The Bank of England (the Bank), the Prudential Regulation Authority (PRA) and the FCA will start overseeing the first critical third parties (CTPs) on Monday 13 July 2026, following designation by the Treasury. CTPs are technology and other service providers whose services underpin the UK financial system. Today, the Treasury has announced its first designations of 4 global cloud services and technology providers: Amazon Web Services EMEA SARL, Google Cloud EMEA Limited, Microsoft Ireland Ope...
The Bank of England, PRA and FCA will begin **direct, joint oversight of the first designated Critical Third Parties (CTPs) from 13 July 2026**, covering four major cloud and technology providers whose services underpin UK financial markets. This materially changes the operational resilience landscape: while regulated firms remain fully responsible for their own outsourcing and third‑party risk management, critical dependencies on AWS, Google Cloud, Microsoft and Oracle will now sit within a separate supervisory regime focused on system‑level resilience and incident management.
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
- UK regulators publish final policy and supervisory materials setting out the CTP oversight regime, including Fundamental Rules and operational risk and resilience requirements
- CTP rules and oversight regime take legal effect, but only apply once a provider is designated as a CTP
- Regulations for CTP oversight come into effect for the first designated CTPs; Bank of England, PRA and FCA formally start supervising AWS EMEA, Google Cloud EMEA, Microsoft Ireland Operations and Oracle UK as CTPs
Compliance Impact
Non‑compliance primarily affects regulated firms through weaknesses in operational resilience and third‑party risk management, rather than direct CTP rule breaches, but could result in supervisory findings, remediation programmes, restrictions on business growth and, in serious cases, enforcement action. For designated CTPs, failure to meet the regime’s requirements may trigger direct regulatory intervention, including directions on how services are provided, which can materially impact firms that rely on those services.
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BankBroker DealerPayment Provider The Upper Tribunal has made an order suspending parts of the scheme. We set out what the partial suspension means for firms and consumers. The Upper Tribunal has confirmed it will hear the legal challenges to our motor finance scheme on 14 to 18 December 2026 or 16 to 26 February 2027. The final dates depend on whether any of those involved in the case apply for further expert opinion or disclosure of information, and whether any such application is successful.The Tribunal has also made an or...
The Upper Tribunal has ordered a **partial suspension** of the FCA’s motor finance consumer redress scheme rules, primarily pausing redress calculation, payment and compensation communications while legal challenges are heard. Compliance teams at motor finance lenders and brokers must now operate under a split regime: preparatory and data‑gathering obligations under PS26/3 remain in force, but scheme‑timetable obligations on paying and notifying compensation are paused until the Tribunal process concludes.
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
– Consultation on the proposed motor finance redress scheme closes (CP25/27), feeding into the final PS26/3 rules
– Firms must start sending final responses to any motor leasing complaint in line with normal complaint‑handling rules (outside the scheme‑specific pause)
– FCA confirms its motor finance compensation scheme has been legally challenged, triggering the Upper Tribunal process
– FCA lifts the general pause on handling certain motor finance complaints, returning many complaints to standard DISP timeframes, alongside the emerging scheme
– Original end of the implementation period for loans taken out from 1 April 2014 under PS26/3 (now effectively paused for redress calculation/payment/communications)
Compliance Impact
Non‑compliance with the remaining live scheme rules and complaint‑handling requirements exposes firms to supervisory intervention, possible enforcement action and heightened FOS risk, even during the suspension. Failures in data gathering, record‑keeping or timely communications to non‑compensated complainants will also materially increase operational, litigation and reputational risk once the Tribunal clarifies the scheme’s future.
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The Retail Payments Infrastructure Board (RPIB), led by the Bank of England, recently published a consultation on the future retail payments infrastructure.To support the consultation, the Payment Vision Delivery Committee (PVDC) which comprises representatives of HM Treasury, the FCA, Bank of England and the PSR, has published further context to support stakeholders' reading of the consultation. It covers issues such as how the commercial model for the infrastructure should work and how the ...
The FCA statement confirms that the Retail Payments Infrastructure Board (RPIB), led by the Bank of England, has launched a major consultation on the **design of the future UK retail payments infrastructure**, supported by contextual material from the Payments Vision Delivery Committee (PVDC). This marks a key implementation step in the UK National Payments Vision, with significant implications for commercial models, access, consumer protection and financial crime controls across all retail payment schemes and providers.
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
(TBD) - PVDC expected to publish its detailed **strategy for retail payments infrastructure**, setting key priorities for next‑generation infrastructure and aligning with the National Payments Vision
(already in train) - HM Treasury consultation on retained EU payments law and FCA engagement paper (Payments Forward Plan context; relevant for alignment with infrastructure changes)
- Retail Payments Infrastructure Board consultation on the design of the Future Retail Payments Infrastructure is launched
- Deadline for submission of responses to the RPIB consultation on the future retail payments infrastructure
Compliance Impact
Non‑engagement with this consultation and subsequent strategy may leave firms exposed to future infrastructure, access and fraud‑control requirements that they have not planned or invested for, with potential operational disruption, competitive disadvantage and heightened regulatory scrutiny. In the medium term, failure to adapt to the new infrastructure model could impair compliance with payment systems regulation, operational resilience expectations and Consumer Duty outcomes.
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Payment ProviderBankFintech The Bank of England and the FCA have published a joint approach setting out how they and where relevant other authorities will work together to regulate systemic stablecoin issuers in the UK.It explains how responsibilities will be split between the authorities, and how UK stablecoin issuers may move from FCA supervision to joint regulation once recognised as systemic by HM Treasury.The approach aims to provide clarity and predictability for firms as the market develops.Read the paper
The FCA and Bank of England have set out a joint supervisory model for **systemic stablecoin issuers**, clarifying how firms will move from FCA-only oversight to joint regulation once HM Treasury designates them as systemic. This matters because UK‑based and non‑UK stablecoin issuers used for payments will face distinct prudential, conduct and structural requirements depending on whether they are non‑systemic (FCA only) or systemic (Bank of England plus FCA), with a managed transition between regimes.
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
- Bank of England consultation paper issued on the proposed regulatory framework for sterling‑denominated systemic stablecoins and systemic payment system operators
- Bank of England intends to finalise the Code of Practice and supporting materials by the end of 2026, confirming the prudential and structural regime for systemic stablecoins
- UK introduces new regulatory authorisation requirements for stablecoin issuers, including FCA authorisation for qualifying issuance and custody activities
- Consultation period closes for the Bank of England’s systemic stablecoin regime proposals
- Bank of England publishes its policy statement and draft Code of Practice for systemic stablecoin issuers, setting out detailed prudential and backing‑asset rules and confirming joint work with the FCA on an end‑to‑end regime
Compliance Impact
Non‑compliance with the emerging stablecoin regime may result in refusal of authorisation, enforcement directions, restrictions on issuance volumes, and potential wind‑down of stablecoin products, with significant balance‑sheet, reputational and operational consequences. Systemic issuers face heightened supervisory scrutiny and Banking Act enforcement powers, making early alignment with prudential, safeguarding and governance expectations critical.
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FintechCrypto ExchangeBank Drax Group PLC (Drax) has announced the FCA has closed its investigation into the company.We undertook an extensive investigation following concerns raised regarding disclosures to the market about the sustainability of Drax’s Canadian biomass. We did not find evidence that justified any further action.Thousands of pages of complex material were reviewed as part of the investigation, and individuals from the company interviewed. Our focus was on areas within our remit, specifically whether Dr...
The FCA concluded its investigation into Drax without taking action after an extensive review of “thousands of pages” and interviews with company personnel, focused on whether Drax’s annual reports and accounts from 2021 to 2023 contained misleading statements or material omissions about biomass sustainability. This matters because it shows the FCA continues to scrutinize **listed-company disclosures** on ESG and sustainability claims, especially where prior regulatory findings or public controversies may indicate potential market disclosure risk.
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
- Period covered by the FCA’s review of Drax’s annual reports and accounts
- Period covered by the FCA’s review of Drax’s annual reports and accounts
- Period covered by the FCA’s review of Drax’s annual reports and accounts
- Ofgem announced conclusions on Drax’s reporting of biomass profiling data, which later formed the background to the FCA’s interest
- The FCA closed the investigation and confirmed that no further action would be taken
Compliance Impact
The practical severity is moderate to high for listed issuers because the FCA’s review shows it will investigate potentially misleading sustainability disclosures and expects accurate, investor-relevant reporting. Non-compliance can lead to enforcement exposure, remediation costs, reputational damage, and intensified scrutiny of future ESG statements even where no action is ultimately taken.
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All Firms
The FCAhasstartedcivil proceedings against Mr Neil Woodford andW4.0.The FCAallegesthat Mr Woodford and W4.0 are providing regulated investment advice and making financial promotions through the subscription-based platform, www.w4pz.com, without authorisation.In the FCA’sview, the activitybreachessections 19 and 21 of the Financial Services and Markets Act 2000 (FSMA).The FCA is seekingan injunction against Mr Woodford and W4.0 tostop them carrying on the potentiallyunlawfulactivities.W4.0 is ...
The FCA has commenced civil proceedings against Neil Woodford and W4.0 (W Four Point Zero FZE LLC, UAE‑registered), alleging they provided regulated investment advice and made financial promotions to UK consumers via subscription platform www.w4pz.com without FCA authorisation, in breach of sections 19 and 21 FSMA 2000. The case underscores that overseas structures, subscription “community” models, and model‑portfolio or strategy platforms aimed at UK users will be treated as carrying on UK‑regulated activities and financial promotions if they effectively target or advise UK investors.
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.
Compliance Impact
Non‑compliance exposes firms and individuals to civil proceedings, injunctive relief, financial penalties, and potentially prohibition orders, alongside significant reputational damage. The case demonstrates the FCA’s willingness to litigate perimeter breaches for digital and overseas platforms, making this a high‑risk area for firms operating at or near the border of regulated advice and promotions.
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Asset ManagerWealth ManagerFintech We set out next steps on issuing new rules and guidance on Money Market Funds (MMFs), following Government plans to replace the current rules. On 15 May, the Government set out its expectation that it will lay legislation that will replace the UK Money Market Funds Regulation. Read the Government statement.Money Market Funds (MMFs) play an important role in the financial system. MMFs are widely used for cash management and provide an alternative or complement to bank deposits for a broad rang...
The FCA has confirmed its *updated approach* to UK money market fund (MMF) reforms, signalling that most detailed MMF requirements will move from retained EU law into FCA rules and guidance, with a new overarching “adequate resilience” liquidity rule and revised expectations for weekly liquid assets (WLA). The key compliance implication is a shift from hard, uniform liquidity minima to a combination of existing regulatory minima plus *supervisory expectations* of 40% WLA for stable NAV MMFs and 20% WLA for variable NAV MMFs, alongside confirmation that “delinking” and enhanced KYC measures will proceed.
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
– FCA publishes CP23/28 “Updating the regime for Money Market Funds,” consulting on higher liquidity minima (15% DLA and 50% WLA), delinking, enhanced KYC, and broader resilience measures
– HM Treasury and the FCA publish the joint policy statement “Reforms to Money Market Fund Regulations,” confirming the Government’s intention to replace the UK MMFR with a new framework and that most MMF requirements will be set in FCA rules and guidance, including higher liquidity expectations
– FCA issues its statement “FCA update on reforms to the UK Money Market Fund Regulation,” setting out updated proposals, including retention of current minimum WLA in rules, the new “adequate resilience” liquidity rule, and supervisory expectations of 40% WLA for stable NAV and 20% WLA for variable NAV MMFs, and indicating that CP23/28 measures such as delinking and enhanced KYC will largely be taken forward
– The UK’s new MMF regime is expected to be in place, subject to Parliamentary approval of the enabling legislation, after which the detailed FCA rules and guidance (including the new resilience rule and WLA expectations) will apply
– HM Treasury will lay the statutory instrument replacing the UK MMFR with the new legislative framework under which FCA rules and guidance for MMFs will be made
Compliance Impact
Non‑compliance with the new FCA MMF rules and supervisory expectations is likely to be treated as a significant prudential and conduct issue, exposing firms to supervisory intervention, potential restrictions on MMF operations, and enforcement action where governance or disclosure failures are identified. Given the explicit financial stability focus of these reforms, regulators can be expected to scrutinise outlier funds and firms that do not align internal practice with the 40%/20% WLA expectations or that cannot evidence robust liquidity and KYC frameworks.
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Asset ManagerHedge FundBank The Bank of England has published a joint review with the FCA on how the Memorandum of Understanding (MoU) for financial market infrastructure (FMI) is working. The Bank of England and the FCA (the authorities) cooperate on the supervision of FMIs.The authorities consulted with FMIs to assess the effectiveness of cooperation between the Bank and FCA over the past 12 months.Following the responses, the authorities have concluded that the arrangements for cooperation remain effective with appro...
The Bank of England and FCA have completed their 2025/26 joint review of the Memorandum of Understanding (MoU) governing cooperation on the supervision of UK financial market infrastructures (FMIs) and have concluded that current arrangements remain effective, well‑coordinated and free from material duplication. For compliance teams at FMIs and connected firms, this confirms regulatory expectations around information‑sharing, supervisory engagement and coordinated oversight by the two authorities, but does not introduce new rules or materially change existing supervisory practice.
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
– The Bank of England and FCA wrote to CCPs, RIEs and RCSDs to request feedback on the effectiveness of cooperation under the MoU based on firms’ interactions during 2024
– The authorities conducted the annual joint review of the MoU for FMIs, considering the responses received from supervised entities over the preceding 12 months and assessing the effectiveness of coordination and duplication
– The Bank of England and FCA will continue to review the MoU each year, including soliciting feedback from FMIs, to confirm that supervisory cooperation remains effective and to identify potential enhancements
Compliance Impact
Non‑compliance would not typically arise directly from the MoU review outcome itself, but FMIs that fail to align with the coordinated expectations and information‑sharing practices of the Bank and FCA risk fragmented supervisory relationships, increased scrutiny, and potential enforcement where underlying prudential, conduct, or operational resilience requirements are not met. Effective engagement with both regulators remains critical to maintaining authorisation, recognition status and continued operation of systemically important market infrastructure.
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BankBroker DealerAsset Manager The UK Payments Initiative (UKPI) announcement signals a major step forward for open banking and commercial variable recurring payments (cVRP). The launch of UKPI paves the way for greater payments competition, innovation and economic growth.Read the announcement.The industry-led scheme will give people more choice about how and when they pay for recurring goods and services.We want to see competition between commercial open banking schemes and expect the launch of the first scheme by UKPI to...
The FCA has published a short policy statement signalling regulatory support for the industry‑led **UK Payments Initiative (UKPI)**, an open banking scheme to deliver commercial variable recurring payments (cVRP) and broader payments innovation. For compliance teams, this marks an early but clear indication that the FCA expects firms to prepare for a future **formal regulatory framework for open banking/open finance and commercial schemes**, with consultation to follow once enabling legislation grants the FCA expanded powers by the end of 2026.
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
– FCA intends to consult on a **long‑term regulatory framework for open banking** (and related commercial schemes such as UKPI), subject to the granting of new powers in legislation
– UK legislation is expected to give the FCA new powers over open banking/open finance, which is a precondition for FCA consultation on a long‑term framework
Compliance Impact
In the immediate term, compliance impact is medium: no new binding rules are introduced, but the FCA’s direction of travel is clear and requires strategic planning. Over the medium term (to and beyond 2026), failure to anticipate the formal open banking/open finance framework, or to adapt recurring payment practices and controls to emerging standards, is likely to create material conduct, operational and supervisory risk.
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BankFintechPayment Provider The Treasury has published its policy statement today on reform of the Consumer Credit Act 1974 (CCA). Reform of the CCA is an important step towards a more flexible regime that supports effective competition and innovation, while maintaining appropriate consumer protection both now and in the future. The proposals set out a framework that places greater emphasis on FCA rules and guidance rather than prescriptive requirements set out in legislation.We intend to consult on the key elements of ...
HM Treasury has issued a policy statement on reform of the Consumer Credit Act 1974 (CCA), signalling a strategic shift from prescriptive, statute-based requirements towards an FCA rulebook-led regime for consumer credit. The FCA’s response confirms it will consult on moving key CCA elements into FCA rules and guidance, anchored in the Consumer Duty, which will materially reshape documentation, processes and conduct standards across the consumer credit lifecycle.
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
– HM Treasury’s policy statement has been published, but no specific implementation dates for CCA reform or FCA rule changes are given in the FCA response
– FCA consultation(s) on key elements of the consumer credit framework are announced as forthcoming; exact dates are not yet specified
– Future milestones such as FCA Policy Statements, Handbook changes and statutory amendments will follow, but no indicative timetable is provided in the FCA response
Compliance Impact
Non‑compliance with the eventual FCA rules replacing or supplementing CCA provisions will expose firms to supervisory intervention, enforcement action, consumer redress and potentially large remediation exercises under the Consumer Duty. Given the centrality of consumer credit to many business models and the likely breadth of changes, firms that do not prepare early may face significant operational, conduct and litigation risk.
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