UK Regulatory Radar

Enforcement transparency: The FCA has confirmed that it has significantly pared back its proposed approach to increase investigation transparency in response to stakeholder concerns and will maintain the existing approach for regulated and listed firms. Instead it will focus on delivering greater transparency in three areas (i) unauthorised activities investigations, (ii) reactively confirming investigations officially announced by others, and (iii) publishing greater detail of issues under investigation on an anonymous basis. The Enforcement Guide (ENFG) has been updated and streamlined to address duplication, reducing it by over 250 pages. The FCA will maintain its existing approach to consulting on future changes to the ENFG in place of the proposal to only consult when statutorily required.

FCA quarterly consultation 48: The FCA’s latest quarterly consultation paper proposes changes to various elements of the Handbook. Amendments included lifting the ban on retail access to certain cryptoasset exchange traded notes, streamlining the assessment of value (AoV) reporting for authorised fund managers, changes to reporting requirements including removing requirements for the annual general insurance pricing attestation and the submission of disciplinary action nil returns, and amendments to UK EMIR reporting requirements to trade repositories.

Removing reporting and notification requirements: The FCA has confirmed the removal of the requirement for firms to provide data related to three specific reports:

• Form G: The Retail Investment Adviser Complaints Notifications Form (requirement for firms to email the FCA in the event of an uptick in complaints within certain parameters)
• FSA039: Client Money and Assets (questions about stock lending and holding client assets are duplicative and/or too high-level to be useful)
• Section F of the RMAR – RMA-F (information about close controllers and links are available elsewhere).

These changes are effective immediately and references to these returns will be removed from the Handbook. 

Compensatory interest: The FOS, in response to its joint Call for Input with the FCA, is consulting on proposals to change the interest applied to the consumer redress awards. The consultation presents four interest rate options and four potential implementation approaches, with the FOS recommending adoption of a Bank of England base rate +1% tracker, and for the new rules to be applied to complaints referred to the FOS from the date the new rate is implemented. The FOS is also seeking feedback on the frequency of future rate reviews. Changes to the rate to make it more proportionate will be broadly welcomed by the industry, however, the FOS' recommendations may not fully satisfy industry concerns, with different views from firms on the best approach. 

PRA report on competitiveness and growth: the PRA has published its second report on embedding its secondary objective of enhancing the UK's international competitiveness and growth (SCGO). The PRA sets out its recent/in-flight policy files that support the SCGO. This includes remuneration rules for senior bankers, streamlining the capital regime for small banks, Matching Adjustment Investment Accelerator and iSPV changes for insurers and ongoing efforts to reduce reporting burden. The report includes the PRA's response to recommendations from the Independent Evaluation Office (IEO) and extensive metrics on operational and growth KPIs.

Innovation and regulation: PRA Executive Director, Prudential Policy, David Bailey’s recent speech on innovation explored issues such as the PRA's secondary competitiveness and growth objective (SCGO) and its approach to making policy. The speech outlined action taken by the PRA to advance the SCGO and used the example of AI to show how it responds to innovation in financial services. The speech will be of interest to firms regulated by the PRA, and those that follow prudential regulatory updates.

Revocation of 2014 Capital Requirements Regulations: the Capital Requirements (Capital Buffers and Macro-prudential Measures) Regulations 2014 will be revoked as of 31 July 2025 by virtue of FSMA 2023. HMT has published an associated Statutory Instrument (SI) noting that the changes will have “no significant impact on the private, voluntary or public sector foreseen”.

No insurance-specific updates – please see also Cross Sector.

Private Intermittent Securities and Capital Exchange System (PISCES): The FCA has published its final rules for PISCES – a platform that allows the secondary trading of private company shares. Companies can set the floor and ceiling of share prices and have a say over who can buy their shares. Access to PISCES will be limited to institutional investors, high-net-worth individuals, sophisticated investors and employees of participating companies. The platform will be delivered through a sandbox, which will allow the FCA to test the design before finalising a permanent regime in 2030. The sandbox is now open, with shares likely to be traded later in 2025. 

Support for faster fund settlement cycles: In response to a statement by industry trade bodies, the FCA has announced that it would be in investors' interests for fund managers to reduce the settlement cycle for fund units to T+2. This comes in the context of the move to T+1 securities settlement across Europe in October 2027.

UK EMIR Trade Repository reporting requirements: The BoE and FCA are consulting on minor changes to the UK EMIR reporting regime following UK EMIR Refit.

Revisions to the UK Stewardship Code: Following consultation, the Financial Reporting Council (FRC) has updated its voluntary Stewardship Code for UK asset managers and asset owners. The new Code takes effect from January 2026, with a transition period to allow current signatories of the Code time to adjust to the new format. Changes include a revised definition of stewardship (removing previous references to the ‘economy, environment and society’), reduced reporting requirements and a more flexible approach to the structure of the stewardship report.

Annual report on Supervision of Financial Market Infrastructure: In the report the BoE shows its continuing focus on FMIs’ financial and operational resilience and its growing support to innovation in the sector. Over the next year, the BoE will also streamline parts of the regulatory regime for CCPs and CSDs - e.g. UK EMIR and UK CSDR, support regulatory initiatives to enable T+1 settlement in 2027 and collaborate with other regulators and the government to understand how further growth can be achieved through tokenisation and digitalisation in wholesale markets. 

Risk management and wind-down planning: The FCA has published the findings of its review into e-money and payment firms' risk management and wind-down planning, noting that both areas require further development. Key concerns regarding risk management frameworks include: inadequate enterprise-wide risk management frameworks, immature liquidity risk management, and insufficient consideration of group risk. The findings for wind-down plans (WDPs) were much starker, with the FCA noting that almost all of the WDPs reviewed were disconnected from the firm’s risk management framework and required more work to be credible and operable.

Consumer research: The PSR has published a research paper on consumer perspectives on payments. It found that consumers are generally satisfied with UK payment systems and prioritise ease of use for lower value transactions and protection for higher value ones. Concerns remain around fraud and limited payment choices, particularly among financially constrained consumers. Respondents felt positive and reassured by the protections offered by the APP scam reimbursement rules.

Mortgage rules reform: The FCA has published a wide-ranging discussion paper on the future of the mortgage market exploring how rule changes could help more people access sustainable home ownership. The paper considers changes to responsible lending rules, ideas for future-proofing the regulatory framework, allowing increased flexibility to promote consumer understanding, and ways in which collective risk appetite could be rebalanced. Specific options include amendments to the minimum stress margin, the use of rent-based affordability assessments, and whether and how the FCA could intervene to support take up of long‑term fixed-rate mortgages.

Motor finance redress scheme: The FCA has invited views on its proposed principles and approach if a redress scheme is required as part of its review into motor finance commission arrangements. The FCA wants to gather stakeholder views and refine its thinking so that it can act quickly to consult if, following the Supreme Court judgement, a redress scheme is required. The FCA’s aim is to deliver certainty for the sector and consumers. It proposes that any scheme follows seven principles: comprehensiveness, certainty, simplicity and cost effectiveness, fairness, market integrity, timeliness, and transparency.

Retirement income advice: The FCA has published the findings of a follow-up review on retirement income advice (RIA), identifying three key areas for the delivery of good customer outcomes. Good practice and areas for improvement were observed across these themes: information collection and record-keeping quality, appropriateness of client risk profiling, and sustainability of clients’ income withdrawals. The findings mirror some of the areas identified in the FCA's 2024 thematic review.

Credit reporting governance: The credit information market interim working group (IWG) has issued its final report setting out final recommendations to the FCA on the design, implementation, and operation of the new Credit Reporting Governance Body (CRGB). Establishing a CRGB was one remedy identified by the FCA in the Credit Information Market Study. The IWG recommends three objectives for the CRGB, to be (i) operational, (ii) consumer-focused, and (iii) future-looking, supported by three outcomes setting the framework for demonstrating progress. The IWG concludes that the CRGB should have a majority independent board and be empowered to oversee its subscribers via contract law, with all parties required to register and subscribe to the CRGB to access shared data. The recommendations have been shared with the FCA to consider and accept or suggest amendments. The IWG will now commence work on initial transition activities.

Removing retail ban on crypto exchange traded notes (cETNs): The FCA has proposed to lift the ban on offering cETNs to retail investors, aligning with practices in other countries and potentially allowing them to be sold to individual consumers if traded on FCA-approved exchanges. The FCA proposes to categorise cETNs as restricted mass market investments, meaning that they would need to comply with financial promotion rules as well as consumer duty when selling to retail consumers. This move aims to support the growth and competitiveness of the UK's crypto industry while ensuring that consumers receive adequate risk information and are not subject to inappropriate investment incentives. The announcement is part of a broader effort by the FCA to establish a regulatory framework for cryptoassets, including recent proposals on stablecoins and other aspects of the regime. It will maintain the ban on retail access to cryptoasset derivatives and continue to monitor the market.

AI Supercharged Sandbox: The FCA has launched a Supercharged Sandbox to enable firms to “experiment safely with AI to support innovation”. This initiative, a collaboration with NVIDIA, provides access to synthetic datasets, NVIDIA infrastructure and enterprise grade-tooling, technical mentorship, and regulatory support to accelerate AI innovation in financial services. The sandbox is designed for firms in the early stages of AI exploration, complementing the upcoming AI Live Testing service for those further along. Applications are open until the 11 August, with experimentation starting in October.

Risk comment for info: technically the guidance states that we should get CLP permission to name clients, and Nvidia is a KPMG client. However, given that this is public knowledge, announced by the FCA and is not damaging to the client’s reputation or to our relationship with the client, it seems excessive to get this approval. I’ll check with Claire re the correct approach when it is public news in this positive context, but this shouldn’t stop UKRR going into production. Please wait for Claire’s reply before going live.

UK government sustainable finance consultations: At London Climate Action Week, the UK government launched consultations on transition plannings, UK Sustainability Reporting Standards (UK SRS) and sustainability reporting assurance. All have a deadline of 17 September. The consultations are intended to support the government’s stated intention to make the UK “the sustainable finance capital of the world”:

• Transition planning: the consultation paper does not propose a specific set of requirements but instead asks for stakeholder views on various issues such as disclosures (requirements versus ‘comply or explain’), mandating implementation of transition plans, legal risks and scope. The government will hold a series of stakeholder engagement events to understand respondents’ views in greater detail.
• UK SRS: the draft UK SRS are the UK-specific versions of the ISSB’s first two sustainability standards, IFRS S1 and S2. The draft UK SRS largely align with ISSB’s standards with six UK-specific amendments. The final standards are expected in autumn 2025.
• Assurance of sustainability reporting: proposals for a voluntary registration regime for entities that offer third-party assurance of sustainability-related disclosures. The planned Audit, Reporting and Governance Authority (ARGA) would be given responsibility for creating the registration regime, setting eligibility criteria, monitoring performance, and taking enforcement action. The government will consider responses ‘in due course’.