised solely by the FCA, while systemic stablecoins used for payments will be jointly...
• Issuing a qualifying sterling‑denominated stablecoin in the UK will become a regulated activity, requiring FCA authorisation for non‑bank issuers and bringing them within the FCA’s prudential,...
• HM Treasury will apply statutory systemic tests under the Banking Act (e.g. scale, interconnectedness, substitutability, impact on confidence in sterling) to decide whether a stablecoin payment...
• Once recognised as systemic, stablecoin issuers and systemic payment system providers will fall under the Bank of England’s remit under the Banking Act 2009, including powers to obtain information,...
• Systemic sterling‑denominated stablecoin issuers will be required to maintain backing reserves equal to all outstanding coins, with backing assets held on statutory trust in the UK and ring‑fenced...

Suggested Considerations

• Map all existing and planned sterling‑denominated stablecoin products against the UK’s systemic and non‑systemic regimes and assess whether their intended use in UK payments could trigger HM Treasury systemic recognition.
• Initiate or update FCA authorisation applications for stablecoin issuance and cryptoasset custody activities, ensuring business models, governance and safeguarding arrangements align with CP25/14 and the forthcoming stablecoin regime.
• Design and implement reserve‑management frameworks capable of maintaining backing assets equal to outstanding coins, in the proposed 70/30 mix between short‑term UK government debt and Bank of England deposits, with appropriate stress testing and liquidity risk oversight.
• Establish statutory trust and segregation structures for backing assets and liquid‑asset reserves, including appointing UK‑authorised third‑party custodians and aligning documentation with FCA client‑asset‑style protections and coinholder proprietary claims.
• Develop capital planning processes and ICAAP‑style assessments to meet the Bank of England’s requirements for capital against general business risk and dedicated reserves for financial risk and wind‑down costs.

Key Dates

References

• [1] fmlc.org/wp-content/uploads/2026/02/FMLC_Reponse-to-Syste...
• [2] paulhastings.com/insights/client-alerts/bank-of-england-c...
• [3] mayerbrown.com/en/insights/publications/2025/12/proposed-...
• [4] whitecase.com/insight-alert/bank-england-consults-regulat...
• [5] skadden.com/insights/publications/2025/11/bank-of-england...
• [6] bankofengland.co.uk/news/2026/june/boe-launches-policy-st...
• [7] theglobalcity.uk/PositiveWebsite/media/IRSG/240208_RESPON...
• [8] fca.org.uk/publications/consultation-papers/cp25-14-stabl...

What Changed

• - The FCA is consulting on clearer scope boundaries for the Consumer Duty to confirm that wholesale, business‑to‑business activities that do not shape retail consumer outcomes should normally be out...
• The FCA will provide case studies and examples of “grey areas” to illustrate when activities are, and are not, caught by the Duty, particularly for early‑chain and wholesale‑only firms.
• The FCA is clarifying accountability in multi‑firm arrangements, confirming that each firm is responsible for its own activities, can rely on other firms to meet their obligations where appropriate,...
• The FCA plans to reduce duplication of obligations across distribution chains, including refining how the “look‑through” concept and co‑manufacturing apply where firms do not directly interact with...
• The FCA is narrowing the territorial scope of the Consumer Duty so that business conducted for genuinely non‑UK customers will generally be out of scope, aligning with the principle that local...

Suggested Considerations

• Map all business lines and activities to identify which are genuinely wholesale, early‑chain or business‑to‑business, and assess where the firm does or does not “shape consumer outcomes” at the end of the chain.
• Review existing Consumer Duty scoping decisions for activities such as market making, custody, safeguarding and other wholesale services, and prepare to adjust those decisions in line with FCA case studies and clarified boundaries.
• Re‑evaluate cross‑border business conducted for non‑UK clients to determine which products and services may fall outside the Consumer Duty under the proposed narrowed territorial scope, and document the basis for this classification.
• Analyse multi‑party distribution chains and co‑manufacturing arrangements to clearly delineate responsibilities, reliance points and escalation mechanisms where other firms are expected to meet their Consumer Duty obligations.
• Update product governance and Consumer Duty frameworks to distinguish between “manufacturers” and supporting firms, ensuring manufacturers continue to meet full Duty requirements while supporting firms apply Principle 12 and cross‑cutting rules proportionately.

Key Dates

References

• [1] skadden.com/insights/publications/2025/10/fca-clarifies-a...
• [2] freshfields.com/en/our-thinking/briefings/2025/10/fca-ref...
• [3] linkedin.com/posts/cgregulatorysolutions_fca-compliance-c...
• [4] simmons-simmons.com/en/publications/cmn92abw80056ukto0v9d...
• [5] stepchange.org/policy-and-research/fca-consultation-new-c...
• [6] fca.org.uk/publications/consultation-papers/cp21-13-new-c...
• [7] traverssmith.com/knowledge/knowledge-container/consumer-d...
• [8] fca.org.uk/markets/strengthening-wholesale-markets

What Changed

• - The FCA has closed its investigation into Drax Group PLC and will take no further action.
• The FCA confirmed that it reviewed whether Drax’s 2021, 2022 and 2023 annual reports and accounts contained misleading statements or omitted important information for investors.
• The FCA stated that its focus was limited to matters within its remit as a listed-company regulator, not a general review of Drax’s broader operations.
• The FCA’s approach confirms that sustainability-related market disclosures can be assessed under listed-company continuing disclosure obligations where they affect investor understanding.
• The FCA indicated that it will close cases where evidence does not support proportionate action, even after a substantial investigation.

Suggested Considerations

• Review annual report drafting controls to ensure sustainability statements are supported by underlying source data and governance evidence before publication.
• Map ESG and environmental claims to the exact disclosure obligations that apply to listed issuers, including continuing disclosure and annual report requirements.
• Test whether statements about biomass sourcing, carbon impact, or sustainability performance could be viewed as misleading without full context or qualifying information.
• Maintain a defensible audit trail showing how disputed environmental data, third-party evidence, and management judgments were validated before disclosure.
• Escalate any controversy involving regulator findings, whistleblower allegations, or media investigations to disclosure committees and legal counsel early in the reporting cycle.

Key Dates

References

• [1] petersandpeters.com/case/fca-investigates-drax-over-bioma...
• [2] reuters.com/sustainability/uks-fca-investigates-energy-co...
• [3] fca.org.uk/news/statements/fca-closes-investigation-drax-...
• [4] morningstar.com/news/alliance-news/1781773118390078000/uk...
• [5] insidermedia.com/news/yorkshire/fca-closes-investigation-...
• [6] uk.finance.yahoo.com/news/fca-drops-drax-probe-over-07260...
• [7] londonstockexchange.com/news-article/DRX/closure-of-inves...
• [8] biomassmagazine.com/articles/fca-opens-investigation-into...

What Changed

• - The FCA has publicly confirmed that providing model portfolios, strategies or investment recommendations via a subscription website can constitute regulated investment advice and financial...
• The FCA is treating digital “community platforms” and strategy‑copying services as potentially regulated activities, not merely education or general commentary, where users are expected to implement...
• The FCA has explicitly framed such activity as breaching the general prohibition in section 19 FSMA (carrying on a regulated activity in the UK without authorisation or exemption) when done without...
• The FCA has explicitly framed such online communications as breaching the financial promotion restriction in section 21 FSMA where no authorised firm approves or issues the promotions.
• The regulator has commenced civil proceedings and is actively seeking an injunction from the court to force the immediate cessation of the allegedly unlawful advice and promotion activities.

Suggested Considerations

• Conduct an immediate perimeter review of all digital, subscription‑based, model‑portfolio, and strategy‑distribution offerings to determine whether they constitute regulated investment advice or arranging, requiring FCA permission.
• Review all online content, marketing materials, newsletters, videos, and “community” communications to identify any that could amount to a financial promotion to UK consumers and ensure they are issued or approved by an authorised firm under section 21 FSMA, or fall clearly within an exemption.
• Update internal policies and product‑governance frameworks for research, commentary, and model portfolios so that any service intended to be implemented by clients is classified and treated as a regulated activity where relevant.
• For groups using non‑UK entities to host platforms or provide content, perform a jurisdictional analysis and document how UK‑facing activities are controlled, authorised, or carved out to avoid a breach of FSMA sections 19 and 21.
• Implement or strengthen pre‑clearance procedures for senior individuals (particularly previously sanctioned or restricted persons) seeking to launch new client‑facing propositions, ensuring that any new business line is assessed for authorisation and promotion requirements before launch.

References

• [1] fca.org.uk/news/statements/fca-takes-action-against-neil-...
• [2] mondovisione.com/media-and-resources/news/uk-financial-co...
• [3] investmentweek.co.uk/news/4530802/fca-takes-civil-action-...
• [4] corporate-adviser.com/fca-launches-legal-action-against-n...
• [5] amlintelligence.com/2026/06/latest-fca-sues-neil-woodford...
• [6] steel-eye.com/news/neil-woodford-fca-fine-liquidity-manag...

What Changed

• - The FCA will introduce a new overarching rule requiring that all UK‑domiciled MMFs must hold sufficient liquidity for “adequate resilience”, explicitly linking fund liquidity to financial stability...
• The FCA will retain the current minimum WLA requirements from the existing UK Money Market Fund Regulation (UK MMFR) in its rules, instead of the previously consulted increases to 50% WLA for all...
• The FCA will issue guidance setting out strong supervisory expectations that stable NAV MMFs should hold 40% WLA and variable NAV MMFs should hold 20% WLA to meet the new resilience requirement,...
• The FCA makes clear that falling below the 40%/20% WLA supervisory expectations should only occur to meet redemption requests or due to factors beyond the manager’s control, and should be rare, with...
• The FCA will retain existing minimum daily liquid asset (DLA) requirements from UK MMFR in rules and does not plan to issue new guidance on DLA levels, but expects DLA and WLA together to be...

Suggested Considerations

• Conduct a comprehensive gap analysis comparing current MMF liquidity management frameworks (DLA, WLA, and stress‑testing assumptions) against the forthcoming FCA “adequate resilience” rule and the 40% (stable NAV) / 20% (variable NAV) WLA supervisory expectations.
• Update MMF liquidity policies, board‑approved risk appetites, and internal limits to reflect the new WLA expectations, including documentation of when and how funds may temporarily operate below 40%/20% WLA and the governance required to approve such deviations.
• Implement enhancements to liquidity monitoring and MI reporting so that portfolio managers, risk, and compliance have near‑real‑time visibility of DLA and WLA levels, breaches of internal and supervisory thresholds, and redemption‑driven use of liquidity buffers.
• Review and update fund prospectuses, KIIDs/KIDs, and investor disclosures to ensure that descriptions of MMF liquidity management, the availability of liquidity management tools, and the operation of stable NAV structures are accurate under the new FCA regime.
• Revise and strengthen investor KYC procedures for MMFs to capture concentration risks and potential correlated outflows, including segmentation of investor types, monitoring of large holders, and scenario analysis around key client redemption behaviour.

Key Dates

References

• [1] jdsupra.com/legalnews/uk-to-reform-money-market-fund-7624...
• [2] assets.publishing.service.gov.uk/media/6a059b2622977ebc82...
• [3] fca.org.uk/publication/consultation/cp23-28.pdf
• [4] theia.org/sites/default/files/2024-03/FCA_CP23_28_MMF_IAR...
• [5] gov.uk/government/publications/reforms-to-money-market-fu...
• [6] immfa.org/publications/consultations-and-responses.html

What Changed

• - The Bank of England and FCA confirm, following consultation with FMIs over the last 12 months, that the existing MoU framework for supervisory cooperation on financial market infrastructures...
• The authorities explicitly reaffirm their commitment to efficient coordination to enhance the effectiveness of supervision, signalling continued emphasis on timely, accurate and proactive information...
• The statement maintains, rather than revises, the current allocation of responsibilities between the Bank of England (as primary prudential and systemic supervisor for FMIs) and the FCA (as conduct,...
• The authorities confirm the continuation of an annual review process of the MoU, including consultation with supervised FMIs to obtain feedback on how coordination is working in practice, embedding...
• The publication sits alongside the underlying 2025 MoU text (and the broader multi‑regulator MoU framework with FCA, PRA and PSR), reinforcing that FMIs should align their governance, reporting and...

Suggested Considerations

• Confirm internally that your firm’s regulatory engagement framework recognises the Bank of England–FCA MoU and clearly allocates responsibilities for managing relationships with both authorities in line with their respective roles.
• Review and, where necessary, update internal regulatory communications and escalation procedures to ensure that information relevant to both the Bank of England and FCA can be shared consistently, accurately and on a timely basis, in anticipation of coordinated supervisory expectations.
• Prepare to continue providing structured, constructive feedback during the annual MoU review process by maintaining records of supervisory interactions with each authority, including instances of overlap, gaps, or divergent expectations.
• Align incident management, operational resilience and major change approval processes with the expectation that both authorities may need to be informed and coordinated, and verify that notification playbooks and contact trees reflect this dual‑regulator structure.
• For groups operating multiple FMIs or cross‑border infrastructures, map where other regulators rely on the Bank of England/FCA supervisory cooperation (for example, via substituted compliance or recognition regimes) and integrate this into your global regulatory engagement strategy.

Key Dates

References

• [1] securitiesfinancetimes.com/securitieslendingnews/industry...
• [2] fca.org.uk/news/statements/bank-england-fca-mou-supervisi...
• [3] ey.com/content/dam/ey-unified-site/ey-com/en-uk/insights/...
• [4] mondovisione.com/media-and-resources/news/bank-of-england...
• [5] cms.law/en/gbr/regulatory-news/boe-fca-mou-on-the-supervi...
• [6] bankofengland.co.uk/-/media/boe/files/memoranda-of-unders...
• [7] psr.org.uk/media/mdfep01b/mou-the-bank-fca-psr-pra-june-2...
• [8] cliffordchance.com/content/dam/cliffordchance/briefings/2...

What Changed

• - The FCA publicly endorses the launch of the UK Payments Initiative (UKPI) as an industry‑led open banking payments scheme focused on commercial variable recurring payments (cVRP), signalling...
• The statement confirms the FCA wants competition between commercial open banking schemes, indicating a shift from a single mandated model (under PSD2/open banking implementation) towards multiple...
• The FCA signals support for the creation of an independent standards‑setting body for open banking payments, moving standard‑setting away from transitional arrangements towards a more permanent,...
• The FCA announces its intention, subject to future legislation granting new powers, to consult on a long‑term regulatory framework for open banking (and, by extension, commercial open banking schemes...
• The FCA links this announcement to its regulatory roadmap for open finance, confirming that open banking data‑sharing will be extended to broader financial data, providing a strategic direction of...

Suggested Considerations

• Conduct an internal assessment of how your firm currently uses or plans to use open banking and cVRP (e.g., recurring payments, subscription billing, merchant acquiring) and document potential exposure to UKPI or similar schemes.
• Establish or update a regulatory horizon‑scanning process to track: (i) UKPI scheme documentation and rulebooks, (ii) FCA’s forthcoming open finance regulatory roadmap outputs, and (iii) the enabling legislation that will grant the FCA new powers.
• Engage product, legal and compliance teams to map existing recurring payment processes and consumer consent flows against anticipated expectations for open banking cVRP, including clarity of consent, cancellation rights, transparency of variable amounts, and dispute handling.
• Review and, where necessary, update data protection, API security, and customer authentication controls to ensure they can support commercial open banking schemes and more granular data‑sharing under an open finance regime.
• For firms intending to participate in UKPI, proactively review and align internal policies with emerging industry standards and scheme rules, including technical standards, liability allocation, service‑level requirements, and complaints/chargeback processes.

Key Dates

References

• [1] fca.org.uk/news
• [2] gov.uk/government/organisations/financial-conduct-authority
• [3] fca.org.uk/news/news-stories/2025-fines
• [4] fca.org.uk/news/press-releases/fca-warns-younger-investor...
• [5] fca.org.uk/consumers/warning-list-unauthorised-firms
• [6] en.wikipedia.org/wiki/Financial_Conduct_Authority
• [7] fca.org.uk
• [8] fca.org.uk/consumers/fca-firm-checker

What Changed

• - The UK Government has confirmed a programme to reform the Consumer Credit Act 1974, moving away from detailed prescriptive legislative requirements towards a more flexible framework based on FCA...
• The FCA has stated its intention to consult on “key elements” of the consumer credit framework that are currently in primary or secondary legislation, where it has the power to do so, covering the...
• The Consumer Duty (Principle 12, PRIN 2A) is explicitly confirmed as the overarching framework for the future consumer credit regime, meaning consumer credit firms will be expected to demonstrate...
• The FCA has signalled that existing consumer rights and protections under the CCA (including cancellation and withdrawal rights, termination, and early settlement rights) will be reviewed and...
• Any new FCA rules arising from CCA reform will be supported by a formal cost–benefit analysis and shaped through stakeholder engagement, implying a structured consultation process (likely one or more...

Suggested Considerations

• Establish an internal CCA reform working group (legal, compliance, product, operations) to track HM Treasury and FCA publications on Consumer Credit Act reform and prepare coordinated responses.
• Map all existing product lines and customer journeys against current CCA and CONC requirements to identify areas most likely to be affected if obligations move from legislation into FCA rules (e.g. pre‑contract disclosure, notices of sums in arrears, default notices, early settlement calculations).
• Review your Consumer Duty implementation for consumer credit products (especially outcomes testing, fair value assessments and customer support processes) to ensure it can absorb additional or re‑framed requirements that may migrate from the CCA into the FCA Handbook.
• Compile an inventory of CCA‑dependent documentation (agreements, pre‑contract information, statutory notices, arrears and default letters, early settlement communications) and assess the effort required to update them if the form or content requirements are recast in FCA rules.
• Enhance regulatory horizon‑scanning processes to include systematic monitoring of HM Treasury CCA reform material and FCA consultations, ensuring early awareness of consultation questions and proposed Handbook text.

Key Dates

References

• [1] fca.org.uk/news/speeches/showing-financial-crime-red-card
• [2] fca.org.uk/news
• [3] fca.org.uk/consumers/protect-yourself-scams
• [4] fca.org.uk/news/news-stories/consumer-warning-binance-mar...
• [5] gov.uk/government/organisations/financial-conduct-authority
• [6] fca.org.uk
• [7] fca.org.uk/news/press-releases/fca-establishes-presence-u...
• [8] fca.org.uk/news/speeches/regulatory-perspective-and-prior...

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

References

• [1] fca.org.uk/news/statements/fca-confirms-motor-finance-red...
• [2] tlt.com/insights-and-events/insight/motor-finance
• [3] ukfinance.org.uk/news-and-insight/blog/motor-finance-prep...
• [4] fca.org.uk/publications/consultation-papers/cp25-27-motor...
• [5] financialinstitutionsnews.com/2026/03/30/fca-publishes-de...
• [6] hoganlovells.com/en/publications/the-road-to-redress-fcas...
• [7] fenchurchlaw.com/motor-finance-and-the-fca-redress-scheme...

What Changed

• No immediate regulatory changes or new requirements are introduced; this is a consultation precursor outlining a planned review. The review will assess:
• Application of Listing Rules to board independence and related party transactions for investment entities.
• How rules, alongside company law, support shareholder rights, engagement, and conflict management (e.g., protecting against "back door takeovers" by minority activists like Saba). Proposals will be...

Suggested Considerations

• Monitor and engage: Investment trust boards/managers should track the upcoming consultation (expected end-2026) and consider submitting responses on board independence, conflicts, and shareholder protections.[FCA blog]
• Review governance: Assess articles of association for voting enhancements (e.g., electronic voting, opt-ins) and ensure boards understand powers to challenge vexatious requisitions under Companies Act.[FCA blog]
• Enhance shareholder engagement: Platforms and intermediaries to digitize voting processes; firms to promote high turnout (recently >80%) and clear information on director nominations.[FCA blog]
• Conflict checks: Proactively manage related party issues and concentrated ownership risks in line with current Listing Rules, anticipating review focus.

Key Dates

References

• [1] quoteddata.com/2026/03/fca-promises-to-check-its-rules-pr...
• [2] sharecast.com/amp/news/Holding-s-in-Company/Total-Voting-...
• [3] ropesgray.com/en/insights/viewpoints/102mfbp/fca-prioriti...
• [4] ocorian.com/knowledge-hub/insights/change-control-avoidin...
• [5] financialregulation.linklaters.com/post/102mm1y/fca-sets-...
• [6] theaic.co.uk/aic/news/industry-news/the-frustrating-grey-...
• [7] fca.org.uk/news/news-stories/new-regime-securities-consumers
• [8] broadridge.com/resource/regulatory-insights-march-2026

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

References

• [1] nao.org.uk/wp-content/uploads/2022/03/Investigation-into-...
• [2] regulationtomorrow.com/2024/08/the-british-steel-pension-...
• [3] cms.law/en/gbr/regulatory-news/fca-british-steel-pension-...
• [4] thepensionsregulator.gov.uk/-/media/thepensionsregulator/...
• [5] fca.org.uk/publication/correspondence/fca-bsps-decision-l...
• [6] pensionsage.com/pa/NAO-to-investigate-FCA-s-handling-of-B...

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

References

• [1] global.morningstar.com/en-gb/news/alliance-news/177261348...
• [2] fca.org.uk/news/statements/motor-finance-compensation-sch...
• [3] insidermedia.com/news/national/millions-of-customers-to-r...
• [4] sharecast.com/news/news-and-announcements--/fca-consideri...
• [5] lawgazette.co.uk/news/millions-will-receive-car-finance-c...

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

References

• [1] thewealthmosaic.com/vendors/ortec-finance/blogs/fca-risk-...
• [2] fca.org.uk/publications/good-and-poor-practice/risk-asses...
• [3] fca.org.uk/news/statements/beware-high-risk-investments-u...
• [4] alessa.com/blog/maintain-fca-compliance/
• [5] skillcast.com/blog/understanding-conduct-risk-fca-standards
• [6] lexisnexis.co.uk/legal/news/fca-publishes-statement-warni...
• [7] fca.gov/about/faq/risk-identification
• [8] handbook.fca.org.uk/handbook/FCG.pdf

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

References

• [1] mortgagesoup.co.uk/court-approves-mfss-administration/
• [2] theintermediary.co.uk/2026/03/high-court-case-involving-m...
• [3] contextualsolutions.de/blog/market-financial-solutions-co...
• [4] sharecafe.com.au/2026/03/11/market-financial-solutions-fa...
• [5] mortgagesolutions.co.uk/news/2026/03/16/fca-and-fos-propo...
• [6] 9fin.com/insights/uk-court-market-financial-solutions
• [7] financialinstitutionsnews.com/2026/03/03/property-lender-...

What Changed

The redress system modernization introduces several structural and procedural reforms: Registration Stage for Complaints A new formal registration stage has been introduced to standardize how complaints enter the system, improving tracking and early identification of systemic issues across firms and markets. Updated Dismissal Grounds The FCA has revised the criteria for dismissing complaints, providing clearer standards that should reduce disputes about complaint admissibility and improve consistency in decision-making. Enhanced Fair and Reasonable Test Guidance Clearer guidance on how the...

Suggested Considerations

• *Immediate Operational Priorities (Pre-May 2026):
• *Governance and Accountability
• Appoint senior managers with explicit accountability for complaints handling and redress programmes
• Establish board-level oversight structures with regular reporting on complaints volumes, redress calculations, and regulatory compliance
• Document decision-making frameworks for complaint eligibility and dismissal grounds

Key Dates

References

• [1] memaconsultants.com/resources/insights/2026-02-motor-fina...
• [2] tcc.group/blog/2026/03/05/motor-finance-consumer-redress-...
• [3] rbcompliance.co.uk/post/2025-year-end-regulatory-round-up...
• [4] fca.org.uk/publications/consultation-papers/cp25-27-motor...
• [5] arum-global.com/insights/blog/fcamotorfinancecompensation...
• [6] lewissilkin.com/insights/2025/07/24/plans-to-reform-the-f...
• [7] fca.org.uk/publication/finalised-guidance/fca-approach-pa...
• [8] service.betterregulation.com/document/801098