We’re inviting applications from senior practitioners at smaller regulated firms in the general insurance and consumer credit sectors to join the panel. The Smaller Business Practitioner Panel provides independent advice and challenge from the perspective of smaller firms, helping to shape our work at a time of significant change in UK financial services regulation.Its key remit is to provide input to the FCA from the industry to help us meet our strategic and operational objectives from a sm...
InsuranceAll Firms
Policy statement 14/26
PRA Policy Statement PS14/26 finalises the restatement of CRR definitions into the PRA Rulebook Glossary, with consequential amendments across other Rulebook Parts and updates to SS15/13 on groups. For compliance teams, the key issue is transition planning: the remaining CRR definitions are being moved out of the CRR framework, and firms must ensure their policies, capital documentation, systems, and references align with the PRA Rulebook versions before the repeal of CRR Articles 4–5 takes effect on 1 January 2027.
What Changed
- - The PRA has finalised new and restated PRA Rulebook Glossary definitions that replace the CRR definitions previously found in Articles 4, 4A, 4B and 5 for PRA Rulebook purposes.
- The PRA has made consequential amendments across other Parts of the PRA Rulebook to align internal cross-references and terminology with the new glossary structure.
- The PRA has updated Supervisory Statement SS15/13 – Groups to reflect the transfer of CRR definitions into the PRA Rulebook framework.
- The PRA has stated that the vast majority of definitions are restated without substantive policy change, but some definitions were clarified for drafting consistency and readability.
- HM Treasury has set the legislative timetable so that the relevant CRR Articles 4–5 will be revoked from 1 January 2027, while the statutory restatement of selected definitions was made in April 2026.
Suggested Considerations
- Review all internal policies, manuals, and regulatory interpretation documents that currently cite CRR Articles 4, 4A, 4B, or 5 and replace those references with the corresponding PRA Rulebook Glossary definitions.
- Update capital adequacy, prudential reporting, and risk management systems to use the new PRA Rulebook terminology where definitions have moved from the CRR text.
- Reconcile group supervision materials, governance papers, and consolidation analyses against the revised SS15/13 wording to ensure group structures are assessed using the updated definitions.
- Map every affected business line and legal entity to determine which Rulebook Parts and counterparties rely on the transferred CRR definitions.
- Test template agreements, customer disclosures, and internal controls for terminology drift where contractual drafting depends on CRR-defined concepts.
Key Dates
- HM Treasury published its Policy Update on applying the FSMA model of regulation to the UK CRR and proposed revoking the remaining CRR provisions while restating only necessary definitions
- PRA published CP19/25 proposing the transfer of CRR definitions into the PRA Rulebook Glossary and consequential amendments across the Rulebook
- PRA published earlier final policy work on CRR restatement and related implementation measures, indicating the wider restatement programme was already underway
- HM Treasury published a policy update confirming it would proceed largely as consulted on, with a change to the statutory definition of “securitisation” for consistency with PRA Basel 3.1 rules
- The commencement statutory instrument revoking CRR Articles 4–5 was made, with effect from 1 January 2027
Compliance Impact
The compliance impact is moderate to high because this is a definitional restatement rather than a wholesale policy rewrite, but it affects the legal basis of many prudential references and could create misstatement risk if firms continue to rely on revoked CRR text after 1 January 2027. Non-compliance may lead to inaccurate capital, governance, or perimeter analysis, and could trigger supervisory findings where firms have not updated systems, documentation, or controls to the new Rulebook structure.
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
BankAsset ManagerBroker Dealer Why frontier AI matters for firmsArtificial intelligence (AI) continues to evolve rapidly. Frontier AI models represent a step-change in capability, with significant implications for cyber security and operational resilience.The cyber capabilities of current frontier AI models are already exceeding what a skilled practitioner could achieve, and at a significantly higher speed, greater scale, and lower cost. These capabilities, if used maliciously, amplify cyber threats to firms’ safety and so...
Bank
Speech by Sarah Pritchard, deputy chief executive, at the Investment Association's Private Markets Summit 2026. Headlines are always a tough read when funds run into difficulty.And lately, the language has been stark.Some have even asked if private credit has a canary in the coal mine.That’ll make you sit up a bit straighter, won’t it?But in this moment, it’s important to remember that stress in markets is normal – and okay, as long as the system stays resilient.Private markets, done well, ca...
All Firms
Kingscrown Finance Limited (Kingscrown) has stopped onboarding new customers or undertaking new business with existing customers – including extending existing credit. Kingscrown, which was incorporated in 2014, provides lending for business and investment purposes, including property investment, buy-to-let and house in multiple occupation (HMO) finance.The voluntary restrictions on Kingscrown’s business came into effect on 21 April 2026. Kingscrown has never been authorised by or registered ...
All Firms
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.
Bank
The FCA Board appoints new members to decision-making committee. The Board of the FCA has appointed Jonathan Peddie and Raymond Cox KC as new members of the FCA’s Regulatory Decisions Committee (RDC).The RDC is responsible for taking certain regulatory decisions on behalf of the FCA relating to contested enforcement action. Committee members bring a broad range of professional experience to support fair, independent and evidence-based decision-making.Alison Potter, the chair of the RDC, said:...
All Firms
The FCA has led international action to stop illegal finfluencers putting consumers' money at risk. Seventeen regulators worldwide took part in the 'week of action' which included enforcement activity, consumer awareness campaigns, and educational programmes for finfluencers who want to act responsibly. Activity started on 20 April 2026.In the UK, the FCA:Secured a guilty plea from Geordie Shore’s Aaron Chalmers for illegal promotions on social media. Criminal proceedings have been commenced ...
All Firms
Firms willbenefitfromreduced costs andgreater flexibility, andfind it easier tocomply with the Senior Managers and Certification Regime (SM&CR),following reformsset outon 22 April by theFCA and Prudential Regulation Authority (PRA). The changes, which come as the first phase of a multi-stage package of reform from the Government and regulators, will maintain the core principle of senior leader accountability, and will benefit firms by:Giving more time to submit senior manager applications whe...
All Firms
The PRA and FCA have set out reforms to the Senior Managers and Certification Regime, designed to reduce costs and offer greater flexibility.
All Firms
Policy statement 12/26
All Firms
Help shape financial regulation from the perspective of consumers. We are recruiting 2 new members to the Financial Services Consumer Panel, an independent statutory panel that represents the interests of consumers of financial services to the FCA.Panel members provide constructive challenge and expert advice to help ensure the consumer perspective is fully embedded in the FCA’s policy development and implementation. Members engage regularly with senior FCA colleagues, including the chair, ch...
Asset ManagerWealth ManagerBank Given at Columbia University, New York
BankAsset ManagerWealth Manager
The Bank of England has today published new and updated guidance on how the Bank might implement the UK’s resolution regime in the event of a bank failure.
The Bank of England (BoE) has published updated operational guides on implementing the UK's resolution regime for failing banks, including new details on transfer resolutions and an alternate bail-in approach using non-transferable contingent beneficial interests, informed by recent failures like Silicon Valley Bank and Credit Suisse. This matters for compliance professionals as it enhances transparency on BoE execution strategies, strengthens cross-border resolvability (e.g., via a US SEC No-Action Letter), and requires firms to align recovery/resolution plans with these operational clarifications to ensure feasibility and credibility under the Resolvability Assessment Framework (RAF).[BoE News Release](https://www.bankofengland.co.uk/news/2026/april/boe-enhances-resolution-readiness-with-updated-operational-guides)
What Changed
- - New Operational Guide to Transfer Resolution: Details BoE's execution of transfers to private sector purchasers or temporary bridge banks, including recapitalisation payments and use of resolution...
- Updates to Operational Guide to Bail-in Resolution: Introduces an alternate approach where affected creditors receive non-transferable contingent beneficial interests (simplifying bail-in by...
- US SEC No-Action Letter: Confirms non-transferable contingent beneficial interests for US investors need no SEC registration, aiding cross-border bail-in operability.[BoE News...
Suggested Considerations
- Assess resolvability: Major firms perform and disclose self-assessments under RAF; address identified barriers or face BoE powers to mandate fixes.
- Enhance capabilities: Implement MREL, operational continuity in resolution (OCIR), and Single Customer View for deposits; prepare for recapitalisation or non-transferable interests in bail-in.
- Cross-border coordination: US-exposed firms leverage SEC No-Action Letter for bail-in planning; engage BoE on international strategies.[BoE News Release](https://www.bankofengland.co.uk/news/2026/april/boe-enhances-resolution-readiness-with-updated-operational-guides)
- Monitor thresholds: Notify BoE/PRA if approaching £25bn assets or account thresholds.
Key Dates
- Firms must maintain resolution packs and MREL compliance; bail-in firms have at least **6 years** (plus up to 2-year extension) to meet end-state MREL, and **minimum 18 months** for additional resolvability requirements
- Modified insolvency firms forecasting £25bn assets or transactional account thresholds within 3 years must inform BoE/PRA
Compliance Impact
Urgency: High - This is guidance, not new rules, but directly impacts resolution plan credibility and RAF assessments, with potential supervisory/enforcement actions for non-alignment (e.g., MREL shortfalls or unresolved barriers). Firms must act proactively to avoid heightened BoE scrutiny, especially post-SVB/Credit Suisse lessons emphasizing bail-in effectiveness and no public fund reliance.
AI-generated analysis. May contain errors or omissions — verify with the
original BoE source
before acting. Full disclaimer.
BankPayment ProviderAll Firms
On 3 March 2026, we said we’d bring forward our planned review of the UK Listing Rules for Investment entities, including how they apply to board independence and related party provisions.Since then, there has been substantial debate over our role in relation to investment trusts, including calls for us to ‘get to grips’ with voting rules ‘that allow a minority shareholder to repeatedly attack an investment trust’.Much of this debate suggests there are misunderstandings about how investment t...
This FCA blog post announces an accelerated review of UK Listing Rules for investment entities, focusing on board independence, related party provisions, conflicts of interest, and shareholder rights amid debates over activist minority shareholders targeting investment trusts. It matters because it clarifies the FCA's limited role (rules apply to issuers, not shareholders), reinforces Companies Act protections, and signals upcoming proposals to ensure rules fit novel scenarios like concentrated ownership, potentially impacting governance and listing compliance for investment trusts.[FCA blog]
What Changed
- No immediate regulatory changes or new requirements are introduced; this is a consultation precursor outlining a planned review. The review will assess:
- Application of Listing Rules to board independence and related party transactions for investment entities.
- How rules, alongside company law, support shareholder rights, engagement, and conflict management (e.g., protecting against "back door takeovers" by minority activists like Saba).
Proposals will be...
Suggested Considerations
- Monitor and engage: Investment trust boards/managers should track the upcoming consultation (expected end-2026) and consider submitting responses on board independence, conflicts, and shareholder protections.[FCA blog]
- Review governance: Assess articles of association for voting enhancements (e.g., electronic voting, opt-ins) and ensure boards understand powers to challenge vexatious requisitions under Companies Act.[FCA blog]
- Enhance shareholder engagement: Platforms and intermediaries to digitize voting processes; firms to promote high turnout (recently >80%) and clear information on director nominations.[FCA blog]
- Conflict checks: Proactively manage related party issues and concentrated ownership risks in line with current Listing Rules, anticipating review focus.
Key Dates
- FCA to complete review and publish consultation paper with proposals.[FCA blog]
- FCA announces acceleration of planned Listing Rules review for investment entities.[FCA blog]
Compliance Impact
Urgency: Medium. This signals future changes via consultation but imposes no immediate obligations; however, it heightens scrutiny on investment trust governance amid activist pressures, risking enforcement if conflicts or independence lapses occur pre-review. Matters for compliance teams to audit current setups against Listing Rules and Companies Act, avoiding missteps in high-profile cases like Saba campaigns, while preparing for end-2026 proposals that could tighten related party and board rules.[FCA blog]
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
Asset ManagerAll Firms
Supervisory Statement 9/17
**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...
Suggested Considerations
- *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
- Proposed implementation date for superseding SS18/13 (achieved with December 2017 publication)
- PRA consultation deadline for CP9/17 (the consultation paper preceding this statement)
- SS9/17 first published and became effective
- 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"
Compliance Impact
Urgency: HIGH
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
BankAll Firms
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.
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), Large Exposures rules...
Suggested Considerations
- 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 2.1/2.3), and notification obligations.
- Enhance governance controls for integrity (Fundamental Rule 1), including document fabrication prevention, timely solvency disclosures (Fundamental Rule 7), and prudent management (Fundamental Rule 3).
- 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
22 May 2024; Period of identified breaches, including capital non-compliance, misleading submissions, and large exposure failures
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.
AI-generated analysis. May contain errors or omissions — verify with the
original BoE source
before acting. Full disclaimer.
BankFintech
We have opened an enforcement investigation into Market Financial Solutions Limited (MFS). MFS is an Annex 1 business, which is solely registered with and supervised by us for its compliance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.Annex 1 registered firms are not authorised or subject to wider FCA regulation.MFS entered administration on 25 February 2026.
The FCA has opened an enforcement investigation into Market Financial Solutions Limited (MFS) following the firm's entry into administration on 25 February 2026, amid allegations of serious financial irregularities, fraud, and double-pledging of collateral. This investigation is significant because it represents regulatory scrutiny of an Annex 1 business—a firm with limited FCA oversight—whose collapse exposed structural weaknesses in private credit markets and raised questions about due diligence practices across the financial sector.
What Changed
- The FCA's enforcement investigation does not introduce new regulatory requirements but rather represents the regulator's response to alleged breaches of existing obligations.
- Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017: MFS's primary regulatory obligation as an Annex 1 registered firm.
Suggested Considerations
- *For MFS and its Administrators:
- Cooperate fully with the FCA enforcement investigation
- Preserve all documentation related to AML/CTF compliance, customer due diligence, and transaction monitoring
- Provide access to bank accounts, transaction records, and compliance files to investigators
- Respond to FCA information requests within specified timeframes
Key Dates
- MFS entered administration
- FCA enforcement investigation opened (current date context)
for investigation completion or enforcement action
Compliance Impact
Urgency: CRITICAL
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
BankAll Firms
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)
All Firms
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...
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 on how the...
Suggested Considerations
- *Immediate Operational Priorities (Pre-May 2026):
- *Governance and Accountability
- Appoint senior managers with explicit accountability for complaints handling and redress programmes
- Establish board-level oversight structures with regular reporting on complaints volumes, redress calculations, and regulatory compliance
- Document decision-making frameworks for complaint eligibility and dismissal grounds
Key Dates
- Consumers expected to begin receiving compensation under motor finance scheme
- FCA expected to publish final rules and guidance for motor finance redress scheme, confirming scope, calculation methodologies, and timescales
- Complaints pause lifts for DCA-related motor finance complaints; standard 8-week response deadline resumes
2026 onwards; - Motor finance compensation payments anticipated to commence
Compliance Impact
Urgency: CRITICAL
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
BankFintechPayment Provider The Prudential Regulation Authority (PRA) has imposed a financial penalty of £10,625,000 on U K Insurance Limited (UKI Limited) in connection with a miscalculation of their Solvency II balance sheet during 2023 and 2024.
The PRA fined U K Insurance Limited (UKI Limited) £10.625 million (reduced from £21.25 million via 50% Early Account Scheme discount) for breaching Solvency II reporting rules due to a miscalculation overstating its solvency balance sheet in 2023-2024, stemming from ineffective controls and resourcing in finance/actuarial functions. This landmark case highlights PRA's emphasis on accurate prudential reporting and rewards early self-reporting/cooperation, signaling heightened enforcement scrutiny on insurers' control frameworks. It matters as it demonstrates PRA's use of the EAS for efficiency and underscores risks of control failures undermining supervisory effectiveness.
What Changed
- No new regulatory rules or requirements are introduced; this is an enforcement action applying existing PRA rules. Key breaches include:
- PRA Fundamental Rule 6: Failure to organise/control affairs responsibly/effectively due to ineffective preventative/detective controls and resourcing issues.
- Notifications Rule 6.1: Information to PRA not factually accurate or complete.
- Reporting Rules 2.4 and 3.2: Submissions lacked completeness, reliability, and compliance with SFCR structure/principles.
This is the first EAS application, per PRA's enforcement approach (pages...
Suggested Considerations
- Conduct control reviews: Assess finance/actuarial functions for preventative/detective control gaps, resourcing adequacy, and documentation (e.g., double-counting risks in Solvency II balance sheets).
- Test reporting accuracy: Validate Solvency II submissions (e.g., SFCR, SCR Coverage Ratio) against Rules 6.1, 2.4, 3.2; ensure factual accuracy, completeness, and reliability.
- Leverage EAS: Self-report errors early, provide candid root-cause analyses, and make admissions to qualify for penalty discounts.
- Remediate proactively: Invest in control enhancements, as UKI did post-identification; align with PRA 2026 priorities on data quality, internal models, and operational resilience.
- Document governance: Address longstanding resourcing concerns, per PRA's 2023 PSM letter risks.
Key Dates
2024; Relevant period of miscalculation and breaches
Firm notified PRA of error with preliminary root cause analysis
Public disclosure via Regulatory News Service on SCR Coverage Ratio impact
Aviva acquired DLG/UKI Limited (events pre-date)
PRA issued Final Notice and imposed penalty
Compliance Impact
Urgency: High – This enforcement validates PRA's zero-tolerance for solvency misreporting, risking supervisory misjudgment and policyholder threats; firms face similar fines without EAS discounts. It amplifies 2026 priorities on internal models, data quality, and controls amid softening markets/BPA pressures, demanding immediate control audits to avoid escalation.
AI-generated analysis. May contain errors or omissions — verify with the
original BoE source
before acting. Full disclaimer.
InsuranceAll Firms
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...
BankInsurance
We'd also streamline the scheme, so millions get compensation in 2026. We're considering over 1,000 responses to our proposals for a compensation scheme for motor finance customers who were treated unfairly.If we proceed with a scheme, we are likely to make several changes. If we do go ahead, we expect to publish final rules in late March. The timing of publication will be outside market hours and we'll confirm the date in advance. Final decisions on the scheme have not yet been made. But to ...
The FCA is implementing a **streamlined motor finance compensation scheme** to address unfair commission disclosure practices, with final rules expected in late March 2026 and scheme launch in early 2026. This represents a major regulatory intervention affecting approximately 14 million motor finance agreements with estimated total redress costs of £8.2 billion, requiring immediate operational preparation by all lenders and finance providers.
What Changed
- The FCA's streamlined approach introduces several material modifications to the original compensation scheme proposal:
Process Streamlining
- Automatic opt-in for prior complainants: Customers who complained before scheme launch will no longer be asked to opt out.
- Immediate acceptance of offers: Consumers can accept redress offers immediately rather than waiting for final determinations.
- Flexible communication channels: Firms are no longer required to use recorded delivery; alternative channels with fraud safeguards are permitted.
Implementation Timeline
- Three-month standard implementation period from scheme launch, with up to five months for older agreements to allow adequate data review and calculation accuracy.
Suggested Considerations
- *Immediate Priorities (Q1 2026):
- *Data Integrity Assessment: Conduct comprehensive audit of historic motor finance agreements to identify eligible customers and validate transactional data completeness, particularly for older agreements.
- *Redress Calculator Development: Build auditable, validated redress calculators capable of:
- Repricing loans based on proposed APR reductions
- Calculating compensatory interest at BoE base rate + 1%
Key Dates
– Scheme implementation begins (exact date dependent on final rules publication)
– FCA to publish final scheme rules (timing to be confirmed in advance, outside market hours)
– Motor finance complaints handling pause lifts; firms must be ready to respond to complaints outside the scheme
– Record retention deadline for all relevant scheme documentation
– Standard implementation period for lenders to contact prior complainants and provide compensation notifications
Compliance Impact
Urgency: CRITICAL
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
BankFintechAll Firms
We are bringing forward a review of some aspects of the UK Listing Rules to consider how they apply to specific types of investment entities. As part of the Primary Markets EffectivenessReviewwe explored which types of investment entities could be eligible to be listed. Since introducing the new listingruleswe have heard from stakeholders that these eligibility criteria, particularlyregardingrisk-spreading, may be unduly restrictive. We will use this review to assess if changes should be made...
The FCA is conducting a targeted review of UK Listing Rules applicable to investment entities, with particular focus on whether current risk-spreading eligibility criteria are unduly restrictive and how rules support shareholder rights and conflict management. This review represents a potential material shift in listing accessibility for alternative investment funds and closed-ended investment vehicles, with final proposals expected by end-2026.
What Changed
The FCA's review addresses three primary areas:
Risk-Spreading Eligibility Criteria
Stakeholders have flagged that current risk-spreading requirements in the new listing rules may be overly restrictive for certain investment entity types. The FCA will assess whether modifications are warranted to broaden eligibility for investment entities seeking primary market access.
Shareholder Rights and Board Governance
The review will examine how listing rules, in conjunction with company law, ensure boards adequately support shareholder rights, facilitate shareholder engagement, and manage conflicts...
Suggested Considerations
- *Immediate (Q1 2026):
- *Monitor FCA consultation announcements for publication of the consultation paper on listing rules modifications
- *Assess current compliance posture against existing risk-spreading criteria to identify potential gaps or restrictive elements
- *Document shareholder engagement frameworks and conflict-of-interest management procedures to prepare for governance review
- *During consultation period:
Key Dates
- FCA to complete review and issue final rules
- Consultation paper publication (FCA indicates "proposals in a consultation paper" without specific date, but typical FCA consultation windows are 8-12 weeks)
- Final rules expected following consultation period
Compliance Impact
Urgency: HIGH
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
Asset ManagerHedge Fund
Given at the Monetary Policy Mandate Conference at Norges Bank, Oslo
BankAsset ManagerWealth Manager
We have signed a Memorandum of Understanding (MoU) with the Independent Football Regulator (IFR). The MoU establishes how the 2 organisations will work together and support effective regulation where football and financial services intersect.It also sets out a high-level framework for principles for cooperation between the IFR and the FCA.Read the MoU (PDF)
The FCA has signed a Memorandum of Understanding (MoU) with the newly established Independent Football Regulator (IFR) to define cooperation on regulating intersections between football clubs and financial services, such as ownership suitability, licensing, and financial sustainability. This matters for compliance professionals as it formalizes information sharing and joint oversight, potentially impacting firms involved in football-related financing, investments, or consumer credit products tied to sports. It supports the Football Governance Act 2025 framework, enhancing regulatory alignment where financial misconduct could affect club operations.[https://www.fca.org.uk/news/statements/mou-independent-football-regulator-fca]
What Changed
- - Establishes a high-level framework of principles for cooperation between FCA and IFR, focusing on effective regulation at the football-financial services nexus.
- Outlines how the organizations will work together, including information sharing on matters like club owners' financial dealings, licensing compliance, and enforcement where financial services...
- Builds on prior MoUs (e.g., FCA-UKGC models) by addressing regulatory overlaps, with IFR gaining powers for investigations, enforcement sanctions, and revenue distribution resolutions under the...
Suggested Considerations
- Review and map exposures: Firms should assess football-related client portfolios for IFR overlap (e.g., loans to clubs, owner financing) and prepare for dual FCA-IFR scrutiny.
- Enhance information sharing protocols: Update compliance policies to respond promptly to IFR requests for data on regulated activities (e.g., under IFR's clause 65 powers), mirroring FCA's existing MoU frameworks.[https://www.fca.org.uk/news/statements/mou-independent-football-regulator-fca]
- Incorporate IFR factors in due diligence: For owner suitability, align with IFR tests (fit/proper custodians, resource adequacy); flag potential divestment risks in advisory services.
- Monitor joint enforcement: Participate in escalation procedures if disputes arise, ensuring internal records of regulatory remit discussions.
Key Dates
Football Governance Act 2025 enactment; Establishes IFR statutory powers, including provisional/full club licensing from this date onward
IFR licensing rollout; Clubs transition from provisional to full licenses once threshold conditions (e.g., financial resources, owner suitability) met; no fixed end-date
Compliance Impact
Urgency: Medium – This MoU does not impose new binding rules or deadlines but signals heightened cross-regulator focus on football finances post-Football Governance Act 2025, risking enforcement overlaps or info requests. It matters for firms with niche exposures (e.g., sports financing) to avoid gaps in owner due diligence or financial promotions, potentially amplifying AML/conduct risks amid IFR's divestment powers.
AI-generated analysis. May contain errors or omissions — verify with the
original FCA source
before acting. Full disclaimer.
BankFintechPayment Provider
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...
BankWealth ManagerAll Firms
Policy and guidance
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...
- 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 consumer protection or adverse effects on integrity/competition objectives; (2) Events might not have occurred (or...
Suggested Considerations
- Monitor for triggering events: Firms should self-assess operations against the two-part test, particularly potential consumer detriment exceeding £45m/£210m thresholds or impacts on FCA objectives.
- Enhance internal reviews: Conduct "lessons learned" exercises post-incident to align with FCA's non-statutory approach, reducing escalation risk to formal probes.
- No direct firm obligations: This is FCA policy on self-investigation; firms face no new reporting or compliance mandates but should prepare for FCA enquiries if events suggest regulatory system failures.
- Document qualitative factors (e.g., vulnerability) in risk assessments to contextualize detriment.
Key Dates
- 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.
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original FCA source
before acting. Full disclaimer.
Asset ManagerBankInsurance Policy statements
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,...
- 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...
- Managerial accountability: Relative to knowledge/authority under ICR2; no expansion into purely private life.
- Minor tweaks from CP25/18 feedback: New diagrams, employment law alignment, withdrawn burdensome factors.
Suggested Considerations
- 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.g., non-bank alignment); document decision-making to demonstrate fairness/decisiveness.
- Firms not to investigate trivial/improbable allegations or overstep privacy laws.
Key Dates
- New COCON rules and guidance come into force (non-retrospective)
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.
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Asset ManagerBankInsurance Policy statement 1/26
PS1/26 represents the UK Prudential Regulation Authority's final implementation framework for the Basel 3.1 international banking standards, effective 1 January 2027 (with market risk internal models delayed to 1 January 2028). This policy statement establishes mandatory capital, credit risk, operational risk, and market risk requirements for UK-regulated banks, building societies, and investment firms, addressing post-financial crisis shortcomings in risk-weighted asset (RWA) calculations and capital adequacy frameworks.
What Changed
- Credit Risk Framework
- Implementation of restrictions on Internal Ratings-Based (IRB) approach scope, effective 1 January 2027, with firms required to reclassify certain exposures (e.g., slotting approach IPRE exposures)...
- Minor clarifications and amendments to the Standardised Approach and credit risk mitigation techniques.
Operational Risk
- Updated Business Indicator Component (BIC) calculation methodology requiring inclusion of the current financial year in the three-year average calculation (or an estimate if unavailable).
- Clarifications on legal risk treatment and loss data set dates.
Market Risk (Fundamental Review of the Trading Book – FRTB)
Suggested Considerations
- *Immediate (by mid-2026)
- *Conduct impact assessment: Quantify RWA changes under Basel 3.1 across credit risk, operational risk, and market risk frameworks.
- *Review IRB permissions: Identify exposures requiring reclassification (e.g., IPRE to HVCRE) and prepare permission amendment applications.
- *Assess FRTB-IMA readiness: For firms with existing IMA permissions, evaluate transition strategy for out-of-scope positions moving to ASA/SSA during interim period (2027–2027).
- *Arrange board-level assurance: Establish governance framework for board oversight of RWA calculation accuracy and Basel 3.1 implementation.
Key Dates
– PRA publishes PS1/26 (final rules)
– Must include Basel 3.1/SDDT impact assessment
– Effective date for Basel 3.1 implementation (credit risk, operational risk, reporting/disclosure, IRB scope restrictions, SDDT regime)
– Interim period begins for FRTB-IMA transition; existing IMA permissions retained; out-of-scope positions move to ASA/SSA
– FRTB-IMA implementation effective date
Compliance Impact
Urgency: HIGH
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The Prudential Regulation Authority (PRA) has published the final rules for the implementation of Basel 3.1 standards in the UK, with an effective date of January 1, 2027. The rules aim to enhance the resilience of banks and improve the stability of the financial system. Firms must review and update their policies and procedures to ensure compliance with the new requirements.
What Changed
The PRA has introduced new rules for the calculation of risk-weighted assets, including changes to the credit risk standardised approach, market risk framework, and operational risk requirements. The rules also include amendments to the definitions of probability of default, loss given default, and conversion factor.
Suggested Considerations
- Review and update credit risk policies and procedures to ensure compliance with the new standardised approach
- Assess the impact of the new market risk framework on trading book positions and capital requirements
- Update operational risk management frameworks to reflect changes to the Business Indicator and subcomponents
Key Dates
Basel 3.1 rules take effect
Internal model approach for market risk takes effect
Potential Consequences
Non-compliance with the new rules may result in enforcement action, fines, or other regulatory penalties
Related Regulations
Basel 3.1Capital Requirements Regulation (CRR)Financial Services and Markets Act (FSMA) 2023
Confidence: high
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BankBroker DealerAsset Manager
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...
Wealth ManagerAll Firms
Letter to Chief Executive Officers of PRA regulated international banks active in the UK
BankWealth Manager
Given at King’s College London
BankWealth ManagerAll Firms
We stand in full solidarity with the Federal Reserve System and its Chair Jerome H. Powell.
BankAsset ManagerWealth Manager
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...
BankBroker DealerAsset Manager
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...
BankWealth ManagerAll Firms
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.
BankAsset ManagerWealth Manager
Earlier this year, we undertook a refresh of our Sustainable Finance Advisory Committee. In line with good governance, we planned to refresh the membership on a staggered basis, allowing us to bring in new expertise whilst benefiting from some continuity. Following this process, we are pleased to announce the appointment of two new members to the Committee:Elly Dowding, Director of ESG AccordFarnam Bidgoli, Independent AdviserThese appointments reflect our commitment to drawing on diverse exp...
Asset ManagerWealth ManagerAll Firms
With over 20 years’ experience and responsibility for supervising 5,000 firms, I know that when an issue arises, the first question is often: 'What action will you take?'That’s a fair question – enforcement is one of the most visible ways we act. It often grabs headlines with big fines and publicity.But our role as supervisors is to exercise judgement - selecting the right tool to achieve the best and fastest outcomes for consumers and markets.While enforcement is a vital part of the kit, it’...
This FCA blog post outlines the regulator's supervisory "toolkit" for addressing consumer harm, emphasizing proactive supervision over enforcement to achieve faster outcomes like redress and market-wide improvements. It matters because it signals FCA's preference for swift, non-enforcement interventions (e.g., skilled person reviews, voluntary requirements), urging firms to respond promptly to supervisory feedback to avoid escalation. Compliance teams should view this as a reminder to prioritize Consumer Duty compliance, as supervision tools are increasingly tied to it for rapid harm prevention.
What Changed
- No new rules or requirements are introduced; this is a supervisory strategy update highlighting FCA's full range of tools beyond enforcement. Key emphases include:
- Prioritizing supervision for quick fixes, such as multi-firm reviews, good/poor practice guidance, and skilled person reviews (s.166) under FSMA.
- Integration of Consumer Duty (Principle 12) as a core principle for assessing and remedying poor outcomes, e.g., unclear policy renewals or inadequate support.
- Examples from insurance (e.g., stolen vehicle claims yielding £200m redress; home emergency cover improvements reducing complaints by 61%).
Suggested Considerations
- Embed proactive monitoring: Regularly review customer outcomes under Consumer Duty, acting on foreseeable harm (e.g., communication barriers, vulnerable customer support).
- Respond swiftly to FCA contact: Engage with supervision teams on identified issues; prepare for tools like skilled person reviews or voluntary restrictions.
- Improve practices market-wide: Use FCA guidance (e.g., good/poor examples) to self-assess; ensure clear information, fair value, and accessible support.
- Evidence compliance: Map business to Consumer Duty, monitor biases, and demonstrate senior manager oversight via SM&CR.
- Facilitate redress: Identify and pay compensation promptly when issues arise, as seen in FCA interventions (£200m vehicle claims; £350k home insurance).
Compliance Impact
Urgency: Medium – This reinforces existing obligations under Consumer Duty and Principles, but underscores risk of supervisory escalation if firms ignore early warnings. It matters because FCA prioritizes speed (supervision over enforcement), enabling quick harm fixes but exposing non-responsive firms to s.166 reviews (costly, used 20+ times in insurance since 2022) or restrictions, impacting reputation and finances. Firms with consumer-facing products must audit processes now to align with "good outcomes" expectations.
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original FCA source
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InsuranceAll Firms
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...
BankWealth ManagerAll Firms
David Roberts has been reappointed as Chair of the Court of the Bank of England by His Majesty the King
BankWealth Manager
Policy statement 26/25
The Prudential Regulation Authority (PRA) has issued PS26/25, finalizing the withdrawal of Supervisory Statement (SS) 20/15, which previously set prescriptive expectations for building societies' treasury and lending activities, effective immediately upon publication on 5 December 2025. This deregulatory move reduces administrative burdens, enhances proportionality across deposit takers, and promotes competition by aligning building societies more closely with banks, while relying on existing tools like the PRA Rulebook, SMCR, and routine supervision for risk management. It matters for compliance teams as it eliminates specific guidance often misinterpreted as binding requirements, freeing firms to tailor risk frameworks but requiring vigilance on broader prudential expectations.
What Changed
- - Full deletion of SS20/15: Removes all expectations on treasury and lending activities, including the "Treasury Approaches" framework, without replacement.
- Consequential amendments: Updates SS31/15 (Internal Capital Adequacy Assessment Process and Supervisory Review and Evaluation Process) to excise references to SS20/15.
- Alignment with broader policy: Addresses inconsistencies with PRA's approach for banks, improved sector risk management maturity, and proportionality for smaller firms; supports objectives of safety,...
- No new rules imposed: PRA deems existing tools sufficient, including Building Societies Act 1986 restrictions, PRA Rulebook, SMCR, and supervision; derivatives permitted only for risk management...
Suggested Considerations
- Review and update policies: Building societies must confirm internal treasury/lending frameworks align with remaining requirements (e.g., PRA Rulebook, Building Societies Act 1986, ICAAP/SREP under amended SS31/15); remove any SS20/15-specific references or processes.
- Assess risk management: Evaluate use of derivatives or treasury tools for compliance with non-prescriptive expectations; ensure SMCR accountability and board oversight.
- Update governance documents: Revise ICAAP/SREP processes per SS31/15 amendments; document rationale for tailored approaches to demonstrate proportionality.
- Engage supervisors: No immediate reporting mandated, but proactive dialogue recommended for firms previously on extensions or complex approaches.
- Monitor related reforms: Track Strong and Simple framework (e.g., PS4/26, PS20/25) for SDDT capital/liquidity simplifications referencing this change.
Compliance Impact
Urgency: Medium – Effective immediately (5 December 2025), but deregulatory nature reduces burdens rather than imposing new obligations; critical for year-end 2025/early 2026 planning to avoid legacy SS20/15 misapplication. Matters as it shifts from prescriptive "hard limits" (often treated as rules) to principles-based supervision, enabling flexibility but heightening reliance on firm-specific risk assessments amid PRA's focus on competition and growth; non-compliance risks arise from over-reliance on withdrawn guidance or inadequate tailoring.
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before acting. Full disclaimer.
Bank
Policy statement 25/25
PS25/25 is the PRA's policy statement providing feedback on CP10/25 and issuing updated Supervisory Statement SS5/25, which replaces SS3/19 to enhance banks' and insurers' management of climate-related financial risks through strengthened governance, risk management, scenario analysis, data quality, and disclosures. It matters because it sets a higher regulatory bar for embedding climate risks proportionately into core processes like ICAAP, ILAAP, ORSA, and financial reporting, promoting resilience and strategic decision-making amid evolving climate threats.
What Changed
- The main changes in SS5/25 from SS3/19 and CP10/25 responses include:
- Proportionate application clarification: New 'Overarching aims' section in Chapter 3 explains how firms should tailor expectations to their climate risk exposure, business size, and complexity via a...
- Governance strengthening: Boards and senior management must actively oversee climate risks, embedding them in strategy and ensuring accountability.
- Risk management enhancements: Integrate climate risks into existing frameworks/risk registers (supplementary sub-registers allowed); 'accept, manage, avoid' is suggestive, not mandatory; aligns with...
- Climate scenario analysis (CSA) advancements: Firms must use CSA strategically for decisions; flexibility on number/type of scenarios, reverse stress/sensitivity analysis, and longer horizons...
Suggested Considerations
- Conduct gap analysis against SS5/25 within 6 months and remediate (e.g., update governance, risk frameworks, CSA processes).
- Integrate climate risks into board oversight, strategy, risk registers, ICAAP/ILAAP (banks), ORSA/stress testing (insurers), and financial reporting.
- Perform CSA exercises commensurate with exposures, using suitable scenarios to inform decisions; enhance data quality and disclosures.
- Document proportionate application (two-step process: materiality assessment, risk response); leverage existing structures where robust.
- Ensure senior accountability and alignment with standards like SS1/21.
Key Dates
- PS25/25 and SS5/25 published; SS5/25 effective immediately, replacing SS3/19
- Firms assess gaps against new expectations and develop remediation plans (industry guidance)
- Forward-looking, strategic implementation proportionate to risks; PRA may request progress evidence
Compliance Impact
Urgency: High – Effective immediately (3 Dec 2025), requiring significant uplift to existing approaches; non-compliance risks supervisory scrutiny, as PRA expects ambitious, ongoing progress and may request evidence. Matters for capital/liquidity planning, resilience, and strategic viability amid maturing climate risk landscape.
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original PRA source
before acting. Full disclaimer.
BankInsurance
Supervisory statement 5/25
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,...
- Governance enhancements: Emphasizes board accountability, integration into business strategy, climate risk appetite statements, and linkage to Senior Managers & Certification Regime (SM&CR) without...
- Risk management integration: Requires embedding climate risks into existing frameworks with quantitative metrics/limits where material; detailed mapping of risks (e.g., physical/transition via...
- Scenario analysis: Firms must conduct climate scenario exercises capturing plausible pathways, impacts on capital/liquidity/solvency, with transparent assumptions and management challenge;...
- Data expectations: Critical assessment of data sources/quality (e.g., geographic/sectoral for banks, hazard/vulnerability for insurers); use proxies with documented limitations.
Suggested Considerations
- Conduct materiality assessment of climate risks to scope proportionality (leverage TCFD/CSRD work).
- Embed climate risks in governance: Define risk appetite, update SM&CR responsibilities, ensure board MI/challenge.
- Integrate into risk frameworks: Update risk registers, ICAAP/ILAAP/ORSA/SCR with quantitative metrics, scenarios, and controls; adjust underwriting/pricing/collateral.
- Perform climate scenario analysis: Model impacts on capital/liquidity/solvency using plausible pathways.
- Enhance data: Source/assess granular data (e.g., location/sector/hazards), document proxies/limitations.
Key Dates
Consultation paper CP10/25 issued (feedback incorporated in final policy)
Firms assess gaps against new expectations and develop implementation plans
Publication of PS25/25 and SS5/25; replaces SS3/19 effective immediately
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.
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BankInsurance
Letter from the Chancellor to the Governor
BankWealth ManagerAsset Manager
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’
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. explainability/reliability; prefer simpler models where AI/ML gains are marginal; mitigate overfitting via representative datasets.
- Ongoing monitoring: Increase frequency beyond tier-dependent intervals (e.g., six months may suffice for traditional models but not dynamic AI/ML); define quantitative triggers for re-validation.
Suggested Considerations
- 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.g., explainability vs. performance) and ensure datasets prevent overfitting.
- Revise ongoing monitoring policies for more frequent, quantitative checks on AI/ML (e.g., beyond six months); define degradation triggers, fallback models, and kill switches.
- Participate in PRA initiatives like MRM roundtables or AI Consortium for dialogue; align first/second-line defenses per SS1/23.
Key Dates
- PRA published roundtable summary and slides. https://www.bankofengland.co.uk/prudential-regulation/publication/2025/november/pra-holds-model-risk-management-roundtable-on-ai
22 October 2025; - PRA held CRO roundtable sessions with 21 firms on AI/ML MRM
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
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BankAll Firms
Consultation paper 23/25
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...
- Levy adjustments: Addition of targeted support to FSCS Class 2, Category 2.1 (life distribution/investment intermediation) for both FOS and FSCS levies based on annual eligible income; withdrawal of...
- PRA-FCA joint proposals (Chapter 4): Amended invoice due dates for firms paying £50,000+ in annual FCA/PRA fees ("payments on account") to prevent overdue labels from procedural mismatches.
- Other updates: Removal of £3 agent registration fee for payment institutions, RAISPs, and EMIs; policy tweaks like expanding skilled person reviews for motor finance to more lenders, pro-rating for...
Suggested Considerations
- Review current fee/levy exposure and model impacts of new blocks (e.g., PISCES, targeted support, DPC) and withdrawn FOS changes.
- 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: Factor in new Category 4 fees for A.13 or crypto/DPC registrations.
Key Dates
- Deadline for comments on targeted support proposals (FCA CP25/33 paras 2.11-2.18, questions 3-7)
- Consultation close for all other proposals, including PRA-FCA joint changes; responses to cp25-33@fca.org.uk
- FCA publishes feedback and rules on targeted support in Handbook Notice
- FCA publishes feedback and rules on all other proposals (including Chapter 4) in Handbook Notice; Spring fee-rates consultation
- 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).
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original PRA source
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BankFintechPayment Provider Statement from the Bank of England
BankWealth ManagerAsset Manager
Megan Greene has been reappointed as an external member of the Monetary Policy Committee by the Chancellor of the Exchequer, Rachel Reeves
BankAsset ManagerWealth Manager
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.
BankAsset ManagerWealth Manager
Supervisory statement 31/15
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,...
- 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 the ICAAP process
SREP Assessment Framework
The PRA reviews and evaluates:
- Arrangements, strategies, processes and mechanisms implemented by a firm to comply with regulatory requirements
Suggested Considerations
- *Immediate Compliance Actions
- *Establish ICAAP Framework: Implement a comprehensive ICAAP that covers all material risks identified by the firm and the PRA, including those specific to the firm's business model and risk profile
- *Risk Identification and Assessment: Conduct thorough identification of all material risks (IRRBB, market risk, operational risk, concentration risk, group risk, pension obligations, foreign currency lending) and assess capital adequacy against these risks
- *Stress Testing and Scenario Analysis: Develop and maintain robust stress testing and scenario analysis capabilities, including:
- Results of stress tests carried out in accordance with CRR requirements for firms using IRB approaches or internal models
Key Dates
- SS31/15 first published, replacing PRA SS5/13 and PRA SS6/13
- Effective date for updates to SS31/15 (as referenced in recent amendments)
- Firms must carry out ICAAP on a continuous basis in accordance with PRA ICAA rules
Compliance Impact
Urgency Rating: HIGH
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BankBroker Dealer
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.
BankWealth Manager
Policy statement 21/25
PS21/25 implements reforms to PRA remuneration rules for banks, building societies, and PRA-designated investment firms, simplifying Material Risk Taker (MRT) identification, aligning deferral periods with international standards (4 years for non-SMF MRTs and 5 years for SMFs), and enhancing links to individual accountability under the Senior Managers Regime (SMR). These changes matter as they reduce regulatory burden, increase flexibility in bonus structures (e.g., marginal deferral rates and cash payments), and promote competitiveness while maintaining risk alignment, potentially reversing trends toward higher fixed pay.
What Changed
- - MRT Identification: Simplified quantitative threshold to the top 0.3% of earners (assessed against risk impact); qualitative criteria unchanged; raised proportionality threshold for disapplying...
- Deferral Periods: 4-year minimum for non-SMF MRTs (previously varied); reduced to 5 years for SMFs (from 7 years); aligns with FCA and international practice.
- Deferral Rates: Marginal system—40% deferral on first £660,000 of variable remuneration, 60% above; replaces cliff-edge approach for proportionality.
- Upfront Cash Flexibility: Removed equal cash/instrument split requirement (Remuneration 15.16 deleted); deferred portion should have higher instrument share as good practice (new SS2/17 para 5.44B);...
- Individual Accountability: New rules/expectations for adjusting remuneration up the management chain for adverse outcomes; senior management accountable against PRA priorities; Remuneration...
Suggested Considerations
- Review and update MRT identification processes, applying simplified top 0.3% threshold and new proportionality exemptions.
- Revise remuneration policies for deferral (4/5 years, marginal rates), upfront cash flexibility, and instrument expectations; update bonus award calculations.
- Embed SMR-linked adjustments: Define criteria for chain-wide pay reductions on adverse outcomes; align Remuneration Committee oversight with PRA priorities and risk events.
- For dual-regulated firms: Transition to PRA-cross-referenced FCA rules (SYSC 19D).
- Optional early adoption for specified changes on 2025/unvested awards; document governance for RemCo approvals and board policies.
Key Dates
Preceding joint consultation (CP16/24/PRA, CP24/23/FCA) closed prior to PS
Publication date; some changes (e.g., deferral periods, pro-rata vesting) may apply to ongoing 2025 performance year and unvested prior awards at firm discretion
Final rules and updated SS2/17 take effect; apply to performance years starting after this date (e.g., mandatory from 1 January 2026 for calendar-year firms)
Compliance Impact
Urgency: High – Mandatory from performance years post-16 October 2025 (e.g., 2026 for most), with immediate opt-in possible; impacts 2026 bonus cycles, requiring swift policy rewrites amid year-end planning. Matters due to simplified but ownership-heavy MRT processes, SMR-pay linkages raising accountability risks, and flexibility needing robust justification to avoid supervisory challenge; non-compliance risks enforcement under PRA accountability regimes.
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
BankAsset ManagerAll Firms
Policy statement 16/25
PS16/25 is the PRA's policy statement restating firm-facing organisational requirements from the MiFID Org Reg (e.g., outsourcing, record-keeping, risk management, compliance, internal audit, and governance) into the PRA Rulebook, with no material changes, to align with HMT's revocation of the EU regulation under FSMA 2023. This matters because it ensures continuity of prudential oversight for PRA-authorised firms post-revocation, preventing enforcement gaps in systems and controls while adapting provisions (e.g., supervisory function) to UK governance structures.
What Changed
- - Restatement of requirements: Provisions from MiFID Org Reg Articles on outsourcing, record-keeping, control procedures, risk management, compliance, internal audit, and governance are transferred...
- Supervisory function adjustment: Following consultation feedback, PRA retained Article 25 provisions but substituted "governing body" for "supervisory function" to fit UK firm structures, preserving...
- Technical standards update: Minor amendment to algorithmic trading technical standards, replacing references to revoked MiFID Org Reg Article 23(2) with new PRA Rulebook rule 2.2D.
- No policy or scope changes; adjustments mainly reflect PRA drafting style and respond to feedback for clarity.
Suggested Considerations
- Review and map existing MiFID Org Reg compliance processes against restated PRA Rulebook provisions (e.g., update policies on outsourcing, risk management, governance).
- Confirm governing body oversight aligns with adapted Article 25 requirements; document any adjustments for UK structures.
- Update internal references in algorithmic trading governance documents to new rule 2.2D.
- Conduct gap analysis and training on minor clarifications; prepare for dual FCA/PRA alignment if applicable.
- Monitor HMT commencement order; if delayed, reassess implementation plans.
Key Dates
- PRA publishes PS16/25 with final rules and feedback to CP9/25 consultation
- New PRA rules and technical standards come into force, coinciding with HMT's anticipated revocation of MiFID Org Reg via commencement order (FCA rules align on same date)
- HMT expected to lay second Statutory Instrument revoking remaining MiFID Org Reg provisions; PRA may delay/revoke rules if not made
Compliance Impact
Urgency: High – Firms must act promptly as rules take effect on 23 October 2025 (past deadline as of current date), with no transition period; non-compliance risks enforcement gaps in core systems/controls post-revocation. Impact is low for substance (restatement only) but requires documentation updates to avoid supervisory scrutiny, especially for governance and outsourcing.
AI-generated analysis. May contain errors or omissions — verify with the
original PRA source
before acting. Full disclaimer.
BankBroker DealerAll Firms
Given at the London School of Economics and Political Science
BankWealth ManagerAsset Manager
Given at Britain’s Return to the Gold Standard in 1925 Revisited, Bank of England
BankWealth ManagerAll Firms