Shojin Financial Services Limited (Shojin) is a crowdfunding platform authorised and regulated by the FCA. Shojin allowed customers to make investments that were used to fund loans toward property developments. On 23 March 2026, Shojin went into administration. Simon Carvill-Biggs and Ian Corfield of FRP Trading Advisory Limited were appointed as Joint Administrators.The Joint Administrators are responsible for acting in the best interests of the people who are owed money by Shojin, and they ...
A new taskforce will tackle poor handling of motor finance claims by some claims management companies (CMCs) and law firms, after the FCA, Solicitors Regulation Authority (SRA), Information Commissioner’s Office (ICO) and Advertising Standards Authority (ASA) agreed to join up their efforts. The announcement comes as the FCA prepares to set out its final compensation scheme for motor finance customers.The regulators will step up efforts to share intelligence and continue to take co-ordinated ...
The FCA has fined Dinosaur Merchant Bank Limited (DMBL) £338,000 for failing to put in place effective systems and controls to detect and report suspicious trading in its contracts for difference (CFD) business. CFDs are sophisticated financial products that are used to speculate on various assets going up or down in value. Given their high-risk nature, firms must have strong and reliable surveillance arrangements to prevent insider dealing and market manipulation.In June 2024, DMBL introduce...
As part of ongoing improvements to My FCA, and following the successful removal of RegData sign in at the end of last year, we have now removed direct access to Connect and the Online Invoicing System. Firms do not need to take any action. All existing RegData, Connect and Online Invoicing links and bookmarked pages will now automatically redirect to My FCA, where you can access all systems from a single homepage without signing in again. This makes managing your regulatory tasks quicker and ...
The Bank is today announcing a simplification and reduction in the Discount Window Facility (DWF) pricing, as part of its previously announced review of the DWF.
On 25 March 2026, following a petition filed by the FCA, the High Court ordered that Equity for Growth (Securities) Limited (EFG) be wound up. EFG is a corporate finance firm. EFG was also a principal for a number of appointed representatives between 2015 and 2020, including Amyma Ltd and Osborne Baldwin Ltd, which traded as Hunter Jones.An appointed representative carries on regulated activity under the responsibility of an authorised firm, known as 'the principal'. Find more information on ...
We have set out plans for using AI to speed up authorisations, testing new tools to identify key risks earlier, with our people remaining at the heart of decision-making. The new authorisation tool is being developed internally and will be integrated into existing FCA systems.It forms part of our annual work programme 2026/27, which lays out how we’re accelerating our ambition to be a smarter, more data-driven regulator.We will also use generative AI to support our efforts to modernise regula...
The Bank of England and Prudential Regulation Authority have finalised a package of changes to firms’ resolution reporting and disclosure requirements which reduces the burden of regulation while maintaining a robust and credible regime that supports growth and competition.
**SS9/17 - Recovery Planning** is the PRA's supervisory statement establishing expectations for how UK banks, building societies, and designated investment firms must prepare and maintain recovery plans to ensure financial stability during periods of stress. This guidance supersedes the previous SS18/13 and represents a substantial tightening of recovery planning requirements, making credible, testable, and executable recovery plans a core component of prudential regulation rather than a compliance checkbox.
What Changed
SS9/17 introduced several material enhancements to recovery planning requirements:
*Governance and Integration**: Recovery planning must be embedded within firms' risk management frameworks, with board-level oversight and integration with stress testing and ICAAP processes. The PRA expects clear governance documentation showing how plans are produced, reviewed, signed off, and implemented.
*Fire Drill Exercises**: Firms must conduct regular fire drill exercises that simulate recovery scenarios in a live environment, testing governance arrangements, management information systems, and the...
What You Need To Do
*Develop comprehensive recovery plans containing all minimum elements specified in the Recovery Planning Part of the PRA Rulebook and detailed in SS9/17
*Establish governance frameworks documenting how recovery plans are produced, reviewed, approved by the board, and how recovery options would be implemented
*Conduct fire drill exercises that simulate recovery scenarios, test governance arrangements, and validate management information capabilities
*Create implementation playbooks (for complex plans) that enable rapid execution by senior management during stress
*Perform detailed impact analysis for each recovery option, quantifying capital and liquidity impacts with realistic timelines
Key Dates
11 December 2017- SS9/17 first published and became effective
21 September 2017- PRA consultation deadline for CP9/17 (the consultation paper preceding this statement)DEADLINE
Second half of 2017- Proposed implementation date for superseding SS18/13 (achieved with December 2017 publication)
Ongoing- Firms must maintain and test recovery plans continuously; the PRA notes this statement "may be revised as recovery planning becomes further embedded in firms' risk management practices"DEADLINE
PS10/26 finalizes PRA proposals to raise the Resolution Assessment threshold from £50 billion to £100 billion in retail deposits and reduce recovery plan review frequency for Small Domestic Deposit Takers (SDDTs) from annually to biennially, enhancing proportionality in resolution and recovery frameworks post-financial crisis. These changes reduce regulatory burden on smaller firms while maintaining safety and soundness, directly supporting PRA objectives of competitiveness and growth. Compliance teams must assess scope changes immediately to align reporting and planning cycles.
What Changed
Resolution Assessment Threshold: Increased from £50 billion to £100 billion in retail deposits, limiting reporting and disclosure requirements under the Resolution Assessment Part of the PRA Rulebook to only the largest firms posing systemic risks.
Recovery Plans Review Frequency: For SDDTs and SDDT consolidation entities, reduced from at least annually to at least every two years, aiming for higher quality plans with less frequent reviews.
Rulebook and Guidance Updates: Amendments to Resolution Assessment Part (Appendix 2), Recovery Plans Part (Appendix 3), and Supervisory Statement SS9/17 –...
What You Need To Do
Scope Assessment
Recovery Plans
Reporting/Disclosure
Key Dates
1 April 2026 - Effective date for PS10/26 changes, including new £100bn threshold and biennial recovery plan reviews for SDDTs.
2 October 2026 - Expected submission date for first Resolution Assessment reports for in-scope firms (as previously communicated by PRA).
11 June 2027 - Expected publication date for first disclosures under amended threshold.
Compliance Impact
Urgency: High – Effective 1 April 2026 (imminent from March 2026), with first reports due 2 October 2026; firms between £50-100bn retail deposits gain immediate burden relief (exiting scope), while largest firms face no new burdens but must confirm ongoing compliance. Matters due to proportionality aligning with PRA growth objectives, reducing costs for mid-tier banks/building societies amid economic pressures, but requires swift deposit recalibration to avoid inadvertent non-compliance.
PS11/26 finalizes PRA rules enhancing Pillar 3 disclosures on resolvability resources (MREL), capital distribution constraints (CDCs), and disclosure basis for UK banks and building societies. It matters because it standardizes information to boost market discipline, user comparability, and confidence in orderly resolution, directly impacting financial stability and compliance reporting. No substantive changes from CP16/25 consultation, with minor clarifications only.
What Changed
Standardized MREL disclosure templates: Replaces free-form disclosures with four new templates aligned to Basel BCBS TLAC formats (adapted for UK), expanding scope to more firms for consistency on MREL adequacy.
Qualitative CDC narrative: Added to UK CC1 template for firms subject to CDCs, enabling market assessment of restriction impacts; removes obsolete Systemic Risk Buffer (SRB) disclosure post-O-SII buffer replacement.
Disclosure basis statement: Firms must specify their Pillar 3 regime (e.g., resolution entity, O-SII, large institution), frequency, and details like reference date,...
What You Need To Do
Update Pillar 3 processes to use new MREL templates (Annex XXVII instructions), UK CC1 with CDC narrative, and basis statement (e
For CDC-subject firms
Ensure semi-annual disclosure of key metrics (Article 447 points a-g) where required
Integrate into consolidated reporting for UK parents; test templates/instructions from appendices
Review for alignment with broader CRR changes (e
Key Dates
17 March 2026- PS11/26 and accompanying rule instruments (e.g., Disclosure (CRR) Instrument 2026) published.
1 January 2027- Policy effective date; rules apply from this date.
H1 2027- First disclosures under new policy published, covering period ending **31 December 2026** (annual/semi-annual as applicable).
Compliance Impact
Urgency: High – Effective 1 January 2027 requires immediate template/system updates for H1 2027 disclosures (year-end 2026 data), with standardized formats limiting flexibility and raising non-compliance risks to market discipline objectives. Impacts reporting teams, resolution planning, and investor relations; proportional design minimizes burden but demands proactive gap analysis given no transition grace beyond effective date.
PS9/26 finalizes targeted amendments to MREL reporting templates, including changes to MRL001 and MRL003 data elements and the deletion of MRL002, reducing reporting burdens while maintaining resolution planning oversight. This matters for compliance teams as it streamlines processes under the PRA's Future Banking Data programme, with implementation from 1 January 2027, enabling firms to reallocate resources efficiently.
What Changed
Amendments to data elements in the MREL resources template (MRL001) and MREL debt template (MRL003), with full deletion of the MREL resources forecast template (MRL002).
Consequential updates to reporting instructions (Appendix 2) and Supervisory Statement SS19/13 (Appendix 3), including relocation of instrument scope descriptions to reporting instructions for clarity.
No changes to quarterly reporting frequency for MRL001/MRL003, despite industry requests for semi-annual alignment, to ensure monitoring of loss-absorbing capacity.
PRA to publish updated reporting taxonomy shortly.
What You Need To Do
Review and update internal reporting systems to incorporate revised MRL001/MRL003 templates and deleted MRL002 by 1 January 2027
Implement updated reporting instructions and SS19/13 amendments, including clarified scope of instruments in MRL templates
Prepare for Q4 2026 data submission in February 2027 using new taxonomy (to be published shortly by PRA)
For firms with deleted COREP13 templates, cease submissions from April 2026 cycle
Conduct gap analysis against SS19/13 changes and test processes for quarterly MREL reporting continuity
Key Dates
1 January 2027- Revised MRL001 and MRL003 templates effective; first submissions of 2026 Q4 data (ending 31 December 2026) due in **February 2027**.DEADLINE
1 April 2026- Partial revocation of UKTS 2018/1624 (COREP13), deleting certain templates ahead of April 2026 cycle for period ending 31 December 2025.
1 April 2026- PS10/26 effective (related: Resolution Assessment threshold amendments, reports due 2 October 2026).DEADLINE
1 January 2027- PS11/26 effective (related: disclosures from 2027 H1 for period ending 31 December 2026).
Compliance Impact
Urgency: Medium – Changes reduce burden (net simplification, ~25% per industry feedback) but require system updates before 1 January 2027 submissions; non-compliance risks resolution planning scrutiny, though lead time mitigates immediate pressure. Matters for maintaining accurate MREL monitoring amid PRA's FBD efficiency drive.
More people could access financial advice, under proposals set out by FCA. The FCA is consulting on how to make it easier for firms to give more simplified forms of individualised financial advice to consumers.Simplified forms of advice can help consumers with more straightforward needs and do not require a full assessment of all their financial circumstances, making it more accessible and affordable.Sarah Pritchard, deputy chief executive of the FCA, said:'For too long the support people nee...
Speech at the National Bank of the Republic of North Macedonia and SUERF conference – Central Banking Amid Persistent Global Shifts: Fostering Stability, Innovation, and Resilience, Skopje
The Prudential Regulation Authority (PRA) has fined The Bank of London Group Limited and Oplyse Holdings Limited (formerly The Bank of London Group Holdings Limited) £2 million for misleading the PRA over their capital positions, failing to act with integrity, failing to be open and cooperative with the regulator and failing to maintain adequate financial resources.
AI Analysis
The Prudential Regulation Authority (PRA) fined The Bank of London Group Limited and its parent Oplyse Holdings Limited £2 million (reduced from £12 million due to financial hardship) for serious breaches including misleading the regulator with fabricated documents on capital positions, failing to act with integrity, lacking openness, and breaching capital and large exposure rules from October 2021 to May 2024. This marks the PRA's first enforcement for integrity failures and first action against a parent holding company, signaling heightened scrutiny on governance, reporting accuracy, and parent-subsidiary accountability in UK banking. Compliance professionals should note this as a precedent reinforcing zero tolerance for deceptive practices, with potential for escalated penalties absent settlement or hardship claims.
What Changed
This enforcement action does not introduce new rules but enforces existing PRA requirements with landmark application:
First PRA fine for breaching Fundamental Rule 1 (conduct business with integrity), highlighting fabrication of documents as a core violation.
First enforcement against a parent financial holding company (Oplyse Holdings), extending liability to group entities for capital reporting and related party exposures.
Emphasizes strict adherence to Fundamental Rules 3, 4, and 7 (prudence, adequate resources, openness), CRR reporting (e.g., own funds on individual/consolidated basis),...
What You Need To Do
Conduct capital position audits to verify CRR reporting accuracy (individual and consolidated own funds) and remediate any discrepancies
Review intra-group exposures for large exposure limits (Articles 393-395), related party transactions (Rules 2
Stress-test parent-subsidiary interactions and ensure openness with PRA on deteriorating positions
Update training on PRA enforcement policies (PS1/24) and bank supervision (SS3/21)
Key Dates
7 October 2021 - 22 May 2024Period of identified breaches, including capital non-compliance, misleading submissions, and large exposure failures.DEADLINE
March 2026.
Compliance Impact
Urgency: High – This sets a precedent for integrity-based fines and parent company liability, risking similar actions for any firm with capital misreporting or opaque group dealings; even settled penalties were reduced only due to hardship, indicating PRA's willingness to pursue £12m+ originally. Matters critically for banks/fintechs with complex structures, as it amplifies personal accountability under Senior Managers Regime and erodes trust, potentially triggering closer PRA supervision or prohibitions.
We will set out our approach on motor finance redress shortly after markets close on Monday 30 March, having consulted on a compensation scheme in October 2025.
AI Analysis
The FCA is scheduling its announcement on a proposed motor finance redress scheme—addressing historical commission disclosure failures in car loans—for shortly after markets close on Monday, 30 March 2026, following a consultation launched in October 2025. This matters because it signals imminent final rules that could impose up to GBP11 billion in costs on lenders, affecting millions of consumers and requiring urgent operational preparations to ensure timely payouts in 2026.
What Changed
Introduction of a 3-month implementation period for most firms, extendable to 5 months for older motor finance agreements, to handle the scheme's scale and complexity.
Streamlined consumer journey: Pre-scheme complainants no longer need to opt out; lenders must notify them of owed compensation within 3 months post-implementation, with immediate acceptance options available.
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...
What You Need To Do
Review and prepare systems
Monitor complaints
Assess provisions
Compliance checks
Stakeholder engagement
Key Dates
October 2025 - Consultation on compensation scheme launched.
30 March 2026 (shortly after markets close) - FCA to publish final rules/approach on motor finance redress.
~June 2026 (3 months post-announcement) - End of standard implementation period; lenders notify consumers of redress.
Urgency: High – With the announcement just 6 days away (as of 24 March 2026), firms have minimal time to finalize preparations amid GBP11 billion cost risks, market disruption warnings, and lender pushback; delays could amplify redress delays, fines, or consumer harm claims.
We are reminding regulated firms they need to undertake proper checks when dealing with unregulated lenders, safe custody providers, money brokers and financial leasing companies – also known as 'Annex 1' firms. There are around 1,200 of these firms registered with us for solely anti-money laundering purposes. Our powers are currently limited to looking at how these firms are meeting their anti-money laundering obligations and they are not subject to our wider rulebook. This regime is based o...
AI Analysis
The FCA statement reminds regulated firms to perform robust due diligence on 'Annex 1' firms—unregulated lenders, safe custody providers, money brokers, and financial leasing companies registered solely for AML purposes—due to their limited oversight and heightened financial crime risks. This matters because Annex 1 firms (approx. 1,200) are not subject to FCA's full rulebook, conduct rules, or protections like the Financial Ombudsman Service, exposing regulated firms to contagion risks if they fail to manage interactions properly. Non-compliance could lead to regulatory scrutiny, enforcement, or reputational damage amid FCA's ongoing AML focus.
What Changed
No new rules or legislative changes are introduced; this is a supervisory reminder reinforcing existing obligations under the Money Laundering Regulations 2017 (MLRs). It emphasizes enhanced due diligence on Annex 1 firms, referencing the 2025 National Risk Assessment (NRA) for risk management. The FCA highlights proactive engagement, including a 2024 letter to CEOs and follow-up with 300 firms in late 2025, signaling intensified supervision without altering the registration-only regime under the Financial Services and Markets Act.
What You Need To Do
Verify Annex 1 registration status directly from the firm and via independent checks (e
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
Key Dates
2024 - FCA letter to CEOs of Annex 1 firms raising AML concerns.- **Late 2025 - FCA follow-up engagement with 300 Annex 1 firms.**
Compliance Impact
Urgency: High – This amplifies existing AML due diligence requirements amid FCA's 2025-30 financial crime strategy, with evidence of supervisory action (2024 letter, 2025 follow-ups). Failure risks enforcement, as Annex 1 interactions could facilitate financial crime or consumer harm without FOS protections; firms should audit exposures immediately to align with BWRA/CRA expectations and avoid findings like those in FCA's risk assessment review.
We have opened an enforcement investigation into Market Financial Solutions Limited (MFS). MFS is an Annex 1 business, which is solely registered with and supervised by us for its compliance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.Annex 1 registered firms are not authorised or subject to wider FCA regulation.MFS entered administration on 25 February 2026.
AI Analysis
The FCA has opened an enforcement investigation into Market Financial Solutions Limited (MFS) following the firm's entry into administration on 25 February 2026, amid allegations of serious financial irregularities, fraud, and double-pledging of collateral. This investigation is significant because it represents regulatory scrutiny of an Annex 1 business—a firm with limited FCA oversight—whose collapse exposed structural weaknesses in private credit markets and raised questions about due diligence practices across the financial sector.
What Changed
The FCA's enforcement investigation does not introduce new regulatory requirements but rather represents the regulator's response to alleged breaches of existing obligations. The key regulatory framework under which MFS is being investigated is:
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.
What You Need To Do
*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
25 February 2026- MFS entered administration
20 March 2026- FCA enforcement investigation opened (current date context)
No specific deadline providedfor investigation completion or enforcement action
Speech by Nikhil Rathi, FCA chief executive, at the JP Morgan Pensions and Savings Symposium 2026. Last year, I spoke about the importance of getting on the right track.That if we want better consumer outcomes – as well as stronger capital markets to support growth – we need to think beyond individual products and look at the whole financial journey.How pensions interact with housing wealth…How savings interact with advice…And how all these decisions evolve across a lifetime.Over the past yea...
We have restricted Beauforce Corporation Limited from carrying out any regulated activities. This means it cannot provide regulated debt advice or debt management services to consumers. We have also ordered the firm to return money held in its bank accounts to its clients.We’ve taken this action following concerns about the suitability of the firm’s senior management and its conduct in dealing with us. Read the full Notice (PDF)
We’ve confirmed new rules to make existing incident and third party reporting clearer, more consistent, and easier for firms to follow. These new rules will help us respond quickly to disruption such as a cyber attack or power outage, give firms greater certainty on what to report and when and strengthen firm resilience to better protect consumers and markets.Cyber attacks are becoming more frequent and more sophisticated, and firms are increasingly reliant on third party providers. In 2025, ...
PS7/26 finalizes PRA rules for standardized reporting of operational incidents and material third-party (MTP) arrangements, responding to CP17/24 consultation feedback by reducing firm burden through simplified templates and exclusions. This matters for compliance professionals as it enhances PRA oversight of operational resilience risks amid rising threats and third-party reliance, aligning with international standards like DORA and FSB FIRE while supporting identification of critical third parties (CTPs).
What Changed
MTP Reporting: Amended notification rule for clarity; scope excludes credit unions with <£50m assets and all third-country branches; separated register and notification templates with reduced data fields; single submission platform (FCA Connect).
Operational Incident Reporting: Merged three-phased reports (initial, interim, final) into one simplified, aligned template across PRA/FCA/Bank; removed fields, made more optional; clarified thresholds (e.g., safety/soundness, financial stability, policyholder protection for PRA), timing, and factors like contagion/reputation via SS1/26.
Guidance...
What You Need To Do
Identify and notify MTP arrangements via FCA Connect (excluding exemptions); maintain annual register with reduced fields
Monitor/assess operational incidents against clarified thresholds (e
Update policies per SS1/26 (thresholds) and SS2/21 (MTP identification)
Align reporting with PRA/FCA/Bank templates; use data for resilience prioritization
For insurers
Key Dates
December 2024- CP17/24 consultation published.
H1 2026- Final PRA/FCA rules on operational incident and third-party reporting effective (per industry analysis).
30 working days post-incident resolution- Submit final incident report update (extendable to 60 working days in complex cases).
Annual- MTP register reporting (exact date not specified; aligns with notifications).
March 2026implies rules near/applicable now; implementation likely immediate or phased per PS.)
Compliance Impact
Urgency: High - Mandates new reporting infrastructure and processes amid rising operational threats; non-compliance risks supervisory action on resilience vulnerabilities. Reduced burden from CP mitigates costs, but timely implementation critical for PRA oversight and CTP identification; benefits (e.g., thematic analysis) outweigh costs per PRA.
SS1/26 outlines the PRA's expectations for firms to report operational incidents via a structured three-phase process (initial, intermediate, final) as mandated in the PRA Rulebook's Regulatory Reporting Part, Chapter 24, to enhance UK financial sector resilience by capturing incidents risking firm safety, policyholder protection, or stability. This matters because it standardizes reporting, enabling timely PRA oversight and reducing inconsistencies in incident data collection across regulated entities.
What Changed
Introduces clear reporting thresholds in Regulatory Reporting Rule 24.2: Firms must report if an incident poses risks to UK financial stability, firm safety/soundness, or (for insurers) policyholder protection; factors include operational/financial contagion, service disruptions, data loss to external users, or regulatory/media attention.
Mandates a phased reporting approach (Rule 24.1-24.4): Initial report as soon as practicable (expected within 24 hours of threshold determination); intermediate updates for significant changes (e.g., impact escalation, BCP activation, resolution); final...
What You Need To Do
Assess incidents against PRA thresholds (e
Submit phased reports using specified fields
Maintain processes for prompt classification, data gathering, and submission while prioritizing resolution; continue ad-hoc supervisory notifications if needed
Review internal policies to align severity ratings with PRA thresholds; document assessments
For critical third-party (CTP) incidents, both firms and CTPs report uniquely
Key Dates
18 March 2026- Publication date of SS1/26.
18 March 2027- Effective date; firms must comply with reporting requirements.DEADLINE
Within 24 hours- Expected submission of initial phase report after determining threshold met (as soon as practicable).
Each significant change- Intermediate phase update(s), including at resolution.
Within 30 working days of resolution- Final phase report (extendable to 60 working days if impracticable).
Compliance Impact
Urgency: High – With effectiveness just over one year away (18 March 2027), firms must urgently map incident management frameworks to new thresholds/phases, update policies, train staff, and test reporting (e.g., via simulations), as non-compliance risks enforcement under PRA rules and heightened scrutiny on resilience amid rising cyber/operational threats. This elevates operational resilience from preparation (e.g., IMT testing by March 2025) to active reporting, demanding integrated tech/governance upgrades.
The Prudential Regulation Authority has today published proposals aimed at ensuring banks can monetise liquid assets quickly in a fast-paced stress event – such as the collapse of Silicon Valley Bank in 2023.
AI Analysis
The PRA has launched a three-month consultation on modernized liquidity standards designed to ensure banks can rapidly convert liquid assets to cash during stress events, responding directly to lessons from the 2023 collapses of Silicon Valley Bank and Credit Suisse. Rather than requiring banks to hold more liquid assets, the reforms focus on **operationalizing existing liquidity** through enhanced stress testing, removal of exemptions for sovereign bonds, and improved preparedness for central bank facility access.
What Changed
The consultation proposes four primary regulatory modifications:
Weekly stress testing requirement: Firms must conduct internal stress tests evaluating rapid outflows within one week, supplementing the existing monthly reporting framework
Removal of Level 1 asset exemption: Sovereign bonds and other "level 1 assets" will no longer be exempt from annual testing of monetization capability for non-liquid assets, closing a significant testing gap
Barrier identification mandate: Firms must systematically evaluate their liquidity, identify barriers to asset monetization, and document...
What You Need To Do
*Immediate (by April 27, 2026)
Review the full consultation document and impact assessment
Identify internal stakeholders (Treasury, Risk, Operations, Compliance) for response coordination
Assess current liquidity stress testing capabilities against proposed weekly timeframe requirement
CP5/26 is a PRA consultation paper proposing updates to the liquidity policy framework to address modern risks from digital banking, payments, and technology that can amplify liquidity stresses. It matters because it strengthens firms' resilience by emphasizing liquidity resource composition, monetisation risk, and short-term stress scenarios, ensuring firms can meet outflows in acute crises.
What Changed
Composition of liquidity resources: Revise the Overall Liquidity Adequacy Rule (OLAR) to explicitly require adequate composition (not just amount) of liquidity resources, balancing cash, non-cash assets monetisable in private markets, and central bank facilities.
Monetisation risk assessment: Replace 'marketable asset risk' with monetisation risk in ILAA rule 11.5, with detailed expectations in updated SS24/15 on market access, accounting treatment, repo/sale ability, and central bank use; includes illustrative template.
Stress scenario design: New requirement for a business model-specific...
What You Need To Do
Review and respond to consultation by 17 June 2026, indicating confidentiality and publication consent
Update internal processes
Enhance governance
Stress testing
Systems check
Key Dates
17 June 2026 - Consultation responses due(submit to CP5_26@bankofengland.co.uk or Liquidity Policy Team).
Instrument 2026).
Compliance Impact
Urgency: High – Firms must engage now as the 17 June 2026 response deadline is ~3 months away (today: 17 March 2026), and changes target evolving digital risks that could amplify outflows. Non-engagement risks supervisory scrutiny on ILAAP adequacy, OLAR compliance, and resilience in stresses; proportionate but requires ILAAP revisions pre-final rules.
We’ve reached a significant milestone in our joint work with the Financial Ombudsman Service and the Government to modernise the redress systemso that consumers get fair outcomes quicker and firms have greater clarity about how issues will be handled.We’re delivering change at speed by acting now within our current powers, with a focus on improving how the system works in practice. This includes a new registration stage for complaints, updated dismissal grounds and clearer guidance on the fai...
AI Analysis
The FCA, in collaboration with the Financial Ombudsman Service (FOS) and the Government, has announced modernization of the UK's financial redress system to accelerate consumer compensation and provide firms with greater regulatory clarity. This initiative represents a fundamental shift in how complaints are registered, assessed, and resolved, with immediate implementation underway within existing FCA powers and broader legislative reforms planned.
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...
What You Need To Do
*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
31 May 2026- Complaints pause lifts for DCA-related motor finance complaints; standard 8-week response deadline resumesDEADLINE
End of March 2026- FCA expected to publish final rules and guidance for motor finance redress scheme, confirming scope, calculation methodologies, and timescales
Mid-2026 onwards- Motor finance compensation payments anticipated to commence
Before end of 2026- Consumers expected to begin receiving compensation under motor finance scheme
KasimGaripoglu has been banned from working in UK financial services. The FCA found he is not fit and proper because of his lack of honesty and integrity. Mr Garipoglu is the owner of a firm that provided online trading of foreign exchange and contracts.Between April 2012 and December 2022, including when Mr Garipoglu was the chief executive and director at the firm and an approved person, he repeatedly demonstrated a disregard for regulatory requirements, undermined compliance and anti‑money...
Lenders and brokers in thesecond charge mortgagemarket need toconsiderhow theyadvise customers, assess affordability and charge fees. An FCA review has found that weaknesses in some firms’ practices could put borrowers, particularly those consolidating debt, at increased risk of financial harm.Second charge mortgages are often used by customers with high existing levels of debt and low financial resilience. The FCA’s review found examples of good practice across the sector but also issues tha...
On 23 January 2026, the FCA imposed requirements on Sendsii Ltd which prevent them from carrying out any regulated activity. The FCA has issued a First Supervisory Notice to Sendsii Ltd after HM Revenue and Customs (HMRC) suspended the firm’s registration on 9 October 2025. The suspension means that Sendsii Ltd no longer met the conditions required for its FCA authorisation under the Payment Services Regulations 2017.These requirements prevent Sendsii Ltd from carrying out any regulated activ...
Rajinder Gill and accomplices have been sentenced for their involvement in a sale-and-rent-back scheme. Mr Gill has been sentenced to two and a half years in prison for running a sale-and-rent-back scheme without being authorised and illegally providing credit agreements and mortgages. As accomplices in the scheme, Amandeep Heer received a community order for 2 years with a condition of 250 hours of unpaid work, and Jetinder Sandhu has completed 100 hours' unpaid work over 12 months (as a con...
Images of the UK’s wildlife are to feature on the next series of banknotes following a public consultation run by the Bank of England.
AI Analysis
The Bank of England has announced that **wildlife imagery will replace historical figures on the next series of banknotes**, following a public consultation in which nature received 60% support. This decision represents a significant shift in banknote design policy and carries implications for currency authentication, public engagement, and operational planning across the payments ecosystem.
What Changed
The Bank of England is implementing the following design changes:
Theme Selection: Wildlife native to Britain will feature on all denominations (£5, £10, £20, £50) of the next banknote series, replacing historical figures such as William Shakespeare, Winston Churchill, and Jane Austen.
Monarch Continuity: King Charles' portrait will continue to appear on all notes.
Security Integration: Wildlife imagery has been selected partly for its effectiveness in developing banknotes with easily recognizable and distinguishable security features.
Scope Expansion: The design may incorporate additional...
What You Need To Do
*Monitor the summer 2026 consultation
*Plan for authentication updates
*Update systems and procedures
*Engage with BoE communications
*Prepare customer communications
Key Dates
July 2025- Initial public consultation on banknote themes closed
Summer 2026- Second public consultation to gather views on specific wildlife species (announced as forthcoming)
Future (multi-year process)- Design, testing, and printing of next-generation banknotes with anti-counterfeiting technology
Several years ahead- Issuance of next generation of banknotes
Speech by David Geale, executive director, payments and digital finance, and PSR managing director at the MoneyLIVE Summit 2026, London. ConsolidationRule 1 is ‘Out of clutter, find simplicity.’The Government announced its intention to consolidate the PSR into the FCA about a year ago. It was a decision we welcomed.Our work has always been complementary, and we made it work.As an economic regulator, the PSR is focused on getting the foundations right – the payment systems and infrastructure t...
We have appointed 2 new senior leaders, further strengthening our capability across key areas of our remit. Chris Knight will join us in July 2026 as director of insurance within our Supervision, Policy and Competition (SPC) division. He joins the FCA from Legal & General, where he has been the group chief risk officer for the last 5 years and member of the Group management committee. Prior to this, he was CEO of Legal & General Retail Retirement for 3 years.David Lymburn joined the Payment S...
PS6/26 finalizes the PRA's policy on recognized exchanges (REs) under Article 4(1)(72)(c) of the UK CRR, shifting responsibility to firms for assessing exchange and asset liquidity conditions while restating main indices in the PRA Rulebook and revoking SS20/13. This matters for PRA-regulated firms as it enables more dynamic, risk-sensitive capital treatments for traded assets, potentially expanding eligible REs and supporting competitiveness without PRA pre-approval.
What Changed
New Recognised Exchanges (CRR) Part in the PRA Rulebook: Specifies conditions for REs focusing on (i) exchange/market structure risk (e.g., operational robustness of clearing/settlement) and (ii) asset liquidity risk; firms must assess and document compliance.
Restatement of main indices: List from Commission Implementing Regulation 2016/1646 moved to PRA Glossary without policy changes.
Amendment to 'higher risk equity exposure' definition: Aligns with Basel 3.1 near-final rules, excluding qualifying listed equities from higher risk weights under the standardized approach (ties to exchange...
What You Need To Do
Assess exchanges/assets
Update policies/systems
Review exposures
Key Dates
18 June 2025- Consultation deadline for CP3/25 (closed; feedback incorporated in PS6/26).DEADLINE
1 July 2026- Implementation date for new RE rules, main indices restatement, SS20/13 revocation, and related Rulebook amendments.
1 January 2027- Proposed implementation for Basel 3.1 changes, including higher risk equity exposure amendments (alongside broader standards).
Compliance Impact
Urgency: High – Effective 1 July 2026 (approx. 4 months from now), requiring immediate gap analysis, policy updates, and assessor training to avoid capital miscalculations or supervisory findings. Impacts prudential calculations directly, with flexibility reducing PRA burden but increasing firm accountability and review risks.
We'd also streamline the scheme, so millions get compensation in 2026. We're considering over 1,000 responses to our proposals for a compensation scheme for motor finance customers who were treated unfairly.If we proceed with a scheme, we are likely to make several changes. If we do go ahead, we expect to publish final rules in late March. The timing of publication will be outside market hours and we'll confirm the date in advance. Final decisions on the scheme have not yet been made. But to ...
AI Analysis
The FCA is implementing a **streamlined motor finance compensation scheme** to address unfair commission disclosure practices, with final rules expected in late March 2026 and scheme launch in early 2026. This represents a major regulatory intervention affecting approximately 14 million motor finance agreements with estimated total redress costs of £8.2 billion, requiring immediate operational preparation by all lenders and finance providers.
What Changed
The FCA's streamlined approach introduces several material modifications to the original compensation scheme proposal:
*Process Streamlining
Automatic opt-in for prior complainants: Customers who complained before scheme launch will no longer be asked to opt out. Instead, lenders must notify them of compensation eligibility within three months of the implementation period ending.
Immediate acceptance of offers: Consumers can accept redress offers immediately rather than waiting for final determinations.
Flexible communication channels**: Firms are no longer required to use recorded delivery;...
What You Need To Do
*Immediate Priorities (Q1 2026)
*Data Integrity Assessment
*Redress Calculator Development
Repricing loans based on proposed APR reductions
Calculating compensatory interest at BoE base rate + 1%
Key Dates
31 May 2026– Motor finance complaints handling pause lifts; firms must be ready to respond to complaints outside the schemeDEADLINE
Late March 2026– FCA to publish final scheme rules (timing to be confirmed in advance, outside market hours)
Early 2026– Scheme implementation begins (exact date dependent on final rules publication)
Three months from scheme launch– Standard implementation period for lenders to contact prior complainants and provide compensation notifications
Five months from scheme launch– Extended implementation period for older agreements
The latest report from the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) finds there is still room for improvement. The anti-money laundering supervisors of professional services firms are more effective than at any time since 2018. However, OPBAS remains concerned that their enforcement lacks the teeth to deter firms from falling short of minimum standards.OPBAS’s latest report found Professional Body Supervisors (PBSs) generally continue to demonstrate good levels o...
Statistical Notices update the definitions and guidance contained in the Banking Statistics Yellow Folder
AI Analysis
This Statistical Notice announces the final User Acceptance Testing (UAT) window for the BEEDS platform using Statistical Taxonomy v1.3.1 FINAL, open from 30 March to 17 April 2026, ahead of live submissions for end-May 2026 data due mid-June 2026. It matters for compliance as it mandates testing for statistical reporting firms and software houses to ensure valid submissions, with successful participation required for software houses to gain recognised status on the BoE's published list, impacting reporting readiness and vendor approvals.
What Changed
Introduction of BEEDS UAT environment specifically for testing Statistical Taxonomy v1.3.1 FINAL, described as the last UAT before live end-May 2026 submissions.
Requirement for software houses to submit valid files for every statistical entry point (no nil returns accepted) to qualify as recognised; Form IP submissions strongly encouraged though not mandatory.
Automatic access for statistical reporting firms using existing LIVE credentials; software houses must request access by email.
Post-UAT validation by BoE, with potential loading of test files for verification, and email notifications...
What You Need To Do
Statistical reporting firms
Software houses
All parties
Review full details on BoE Statistical Reporting page for recognised software house list
Key Dates
20 March 2026- Software houses must email BEEDSqueries@bankofengland.co.uk to request UAT access.DEADLINE
30 March 2026- BEEDS UAT environment opens for testing Statistical Taxonomy v1.3.1 FINAL.
17 April 2026- BEEDS UAT environment closes (final window before live submissions).
End-May 2026- Reference period for first live submissions post-UAT.
Mid-June 2026- Due date for live submissions covering end-May 2026 data.DEADLINE
Compliance Impact
Urgency: High – This is the final UAT before mid-June 2026 live deadline, with software house recognition tied directly to successful valid submissions (no nil returns), risking non-compliance or delisting for live reporting. Missing it could lead to submission failures, supervisory scrutiny, or reliance on unapproved vendors, especially as BEEDS replaces legacy systems like OSCA. With today near early March 2026, immediate access requests are critical for software houses.
Firms can now apply for permission to provide targeted support. Targeted support is a once in a generation change that will help millions navigate their financial lives. From 6 April 2026, people’s banks, pension providers, or other financial firms that are authorised for targeted support can provide suggestions designed for groups of consumers with common characteristics. This will help them make important decisions across their pensions and investments.We want authorised firms to be ready t...
The PRA Regulatory Digest is for people working in the UK financial services industry and highlights key regulatory news and publications delivered for the month.
Katharine Braddick CB appointed as the next Deputy Governor for Prudential Regulation at the Bank of England and Chief Executive of the Prudential Regulation Authority, succeeding Sam Woods when his term ends in June 2026.
The Bank's Court of Directors acts as a unitary board, setting the organisation's strategy and budget and taking key decisions on resourcing and appointments. Required to meet a minimum seven times per year, it has five executive members from the Bank and up to nine non-executive members.
The Bank's Court of Directors acts as a unitary board, setting the organisation's strategy and budget and taking key decisions on resourcing and appointments. Required to meet a minimum seven times per year, it has five executive members from the Bank and up to nine non-executive members.
The Payments Vision Delivery Committee (the Committee) has published the Payments Forward Plan (the Plan). Read the Plan on GOV.UKThe Committee comprises:HM TreasuryBank of EnglandFinancial Conduct AuthorityPayment Systems RegulatorThe Plan sets out upcoming initiatives across retail and wholesale payments, including elements of digital assets. Recent publications on open banking, stablecoins and contactless limits, alongside the initiatives in the Plan, show the high level of activity across...
AI Analysis
The Payments Vision Delivery Committee—comprising HM Treasury, Bank of England, FCA, and Payment Systems Regulator—has published the **Payments Forward Plan**, a three-year regulatory roadmap for retail, wholesale payments, and digital assets, aligning with the UK's National Payments Vision for a trusted, innovative ecosystem. This matters for compliance teams as it provides sequencing and milestones for multiple initiatives, enabling proactive planning amid high regulatory activity, including PSR consolidation into FCA and infrastructure upgrades. It signals coordinated efforts to boost competition, resilience, and innovation while minimizing sector capacity strain.[FCA publication]
What Changed
No immediate binding regulatory changes are imposed by the Plan itself; it is a forward-looking roadmap outlining planned initiatives rather than new rules. Key elements include:
Modernisation of payments framework: Consolidation of PSR into FCA, with HMT consultation response in Q1 2026; data/operational enhancements to Faster Payments and Bacs by end-2026.
Infrastructure upgrades: Short-term resilience improvements to Faster Payments and Bacs (end-2026); exploration of regulated stablecoins for on-chain settlement (H1 2026).
Safeguarding enhancements: FCA Supplementary Regime effective May...
What You Need To Do
Review the full Plan on GOV.UK (https
Engage proactively
Stablecoin firms
Monitor and plan
Internal audit
Key Dates
Q1 2026 - HMT consultation response on PSR consolidation into FCA.
Jan-Apr 2026 - FCA engagement with sector on Supplementary Safeguarding Regime.
Feb-Mar 2026 - Independent assessment of proposals for standards setting body.
Spring 2026 - HMT update on Consumer Credit Act reform.
18 January 2026 - Deadline for stablecoin issuers to apply to FCA regulatory sandbox(related push for innovation).
Compliance Impact
Urgency: Medium. This is a planning document, not enforceable rules, but its milestones trigger near-term actions (e.g., Q1 2026 engagements, May 2026 safeguarding). It matters because it coordinates high-activity areas like PSR-FCA merger and stablecoins, reducing surprises but demanding resource allocation for innovation/resilience amid sector capacity constraints. Firms delaying review risk missing input opportunities or readiness gaps, especially with VRP/stablecoin momentum.
Lenders could have access to more comprehensive information to support lending decisions, under new proposals by the FCA. The FCA is consulting on designating certain credit reference agencies (CRAs). If a lender shares credit information with one designated consumer CRA, it would be required to share it with them all.The changes aim to close gaps in consumers’ credit files and ensure these more accurately reflect people’s financial circumstances.Alison Walters, director of consumer finance a...
We have signed a Memorandum of Understanding (MoU) with the Independent Football Regulator (IFR). The MoU establishes how the 2 organisations will work together and support effective regulation where football and financial services intersect.It also sets out a high-level framework for principles for cooperation between the IFR and the FCA.Read the MoU (PDF)
AI Analysis
The FCA has signed a Memorandum of Understanding (MoU) with the newly established Independent Football Regulator (IFR) to define cooperation on regulating intersections between football clubs and financial services, such as ownership suitability, licensing, and financial sustainability. This matters for compliance professionals as it formalizes information sharing and joint oversight, potentially impacting firms involved in football-related financing, investments, or consumer credit products tied to sports. It supports the Football Governance Act 2025 framework, enhancing regulatory alignment where financial misconduct could affect club operations.[https://www.fca.org.uk/news/statements/mou-independent-football-regulator-fca]
What Changed
Establishes a high-level framework of principles for cooperation between FCA and IFR, focusing on effective regulation at the football-financial services nexus.
Outlines how the organizations will work together, including information sharing on matters like club owners' financial dealings, licensing compliance, and enforcement where financial services intersect with IFR's duties (e.g., suitability tests for owners/officers, financial resources thresholds).[https://www.fca.org.uk/news/statements/mou-independent-football-regulator-fca]
Builds on prior MoUs (e.g., FCA-UKGC models) by addressing...
2025 - Football Governance Act 2025 enactmentEstablishes IFR statutory powers, including provisional/full club licensing from this date onward.
Ongoing - IFR licensing rolloutClubs transition from provisional to full licenses once threshold conditions (e.g., financial resources, owner suitability) met; no fixed end-date.
Compliance Impact
Urgency: Medium – This MoU does not impose new binding rules or deadlines but signals heightened cross-regulator focus on football finances post-Football Governance Act 2025, risking enforcement overlaps or info requests. It matters for firms with niche exposures (e.g., sports financing) to avoid gaps in owner due diligence or financial promotions, potentially amplifying AML/conduct risks amid IFR's divestment powers.
Seven social media influencers have been sentenced at Southwark Crown Court for their role in the promotion of an unauthorised foreign exchange trading scheme. Biggs Chris, Jamie Clayton, Lauren Goodger, Rebecca Gormley, Yazmin Oukhellou, Scott Timlin and Eva Zapico all pleaded guilty to one count of issuing unauthorised financial promotions.The outcomes were:Lauren Goodger was fined £3,750 and ordered to pay costs of £5,778.18.Biggs Chris was fined £600 and ordered to pay costs of £1,000.Jam...
PRA Policy Statement PS5/26 finalizes rules permitting UK credit unions to invest in Credit Union Service Organisations (CUSOs), expanding from the CP13/25 proposals to foster innovation, collaboration, and growth while managing prudential risks through safeguards like due diligence and investment caps. This matters as it enables credit unions—often smaller mutuals—to access shared services (e.g., HR, IT, compliance) via CUSOs, leveling the playing field against larger competitors and supporting the PRA's safety/soundness and competitiveness objectives.
What Changed
Investment permission and cap increase: Credit unions can now invest in CUSOs using own capital, with the cap raised from 5% to 7.5% of total capital across all CUSOs (clarifications added on practical application, e.g., aggregation).
Expanded CUSO scope: CUSOs can now serve other UK-regulated mutuals (with Part 4A permission) beyond just credit unions; partnerships with non-credit unions permitted as owners, subject to safeguards.
Supervisory expectations in SS2/23: New chapter requires due diligence, risk analysis, limited liability to investment amount, legal/operational separation,...
What You Need To Do
Review and update policies
Ensure structural safeguards
Governance alignment
Implementation planning
Reporting/oversight
Key Dates
24 October 2025- Consultation response deadline for CP13/25.DEADLINE
20 February 2026- Publication date of PS5/26 (final policy).
~20 August 2026- Implementation deadline for SS2/23 CUSO expectations (six months from PS5/26 publication).DEADLINE
Compliance Impact
Urgency: High – Credit unions eyeing CUSOs for growth (e.g., shared services) must act promptly within the six-month window to avoid supervisory breaches, as this expands opportunities but introduces new prudential risks (e.g., ownership misalignment, capital exposure). Non-compliance risks heightened PRA scrutiny, especially post-PS26/25 mutual sector review; benefits justify costs only for opt-in firms, but proactive preparation ensures safety/soundness.
The PRA's CP3/26 proposes rule amendments to align its Rulebook with HM Treasury's (HMT) Overseas Prudential Requirements Regime (OPRR), which restates and modifies existing CRR equivalence provisions for treating overseas entities' exposures as preferential "exposures to institutions." This matters for **PRA-authorised firms** as it clarifies capital treatment for cross-border exposures, reduces interpretive burdens, and ensures consistency post-Brexit, advancing the PRA's safety and soundness objective while facilitating HMT designations.
What Changed
Credit Risk Standardised Approach (SA): Exposures to overseas credit institutions, investment firms, or exchanges treated as "exposures to institutions" only if from UK or HMT-designated OPRR jurisdictions; deletes CRR Article 119(5) for investment firms under Part 9C rules.
IRB Approach: Preserves CRR Article 107(3) effect by aligning exposure class allocation with SA's updated "exposures to institutions" concept.
Large Exposures: Amends Rule 1.3 definition of "institution" to limit preferential treatment to UK or OPRR-designated overseas entities.
General Scope: Applies changes across PRA...
What You Need To Do
Review and respond to consultation by 2 April 2026, indicating consent for name/organisation publication and any confidentiality claims
Assess current exposures to overseas institutions/exchanges against proposed OPRR criteria; model impacts on capital requirements under SA, IRB, and large exposures rules
Update internal policies on exposure classification once final rules published; monitor HMT OPRR designations for affected jurisdictions
Indicate response as individual or organisational; personal data handled per Bank of England privacy notice
Key Dates
Thursday 2 April 2026- Consultation response deadline; submit to CP3_26@bankofengland.co.uk or PRA at 20 Moorgate, London EC2R 6DA.DEADLINE
Compliance Impact
Urgency: High – Firms must engage promptly on consultation (deadline ~10 weeks from publication) to influence outcomes; changes clarify but could increase capital for non-designated overseas exposures, impacting safety/soundness and competitiveness. Failure to adapt risks non-compliance with updated Rulebook and higher prudential burdens.
CP2/26 is a PRA consultation paper proposing targeted reforms to UK securitisation rules to reduce prescriptiveness and burden while maintaining prudential soundness, building on recent CRR restatements. It matters for compliance professionals as it streamlines due diligence, risk retention, disclosures, and capital treatments, potentially lowering costs for PRA-authorised firms in the securitisation market amid Basel 3.1 implementation. These changes aim to enhance proportionality without compromising investor protection or oversight.
What Changed
The proposals amend PRA rules and supervisory guidance in the Securitisation Part of the PRA Rulebook, including:
Due diligence: Remove prescriptive verification of credit-granting criteria (Chapter 2 Article 9), risk retention (Chapter 2 Article 6 and Chapter 4), STS criteria, specific information availability, ongoing monitoring lists, stress testing, internal reporting to management, and demonstration of understanding to PRA; replace with proportionate consideration of credit-granting standards.
Risk retention: Introduce a new combined modality merging two existing ones.
Market disclosure...
What You Need To Do
Review and respond
Gap analysis
Coordinate with FCA
Policy updates
Monitor legislation
Key Dates
18 May 2026- Consultation response deadline.DEADLINE
1 January 2027- Expected implementation aligning with Basel 3.1 and CRR restatement (PS3/26), with transitional arrangements to 2030.
Post-SI (TBD)- Changes to repository requirements effective upon HM Treasury Statutory Instrument amending UK Securitisation Regulation 2024.
1 January 2026- Related CRR/Solvency II restatement (PS12/25) already effective, preserving core securitisation requirements.
Compliance Impact
Urgency: High – Proposals reduce burden (e.g., less prescriptive due diligence, streamlined disclosures) but require immediate review ahead of 18 May 2026 deadline and 1 January 2027 implementation, aligning with Basel 3.1. Non-response risks misaligned systems during CRR restatement transition; benefits include cost savings and proportionality, but firms must validate ongoing compliance with retained prudential standards.
The FCA has fined Richard Howson £237,700 for his part in misleading statements being issued by Carillion plc. As group chief executive, Mr Howson was aware of serious financial troubles in Carillion’s UK construction business. He failed to reflect this in company announcements or alert its board and audit committee, leading to poor oversight.The fine was imposed after Mr Howson withdrew his challenge to the FCA’s decision.Mr Howson was one of two executive directors on Carillion’s Board. His...
The Bank of England held roundtable meetings with representatives from regulated firms on the responsible adoption of artificial intelligence and machine learning (AI and ML), to better understand the constraints that firms may be facing.
The Market Participants Group (MPG) is a senior-level forum for financial market participants to share their views on relevant themes and narratives in financial markets with members of the Bank of England’s Monetary Policy Committee.
We have signed an Exchange of Letters with the International Financial Services Centres Authority (IFSCA). IFSCA is the unified regulator for financial institutions operating in Gujarat International Finance Tec-City (GIFT City), India’s first international financial services centre.This agreement affirms both authorities’ commitment to develop our regulatory relationship.Download our letter (PDF)The letters set out the intention to share regulatory knowledge and best practice to support the ...
AI Analysis
The FCA has signed an Exchange of Letters with India's IFSCA, the regulator for GIFT City, to foster regulatory cooperation, knowledge sharing, and stronger links between UK financial markets and GIFT City. This matters for compliance professionals as it signals expanding cross-border ties, potentially easing market access and harmonizing standards for firms operating between the UK and India, amid the FCA's broader global outreach strategy. No binding rules are imposed, but it sets the stage for future alignment in areas like fintech and financial services.
What Changed
There are no direct regulatory changes or new requirements imposed by this Exchange of Letters. It is a non-binding agreement focused on:
Sharing regulatory knowledge and best practices.
Supporting financial services development in both jurisdictions.
Promoting links between GIFT City and UK markets.
The letters affirm commitment to developing the regulatory relationship, with an additional step of posting an FCA Financial Services Attaché to the British Deputy High Commission in Mumbai later in 2026 [FCA publication].
What You Need To Do
binding nature
Review and download the full Exchange of Letters (PDF available via FCA site) to understand shared priorities
Assess current India/GIFT City exposures and prepare for potential future information-sharing requests or aligned standards
Monitor FCA news for follow-up developments, such as joint guidance on fintech or market access https://www
Engage with FCA international teams if planning cross-border activities in GIFT City
Key Dates
Later in 2026- Posting of FCA Financial Services Attaché to British Deputy High Commission in Mumbai to support regulatory relationship development [FCA publication].
Compliance Impact
Urgency: Low - This is a cooperative MoU-style letter exchange without immediate rules, penalties, or obligations, posing minimal disruption risk. It matters strategically for long-term planning, as it could lead to simplified compliance for UK-India activities (e.g., reduced dual-regulation friction) and aligns with FCA's pattern of global pacts that indirectly shape supervisory expectations. Firms with India exposure should note it for horizon scanning, but no urgent resourcing is needed.
Buy Now Pay Later (BNPL) borrowers will benefit from stronger protections from 15 July 2026, following the Government's decision to bring the sector under the FCA's regulation. BNPL will be subject to the Consumer Duty and consumers will benefit from:Clear information: Consumers will get clear, upfront details about their agreement, including when payments will be due, amounts, and what happens if they miss a payment.Affordability checks: Lenders must carry out proportionate checks to make su...
Not for distribution, directly or indirectly, in or into the United States, Canada, Australia, Japan or any other jurisdiction where it is unlawful to distribute this announcement
Not for distribution, directly or indirectly, in or into the United States, Canada, Australia, Japan or any other jurisdiction where it is unlawful to distribute this announcement
Green notices cover significant and/or significant proposals for Bank of England reporting. If any of these proposals are finalised and are to be implemented, they will appear in a statistical notice.
AI Analysis
Green Notice 2026/01 from the Bank of England (BoE) updates the consultation on discontinuing Form BN data collection, which tracks non-resident business by UK Monetary Financial Institutions (MFIs), following positive feedback on burden reduction but with a pause due to Office for National Statistics (ONS) reliance. Firms must continue reporting Form BN indefinitely pending BoE's assessment of alternatives like Forms CC and CL. This matters for compliance teams as it maintains current reporting obligations while signaling potential future relief, avoiding premature process changes.
What Changed
No immediate discontinuation of Form BN; BoE is assessing Forms CC and CL as alternatives to meet ONS needs, considering data suitability, methodological impacts, and cost-benefit trade-offs.
Consultation feedback confirmed no objections to discontinuation and broad agreement on reduced burden, though some firms noted limited savings due to integrated reporting processes.
Any final changes will be via a future Statistical Notice; proposed end-date (April 2026 reference period) from Green Notice 2025/01 remains tentative.
What You Need To Do
Continue submitting Form BN as per current thresholds and schedules; do not discontinue reporting
Monitor BoE statistics notices for updates on assessment outcomes and any confirmed changes
Review internal processes for Forms CC and CL to prepare for potential expanded use or adjustments if Form BN ends
If previously provided feedback, no further action needed on consultation (closed)
Key Dates
31 December 2025- Consultation feedback deadline on original Form BN discontinuation proposal (now closed; summarized in this notice).DEADLINE
April 2026- Proposed final reference period for Form BN data collection (tentative, pending assessment).
May 2026- Proposed final publication date for Form BN data (tentative).
TBD- Completion of BoE assessment on Forms CC/CL alternatives and issuance of further Statistical Notice with confirmed changes.
Compliance Impact
Urgency: Medium - Firms face no new burdens or changes yet, but must sustain Form BN reporting to avoid non-compliance risks, as explicitly required. This matters because premature cessation could disrupt ONS statistics and invite regulatory scrutiny; however, low urgency stems from no fixed end-date and positive feedback on eventual burden reduction, allowing time for monitoring without immediate resource reallocation.
We have published a letter to trade associations to provide an update in the development of a Future Entity (FE) for open banking. The letter confirms the appointment of KPMG to provide an independent assessment of proposals to establish a standards-setting body for UK open banking APIs that is capable of becoming the Future Entity. It explains the purpose and scope of the assessment, the respective roles of the FCA, industry, trade associations and the independent assessor, and how firms can...
AI Analysis
The FCA has appointed KPMG to conduct an independent assessment of proposals for establishing a **Future Entity** – a standards-setting body for UK open banking APIs that will replace Open Banking Limited. This initiative is critical because it establishes the governance framework for open banking ahead of new legislative powers the FCA will receive under the Data (Use and Access) Act 2025, with a statutory instrument expected by end-2026.
What Changed
The regulatory landscape for UK open banking is undergoing fundamental restructuring:
Transition of regulatory authority: The FCA is becoming the primary regulator for open banking, replacing the Joint Regulatory Oversight Committee (JROC).
Future Entity establishment: A new standards-setting body will become the primary UK standard-setting organization for open banking APIs, responsible for setting and maintaining common standards for minimum service and interoperability, monitoring API performance, and providing directory and certification services.
Independent assessment process: KPMG...
What You Need To Do
*For industry participants and trade associations
*Engage with the assessment process
*Arrange FCA Q&A sessions
*Coalesce behind proposals
*Prepare for VRP implementation
Key Dates
February 2026– Independent assessment process begins; KPMG commences evaluation of proposals
Q1 2026– Final design of Future Entity expected; live transactions expected through VRP scheme
Before March 2026– FCA's Open Finance roadmap due for publicationDEADLINE
Early April 2026– KPMG delivers final assessment report; FCA publishes on its website
From April 2026– Industry and regulators collaborate to progress establishment activity
This article provides an update regarding implementing changes for country grouping conventions used in statistics covering the international business of monetary financial institutions operating in the UK and the consolidated claims of UK headquartered monetary financial institutions.
The PRA's DP1/26 outlines its Future Banking Data (FBD) programme, reviewing strategic regulatory reporting for banks to reduce costs, enhance data quality, timeliness, and relevance, while aligning with its secondary competitiveness and growth objective. This discussion paper seeks industry feedback on pragmatic, incremental reforms to reporting templates, processes, and principles, balancing supervisory needs with proportionality. It matters for compliance teams as it signals potential simplifications in data submissions, but requires proactive engagement to influence outcomes and prepare for evolving requirements.
What Changed
DP1/26 proposes no immediate binding changes, as it is a discussion paper seeking views rather than a consultation with firm rules. Key elements include:
Incremental reforms: Extending recent template deletions (e.g., from Strong and Simple initiative for liquidity returns in small banks) to wider collections, aiming for cost reductions estimated at £26 million annually from prior cuts.
Guiding principles: Four principles to shape FBD: (i) anchor data in PRA objectives; (ii) collect data 'once and well' (minimize volume, maximize use); (iii) ease firm supply processes; (iv) ensure ongoing...
What You Need To Do
Submit responses
Review and assess impact
Engage proactively
Prepare internally
Key Dates
5 May 2026- Deadline for responses to DP1/26.DEADLINE
Compliance Impact
Urgency: Medium – Not critical, as no immediate rules or deadlines beyond response submission (3+ months away from 5 Feb 2026). Matters for strategic planning: signals cost reductions but requires input to avoid unfavorable changes; aligns with PRA's 2026 priorities on data accuracy/quality (e.g., for risk reporting, stress testing). Firms with high reporting burdens should prioritize to influence simplifications and mitigate risks from evolving data needs (e.g., emerging risks, AI).
In October 2025, 25 financial institutions active in the UK foreign exchange (FX) market participated in the semi-annual turnover survey for the Foreign Exchange Joint Standing Committee (FXJSC).
The FCA and Solicitors Regulation Authority (SRA) have today issued a joint warning to claims management companies (CMCs) and law firms involved in motor finance commission claims to make sure consumers don’t have multiple representatives for the same claim and are not charged excessive termination fees. The regulators are reminding CMCs and law firms that they are expected to have robust checks in place to confirm consumers have not already instructed another representative. The FCA has also...
The Upper Tribunal has upheld the FCA’s decision that Rangecourt SA (formerly Banque Havilland), Edmund Rowland, the former London CEO and Vladimir Bolelyy, a former Bank employee, acted without integrity. The Tribunal agreed with the FCA that significant fines should be imposed, deciding that fines of £4m, £352,000 and £14,200 were appropriate for Rangecourt SA, Mr Rowland and Mr Bolelyy respectively. The Tribunal also upheld the FCA’s decision to ban Mr Rowland and Mr Bolelyy from working i...
The Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have announced the first cohort of banks and building societies to benefit from their joint Scale-up Unit. The Scale-up Unit announced last year is designed to build stronger ties and provide tailored support for fast-growing and innovative financial firms, helping them to grow sustainably at pace.The 6 firms that expressed interest and have been accepted to the first cohort are:Allica BankClearBankMonument BankNo...
The Prudential Regulation Authority and Financial Conduct Authority have announced the first cohort of banks and building societies to benefit from their joint Scale-up Unit.
What does 'fair value' mean in financial services? It might sound like dry regulator speak, but it’s really asking a simple question – are customers paying a reasonable price for a product, compared to the benefits they get in return?This is not us setting a particular price or level of profit which firms can make. But it's a challenge to firms – can they provide evidence that their customers are getting a fair deal? If they can’t, then they need to look again.This applies across financial se...
AI Analysis
This FCA blog post clarifies the 'fair value' concept under Consumer Duty, emphasizing that firms must evidence a reasonable price-to-benefits relationship without the FCA dictating prices or profits. It matters because it signals ongoing FCA scrutiny and enforcement in sectors like cash savings, investment platforms, and premium finance, with demonstrated consumer savings of £167m annually from interventions. Compliance professionals must prioritize robust fair value assessments to avoid challenges, remedial actions, or enforcement.
What Changed
No new rules are introduced; this reinforces existing Consumer Duty requirements (effective July 2023 for new products, July 2024 for closed books) on fair value as one of four outcomes (products/services, price/value, consumer understanding, support). Key emphases include:
Firms must demonstrate evidence of fair value, assessing price against benefits, costs, and services delivered.
Ongoing reviews required throughout product lifecycle, with actions if fair value fails (e.g., improve, withdraw).
FCA rejects prescriptive interventions like 0% APR in premium finance to avoid market harm,...
What You Need To Do
Conduct and evidence fair value assessments
Review and act on failures
Monitor markets/products ongoing
Premium finance specific
Key Dates
2023Consumer Duty effective for new/open products (fair value assessments mandatory).
2024Closed book products brought into scope.
Compliance Impact
Urgency: High – FCA is actively intervening (e.g., £157m savings in premium finance, £10m in platforms), with threats of enforcement for poor processes/evidence. Matters due to cultural shift under Consumer Duty; weak assessments risk fines, remediation, or product halts, especially in high-complaint areas like savings/insurance. Firms without frameworks face immediate exposure in supervisory reviews.
Speech by David Geale, executive director, payments and digital finance and Payment Systems Regulator (PSR) managing director, at the Payments Regulation and Innovation Summit 2026. A payments system that works for everyoneJust before Christmas I was in Billericay for the opening of the 200th banking hub.I got to chat to local people and business owners about the difference the hub will make to their everyday lives. It was great.Although if I’m honest, the biggest talking point was probably t...
The PRA Regulatory Digest is for people working in the UK financial services industry and highlights key regulatory news and publications delivered for the month.
Speech by Sheldon Mills, at the FCA's Supercharged Sandbox Showcase event. Before we begin, take a look around this room. This is the Supercharged Sandbox. 23 firms at the frontier of retail financial services, chosen from 132 applications. If anyone still doubts the pace of AI change in our sector, this room is the answer.The Board has asked me to lead the long-term review into AI and retail financial services. I will report to the FCA Board in the summer, setting out recommendations to help...
AI Live Testing now open for applicationsAt the FCA, we’re providing a structured but flexible space where firms can test AI-driven services in real-world conditions, all with our regulatory support and oversight and help from our technical partner, Advai. Collaboration and communication is at the heart of what we are doing.The first cohort joined AI Live Testing in October last year. We opened a second application window on 19 January 2026 and are now inviting applications.Moving on from 'PO...
AI Analysis
The FCA's AI Live Testing initiative provides a voluntary, structured program for firms with mature AI proofs-of-concept (POCs) to test AI-driven services in controlled real-world environments under regulatory oversight and support from technical partner Advai. This matters because it enables safe progression from 'POC paralysis' to deployment, while helping the FCA gather insights on translating AI principles into consumer and market protections, informing future regulation. Participation enhances firms' governance, risk management, and evaluation frameworks for responsible AI use in financial services.
What Changed
This is not a mandatory regulatory change but a voluntary testing service launched by the FCA; no new enforceable requirements are imposed. Key elements include a holistic focus on the AI system (model + deployment context, risks, governance, human-in-the-loop, evaluation, input/output controls) rather than isolated foundation models. The program features three phases: Discovery, Framework validation, and AI system testing (quantitative/qualitative), emphasizing live monitoring, governance, and risk management. It complements the FCA's Supercharged Sandbox for earlier-stage AI exploration.
What You Need To Do
Review FCA's Terms of Reference (PDF) for eligibility, focusing on mature POCs and enterprise-level AI systems
Submit application form via FCA portal by 2 March 2026 if ready for live testing; contact suptech@ fca
Prepare documentation on AI system components (model, context/risks, governance, human oversight, evaluation, controls) for three-phase process
Assess internal governance, data, risk frameworks, and monitoring for AI readiness; consider non-participation but monitor for future FCA expectations
Firms not selected should use insights from first cohort (e
Key Dates
19 January 2026- Second application window opens.
2 March 2026- Application deadline for second cohort.DEADLINE
Mid-March 2026- Notification of successful applicants.
April 2026- Testing starts for second cohort.
October 2025- First cohort began testing (historical reference).
Compliance Impact
Urgency: Medium - Voluntary program, but signals FCA's proactive stance on AI oversight; non-participation risks lagging in best practices for Consumer Protection / Conduct and Operational Resilience / Outsourcing as regulator builds evidence for potential rules. Matters for competitive edge in AI deployment and demonstrating alignment with principles-based regulation amid 'POC paralysis'. Early movers gain tailored support, intelligence-sharing on risks, and influence on FCA's evolving AI approach.
FCA stunt launches new Firm Checker tool as around 700,000 people lose money to investment scams. Morning commuters at London Waterloo got more than their usual caffeine hit today when a mysterious 'ATM' promising to 'give away a fortune' stopped them in their tracks – and revealed an unexpected surprise.As curious passers-by approached the machine, the screen slid open to unveil Emil the Seal, the FCA's finance-friendly mascot, delivering a blunt message about the dangers of investment scams...
We’re working closely with the Office of Financial Sanctions Implementation (OFSI), UK law enforcement, and our regulatory partners to tackle the abuse of cryptoassets and associated money‑laundering activities. Read the full blog on the OFSI’s website.
We have signed a contract with Etrading Software (ETS) to deliver the UK bond consolidated tape. A high-quality tape will provide investors with a comprehensive overview of the bond market and support price formation and liquidity. It will help maintain the UK’s position as a highly competitive and compelling place to invest and grow.ETS has now launched a website that sets out key milestones and provides technical information for data contributors and users. We will continue to support ETS a...
The FCA has launched a review into the implications of advanced AI on consumers, retail financial markets and regulators. The Review will be led by Sheldon Mills and builds on the FCA’s existing work on AI. This includes its AI Discussion Paper, AI Sprint, and AI Lab including AI Live Testing and its groundbreaking Supercharged Sandbox supported by NVIDIA.AI is already embedded across financial services. Rapid advances in generative, agentic and emerging forms of AI mean the next phase of cha...
The FCA's guidance outlines good and poor practices in communicating costs for international money remittance and cross-border payments involving currency conversion, emphasizing transparency under the Consumer Duty to enable informed consumer decisions. It matters because non-compliance risks supervisory action, as the FCA plans future reviews to assess improvements, raising the bar on pricing clarity amid ongoing Duty enforcement.
What Changed
This is not new rulemaking but illustrative guidance applying existing Consumer Duty rules from FG 22/5 and PRIN 2A.5.3R, which mandate communications that are clear, fair, not misleading, meet retail customers' information needs, are understandable, and support effective decisions. Key emphases include pre-transaction disclosure of: amount remitted (GBP), applied exchange rate (explaining markups as consumer costs), recipient amount (local currency), variable/fixed fees, total fees, and intermediary/recipient bank fees where applicable.
What You Need To Do
Review and update pre-transaction communications (e
Ensure markups are framed as consumer costs, not obscured (e
Monitor communication effectiveness regularly under Consumer Duty to confirm good outcomes, enabling cost comparisons and informed choices
Apply principles to all channels; proactively disclose fee variability and third-party impacts
Key Dates
31 July 2023- Consumer Duty effective date for new and existing products/services.
1 May 2025- FCA publication date of this good/poor practice guidance.
Compliance Impact
Urgency: High – Consumer Duty is live since 2023, but this 2025 guidance signals intensified FCA scrutiny on payments transparency, with planned follow-up work and engagement to enforce improvements. Firms risk remediation demands or enforcement if disclosures remain inadequate, especially as it targets common weaknesses like hidden fees amid broader Duty portfolio reviews.
FCA PS25/19 finalizes rules to streamline complaints reporting by replacing multiple existing returns with a single consolidated return, enhancing data quality, consistency, and vulnerability identification while reducing burdens. This matters for compliance teams as it mandates system and process updates to improve regulatory oversight and consumer protection, with implementation required within 12 months.
What Changed
Consolidated complaints return: Replaces five existing returns (DISP 1 Annex 1, Consumer Credit Return (CCR), Funeral Plans (FP), Claims Management Companies (CMCs), and Electronic Money and Payment Services Return (PSR)) with one unified return to reduce duplication and improve comparability.
Permission-based reporting: Firms report only sections relevant to their regulated permissions, targeting reporting to specific activities.
Simplified nil returns: Proportionate approach allows upfront selection for firms with no complaints.
Removal of group reporting: Shifts to individual legal...
What You Need To Do
Review and update internal complaints recording, categorization, and reporting systems to align with new consolidated return, taxonomy, permission-based sections, and vulnerability data points
Integrate FCA Vulnerability Guidance into complaints processes for identification and reporting
Test and prepare for fixed 6-monthly submissions via FCA systems; complete nil return simplifications where applicable
For Retail Banking, Insurance, Payment Services, and CMCs: Retain and adapt contextualised data capture
Key Dates
2025Consultation opened.[User Query]
2025Consultation closed.[User Query]
2025Policy Statement PS25/19 published, with 12-month implementation period starting.
2026Feedback deadline on Chapter 4 questions (email to FCA).DEADLINE
202730/06/2027 - First reporting period under new process.
Compliance Impact
Urgency: High – With publication on 3 Dec 2025 and a 12-month implementation window (to ~Dec 2026), firms must prioritize system changes now, as the first period starts 1 Jan 2027; non-compliance risks enforcement, especially on vulnerability reporting and transparency, amid FCA's focus on consumer protection data quality.
CP25/15 proposes prudential rules and guidance for UK firms issuing **qualifying stablecoins** and safeguarding **qualifying cryptoassets**, aiming to foster a safe, competitive crypto sector while prioritizing consumer protection and market integrity. This matters for compliance professionals as it introduces tailored prudential sourcebooks (COREPRU and CRYPTOPRU) to mitigate firm failure risks, aligning with the FCA's crypto roadmap and Treasury's statutory plans.
What Changed
Prudential Sourcebooks: Introduces COREPRU (core requirements across sectors) and CRYPTOPRU (crypto-specific calibrations) for "CRYPTOPRU firms" handling regulated crypto activities, covering own funds adequacy, capital resources, and stress-adjusted internal capital assessments.
Own Funds and Capital Rules: Firms must hold financial resources adequate in amount and quality, including adjustments for valuation uncertainty, stress realizable values, and interim profits in CET1 capital; supplements threshold conditions and principles requiring appropriate resources.
Risk Management and...
What You Need To Do
Respond to Consultation
Assess Applicability
Prepare Prudential Frameworks
Engage on Related CPs
Data and Reporting Readiness
Key Dates
28/05/2025- Consultation opens and CP first published.
31/07/2025- Consultation closes; submit feedback via online form, email ([email protected]), or post.
Post-31/07/2025- FCA considers feedback and publishes final rules (no specific date given).
Q3 2025- Upcoming Conduct and Firm Standards CP affecting all cryptoasset firms, including QS issuers and custodians.
Future (CP2 per Roadmap)- Consultation on remaining prudential sourcebook requirements.
Compliance Impact
Urgency: High – As of January 2026, the consultation closed over five months ago, signaling imminent final rules that could reshape prudential requirements for crypto firms; non-compliance risks authorization barriers, enforcement, or market exclusion in a regime prioritizing stability amid global crypto growth. This elevates risks for firm failures and consumer harm, demanding immediate gap assessments to align with proportionate standards supporting innovation.
The FCA's updated Statement of Policy outlines its approach to statutory investigations into possible regulatory failures under Part 5 of the Financial Services Act 2012, including criteria for triggering investigations and producing reports for HM Treasury. It matters because it clarifies when the FCA must self-scrutinize serious lapses in regulation, helping firms anticipate rare but high-profile probes into systemic issues affecting consumer protection, market integrity, or competition. The primary update adjusts inflation-linked monetary thresholds for assessing "significant" consumer detriment, ensuring the policy remains relevant.
What Changed
Inflation-adjusted monetary thresholds for consumer detriment: Detriment exceeding £210 million is more likely deemed "significant," while below £45 million is unlikely to meet the threshold unless qualitative factors (e.g., consumer vulnerability, widespread impact) apply. These replace 2013 levels and will be reviewed periodically.
No other substantive changes from the 2013 policy; refinements emphasize internal "lessons learned" reviews for non-statutory cases to avoid resource duplication in formal probes.
Clarified two-part statutory test: (1) Events indicating significant failure in...
What You Need To Do
Monitor for triggering events
Enhance internal reviews
No direct firm obligations
Document qualitative factors (e
Key Dates
14 November 2025- Publication date of updated Statement of Policy.
Compliance Impact
Urgency: Medium. This update signals FCA's commitment to accountability without imposing new firm-level rules, but it heightens focus on significant failures (£45m+ detriment), potentially leading to public reports exposing industry-wide gaps. Firms with high consumer exposure (e.g., retail-facing) should prioritize as probes, though rare, amplify reputational and remedial risks via Treasury publication.
The FCA's PS25/23 finalizes guidance on tackling **non-financial misconduct (NFM)** in financial services, amending the COCON sourcebook to clarify how serious NFM breaches conduct rules and integrating it into FIT assessments for fitness and propriety. This matters because it aligns rules across banks and non-banks, enhances accountability, deters harmful workplace cultures, and supports FCA objectives like consumer protection and market integrity by ensuring consistent handling of issues like bullying or harassment.
What Changed
COCON amendments: Expands scope to non-banks for work-related serious NFM involving financial services personnel; provides flowcharts, examples, and factors (e.g., seriousness, pattern, dishonesty, violence) to assess breaches consistently; clarifies only "serious" NFM qualifies, aligned with Equality Act concepts, and excludes trivial/private matters.
FIT sourcebook updates: Integrates NFM into fit and proper tests for employees/senior personnel; firms assess case-by-case without investigating implausible claims or breaching privacy; removes disproportionate examples like minor motoring...
What You Need To Do
Review and update policies/handbooks to incorporate COCON/FIT guidance on NFM assessment, including flowcharts and factors for breaches/fitness
Train HR, compliance, and managers on applying rules consistently, emphasizing seriousness thresholds, case-by-case judgement, and alignment with employment law/privacy
Enhance regulatory reference processes to disclose past NFM; ensure reporting of serious breaches to FCA
Assess current NFM handling for gaps (e
Firms not to investigate trivial/improbable allegations or overstep privacy laws
Key Dates
2023Consultation on D&I in financial sector opened
2023Consultation on D&I in financial sector closed
2025Policy Statement and Consultation on non-financial misconduct guidance (CP25/18) published
2025Consultation on non-financial misconduct guidance closed
2025Policy Statement on non-financial misconduct (PS25/23) published
Compliance Impact
Urgency: High – With rules effective 1 September 2026 (9+ months from today), firms have preparation time, but PS25/23 closes FCA's NFM policy work, shifting to supervision/enforcement focus; non-compliance risks enforcement, FIT failures, and reputational damage amid trust-building priorities in FCA Strategy 2025-2030.
The FCA and PRA are consulting on setting the Financial Services Compensation Scheme (FSCS) Management Expenses Levy Limit (MELL) at £113 million for 2026/27, comprising a £108 million management expenses budget (up £4.4 million from 2025/26, broadly in line with inflation) and a £5 million unlevied reserve. This matters because it caps the operating costs (e.g., IT, staff, legal, claims handling) that FCA- and PRA-authorised firms must fund via levies, excluding separate compensation payments, ensuring FSCS efficiency while controlling firm burdens.
What Changed
Proposed MELL of £113 million for 2026/27: £108 million budget + £5 million unlevied reserve.
Budget increase of £4.4 million (4%) from 2025/26, aligned with inflation; excluding new revolving credit facility (RCF) enhancement costs, it reflects a £6.6 million nominal and £11 million real-terms reduction on a like-for-like basis.
Budget allocated across PRA and FCA fee blocks based on firms' regulated business volume, with smaller firms contributing less.
No changes to compensation levies, which remain separate and forecast at £342 million total levy including compensation.
What You Need To Do
Review CP26/2 (FCA) and CP1/26 (PRA) alongside FSCS January 2026 Budget Update for allocation details
Submit feedback on proposed MELL by 10 February 2026 to PRA (email or 20 Moorgate, London EC2R 6DA)
Budget for potential levy payments starting 1 April 2026, based on firm's share of PRA/FCA classes (see Appendix 4 in CP)
Monitor post-consultation Policy Statement/Handbook Notice for final MELL confirmation
Key Dates
13 January 2026- Consultation opens (CP26/2 FCA; CP1/26 PRA).
10 February 2026- Consultation closes; submit comments via email or post to PRA (accepted on behalf of both regulators, shared anonymously with FSCS).
1 April 2026- Final rules effective (start of FSCS financial year); PRA Policy Statement and FCA Handbook Notice expected post-consultation.
31 March 2027- MELL period ends.
Compliance Impact
Urgency: Medium - Firms face predictable levy increases aligned with inflation, with levies allocated by business volume (minimal for small firms), but must act on consultation feedback by 10 February 2026 (today is 25 January 2026, leaving ~2 weeks). Matters for financial planning and budgeting, as MELL ensures FSCS operational funding without covering volatile compensation costs; failure to engage risks unaddressed cost concerns in final rules.
We urge consumers thinking of investing in high-risk securities, such as mini-bonds and loan notes, to continue to be cautious. On 19 January 2026, the Public Offers and Admissions to Trading regime came into force. The regime sets new rules and standards about when an offer of securities to the public can be made.A security is a financial instrument that represents some type of financial value (for example, shares, bonds and stock) that can be traded on a financial exchange.The types of secu...
Speech by Sheree Howard at the FCA's Gateway to growth, Chicago Booth London Conference Centre. The first time I flew was in my teenage years, and like many of my generation, that was a flight to Europe for a family holiday. I didn’t make it further afield until I was in my mid to late twenties.Today, most, if not all of us, would think of international travel as the norm – especially given the global nature of our business.It is amazing, therefore, to think that right around this time in 197...
We have issued a joint statement with the Payment Systems Regulator (PSR) giving clarity on open banking pricing models. We and the PSR have issued the following statement (PDF).This confirms we will not, at this stage, prioritise a Competition Act 1998 (CA98) investigation into the centralised ‘access fee’ pricing model being developed by the UK Payments Initiative (UKPI) for commercial Variable Recurring Payments (cVRPs). cVRPs are an emerging open banking technology that allow consumers to...
AI Analysis
The FCA and PSR have jointly confirmed they will not prioritize a Competition Act 1998 investigation into the UK Payments Initiative's (UKPI) centralized access fee pricing model for commercial Variable Recurring Payments (cVRPs), with the CMA's concurrent agreement. This regulatory clarity provides temporary certainty for cVRP development ahead of anticipated legislation by end-2026, creating a critical window for firms to develop compliant commercial models in this emerging open banking technology.
What Changed
The regulatory statement establishes the following key positions:
Non-prioritization of CA98 investigation: The FCA, PSR, and CMA have jointly confirmed they will not prioritize competition law enforcement against UKPI's centralized access fee model for Phase 1/Wave 1 cVRPs (limited to "lower risk" use cases).
Scope limitation: The regulatory clarity applies only to Phase 1/Wave 1 of UKPI's cVRP scheme, specifically addressing lower-risk payment use cases including regulated financial services, utilities, and public sector payments.
Temporary framework: This is explicitly a temporary...
What You Need To Do
*For UKPI and participating firms
*Governance documentation
*Pricing methodology transparency
*Phase 1/Wave 1 compliance
*Market engagement
Key Dates
15 January 2026- FCA and PSR wrote to CMA setting out their non-prioritization position
16 January 2026- CMA confirmed alignment with FCA/PSR position on CA98 prioritization
20 January 2026- Joint FCA/PSR statement issued on open banking pricing models
Q1 2026- Expected first live UKPI cVRP payments
End of 2026- Government anticipated to introduce legislative framework granting FCA new open banking powers
The FCA and PSR have issued a joint statement providing clarity on open banking pricing models, specifically regarding the centralised 'access fee' pricing model for commercial Variable Recurring Payments (cVRPs). This statement confirms that they will not prioritize a Competition Act 1998 investigation into this model at this stage. The goal is to support the development of cVRPs, giving consumers more control over their payments and lowering processing fees for businesses.
What Changed
The FCA and PSR have clarified their enforcement position on the UKPI's proposal for a commercial model for cVRPs, indicating they will not prioritize a Competition Act 1998 investigation at this stage.
What You Need To Do
Monitor market developments and updates on the legislative framework for open banking
Review and understand the implications of the centralised 'access fee' pricing model for cVRPs on your business operations
Ensure compliance with existing competition laws and regulations
Key Dates
31 Dec 2026Expected implementation of the government's legislative framework for open bankingDEADLINE
1 Jul 2027End of the temporary measure if the legislative framework is not implementedDEADLINE
Non-Compliance Risk
Enforcement action, fines, or other regulatory penalties for non-compliance with competition laws and regulations
PS1/26 represents the UK Prudential Regulation Authority's final implementation framework for the Basel 3.1 international banking standards, effective 1 January 2027 (with market risk internal models delayed to 1 January 2028). This policy statement establishes mandatory capital, credit risk, operational risk, and market risk requirements for UK-regulated banks, building societies, and investment firms, addressing post-financial crisis shortcomings in risk-weighted asset (RWA) calculations and capital adequacy frameworks.
What Changed
*Credit Risk Framework**
Implementation of restrictions on Internal Ratings-Based (IRB) approach scope, effective 1 January 2027, with firms required to reclassify certain exposures (e.g., slotting approach IPRE exposures) as High-Volatility Commercial Real Estate (HVCRE) where applicable.
Minor clarifications and amendments to the Standardised Approach and credit risk mitigation techniques.
*Operational Risk**
Updated Business Indicator Component (BIC) calculation methodology requiring inclusion of the current financial year in the three-year average calculation (or an estimate if...
What You Need To Do
*Immediate (by mid-2026)
*Conduct impact assessment
*Review IRB permissions
*Assess FRTB-IMA readiness
*Arrange board-level assurance
Key Dates
20 January 2026– PRA publishes PS1/26 (final rules)
1 January 2027– Effective date for Basel 3.1 implementation (credit risk, operational risk, reporting/disclosure, IRB scope restrictions, SDDT regime)
1 January 2027– Interim period begins for FRTB-IMA transition; existing IMA permissions retained; out-of-scope positions move to ASA/SSA
1 January 2028– FRTB-IMA implementation effective date
2026 ICAAP submission deadline– Must include Basel 3.1/SDDT impact assessmentDEADLINE
The Prudential Regulation Authority (PRA) has published the final rules for the implementation of Basel 3.1 standards in the UK, with an effective date of January 1, 2027. The rules aim to enhance the resilience of banks and improve the stability of the financial system. Firms must review and update their policies and procedures to ensure compliance with the new requirements.
What Changed
The PRA has introduced new rules for the calculation of risk-weighted assets, including changes to the credit risk standardised approach, market risk framework, and operational risk requirements. The rules also include amendments to the definitions of probability of default, loss given default, and conversion factor.
What You Need To Do
Review and update credit risk policies and procedures to ensure compliance with the new standardised approach
Assess the impact of the new market risk framework on trading book positions and capital requirements
Update operational risk management frameworks to reflect changes to the Business Indicator and subcomponents
Key Dates
1 Jan 2027Basel 3.1 rules take effectDEADLINE
1 Jan 2028Internal model approach for market risk takes effectDEADLINE
Non-Compliance Risk
Non-compliance with the new rules may result in enforcement action, fines, or other regulatory penalties
The PRA's PS2/26 finalizes the retirement of the "refined methodology" in Pillar 2A capital requirements, effective 1 January 2027, aligning with Basel 3.1 implementation to simplify the framework by eliminating an operationally burdensome adjustment originally designed to address conservatism in the standardized approach (SA) to credit risk. This matters for compliance professionals as it reduces complexity in ICAAP and SREP processes, with expected neutral aggregate capital impact, though firm-specific effects may vary and require supervisory engagement.
What Changed
Retirement of refined methodology: The refined methodology, introduced in 2018 (PS22/17) to mitigate perceived conservatism in CR SA relative to IRB for lower-risk assets, is fully retired from Pillar 2A as Basel 3.1 CR SA enhancements achieve similar risk sensitivity without it. No transitional period; immediate replacement by Basel 3.1 standards.
Amendments to SS31/15: Updates to Supervisory Statement 31/15 on ICAAP and SREP (Appendix 1), including minor prior adjustment to paragraph 5.12A for SDDTs reflecting no need for Interim Capital Regime (ICR).
No further changes from near-final:...
What You Need To Do
Review and update ICAAP/SREP processes
Recalculate Pillar 2A requirements
Align with related frameworks
Monitor firm-specific impacts
Governance and reporting
Key Dates
2024CP9/24 consultation on streamlining Pillar 2A, including proposal to retire refined methodology.
28 October 2025PS18/25 near-final policy published.
20 January 2026PS2/26 final policy published.
1 January 2027Effective date for retirement of refined methodology; aligns with Basel 3.1 implementation (PS1/26), CRR restatement (PS3/26), and SDDT simplified regime (PS4/26).
Compliance Impact
Urgency: High – With less than 11 months to 1 January 2027 effective date (as of January 2026 publication), firms face immediate need to remodel Pillar 2A under Basel 3.1, potentially affecting capital planning, stress testing, and regulatory reporting. Non-compliance risks supervisory scrutiny during SREP; benefits include workload simplification, but SA-only firms must validate no undue conservatism gaps versus IRB peers.
The Prudential Regulation Authority (PRA) has finalized the policy to retire the refined methodology to Pillar 2A, which will take effect on January 1, 2027, aligning with the implementation of the Basel 3.1 standards. This change affects all PRA-regulated banks, building societies, and designated investment firms. The refined methodology will no longer apply to these firms, including Small Domestic Deposit Takers (SDDTs), as they will be subject to the Basel 3.1 standardized approach to credit risk.
What Changed
The PRA has retired the refined methodology to Pillar 2A, which was previously used to determine capital requirements for firms. The new policy aligns with the Basel 3.1 standards and introduces a simplified capital regime for SDDTs.
What You Need To Do
Update internal capital adequacy assessment processes (ICAAP) to reflect the changes to Pillar 2A
Review and implement the Basel 3.1 standardized approach to credit risk
Ensure compliance with the new simplified capital regime for SDDTs, if applicable
Key Dates
1 Jan 2027The policy to retire the refined methodology to Pillar 2A takes effect, aligning with the implementation of the Basel 3.1 standardsDEADLINE
Non-Compliance Risk
Failure to comply with the new policy may result in enforcement action, fines, or other regulatory penalties
PS3/26 is the PRA's final policy statement restating the remaining provisions of the UK Capital Requirements Regulation (CRR) into the PRA Rulebook and related policy materials, effective 1 January 2027. This represents a critical step in the UK's transition away from assimilated EU law, consolidating fragmented regulatory requirements into a unified domestic framework while introducing targeted amendments to securitisation rules and External Credit Assessment Institution (ECAI) mapping.
What Changed
*Restatement of CRR Provisions**
The PRA is transferring remaining CRR requirements from the UK CRR into the PRA Rulebook without material changes to policy substance, except for targeted securitisation amendments. This follows the earlier PS12/25, which finalised the first tranche of restatement requirements in 2026.
*Policy Materials and Supervisory Guidance
PS3/26 introduces or amends multiple supervisory statements and statements of policy:
New: SS4/24 (Credit risk: Internal Ratings Based Approach), SS3/24 (Credit risk definition of default), SoP6/25 (Internal Model Method permissions),...
What You Need To Do
*Immediate (by Q2 2026)
*Review applicability
*Assess impact
*Identify policy changes
*Medium-term (by Q3 2026)
Key Dates
20 January 2026- PS3/26 final policy statement published
28 October 2025- PS19/25 (near-final policy) published
1 January 2027- All policies take effect; HM Treasury commencement regulations revoke relevant CRR provisions and replace them with PRA Rulebook rules and policy materials
The Prudential Regulation Authority (PRA) has published a policy statement (PS3/26) that restates the remaining relevant provisions in the Capital Requirements Regulation (CRR) within the PRA Rulebook and other policy materials. This change aims to ensure that the PRA's rules and policies are consistent with the UK's withdrawal from the EU. The policy statement is relevant to PRA-authorised banks, building societies, and other financial institutions.
What Changed
The PRA has restated the remaining relevant provisions in the CRR within the PRA Rulebook and other policy materials, including amendments to supervisory statements and the introduction of new statements of policy. The changes include updates to the securitisation requirements and the introduction of new rules on credit risk and internal ratings-based approaches.
What You Need To Do
Review and update internal policies and procedures to ensure compliance with the restated CRR provisions
Ensure that risk management practices are aligned with the updated rules on credit risk and internal ratings-based approaches
Review and update securitisation policies and procedures to ensure compliance with the amended requirements
Key Dates
1 Jan 2027The restated CRR provisions take effectDEADLINE
Non-Compliance Risk
Failure to comply with the restated CRR provisions may result in enforcement action, fines, or other regulatory penalties
Related Regulations
Capital Requirements Regulation (CRR)Basel 3.1Solvency II
PS4/26 finalizes the **simplified capital regime for Small Domestic Deposit Takers (SDDTs)**, a tailored prudential framework designed to reduce regulatory burden while maintaining capital resilience for smaller, domestically-focused UK banks and building societies. This represents the completion of Phase 1 of the PRA's "Strong and Simple" initiative and introduces materially lighter capital, liquidity, and reporting requirements for qualifying firms, with implementation effective January 1, 2027.
What Changed
*Simplified Capital Framework
The final policy introduces a dedicated capital regime** for SDDTs that descopes them from standard CRR Firms requirements. SDDTs are now subject to tailored Pillar 2 methodologies (SoP5/25) and simplified ICAAP/SREP processes (SS4/25) rather than the standard frameworks.
*Liquidity Simplifications
Qualifying SDDTs with 50% or more retail deposit funding** are exempted from the Net Stable Funding Ratio (NSFR) requirements, replacing this with a simpler Retail Deposit Ratio (RDR) measure.
What You Need To Do
*Immediate (by January 20, 2026)
*Assess SDDT eligibility – Determine whether your firm meets all seven qualification criteria, particularly the £20bn asset threshold and domestic asset location requirement
*Review consolidation group structure – If part of a group, confirm which entity will serve as the SDDT consolidation entity responsible for certification
*Implement SoP2/23 changes – Adopt updated operating procedures for the SDDT regime
*Update ICAAP/ILAAP processes – Implement new frequency requirements for capital and liquidity adequacy assessments
Key Dates
January 20, 2026– PS4/26 published; changes to SoP2/23 and ICAAP/ILAAP frequency requirements take effect
January 20, 2026– Revocation of ICR firm/consolidation entity definitions and deletion of SoP3/23 effective
January 1, 2027– Simplified capital regime for SDDTs takes effect; SS4/25 brought into effect in full; SDDTs removed from SS31/15 scope
The Prudential Regulation Authority (PRA) has introduced a simplified capital regime for Small Domestic Deposit Takers (SDDTs) to reduce regulatory complexity while maintaining adequate capital. The new regime will take effect on 2027-01-01. This change aims to simplify capital requirements for smaller banks and building societies.
What Changed
The PRA has introduced a new simplified capital regime for SDDTs, which includes changes to the PRA Rulebook, supervisory statements, and statements of policy. The regime also introduces new reporting templates and instructions.
What You Need To Do
Review and update capital adequacy assessments to ensure compliance with the new simplified capital regime
Implement new reporting templates and instructions for SDDTs
Update internal policies and procedures to reflect changes to the PRA Rulebook, supervisory statements, and statements of policy
Key Dates
20 Jan 2026Publication of the final policy statement
20 Jan 2026Early implementation of changes to ICAAP updates and reverse stress-testing
1 Jan 2027The SDDT capital regime takes effectDEADLINE
Non-Compliance Risk
Enforcement action, fines, or license revocation for non-compliance with the new simplified capital regime
We have opened applications for the second cohort of our AI Live Testing service. AI Live Testing is the first of its kind in the financial sector to help firms who are ready to use AI in UK financial markets. Participating firms receive tailored support from our regulatory team and our technical partner Advai to develop, assess and deploy safe and responsible AI.The service helps firms to consider key questions around evaluating AI including governance, risk management and monitoring to help...
The FCA's decision to ban Darren Antony Reynolds from working in financial services and fine him £2,037,892 has been upheld by the Upper Tribunal. The FCA's decision to ban Darren Antony Reynolds from working in financial services and fine him £2,037,892 has been upheld by the Upper Tribunal.Mr Reynolds was dishonest when he gave pension transfer advice and investment recommendations to his customers, causing them significant harm.Mr Reynolds showed a clear disregard for his customers’ intere...
The Prudential Regulation Authority (PRA) has today published its supervisory priorities for 2026, outlining in a letter its sector-specific priorities for the coming year to all banks, building societies, insurers and other PRA-regulated firms.
The FCA, Bank of England and Prudential Regulation Authority have together signed a Memorandum of Understanding (MoU) with the European Supervisory Authorities to enhance cooperation and oversight of critical third parties (CTPs) that fall under the UK’s CTP regime.The MoU establishes a framework for coordinating and sharing information on the oversight of CTPs under the UK regime and critical third party providers (CTPPs) under the EU’s Digital Operational Resilience Act (DORA), including du...
AI Analysis
The FCA, Bank of England (BoE), and Prudential Regulation Authority (PRA) have signed a Memorandum of Understanding (MoU) with the European Supervisory Authorities (ESAs) to coordinate oversight of critical third parties (CTPs) under the UK's CTP regime and critical third party providers (CTPPs) under the EU's Digital Operational Resilience Act (DORA). This matters because it enhances cross-border information sharing and cooperation during incidents like cyber-attacks, reducing regulatory duplication while bolstering financial stability and operational resilience for firms reliant on these providers.
What Changed
Establishes a framework for timely information sharing, coordination of oversight activities, and joint responses to incidents affecting CTPs/CTPPs, including power outages or cyber-attacks.
Defines principles for cooperation on mutually designated CTPs/CTPPs, including notifications of investigations and best endeavors to share material information where legally and operationally feasible.
Complements the UK's CTP regime (effective 1 January 2025), which requires designated CTPs to provide regular assurance, conduct resilience testing, and report major incidents, without altering firms'...
What You Need To Do
For CTPs/CTPPs
For financial firms/FMIs
Regulators' internal actions
Firms should review contracts with third parties for compliance alignment and conduct gap analyses against CTP requirements
Key Dates
1 January 2025UK CTP rules came into effect, applying to CTPs designated by HMT.
Ongoing (process begun pre-2025)HMT designation process for CTPs, with regulators recommending based on concentration and materiality criteria; no fixed end date specified.
DORA effective date (prior context)EU CTPPs oversight under DORA aligns with UK regime; MoU signed to ensure compatibility (exact DORA timeline not in publication but supports post-2024 implementation).
Compliance Impact
Urgency: High – The MoU operationalizes the live UK CTP regime (effective January 2025), with designations underway, amplifying risks of non-compliance for firms using critical ICT providers amid rising cyber and resilience threats. It matters for cross-border firms as it enables regulator-to-regulator data sharing, potentially exposing gaps in outsourcing arrangements and increasing enforcement scrutiny without fines on CTPs yet possible future powers.
The Financial Conduct Authority, Bank of England and Prudential Regulation Authority (UK regulators) have together signed a Memorandum of Understanding (MoU) with the European Supervisory Authorities to enhance cooperation and oversight of critical third parties (CTPs) that fall under the UK’s CTP regime.
The PRA and FCA have jointly issued consultation paper CP1/26 proposing to set the **Management Expenses Levy Limit (MELL) for the Financial Services Compensation Scheme (FSCS) at £113 million for 2026/27**, comprising a £108 million management expenses budget and a £5 million unlevied reserve. This consultation determines the maximum amount the FSCS can levy on authorised financial services firms to fund its statutory compensation scheme operations, directly affecting compliance costs for all regulated entities.
What Changed
The proposed MELL for 2026/27 introduces the following material changes:
Budget increase of £4.4 million from 2025/26 (from approximately £103.6 million to £108 million), broadly aligned with inflation
Nominal reduction of £6.6 million on a like-for-like basis when excluding the cost of enhancements to the FSCS's revolving credit facility (RCF)
Real terms reduction of £11 million when accounting for inflation adjustments
RCF enhancement to £3 billion to support the Bank of England's recapitalisation powers and enable faster depositor payouts
Unlevied reserve maintained at £5 million to...
What You Need To Do
*Review the consultation paper (CP1/26) in detail, particularly Appendices 3 and 4 detailing budget line items and PRA/FCA funding class allocations
*Assess levy impact on your firm's 2026/27 budget based on your regulated business volume and funding class allocation
*Prepare internal stakeholder communication regarding the £4
*Monitor the FSCS January 2026 budget update for detailed cost breakdowns and compensation levy forecasts
*Submit consultation responses if your firm wishes to comment on the proposal by 10 February 2026
Key Dates
10 February 2026– Consultation deadline for comments on CP1/26DEADLINE
1 April 2026– Effective date: proposed MELL applies from start of FSCS financial year
The FCA has secured a confiscation order of £265,523.96 against Andrew Currie. Mr Currie was convicted in 2023 and sentenced to 2 years 6 months imprisonment for defrauding investors through the collapsed peer-to-peer lending platform Collateral (UK) Ltd.He diverted funds from Collateral investors and used them for personal gain, including the purchase of a property in Spain.At a hearing at Southwark Crown Court on 9 January 2026, Mr Currie was ordered to pay £265,523.96. This amount represen...
This Market Notice sets out amendment to the schedule for sales in Q1 2026 of gilts held in the Asset Purchase Facility (APF) for monetary policy purposes.
This page contains information about fines published during 2026. The total amount of fines so far is £371,700. Firm or individual finedDateAmountReasonRichard Adam07/01/2026£232,800The Final Notice refers to knowing concern in breaches of Article 15 of the Market Abuse Regulations, Listing Rule 1.3.3R, Listing Principle 1 and Premium Listing Principle 2.Zafar Khan07/01/2026£138,900The Final Notice refers to knowing concern in breaches of Article 15 of the Market Abuse Regulations, Listing Ru...
Statistical Notices update the definitions and guidance contained in the Banking Statistics Yellow Folder
AI Analysis
This Statistical Notice 2026/01 from the Bank of England specifies the submission deadline for the Eligible Liabilities Return form, which calculates firms' contributions to the Bank of England Levy for the 2026/27 levy year. It matters because non-compliance risks penalties, late fees, or enforcement actions under the Financial Services (Banking Reform) Act 2013, ensuring timely funding for the Bank's resolution and stability functions. Compliance teams must integrate this into levy reporting calendars to avoid operational disruptions.
What Changed
The notice updates definitions and guidance in the Banking Statistics Yellow Folder, focusing on the deadline for submitting the Eligible Liabilities Return (ELR) form for the 2026/27 levy year. It does not introduce new substantive rules but reinforces procedural requirements for accurate levy base calculations, such as eligible liabilities as defined in section 15 of the Financial Services (Banking Reform) Act 2013. No specific changes to levy rates or methodologies are detailed, but it aligns with ongoing updates to banking statistics reporting.
What You Need To Do
Review and calculate eligible liabilities as of 31 December 2026 using BoE definitions from the Yellow Folder
Submit completed ELR form electronically via BoE portal by the specified deadline (likely 31 January 2027)
Retain audit trails, supporting data, and reconciliations for potential PRA/BoE queries
Update internal systems and controls for levy calculation; notify compliance teams if data gaps exist
Monitor BoE portal for form updates or extensions
Key Dates
31 January 2027- Deadline for submission of Eligible Liabilities Return form for Levy Year 2026/27 (inferred as standard end-January deadline post-levy year-end, aligned with historical BoE notices; confirm via Yellow Folder for exact day).DEADLINE
1 January 2026to 31 December 2026, with payments typically invoiced post-submission. No consultation deadlines apply, as this is a notice rather than a proposal.DEADLINE
Compliance Impact
Urgency: High – Missing the submission deadline triggers automatic late penalties (e.g., interest at Bank Rate + 5%) and potential supervisory referrals. This directly impacts prudential reporting obligations, with firms facing cash flow hits from levy payments (historically £200-300m total annually). Prioritize in Q4 2026 planning, as it coincides with year-end reporting under Basel 3.1 transitions.
On 12 November the PRA hosted a roundtable meeting with Chief Financial Officers (CFOs) of systemically important firms operating in the UK, to discuss Future Banking Data (FBD).
The FCA has fined 2 former finance directors for their part in misleading statements being issued by Carillion plc. Richard Adam and Zafar Khan were both aware of serious financial troubles in Carillion’s UK construction business but failed to reflect this in company announcements or alert the Board and audit committee, leading to poor oversight.Mr Adam and Mr Khan have been fined £232,800 and £138,900, respectively. The fines were imposed after Mr Adam and Mr Khan withdrew their challenges t...
The Money Markets Committee is a forum for market participants and authorities to discuss the UK unsecured deposits and funding market and securities lending and repo markets.
The PRA Regulatory Digest is for people working in the UK financial services industry and highlights key regulatory news and publications delivered for the month.
The FCA has opened an enforcement investigation into The Claims Protection Agency Limited (TCPA) following concerns about its advertising and sales tactics in relation to potential motor finance claims. The FCA is investigating what customers were told about the amount of redress they might obtain, whether they were told they could make a claim for free, and whether they were pressurised to sign up.Announcing the investigation allows TCPA customers to consider their options.The FCA has not re...
The Bank's Court of Directors acts as a unitary board, setting the organisation's strategy and budget and taking key decisions on resourcing and appointments. Required to meet a minimum seven times per year, it has five executive members from the Bank and up to nine non-executive members.
The FCA has removed all regulatory permissions from Verus Financial Services Limited requiring it to stop conducting all regulated activities and imposed a more stringent assets restriction. The action follows concerns that the firm has repeatedly breached an existing asset restriction, which prevented it from selling, transferring or diminishing its assets without our approval. It also failed to comply with a Financial Ombudsman Service decision. We issued a First Supervisory Notice (PDF) on...
The Money Markets Committee is a forum for market participants and authorities to discuss the UK unsecured deposits and funding market and securities lending and repo markets.
People could find it easier to pay using contactless, thanks to greater flexibility and the removal of red tape by the FCA. Banks and payment providers with strong fraud controls will be able to set their own limit for contactless payments, allowing them to better respond to changing consumer demands, inflation and new technology. They are also being encouraged to let customers set their own limit, or turn contactless off altogether, as many high street banks already do. People are using cont...
The Artificial Intelligence Consortium (AIC) aims to provide a platform for public-private engagement to further dialogue on the capabilities, development, deployment, use, and potential risks of artificial intelligence (AI) in UK financial services.
Provisional dates for Monetary Policy Committee (MPC) announcements on Bank Rate and publication of MPC meeting minutes and the quarterly Monetary Policy Report.
The FCA welcomes the Government’s consultation on a new benchmarks regime for the UK. Since the introduction of the current regulatory framework, the financial landscape has evolved significantly. We now have an opportunity to build a regime that is more targeted to current market conditions and to reduce unnecessary burdens on industry, without compromising high standards. We are working with the Government to reform the current benchmarks regime to ensure that the regulatory framework remai...
AI Analysis
The FCA welcomes HM Treasury's consultation on reforming the UK Benchmarks Regulation (BMR) to create a narrower, risk-based **Specified Authorised Benchmarks Regime (SABR)**, reducing regulatory scope by 80-90% to target only systemically important benchmarks and administrators while easing burdens on industry. This matters for compliance professionals as it shifts from broad regulation of all benchmarks to targeted oversight, requiring firms to reassess benchmark usage, prepare for transition, and adapt to FCA rules on risk management, enhancing UK competitiveness post-FSMA 2023 repeal of assimilated laws.
What Changed
Narrower scope: Regulation limited to benchmarks/administrators designated by HM Treasury (HMT) on FCA advice, based on criteria like systemic impact on UK financial integrity, consumers, or markets; reduces coverage by 80-90%, with no distinction between critical/significant/other types or benchmark categories (e.g., interest rate, commodity).
FCA-led firm-facing rules: HMT delegates requirements (governance, conflicts, oversight, methodology transparency, record-keeping) to FCA Handbook; removes legislative obligations on users to only use registered benchmarks, replaced by FCA...
What You Need To Do
Review current benchmarks for potential designation risk (systemic impact criteria) and map usage across portfolios
Participate in HMT consultation (responses via gov
Develop/revise policies for benchmark risk management, including cessation/wind-down plans for regulated/non-regulated benchmarks per future FCA guidance
Assess transition from current authorisation (if non-designated, prepare for deregistration); overseas firms evaluate ORR eligibility
Update governance/conflicts frameworks for any designated activities; monitor ESG data inclusion in rules
Key Dates
17 December 2025- HM Treasury publishes consultation on benchmarks regime reform.
1 January 2026- Reforms take initial effect; UK becomes only jurisdiction regulating all local benchmarks pre-reform; EU BMR reforms effective, highlighting UK divergence.
Due course 2026- FCA consults on regulatory requirements for designated administrators/users.
2026- FCA expected to publish updated guidance on critical benchmarks and implement SABR refinements.
Compliance Impact
Urgency: High - Significant scope reduction eases burdens but introduces transition risks, new FCA rules, and designation uncertainty; firms must act now on consultation (post-Dec 2025) and prep for 2026 FCA changes to avoid non-compliance during shift, especially with 1 Jan 2026 milestone amplifying competitiveness pressures.
Open banking in the UK is growing rapidly. Latest industry figures show there are more than 16 million users now benefiting from the service. The number of open banking payments has soared by 53% year on year, reflecting a significant shift in how consumers and businesses manage their finances.See the API performance statsA key driver of this transformation is the rise of variable recurring payments (VRPs), which now account for 16% of all open banking transactions. VRPs allow consumers and b...
First-time buyers and the self-employed could get a step-up onto the housing ladder, under new plans from the FCA. Its priorities for reforms to the mortgage market also include helping homeowners unlock housing wealth for a more comfortable later life.The FCA will focus on 4 areas:First-time buyers & underserved consumers: Simplifying mortgage rules to allow more flexible products that reflect different working patterns and income levels at different stages of life.Later-life lending: Review...
Statistical Notices update the definitions and guidance contained in the Banking Statistics Yellow Folder
AI Analysis
This Statistical Notice 2025/06 announces the release of Bank of England Statistics Taxonomy version 1.3.1, which updates definitions and guidance in the Banking Statistics Yellow Folder, including upgrades from XBRL 2.3.0 to 3.0, validation fixes, and data point model changes. It matters for compliance teams at reporting firms as it ensures accurate submission of statistical data to the BoE, supporting monetary policy, financial stability monitoring, and national accounts under the Bank of England Act 1998.
What Changed
Upgrade of the reporting taxonomy from XBRL 2.3.0 to XBRL 3.0, introducing technical enhancements for improved data structure and interoperability.
Validation fixes to address errors in data submission processes.
Changes to the data point model (DPM), refining how specific data elements are defined and reported.
These updates align with ongoing refinements to the Banking Statistics Yellow Folder, which contains core definitions for BoE statistical returns.
What You Need To Do
Review and update reporting systems to support XBRL 3
Participate in the two proposed UAT windows to test submissions under the new taxonomy
Subscribe to or amend BoE Statistical Notices circulation list to receive updates
Cross-reference against the Banking Statistics Yellow Folder for any definitional impacts on ongoing returns
Key Dates
Provisional UAT windows (two proposed)- User Acceptance Testing periods for validating the new taxonomy 1.3.1; exact dates to be confirmed via BoE updates.
Compliance Impact
Urgency: Medium - This is a technical taxonomy update rather than a substantive regulatory shift, but non-compliance risks invalid submissions, data rejection, or delays in BoE reporting, which could affect supervisory assessments and national statistics. Firms with automated reporting pipelines face moderate implementation effort, especially for XBRL migration, but proactive UAT participation mitigates risks.
We're providing guidance to support firms to tackle bullying, harassment and violence in financial services, after they asked for additional support. In July, we changed our rules – setting clearer standards for how financial services firms should address non-financial misconduct.This more closely aligned the rules for banks and non-banks. We wanted to give firms the confidence to act against serious misconduct, drive consistency and make it clearer when non-financial misconduct is a breach o...
Given at the 20th High-level meeting on financial stability and regulatory and supervisory priorities (jointly organised by the Arab Monetary Fund, the Basel Committee on Banking Supervision and the Financial Stability Institute of the Bank of International Settlements).
The Bank of England chairs the London Foreign Exchange Joint Standing Committee (FXJSC) Operations Sub-Committee. The FXJSC is made up of market participants, infrastructure providers and the UK financial regulators.
The Bank of England chairs the London Foreign Exchange Joint Standing Committee (FXJSC) Legal Sub-Committee. The FXJSC is made up of market participants, infrastructure providers and the UK financial regulators.
The Bank of England chairs the London Foreign Exchange Joint Standing Committee (FXJSC), which is a forum for discussion of the wholesale foreign exchange market. The FXJSC is made up of market participants, infrastructure providers and the UK financial regulators.
PS27/25 finalizes the PRA's policy to delete 37 redundant banking regulatory reporting templates (34 FINREP, 2 COREP, and PRA109) as the first phase of the Future Banking Data (FBD) programme, aiming to reduce reporting burdens while maintaining supervisory data quality. This matters for PRA-regulated banks as it delivers immediate cost savings and signals broader regulatory simplification, aligning with the PRA's secondary competitiveness and growth objective.
What Changed
Deletion of 37 whole reporting templates identified as duplicative, outdated, or low-value: 34 FINREP templates, 2 COREP templates (C05.01 and C05.02, now obsolete), and PRA109.
Consolidation of remaining FINREP scoping provisions into a single section of the PRA Rulebook (new Chapters 5A–5F of the Reporting (CRR) Part), with clarifications to unclear or duplicative conditions.
Alignment of FINREP remittance deadlines to 30 business days for reports under Article 430(3), Article 11(2), and new Chapters 5A–5F.
Updates to Supervisory Statement SS34/15 – Guidelines for completing regulatory...
What You Need To Do
Review and update internal reporting systems, processes, and controls to cease submission of the 37 deleted templates for reference dates from 31 December 2025 onwards
Confirm applicability of consolidated FINREP scoping rules (Chapters 5A–5F) and adjust scoping for remaining templates, incorporating clarified conditions
Assess eligibility for individual FINREP waivers under the updated framework if part of a UK consolidation group; apply to PRA if criteria met (90-95% asset contribution)
Update compliance policies and training to reflect SS34/15 amendments and aligned remittance deadlines
Review Pillar 3 disclosure obligations for any ongoing requirements tied to deleted templates and prepare for potential future changes
Key Dates
8 December 2025- Publication of PS27/25, finalizing policy and responses to CP21/25 consultation.
31 December 2025- Effective date for revised rules, amended SS34/15, and deletions; applies to reporting reference dates falling on or after this date (avoids 2025 Q4 submissions where relevant).
11 November 2025- Q3 2025 remittance deadline (precedes PS publication, so no concession for early non-reporting).DEADLINE
Compliance Impact
Urgency: Medium – Changes are simplificatory (deletions reduce burden), with immediate effect from 31 December 2025, but no new requirements or penalties for non-compliance with deleted items; firms must act promptly to decommission processes and avoid erroneous submissions. This matters as it lowers ongoing costs (especially for larger reporters) and sets precedent for FBD phases targeting further efficiencies, but smaller firms see limited benefit without broader reforms.
In line with the Bank's transition to a repo-led, demand-driven operational framework for providing reserves, the Bank is today announcing a reduction in the spread to Bank Rate of the Operational Standing Facility (OSF). This Market Notice confirms the new, recalibrated spread of the OSF at Bank Rate +15bps for the lending facility and Bank Rate -15bps for the deposit facility. As with all SMF facilities, the OSFs are 'open for business' and should be used by SMF participants for the purpose...
A raft of new measures designed to support the growth of the mutuals sector have been announced today by the financial regulators. They include a review of credit union regulations and the launch of a Mutual Societies Development Unit by the Financial Conduct Authority (FCA).
The Prudential Regulation Authority (PRA) has issued PS26/25, finalizing the withdrawal of Supervisory Statement (SS) 20/15, which previously set prescriptive expectations for building societies' treasury and lending activities, effective immediately upon publication on 5 December 2025. This deregulatory move reduces administrative burdens, enhances proportionality across deposit takers, and promotes competition by aligning building societies more closely with banks, while relying on existing tools like the PRA Rulebook, SMCR, and routine supervision for risk management. It matters for compliance teams as it eliminates specific guidance often misinterpreted as binding requirements, freeing firms to tailor risk frameworks but requiring vigilance on broader prudential expectations.
What Changed
Full deletion of SS20/15: Removes all expectations on treasury and lending activities, including the "Treasury Approaches" framework, without replacement.
Consequential amendments: Updates SS31/15 (Internal Capital Adequacy Assessment Process and Supervisory Review and Evaluation Process) to excise references to SS20/15.
Alignment with broader policy: Addresses inconsistencies with PRA's approach for banks, improved sector risk management maturity, and proportionality for smaller firms; supports objectives of safety, soundness, competition, and growth.
No new rules imposed: PRA deems existing...
What You Need To Do
Review and update policies
Assess risk management
Update governance documents
Engage supervisors
Monitor related reforms
Compliance Impact
Urgency: Medium – Effective immediately (5 December 2025), but deregulatory nature reduces burdens rather than imposing new obligations; critical for year-end 2025/early 2026 planning to avoid legacy SS20/15 misapplication. Matters as it shifts from prescriptive "hard limits" (often treated as rules) to principles-based supervision, enabling flexibility but heightening reliance on firm-specific risk assessments amid PRA's focus on competition and growth; non-compliance risks arise from over-reliance on withdrawn guidance or inadequate tailoring.
This report has been informed by the PRA and FCA’s ongoing regulation and supervision of mutuals and by direct engagement with mutuals and their trade associations in sessions around the country throughout 2025.
The Bank of England (the Bank) has today launched its second system-wide exploratory scenario (SWES) exercise. This will focus on how the private markets ecosystem operates under stress and the potential implications for UK financial stability and the UK real economy.
PS25/25 is the PRA's policy statement providing feedback on CP10/25 and issuing updated Supervisory Statement SS5/25, which replaces SS3/19 to enhance banks' and insurers' management of climate-related financial risks through strengthened governance, risk management, scenario analysis, data quality, and disclosures. It matters because it sets a higher regulatory bar for embedding climate risks proportionately into core processes like ICAAP, ILAAP, ORSA, and financial reporting, promoting resilience and strategic decision-making amid evolving climate threats.
What Changed
The main changes in SS5/25 from SS3/19 and CP10/25 responses include:
Proportionate application clarification: New 'Overarching aims' section in Chapter 3 explains how firms should tailor expectations to their climate risk exposure, business size, and complexity via a two-step process (assess materiality, then respond).
Governance strengthening: Boards and senior management must actively oversee climate risks, embedding them in strategy and ensuring accountability.
Risk management enhancements: Integrate climate risks into existing frameworks/risk registers (supplementary sub-registers...
What You Need To Do
Conduct gap analysis against SS5/25 within 6 months and remediate (e
Integrate climate risks into board oversight, strategy, risk registers, ICAAP/ILAAP (banks), ORSA/stress testing (insurers), and financial reporting
Perform CSA exercises commensurate with exposures, using suitable scenarios to inform decisions; enhance data quality and disclosures
Ensure senior accountability and alignment with standards like SS1/21
Key Dates
3 December 2025- PS25/25 and SS5/25 published; SS5/25 effective immediately, replacing SS3/19.
Within 6 months (by ~June 2026)- Firms assess gaps against new expectations and develop remediation plans (industry guidance).
Ongoing- Forward-looking, strategic implementation proportionate to risks; PRA may request progress evidence.
Compliance Impact
Urgency: High – Effective immediately (3 Dec 2025), requiring significant uplift to existing approaches; non-compliance risks supervisory scrutiny, as PRA expects ambitious, ongoing progress and may request evidence. Matters for capital/liquidity planning, resilience, and strategic viability amid maturing climate risk landscape.
SS5/25 is the PRA's updated supervisory statement, published on 3 December 2025, replacing SS3/19 and setting enhanced expectations for banks and insurers to manage climate-related risks through governance, risk management, scenario analysis, data quality, and disclosures. It matters because it represents a step change from awareness-raising to embedding robust, proportionate practices that integrate climate risks into core prudential processes like ICAAP, ILAAP, ORSA, and capital planning, aligning with the PRA's objectives for firm safety and soundness amid evolving physical and transition risks.
What Changed
Replaces SS3/19 entirely: Introduces a more mature, consolidated framework reflecting international standards (e.g., BCBS), with detailed transmission channels for climate risks across credit, market, liquidity, insurance, and operational categories.
Governance enhancements: Emphasizes board accountability, integration into business strategy, climate risk appetite statements, and linkage to Senior Managers & Certification Regime (SM&CR) without new Senior Management Functions (SMFs); promotes challenge culture and Management Information (MI).
Risk management integration: Requires embedding...
What You Need To Do
Conduct materiality assessment of climate risks to scope proportionality (leverage TCFD/CSRD work)
Embed climate risks in governance
Integrate into risk frameworks
Perform climate scenario analysis
Enhance data
Key Dates
3 December 2025Publication of PS25/25 and SS5/25; replaces SS3/19 effective immediately.
Within 6 months of 3 December 2025 (by ~3 June 2026)Firms assess gaps against new expectations and develop implementation plans.
April 2025Consultation paper CP10/25 issued (feedback incorporated in final policy).
Compliance Impact
Urgency: High – Effective immediately with a 6-month window (~June 2026) for gap closure, this demands significant operational uplift (e.g., data, scenarios, integration) amid PRA's shift to enforcement; non-compliance risks supervisory action, given climate risks' materiality to prudential stability and alignment with global standards.
Our Financial Policy Committee (FPC) meets to identify risks to financial stability and agree policy actions aimed at safeguarding the resilience of the UK financial system.
Statistical Notices update the definitions and guidance contained in the Banking Statistics Yellow Folder
AI Analysis
The Bank of England's Statistical Notice 2025/05 requires all reporting institutions to confirm their confidentiality permissions for publishing aggregate statistical data during the 2026 reporting year. This mandatory review streamlines data publication processes by seeking prior consent for aggregate data where firms are among fewer than three contributors, reducing administrative burden while maintaining data integrity.
What Changed
The notice introduces a streamlined confidentiality permission framework with four consent options for reporting institutions:
1. Blanket consent – Give prior approval for all statistical forms
2. Form-by-form consent – Approve permissions on individual forms
3. Selective consent – Approve all forms except specified data points
4. Case-by-case opt-out – Require explicit consent for each publication instance
The material change is the Bank's shift toward pre-approval for aggregate data publication where firms represent fewer than three contributors to an aggregate figure.
What You Need To Do
*Log into the BEEDS portal and access the confidentiality permission survey
*Select one of four consent options (blanket, form-by-form, selective, or case-by-case)
*For multi-entity groups
*Review prepopulated firm information and make adjustments as needed
*Submit final preferences via the portal (latest submission version is treated as final)
Key Dates
19 December 2025, 5:00 PM GMT– Deadline for completing confidentiality preference survey in BEEDS portalDEADLINE
January–December 2026– Reporting reference periods covered by granted permissions
Ongoing– Consent remains valid for these periods unless explicitly withdrawn; applies to resubmissions and late submissions for 2026 reference periods
The PRA Regulatory Digest is for people working in the UK financial services industry and highlights key regulatory news and publications delivered for the month.
PS23/25 from the PRA and FCA finalizes amendments to Binding Technical Standards (BTS) 2016/2251 under UK EMIR, introducing an indefinite exemption for single-stock equity options and index options from bilateral margin requirements, removing IM obligations on legacy contracts for firms falling below thresholds, and allowing alignment with third-country jurisdictions' timelines for IM assessments. These changes reduce operational burdens and enhance competitiveness for UK firms trading non-centrally cleared derivatives, following feedback from CP5/25, while maintaining prudential standards.
What Changed
Indefinite exemption for equity options: Single-stock equity options and index options are permanently exempted from UK bilateral initial margin (IM) and variation margin (VM) requirements, replacing a temporary exemption ending 4 January 2026. This balances safety with international competitiveness, as capital can substitute for margin.
Legacy contracts relief: Firms falling below the Average Aggregate Notional Amount (AANA) threshold no longer need to exchange IM on outstanding legacy non-centrally cleared derivatives contracts.
Third-country alignment: UK firms can adopt another...
What You Need To Do
Assess cross-border transactions
Conduct gap analysis on margin calculations, collateral management, and reporting; train front-to-back office teams on changes
Retain records of AANA calculations and threshold monitoring to justify exemptions or relief
For firms with collected IM on now-exempt legacy positions, evaluate release options per updated FCA instrument language
Key Dates
11 August 2025PRA submits final technical standards instrument to HM Treasury (HMT).
15 August 2025FCA submits final technical standards instrument to HMT.
11 September 2025HMT deems approval of PRA’s instrument.
24 September 2025HMT deems approval of FCA’s instrument.
27 November 2025Amendments to BTS 2016/2251 effective date.
Compliance Impact
Urgency: High – Effective immediately since 27 November 2025 (over a month ago as of current date), firms risk non-compliance if systems still enforce outdated IM/VM for exemptions; operational fixes are needed urgently to avoid breaches, fines, or disputes, especially with phase-out of temporary equity options relief approaching 4 January 2026. Impacts cost savings but requires swift policy recalibration for ongoing UK EMIR adherence.
The Bank of England welcomes the Financial Conduct Authority (FCA) recognition of the 2024 versions of the FX Global Code and UK Money Markets Code under its code recognition scheme.
The PRA held roundtable meetings on artificial intelligence and machine learning (AI and ML) in the context of Supervisory Statement (SS)1/23 ‘Model risk management principles for banks’
AI Analysis
The Prudential Regulation Authority (PRA) held roundtable sessions on 20 and 22 October 2025 with 21 regulated firms to discuss AI and machine learning (AI/ML) adoption under Supervisory Statement SS1/23 on model risk management (MRM) principles for banks. This matters because it highlights PRA's strategic supervisory focus on AI/ML model risks, urging firms to enhance governance, risk appetite, monitoring, and validation to mitigate opacity, overfitting, and rapid performance degradation in these models. https://www.bankofengland.co.uk/prudential-regulation/publication/2025/november/pra-holds-model-risk-management-roundtable-on-ai | https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/publication/2025/november/ai-roundtable-oct-2025.pdf
What Changed
This is not a formal rule change but supervisory guidance via roundtable insights reinforcing SS1/23 principles (effective since 2023). Key emphases include:
Risk appetite: Boards must articulate AI/ML-specific model risk appetite pre-deployment to avoid exceeding tolerances, given higher uncertainty from opacity.
Model inventories and tiering: Address inaccurate/incomplete inventories and aggregate risks from deploying similar AI/ML across portfolios/jurisdictions; challenge tiering for complexity.
Model development: Assess trade-offs in performance vs.
What You Need To Do
Review and strengthen board-level model risk appetite statements to explicitly cover AI/ML opacity and uncertainty; integrate into governance triggers like re-validation
Enhance model inventories for completeness, aggregate risk assessment, and cross-jurisdictional tiering challenges
Update model development policies to evaluate AI/ML trade-offs (e
Revise ongoing monitoring policies for more frequent, quantitative checks on AI/ML (e
Participate in PRA initiatives like MRM roundtables or AI Consortium for dialogue; align first/second-line defenses per SS1/23
Key Dates
20-22 October 2025- PRA held CRO roundtable sessions with 21 firms on AI/ML MRM.
24 November 2025- PRA published roundtable summary and slides. https://www.bankofengland.co.uk/prudential-regulation/publication/2025/november/pra-holds-model-risk-management-roundtable-on-ai
Compliance Impact
Urgency: Medium - Not critical as no new rules or deadlines, but high relevance for AI/ML users amid PRA's strategic MRM focus; non-compliance risks supervisory actions, given observations of gaps in monitoring and governance. Matters for banks scaling AI (rising adoption per industry views), as unaddressed risks like rapid degradation could amplify losses (e.g., historical model failures cost billions). https://www.articsledge.com/post/model-risk-management | https://www.finextra.com/blogposting/30372/the-pras-latest-view-on-ai-governance-implications-for-uk-banks
This joint PRA-FCA consultation (CP23/25 from PRA and Chapter 4 of FCA's CP25/33) proposes policy updates to regulatory fees, levies, and invoice processes for 2026/27, including new fee blocks for emerging activities like PISCES operators and targeted support, alongside adjustments to FOS/FSCS levies and payment timelines. It matters for compliance teams as it directly impacts budgeting, fee calculations, and cash flow management for fee-payers, with potential cost increases and procedural changes effective from April 2026.
What Changed
New fee structures: Introduction of a periodic fee block for PISCES operators based on regulated income (baseline £2,200 annual fee, variable above £500,000 threshold); extension of fee-block A.13 to include "targeted support" activities (Category 2 variation fee for existing firms, Category 4 for new entrants); registration fees for Deferred Payment Credit (DPC/buy-now-pay-later) activities aligned with Temporary Permissions Regime, added to FOS consumer credit fee-block but excluded from FSCS.
Levy adjustments: Addition of targeted support to FSCS Class 2, Category 2.1 (life...
What You Need To Do
Review current fee/levy exposure and model impacts of new blocks (e
Assess invoice processes if paying £50,000+ in FCA/PRA fees; prepare for aligned due dates
Submit consultation responses by deadlines, focusing on targeted support by 9 January 2026
Budget for potential fee increases; monitor Spring 2026 fee-rates CP
For applicants
Key Dates
9 January 2026- Deadline for comments on targeted support proposals (FCA CP25/33 paras 2.11-2.18, questions 3-7).DEADLINE
16 January 2026- Consultation close for all other proposals, including PRA-FCA joint changes; responses to cp25-33@fca.org.uk.
February 2026- FCA publishes feedback and rules on targeted support in Handbook Notice.
March 2026- FCA publishes feedback and rules on all other proposals (including Chapter 4) in Handbook Notice; Spring fee-rates consultation.
April 2026- PRA publishes feedback and rules on Chapter 4; changes effective for 2026/27 fee year (April-March).
Compliance Impact
Urgency: High – Firms must act imminently on consultation responses (deadlines passed as of today, but feedback analysis pending March/April 2026 rules) to influence outcomes; changes affect 2026/27 budgets starting April, with cash flow risks from invoice timing and new fees for emerging activities like PISCES/DPC. Non-engagement risks unbudgeted costs and procedural breaches (e.g., overdue invoices).
From the start of December, UK bank customers will benefit from an increase to the maximum amount they would be reimbursed for if their bank were to fail
The PRA's PS24/25 finalizes rules increasing Financial Services Compensation Scheme (FSCS) depositor protection limits from £85,000 to £120,000 and temporary high balances (THB) from £1 million to £1.4 million for firm failures on or after 1 December 2025, responding to consultation feedback in CP4/25. This matters for PRA-authorized deposit-takers as it enhances consumer protection amid inflation but requires urgent system and disclosure updates to avoid FSCS payout delays or regulatory breaches. Firms must prioritize single customer view (SCV) readiness and phased disclosure revisions to comply efficiently.
What Changed
Increased Protection Limits: Standard FSCS deposit limit rises from £85,000 to £120,000; THB limit from £1 million to £1.4 million, applying to failures from 1 December 2025.
SCV System Updates: Firms must update SCV systems (used by FSCS for rapid compensation) to reflect new limits from 1 December 2025, including accurate contact details.
Disclosure Materials:
- Update information sheets on FSCS cover to reflect new limits and improve clarity/accessibility; provide to depositors as soon as practicable post-1 December 2025, by 31 May 2026.
- Revise compensation stickers/posters (for...
What You Need To Do
Immediate (pre-1 Dec 2025)
By 1 Dec 2025
Post-1 Dec 2025 to 31 May 2026
Document changes for audit trails; consider regtech for SCV automation
Key Dates
1 December 2025- New deposit (£120,000) and THB (£1.4 million) limits apply to firm failures on/after this date; SCV systems must be updated; SS18/15 and SoP1/15 effective.DEADLINE
As soon as practicable after 1 December 2025- Provide updated information sheets, stickers/posters, and exclusions lists to depositors (encouraged immediately to avoid confusion).
31 May 2026- Firm deadline for all disclosure material updates and provision to depositors (six-month transition ends).DEADLINE
Compliance Impact
Urgency: High – SCV updates are mandatory by 1 December 2025 with no transition, risking delayed FSCS payouts and enforcement if unprepared; disclosure changes allow six months but PRA emphasizes early action to prevent depositor confusion. Impacts operational resilience and conduct risk; non-compliance could trigger supervisory action, especially for firms with outdated systems. Cost-benefit analysis shows minimal PRA impact but higher potential FSCS payouts in failures.
The Bank of England, the Monetary Authority of Singapore, and the Bank of Thailand announced a collaboration to explore the technical and policy implications of settling foreign exchange (FX) transactions using synchronised settlement mechanisms.
This was the first meeting of the Market Participants Group (MPG), a senior-level forum for financial market participants to share their views on relevant themes and narratives in financial markets with members of the Bank of England’s Monetary Policy Committee.
The PRA's PS22/25 finalizes an increase in the retail deposits threshold for the leverage ratio requirement from £50 billion to £75 billion, introducing a three-year averaging mechanism for calculations, effective 1 January 2026. This adjustment reflects nominal UK GDP growth since 2016 to maintain the Financial Policy Committee's original risk appetite while smoothing cliff-edge effects for firms like building societies. It matters for major UK banks and similar firms as it alters capital planning and leverage ratio applicability, potentially reducing immediate compliance burdens for those nearing the old threshold.
What Changed
Retail deposits threshold raised from £50 billion to £75 billion, adjusted upward from the CP2/25 proposal of £70 billion to account for further GDP growth to Q2 2025 (rounded to nearest £5 billion).
Introduction of a three-year moving average for calculating retail deposits metric, replacing point-in-time values to mitigate volatility and aid capital planning, particularly for building societies.
Non-UK assets threshold remains unchanged at £10 billion.
Modifications by consent disapplying leverage ratio rules during review will cease on 30 June 2026.
These changes are implemented via...
What You Need To Do
Review and update internal retail deposits calculations to incorporate three-year moving average methodology starting 1 January 2026
Assess current and projected retail deposits against £75 billion threshold (and £10 billion non-UK assets) to determine leverage ratio applicability and adjust capital planning accordingly
Prepare to meet 3
For firms with modifications by consent
Update governance, risk models, and board reporting to reflect changes; conduct gap analysis against PRA Rulebook appendices in PS22/25
Key Dates
5 March 2025- PRA publishes Consultation Paper CP2/25 proposing £70 billion threshold.
5 June 2025- Consultation response deadline.DEADLINE
12 November 2025- PRA issues PS22/25 with final policy.
1 January 2026- Final policy takes effect, applying new £75 billion threshold and three-year averaging.
30 June 2026- Cessation of modifications by consent disapplying leverage ratio rules.
Compliance Impact
Urgency: High – With effectiveness just after today (1 January 2026), firms near £50-75 billion in retail deposits face immediate recalibration of leverage exposures and capital buffers to avoid breaches, amplified by the shift to averaging which requires historical data reconstruction. Non-compliance risks PRA enforcement, heightened scrutiny, or capital inadequacy findings, but the higher threshold and averaging provide planning relief versus the status quo.
The Money Markets Committee is a forum for market participants and authorities to discuss the UK unsecured deposits and funding market and securities lending and repo markets.
The Bank of England (the Bank) has today published a consultation paper (CP) setting out its proposed regulatory regime for sterling-denominated systemic stablecoins.
AI Analysis
The Bank of England has published a consultation paper (issued November 10, 2025) proposing a comprehensive regulatory regime for **sterling-denominated systemic stablecoins**, establishing requirements for backing assets, capital, redemption procedures, and operational safeguards. This represents a pivotal step toward implementing the UK's stablecoin framework, with the regime designed to maintain financial stability while enabling viable business models for systemic stablecoin issuers.
What Changed
The proposed regulatory regime introduces several material requirements for systemic stablecoin issuers:
*Backing Asset Composition
Systemic stablecoin issuers will be permitted to hold up to 60% of backing assets in short-term sterling-denominated UK government debt, with the remaining 40% held as deposits at the Bank of England.
What You Need To Do
*For Systemic Stablecoin Issuers
*Monitor and respond to consultation - Submit detailed comments on proposals before February 2026 deadline, particularly on:
Alternative tools to achieve regulatory objectives
Backing asset composition and holding limits
Safeguarding regime design
Key Dates
November 10, 2025- Bank of England published consultation paper on proposed regulatory regime
February 2026- Consultation deadline (industry to submit comments)DEADLINE
2026- Expected implementation of UK stablecoin regime (timeline subject to consultation outcomes)
Further consultation expected- On detailed design of safeguarding regime and central bank liquidity arrangements
The SONIA Stakeholder Advisory Group supports the Bank’s administration of SONIA by providing advice and technical input to the Bank and the SONIA Oversight Committee
This Market Notice confirms that the previously announced increase to the minimum spread over Bank Rate on bids against Level A collateral in the Indexed Long-Term Repo (ILTR) operation will take effect from 17 November 2025.
The PRA Regulatory Digest is for people working in the UK financial services industry and highlights key regulatory news and publications delivered for the month.
The Bank's Court of Directors acts as a unitary board, setting the organisation's strategy and budget and taking key decisions on resourcing and appointments. Required to meet a minimum seven times per year, it has five executive members from the Bank and up to nine non-executive members.
The Financial Policy Committee (FPC) welcomes today the Prudential Regulation Authority’s (PRA’s) policy statement 20/25 – The Strong and Simple Framework: The simplified capital regime for Small Domestic Deposit Takers (SDDTs) – near-final.
AI Analysis
The Financial Policy Committee (FPC) welcomes the Prudential Regulation Authority's (PRA) Policy Statement (PS) 20/25, which finalizes the second phase of the "Strong and Simple Framework" by introducing a simplified capital regime for Small Domestic Deposit Takers (SDDTs), alongside liquidity simplifications. This matters because it reduces regulatory burdens, enhances competition among smaller UK banks and building societies, and maintains resilience without full Basel 3.1 standards, with implementation on 1 January 2027.
What Changed
Pillar 1 simplifications: Adoption of Basel 3.1 standardised approaches to credit and operational risk; disapplication of due diligence for credit risk, simplifications to market risk, removal of counterparty credit risk and CVA requirements for derivatives (with exceptions), and adjustments to Leverage Ratio and Large Exposures.
Pillar 2A methodologies: Simplifications for credit risk, credit concentration risk (CCoR), and operational risk; amendments to single-name concentration monitoring (cluster limit tightened to 200%, excluding credit institutions); full deduction for certain...
What You Need To Do
Assess SDDT eligibility
Update capital frameworks
ICR transitions
Policy and process revisions
Supervisory engagement
Key Dates
17 January 2025Deadline for comments on related CP14/24.DEADLINE
28 October 2025Publication of near-final PS20/25.
1 January 2026Full Basel 3.1 standards apply to ICR opt-in firms (ICR revoked); some changes to SoP2/23, ICAAP/ILAAP update frequencies effective from PS4/26 publication.
20 January 2026Publication of final PS4/26 confirming PS20/25; effective date for ICAAP/ILAAP updates (including reverse stress-testing).
1 January 2027Simplified capital regime for SDDTs takes full effect.
Compliance Impact
Urgency: High – With full implementation on 1 January 2027 (less than 12 months from today), SDDTs face tight timelines for capital recalibrations, ICR exits, and reporting overhauls; missing deadlines risks supervisory intervention or full Basel 3.1 compliance costs. This significantly eases burdens (e.g., simpler buffers, reduced reporting) but requires proactive gap analysis to leverage simplifications while ensuring resilience.
**PS19/25** is the PRA's near-final policy statement finalizing how remaining Capital Requirements Regulation (CRR) provisions will be restated into the PRA Rulebook, effective January 1, 2027. This represents a critical step in the UK's transition away from assimilated EU law, giving the PRA expanded rule-making authority over UK banks, building societies, and investment firms while introducing targeted policy changes to securitisation, credit risk treatment, and ECAI mapping.
What Changed
The near-final policy confirms and finalizes the following substantive amendments:
*Securitisation Requirements**
Largely preserves current requirements and supervisory expectations with targeted policy changes
Introduces a new formulaic p-factor for the standardised approach to securitisation
Establishes new capital rules for certain mortgage exposures
Clarifies supervisory expectations for unfunded credit protection in synthetic Significant Risk Transfer (SRT) securitisations by adding expectations to SS9/13
*Level of Application of CRR Requirements**
Restates rules relating to level of...
What You Need To Do
*Review the final policy statement when published in Q1 2026 to understand specific rule changes applicable to your firm's business model
*Assess securitisation impacts
*Evaluate mortgage capital treatment
*Update ECAI mapping processes
*Establish implementation timeline
Key Dates
28 October 2025- PRA published near-final policy statement PS19/25
Q1 2026- PRA intends to publish final policies and rule instruments alongside or shortly after final Basel 3.1 package publication
1 January 2026- Implementation date for certain proposals finalized in PS12/25 (limited scope)
1 January 2027- Implementation date for policies and requirements in PS19/25 (primary implementation date)
PS18/25, published by the PRA on 28 October 2025, retires the "refined methodology" for Pillar 2A capital calculations, replacing it with reliance on the Basel 3.1 Credit Risk Standardised Approach (CR SA) for greater risk sensitivity, transparency, and proportionality. This near-final policy simplifies the Pillar 2A framework, reduces administrative burdens, and aligns with broader Basel 3.1 implementation and the Strong and Simple regime for Small Domestic Deposit Takers (SDDTs), promoting safety, soundness, and competition. It matters because it directly impacts credit risk capital add-ons for affected firms, requiring updates to ICAAP/SREP processes ahead of Basel 3.1 timelines.
What Changed
Retirement of Refined Methodology: Eliminates supervisory adjustments to Pillar 2A credit risk add-ons based on IRB benchmarking, as Basel 3.1 CR SA better captures risks and reduces gaps between standardised and IRB approaches.
Policy Material Updates:
- Near-final amendments to Statement of Policy (SoP) 5/15 – The PRA’s methodologies for setting Pillar 2 capital.
- Final amendments to Supervisory Statement (SS) 31/15 – The Internal Capital Adequacy Assessment Process (ICAAP) and Supervisory Review and Evaluation Process (SREP).
- Descope of SDDTs from SoP5/15 and SS31/15, with new...
What You Need To Do
Review and update internal Pillar 2A methodologies, ICAAP/SREP documentation to remove refined methodology reliance and align with Basel 3
Model/calculate potential capital impacts from CR SA changes vs
Prepare for IRRBB/pension risk clarifications in SS31/15 submissions from 1 July 2026; monitor CP12/25 review
Engage PRA supervisors on firm-specific transitions; update reporting (e
Firms may apply changes early in ICAAP from relevant dates (e
Key Dates
28 October 2025- PS18/25 publication with near-final policy and PRA feedback to CP9/24/CP7/24 consultations.
1 July 2026- Effective date for pension obligation risk amendments in SoP5/15 and SS31/15 clarifications (IRRBB changes partially deferred).
Q2 2026- Expected finalisation of CP12/25 Phase 1 proposals (Pillar 2A review, including IRB benchmarking removal).
Basel 3.1 Implementation Date (TBD, aligned with CR SA go-live)- Retirement of refined methodology and related credit/operational risk changes.
January 2026- PS2/26 published as final policy, minor adjustment to SS31/15 para 5.12A.
Compliance Impact
Urgency: High – Firms must act now to recalibrate Pillar 2A capital ahead of Basel 3.1 and 1 July 2026 effective dates, as retirement eliminates adjustments that reduced add-ons for low-risk CR SA firms, potentially increasing capital requirements despite Basel 3.1 offsets. Non-compliance risks supervisory scrutiny in SREP/ICAAP, higher Pillar 2A requirements, and misalignment with simplified regimes; benefits include reduced complexity/burden long-term.
SS31/15 is the PRA's foundational supervisory statement establishing expectations for how UK-regulated banks and large investment firms must conduct their Internal Capital Adequacy Assessment Process (ICAAP) and how the PRA will evaluate these assessments through its Supervisory Review and Evaluation Process (SREP). This guidance is critical because it directly determines the capital requirements firms must maintain and establishes the supervisory framework through which the PRA assesses whether firms hold sufficient capital to cover material risks.
What Changed
The supervisory statement establishes several core regulatory expectations:
*ICAAP Requirements**
Firms must assess on an ongoing basis whether they hold sufficient capital to cover all material risks, including interest rate risk in the banking book (IRRBB), market risk, operational risk, concentration risk, group risk, pension obligation risk, and foreign currency lending to unhedged retail and SME borrowers
Firms must implement stress testing and scenario analysis as integral components of capital planning
The management body must be actively involved and engaged in all relevant stages of...
What You Need To Do
*Immediate Compliance Actions
*Establish ICAAP Framework
*Risk Identification and Assessment
*Stress Testing and Scenario Analysis
Results of stress tests carried out in accordance with CRR requirements for firms using IRB approaches or internal models
Key Dates
29 July 2015- SS31/15 first published, replacing PRA SS5/13 and PRA SS6/13
1 July 2026- Effective date for updates to SS31/15 (as referenced in recent amendments)
Ongoing- Firms must carry out ICAAP on a continuous basis in accordance with PRA ICAA rulesDEADLINE
**PS20/25** represents the second and final phase of the PRA's "Strong and Simple Framework," establishing a significantly simplified capital regime for Small Domestic Deposit Takers (SDDTs) while maintaining their resilience. This near-final policy statement, published on 28 October 2025, fundamentally restructures capital requirements, liquidity rules, and operational frameworks for SDDTs—a critical development for smaller deposit-taking institutions seeking regulatory relief from disproportionate compliance burdens.
What Changed
The simplified capital regime introduces structural changes across all three pillars of capital requirements:
*Pillar 1 (Risk-Weighted Assets)
SDDTs must apply Basel 3.1 standardised approaches for credit risk and operational risk, with specific simplifications.
Due diligence requirements in the standardised approach to credit risk are disapplied for SDDTs.
Counterparty credit risk (CCR) for derivatives and credit valuation adjustment (CVA) risk are disapplied (with minor exceptions).
Market risk framework is simplified, with SDDTs applying the credit risk approach to trading book positions...
What You Need To Do
*For SDDTs Currently Operating or Considering Entry:
*Notification Decision – Determine whether to enter the SDDT regime and submit notification to the PRA by 31 March 2026 if seeking to benefit from simplified rules
*Policy Review – Conduct comprehensive review of PS20/25, related policy statements (PS18/25, PS19/25, PS8/25, PS14/25), and supporting methodologies (SoP5/25, SS4/25, amendments to SoP2/23)
*Capital Calculation Transition – Prepare systems and processes to transition from current capital calculation methodologies to Basel 3
Removal of CCR and CVA calculations for derivatives
Key Dates
31 March 2026– Deadline for firms wishing to enter the SDDT regime to notify the PRA and benefit from the simplified framework at implementation.DEADLINE
1 January 2027– Implementation date for the simplified capital regime for SDDTs; the Interim Capital Regime will no longer apply.
2026 (specific date TBD)– PRA to make final rules and policy covering the entire Basel 3.1 package once HM Treasury makes commencement regulations to revoke relevant CRR provisions.
2027 (specific date TBD)– PRA to implement restatement of CRR requirements (PS19/25).
Publication from the Bank, PRA and FCA to firms and financial market infrastructures highlighting observed effective practices of cyber response and recovery capabilities.
The PRA has published LIAC02/25, a consultation on proposed low impact amendments to rules and policy.
AI Analysis
The PRA's LIAC02/25 consultation, published on 16 October 2025, proposes low-impact amendments to its Rulebook and policy materials, including technical fixes, conditional disapplications, and miscellaneous corrections to enhance accuracy and align with prior policies. These changes matter for PRA-regulated firms as they ensure regulatory consistency with minimal operational burden, with most taking effect in late 2025 or early 2026 following the consultation period.
What Changed
The main proposals include:
Conditional disapplication of PRA General Provisions to implement deference arrangements under the UK-Swiss Berne Financial Services Agreement.
Amendment to Transitional Measure on Technical Provisions (TMTP) Part, Rule 5.2, introducing a new formula for 'Wr' effective 31 December 2025, using existing 'Wq' values without retrospective recalculation.
Amendment to Insurance Special Purpose Vehicle (ISPV) Part, Solvency Requirements Rule 2.2A(3), clarifying the 'no co-mingling' requirement, effective 23 December 2025, alongside updates to SS2/25.
Miscellaneous...
What You Need To Do
Submit consultation responses by 13 November 2025 via the PRA's Low Impact Amendments Process page, focusing on proposed disapplications, TMTP formula, ISPV rules, and miscellaneous changes
Review and update internal policies for TMTP calculations to adopt the new 'Wr' formula from 31 December 2025 year-end, without restating priors
Confirm compliance with ISPV 'no co-mingling' clarifications and SS2/25 updates by 23 December 2025
Verify Rulebook references (e
For friendly societies/credit unions
Key Dates
13 November 2025Consultation closes for LIAC02/25 responses.
21 October 2025Effectiveness of Solvency II restatement amendments (from prior consultations).
23 December 2025Effectiveness of ISPV Rule 2.2A(3), TMTP Rule 5.2A(3), minimum fees reduction, and related SS2/25 updates; also LIAF03/25 amendments per industry reports.
19 January 2026Effectiveness of Securitisation Part Rule 2, Article 7 amendment aligning with FSMA revocations.
24 July 2025Effectiveness of certain non-substantive Solvency II fixes (already passed).
Compliance Impact
Urgency: Low – These are explicitly "low impact" technical, typographical, and alignment amendments with no material capital, reporting, or operational shifts expected; many stem from prior consultations (e.g., CP8/25, CP12/23, PS10/25) and avoid retrospective changes. Firms should act promptly on response deadlines and upcoming effectives (e.g., December 2025) to prevent minor non-compliance, but resource allocation can be minimal given the non-substantive nature.
The PRA and FCA have today confirmed plans to increase flexibility around senior banker pay, alongside changes to create better links between bonus awards and responsible risk-taking.
PS21/25 implements reforms to PRA remuneration rules for banks, building societies, and PRA-designated investment firms, simplifying Material Risk Taker (MRT) identification, aligning deferral periods with international standards (4 years for non-SMF MRTs and 5 years for SMFs), and enhancing links to individual accountability under the Senior Managers Regime (SMR). These changes matter as they reduce regulatory burden, increase flexibility in bonus structures (e.g., marginal deferral rates and cash payments), and promote competitiveness while maintaining risk alignment, potentially reversing trends toward higher fixed pay.
What Changed
MRT Identification: Simplified quantitative threshold to the top 0.3% of earners (assessed against risk impact); qualitative criteria unchanged; raised proportionality threshold for disapplying rules from £44,000 variable pay to £660,000 total pay (with variable pay ≤33% of total); reintroduced exemption for MRTs serving <3 months.
Deferral Periods: 4-year minimum for non-SMF MRTs (previously varied); reduced to 5 years for SMFs (from 7 years); aligns with FCA and international practice.
Deferral Rates: Marginal system—40% deferral on first £660,000 of variable remuneration, 60% above;...
What You Need To Do
Review and update MRT identification processes, applying simplified top 0
Revise remuneration policies for deferral (4/5 years, marginal rates), upfront cash flexibility, and instrument expectations; update bonus award calculations
Embed SMR-linked adjustments
For dual-regulated firms
Optional early adoption for specified changes on 2025/unvested awards; document governance for RemCo approvals and board policies
Key Dates
15 October 2025Publication date; some changes (e.g., deferral periods, pro-rata vesting) may apply to ongoing 2025 performance year and unvested prior awards at firm discretion.
16 October 2025Final rules and updated SS2/17 take effect; apply to performance years starting after this date (e.g., mandatory from 1 January 2026 for calendar-year firms).
November 2024Preceding joint consultation (CP16/24/PRA, CP24/23/FCA) closed prior to PS.
Compliance Impact
Urgency: High – Mandatory from performance years post-16 October 2025 (e.g., 2026 for most), with immediate opt-in possible; impacts 2026 bonus cycles, requiring swift policy rewrites amid year-end planning. Matters due to simplified but ownership-heavy MRT processes, SMR-pay linkages raising accountability risks, and flexibility needing robust justification to avoid supervisory challenge; non-compliance risks enforcement under PRA accountability regimes.
PS16/25 is the PRA's policy statement restating firm-facing organisational requirements from the MiFID Org Reg (e.g., outsourcing, record-keeping, risk management, compliance, internal audit, and governance) into the PRA Rulebook, with no material changes, to align with HMT's revocation of the EU regulation under FSMA 2023. This matters because it ensures continuity of prudential oversight for PRA-authorised firms post-revocation, preventing enforcement gaps in systems and controls while adapting provisions (e.g., supervisory function) to UK governance structures.
What Changed
Restatement of requirements: Provisions from MiFID Org Reg Articles on outsourcing, record-keeping, control procedures, risk management, compliance, internal audit, and governance are transferred verbatim or with minor clarifications into PRA Rulebook parts (e.g., Risk Control).
Supervisory function adjustment: Following consultation feedback, PRA retained Article 25 provisions but substituted "governing body" for "supervisory function" to fit UK firm structures, preserving board-level oversight without substantive change.
Technical standards update: Minor amendment to algorithmic trading...
What You Need To Do
Review and map existing MiFID Org Reg compliance processes against restated PRA Rulebook provisions (e
Confirm governing body oversight aligns with adapted Article 25 requirements; document any adjustments for UK structures
Update internal references in algorithmic trading governance documents to new rule 2
Conduct gap analysis and training on minor clarifications; prepare for dual FCA/PRA alignment if applicable
Monitor HMT commencement order; if delayed, reassess implementation plans
Key Dates
9 October 2025- PRA publishes PS16/25 with final rules and feedback to CP9/25 consultation.
23 October 2025- New PRA rules and technical standards come into force, coinciding with HMT's anticipated revocation of MiFID Org Reg via commencement order (FCA rules align on same date).
Prior to 23 October 2025- HMT expected to lay second Statutory Instrument revoking remaining MiFID Org Reg provisions; PRA may delay/revoke rules if not made.
Compliance Impact
Urgency: High – Firms must act promptly as rules take effect on 23 October 2025 (past deadline as of current date), with no transition period; non-compliance risks enforcement gaps in core systems/controls post-revocation. Impact is low for substance (restatement only) but requires documentation updates to avoid supervisory scrutiny, especially for governance and outsourcing.
The Bank of England chairs the London Foreign Exchange Joint Standing Committee (FXJSC), which is a forum for discussion of the wholesale foreign exchange market. The FXJSC is made up of market participants, infrastructure providers and the UK financial regulators.
The Bank of England chairs the London Foreign Exchange Joint Standing Committee (FXJSC) Legal Sub-Committee. The FXJSC is made up of market participants, infrastructure providers and the UK financial regulators.
The Bank of England chairs the London Foreign Exchange Joint Standing Committee (FXJSC) Operations Sub-Committee. The FXJSC is made up of market participants, infrastructure providers and the UK financial regulators.
Our Financial Policy Committee (FPC) meets to identify risks to financial stability and agree policy actions aimed at safeguarding the resilience of the UK financial system.
Not for distribution, directly or indirectly, in or into the United States, Canada, Australia, Japan or any other jurisdiction where it is unlawful to distribute this announcement.
The PRA Regulatory Digest is for people working in the UK financial services industry and highlights key regulatory news and publications delivered for the month.
Letter to chief financial officers of selected PRA-regulated deposit-takers which provides thematic feedback from the PRA’s review of written auditor reports received in 2025 covering IFRS 9 expected credit loss accounting (ECL) and accounting for climate risk.
AI Analysis
The PRA's Dear CFO Letter, issued on 30 September 2025 by David Bailey, provides thematic feedback to selected PRA-regulated deposit-takers based on its 2025 review of auditor reports on IFRS 9 expected credit loss (ECL) accounting and climate risk integration. It matters because it highlights persistent supervisory concerns around timely credit risk recognition, model limitations, recovery assumptions, and climate impacts amid economic uncertainty, urging firms to strengthen ECL processes to ensure safety and soundness.
What Changed
This is not a formal rule change or new regulation but thematic feedback building on prior years, with "areas of focus" for improvement:
Model risk: Elevated due to macroeconomic/geopolitical uncertainty; firms must enhance post-model adjustments (PMAs) for completeness (e.g., affordability risks, sector vulnerabilities), granular monitoring of borrower cohorts/ECL components, and model redevelopment governance.
Recovery strategies: Ongoing risk of historical bias in Loss Given Default (LGD) estimates; challenge realism of recovery assumptions for vulnerable sectors/borrowers.
Climate risks:...
What You Need To Do
Conduct self-assessments against annex "areas of focus" (model risk, recovery, climate) and share with auditors ahead of 2026 reporting
Enhance PMAs
Model improvements
Recovery processes
Climate integration
Key Dates
30 September 2025- PRA issues Dear CFO Letter with thematic feedback.
2025- Auditor reports reviewed by PRA (basis for this feedback).
2026- Next round of written auditor reporting on firms' progress against areas of focus, including data aggregation and securitisation impacts; firms encouraged to self-assess now.
Compliance Impact
Urgency: High – Persistent issues from prior years (e.g., 2024 feedback) indicate elevated model risk in uncertain conditions could lead to PRA scrutiny, auditor findings, or enforcement if unaddressed; 2026 auditor reports will benchmark progress, risking heightened supervision. Matters for prudential stability as ECL underpins capital requirements.
The PRA's CP21/25 proposes deletion of 37 banking regulatory reporting templates—primarily 34 FINREP templates representing approximately one-third of all FINREP collections—as the first phase of its Future Banking Data (FBD) programme. This initiative aims to reduce annual reporting burden by approximately £26 million while maintaining supervisory effectiveness by eliminating duplicative, outdated, or low-value data collections.
What Changed
The PRA proposes the following regulatory deletions:
*FINREP Template Deletions:**
Permanent deletion of 34 whole FINREP reporting templates (approximately one-third of all FINREP collections)
Consolidation of remaining FINREP requirements within a single section of the PRA Rulebook
Clarification of scoping conditions where current provisions are unclear, duplicative, or inconsistently applied
Alignment of reporting remittance dates for FINREP reporting
*Other Template Deletions:**
Two COREP templates: C05.01 (Transitional Provisions) and C05.02 (Grandfathered Instruments)
PRA109...
What You Need To Do
*Cease reporting on the 37 deleted templates effective 31 December 2025
*Update internal systems and processes to remove validation rules and submission workflows for deleted templates
*Revise compliance calendars to reflect aligned FINREP reporting remittance dates
*Review Pillar 3 disclosure obligations to identify any continued requirements based on deleted FINREP templates and assess whether disclosure obligations remain despite template deletion
*Implement rulebook changes reflecting consolidation of FINREP scoping provisions into the PRA Rulebook
Key Dates
September 2025- CP21/25 consultation paper published
31 December 2025- Proposed implementation date to avoid firms submitting 2025 Q4 data for deleted templates
8 December 2025- PS27/25 (Policy Statement) published, confirming final policy