UK Regulatory Radar

The FCA has published nine new Regulatory Priority reports for its different sectors. We cover these in the relevant sections below.

Modernising the liquidity policy framework: The PRA is consulting (CP5/26) until 17 June 2026 on five proposals to modernise and boost confidence in the liquidity policy framework for banks and building societies – to ensure that they could monetise liquid assets quickly in a fast-paced stress event, such as that seen in 2023. The proposals would require firms to:

• Assess the composition of liquidity resources
• Prepare a stress scenario with sudden, severe outflows in the initial days of a stress i.e. within 7 days
• Assess frictions to the monetisation of liquidity resources
• Broaden their consideration of monetisation in internal stress testing

Monetisation actions would no longer be reported in PRA110. The PRA also proposes to remove the exemption for Level 1 assets (including sovereign bonds) from the LCR Operational Requirement for monetisation testing, clarify the role of central bank facilities within the prudential liquidity framework and amend guidance on pre-positioned collateral.

Sam Woods, PRA CEO, stressed that the changes are not designed to increase the amount of liquid assets held by banks, but to ensure that the assets they do hold are usable in the event of a run. The final rules will update SS24/15 and relevant sections of the PRA Rulebook, and will be implemented in two phases, the first immediately on publication of the final rules and the second 12 months later.

Updates to resolution reporting and disclosure requirements: The BoE and PRA have finalised a package of updates to the current requirements, intended to reduce regulatory burden and foster growth and competition, while maintaining a robust and credible bank failure regime. These changes follow an earlier announcement that the BoE would delete several resolution reporting templates from 1 April 2026. Key amendments include:

• From 1 April 2026 – the threshold for firms subject to Resolution Assessment Framework (RAF) reporting and disclosure requirements will increase from £50 billion to £100 billion in retail deposits. In addition, Small Domestic Deposit Takers will only be required to review their recovery plans every two years instead of annually. See PS10/26.
• From 1 April 2027 – amendments to the Minimum Requirement for Own Funds and Eligible Liabilities (MREL) reporting to simplify and clarify existing expectations. See PS9/26.
• From 1 April 2027 – modifications to Pillar 3 disclosures to improve the way firms explain their resolvability resources, any limitations on capital distribution and their processes for preparing disclosures. This approach will be proportionate to a firm's size and complexity, ensuring that market participants, customers, and other stakeholders have access to decision-useful information without imposing undue additional burden. See PS11/26.

See also Retail Conduct for the FCA’s priorities for Retail Banking and Mortgages.

See also Operational Resilience for final rules on Operational incident and third-party reporting.

FCA Regulatory Priorities – Insurance: The FCA’s key priorities for the coming year are:

• Improving consumer understanding, claims handling and service quality
• Increasing access to insurance
• Supporting growth and innovation
• Simplifying regulation

Life Insurance Stress Test 2028: The PRA has announced its intention to launch the next Life Insurance Stress Test (LIST) exercise in January 2028, a year later than usual, based on the previous two-yearly cycle. LIST 2025 was a significant step in assessing the resilience of UK life insurers under Solvency UK and involved some firm-level disclosure for the first time. The PRA plans to engage with stakeholders throughout 2026 to gather feedback from LIST 2025 and inform the design and setup of the upcoming 2028 exercise, with further details expected in Q4 2026.

Solvency II Own Funds rules: The PRA is consulting (CP4/26) until 24 April on targeted amendments to the UK Solvency II own funds framework. The proposals aim to reduce regulatory burden, improve clarity and address inconsistencies following the restatement of assimilated EU law into the PRA Rulebook. Key changes include removing permission requirements for equity-accounted subordinated instruments, clarifying expectations for concurrent tender offers and new issuances, making minor corrections to Own Funds Rules and restating relevant EIOPA Guidelines into PRA supervisory statements.

FCA Regulatory Priorities – Wholesale Markets: The FCA’s key priorities for the coming year are:

• Improving the resilience of firms and markets
• Enhancing efficient, competitive, and innovative markets
• Enabling the safe and responsible adoption of new technology
• Preventing financial crime and market abuse
• Ensuring firms effectively manage conflicts of interest and conduct oversight

FCA Regulatory Priorities – Wholesale Buy-Side: The FCA’s key priorities for the coming year are:

• Evolve regulation to foster growth and innovation and serve changing consumer needs
• Deliver good outcomes to consumers
• Reinforce consistent, high standards across private market investing
• Preserve market integrity and resilience to disruption

FCA Regulatory Priorities – Payments: The FCA’s key priorities for the coming year are:

• Preparing for the future to support effective competition, innovation and growth
• Ensuring firms implement the Consumer Duty effectively
• Protecting financial system integrity
• Keeping customers’ money safe

Payments Forward Plan: the Payments Forward Plan, issued by the Payments Vision Delivery Committee, including HM Treasury, the BoE, the FCA and the Payment Systems Regulator, sets out sequenced initiatives across retail and wholesale payments, including digital assets. It is intended to help firms plan ahead and support private sector innovation.

Extending RTGS and CHAPS settlement hours: The BoE has confirmed that it will move the start of CHAPS settlement hours from 0600 to 0130 – the early morning extension (EME) will be put in place in September 2027. Participation in the EME will be optional, providing CHAPS direct participants with the opportunity to send payments during the additional settlement period provided. There will be no changes to the evening contingency window and the BoE is considering a refined proposal for additional bank holiday settlement.

Market review of card scheme and processing fees - proposed directions: The PSR is consulting on remedies to address the lack of competition in the cards market. The consultation takes forward two of the four remedies previously consulted upon. These aim to ensure that acquirers and merchants, through their contractual relationship, receive better information to understand the fees they are charged, and that there is evidence behind the pricing decisions.

Cross-border interchange fees market review: The PSR is inviting comments on its merchant survey draft questionnaire on cross-border interchange fees. The survey aims to gather data on UK merchants' costs for processing online payments from the European Economic Area (EEA) using cards or alternative payment methods. The results will inform a Merchant Indifference Test (MIT) to assess appropriate cross-border interchange fee levels.

Operational incident and third-party reporting: The BoE, PRA and FCA have issued a co-ordinated package of policy and supervisory statements setting out final rules for operational incident and third-party reporting. For operational incidents, the policies clarify the definition of an incident, reporting thresholds and the approach to phased incident reporting, and set out how firms will submit standard or enhanced incident reports. For third-party reporting, the policies clarify the definition of a material third-party (MTP) arrangement, the requirements for notification of new or significant changes to MTP arrangements, and the requirement to maintain a register of MTP arrangements and submit it annually to relevant regulators. 

FCA Regulatory Priorities: Retail Banking: The FCA’s key priorities for the coming year are:

• Access to cash and essential banking services
• Good outcomes from products and services
• Fighting fraud and other financial crime
• Operational resilience and data security

FCA Regulatory Priorities: Mortgages: The FCA’s key priorities for the coming year are:

• Improving consumer outcomes under the Mortgage Rule Review
• Encouraging responsible lending and supporting mortgage borrowers in financial difficulty
• Ensuring the quality of advice

FCA Regulatory Priorities: Consumer Finance: The FCA’s key priorities for the coming year are:

• Consumers can access credit that meets their needs
• Firms support consumers who struggle with debt
• Consumers can complain when things go wrong and get appropriate redress

FCA Regulatory Priorities: Consumer Investments: The FCA’s key priorities for the coming year are:

• Building a stronger investment culture
• Strengthening trust
• Securing good consumer outcomes
• Strengthening financial controls

FCA market study on later life mortgages: The FCA has published the terms of reference for its market study on later life mortgages. The study will consider whether changes are needed to enable the lifetime and retirement interest only (RIO) mortgage sector to better meet consumers’ changing needs, driven by effective competition in the market. The FCA invites feedback on the terms of reference by 17 April, and will provide a further update by the end of the year.

FCA, FOS, HMT updates on modernising the redress system: The FCA and FOS are consulting further (CP26/9) on proposals to improve the way complaints and compensation are handled across the UK financial services sector. The consultation forms part of a broader programme launched following the Chancellor’s Mansion House speech in November 2024, which initiated work to modernise the UK’s redress system. The speech was followed by a joint FCA/FOS call for input and CP25/22 in July 2025. CP26/9 sets out changes that could be implemented within the existing legislative framework ahead of wider statutory reforms, alongside an FCA policy statement finalising elements of CP25/22. In parallel, the government has shared an update on its consultation and set out corresponding areas where it plans to legislate – including to make itself responsible for the appointment of the Chair of the FOS, and to make the appointment of the FOS Chief Ombudsman subject to government approval.

FCA guidance on identifying and rectifying harm: The FCA has published Finalised Guidance FG26/2 setting out good and poor practice on identifying and rectifying harm. It provides practical examples drawn from supervisory experience to help firms understand how to comply with existing rules, guidance and principles when identifying consumer harm and undertaking redress exercises. FG26/2 builds on requirements in the Dispute Resolution: Complaints sourcebook (DISP) and the FCA's Principles for Businesses (PRIN), which expect firms to take reasonable steps to identify and remedy problems caused by their activities. This includes explaining how firms may identify potential consumer harm, assess whether remedial action is required and design redress exercises where appropriate.

FCA motor finance scheme update: The FCA has announced changes to its proposed motor finance compensation scheme. These include giving lenders an implementation period of three months (or five for older agreements), removing the requirement for existing complainants to opt into the scheme, and allowing lenders to communicate the redress decision and amount upon determination. Lenders will also not be mandated to communicate redress offers via recorded delivery, and consumers receiving an offer of redress will be able to accept it immediately, replacing the need for lenders to issue a provisional and final redress determination. These changes will likely be welcomed by lenders as they streamline the scheme proposals and reduce the administrative burden. If the FCA proceeds with a scheme, it will publish final rules in late March.

FCA targeted support authorisations gateway: The FCA has opened its authorisation gateway for firms wishing to provide targeted support ahead of the regime going live on 6 April. Read more in here.

FCA targeted support and segmentation considerations: The FCA has published good and poor practice to help firms to design consumer segments. The examples provided should be helpful as firms tackle some of the trickier aspects of segmentation, such as the characteristics to use and the data to draw on. The FCA expects the FOS to consider this publication when deciding what is fair and reasonable in respect of a complaint.

FCA Regulatory Priorities – Pensions: The FCA’s key priorities for the coming year are:

• Ensuring well-run schemes that provide value for money to savers
• Encouraging effective support for consumers
• Supporting growth and innovation
• Modernising pensions and long-term savings

Pension Schemes Bill - preparing master trusts for the proposed new scale requirements: The Pension Schemes Bill will introduce a requirement for defined contribution master trusts to hold a minimum amount of assets under management (at least £25bn from 2030) in a main scale default arrangement (MSDA), alongside a transition pathway for schemes that need longer to reach scale. TPR has published a statement to encourage trustees to:

• Evaluate their potential to grow to scale
• Develop evidence-based projections
• Review their operational readiness for the challenges and opportunities ahead

Stablecoin regulatory sandbox: The FCA has selected four firms to test stablecoin payments, settlement and trading against its proposed stablecoin regulations within the Regulatory Sandbox. The findings from the testing will help to shape the UK's final stablecoin rules which are expected later in 2026 ahead of the opening of the application gateway for crypto firms in September 2026. This initiative is part of the FCA’s broader work to enable innovation across UK financial services, and complements other initiatives such as the Digital Securities Sandbox (DSS).

UK Sustainability Reporting Standards: The UK government has endorsed the ISSB’s sustainability reporting standards, IFRS S1 and S2, and issued the UK Sustainability Reporting Standards (UK SRS) with limited modifications. The UK SRS build upon the TCFD framework and aim to provide investors and other stakeholders with comparable, decision-useful disclosures. The FCA has also consulted on incorporating the UK SRS into its listing rules from accounting periods beginning 1 January 2027. Final policy is expected in autumn 2026.