Financial Services SpeedRead: 03 July 2025 edition

Financial Markets

1. EBA publishes consultation paper on draft Regulatory Technical Standards specifying pre-acquisition information to be provided to competent authorities

On 18 June 2025, the EBA published a consultation paper on draft regulatory technical standards (RTS) specifying the minimum information to be provided by proposed acquirers of qualifying holdings in a credit institution, when notifying competent authorities of such acquisition under Article 22(1) of the Capital Requirements Directive VI (Directive (EU) 2024/1619, referred to as CRD VI).

The standards aim to ensure consistency across the EU in the assessment of proposed acquisitions, in line with the five criteria laid down in Article 23 CRD VI, being: (a) reputation of the proposed acquirer; (b) suitability of appointed members of the management body; (c) financial soundness of the proposed acquirer; (d) target's ability to comply with prudential requirements; and (e) reasonable grounds to suspect money laundering or terrorist risk associated with the acquisition.

The information listed in the draft RTS is as follows:

• identity, past convictions, financial soundness, and interests in the target institution of proposed acquirers;
• good repute, knowledge, skills, and experience of management body members to be appointed or replaced;
• plans for sound management post-acquisition, including strategy, prudential ratios, and new group structure; and
• source of acquisition funding, including borrowed funds, asset sales, and fund transfer channels.

The consultation is open until 18 September 2025.

2. EU Commission publishes reform proposals for the EU Securitisation Framework

On 17 June 2025, the EU Commission published a package of legislative proposals following its review of the EU Securitisation Framework. The proposals include changes to Regulation (EU) 2017/2402 (the Securitisation Regulation), Regulation (EU) No 575/2013 (CRR) (see here and here), as well as the EU Solvency II Delegated Regulation (Commission Delegated Regulation (EU) 2015/35), and Regulation (EU) 2015/61 (Liquidity Coverage Ratio Delegated Regulation).

Some of the key proposals include (among others):

Securitisation Regulation

• new definitions for public and private securitisation (Art 2);
• removal of duplicative verification requirements for investors when EU-based sell-side parties are already involved, and waiving due diligence requirements where multilateral development banks fully guarantee the securitisation position (Art 5);
• waiving risk retention under certain circumstances (Art 6);

CRR

• a risk-sensitive weight floor for senior securitisation to replace the current flat-rate approach (Art 260 and 262 CRR); and
• a new category of 'resilient' senior positions introduced, subject to eligibility criteria (Art 243 CRR).

The proposals have now been submitted to the European Parliament and the Council for their consideration and adoption. If neither objects, they will enter into force 20 days after their publication in the Official Journal of the EU. For a detailed description of the legislative proposals, please refer to the Ashurst briefing here.

3. EU Commission amends technical standards governing transparency requirements

On 18 June 2025, the EU Commission adopted Delegated Regulation (C(2025)3104) amending the RTS laid down in Delegated Regulations (EU) 2017/582 and (EU) 2017/587 governing transparency requirements for trading venues and investment firms across a range of financial instruments, including bonds, structured finance products, emission allowances, and equity instruments (the Delegated Regulation). The amendments reflect reforms made as a result of Regulation (EU) 2024/91 (MiFIR II).

The Delegated Regulation aims to:

• update definitions and provisions to align with the revised MiFIR provisions;
• calibrate transparency thresholds and update pre-trade transparency requirements for both pre- and post-trade transparency relating to bonds, SFPs and emissions allowances;
• update the process for identifying the most relevant market in terms of liquidity;
• specify pre-trade transparency requirements for systematic internalisers;
• specify the details of pre-trade data to be made public by market operators and investment firms operating a trading venue in respect of shares, depositary receipts, ETFs, certificates and other financial instruments;
• further detail the characteristics of transactions not contributing to the price discovery process; and
• allow for discontinuation of data collection in the Financial Instruments Transparency System and Double Volume Cap System.

The new rules will enter into force 20 days after publication in the Official Journal of the European Union, with certain provisions applying from 2 March 2026 to allow market participants time to adapt.

4. ESMA publishes technical advice on UCITS Eligible Assets Directive

On 26 June 2025, ESMA published a Final Report containing technical advice to the European Commission on revising the UCITS Eligible Assets Directive (2007/16/EC). The report addresses a 2023 mandate from the Commission, and feedback from a Call for Evidence published in May 2024 aiming to resolve inconsistencies in how Member States implement the Directive.

ESMA's advice includes, among other things, a proposed 'look-through approach' to determine the UCITS eligibility of securities and a 10% limit for indirect UCITS exposures to alternative assets, subject to safeguards on liquidity and valuation.

The Report also calls for clearer rules on financial indices, derivatives, and embedded derivatives, and updated eligibility criteria for UCITS investments in AIFs, ensuring closed-ended AIFs meet transferable security standards and are subject to equivalent supervision.

ESMA expects the European Commission to take this technical advice into account as it reviews the UCITS Eligible Assets Directive. ESMA’s legislative drafting suggestions are detailed in Annex VI of the Final Report.

5. Council of the EU reaches provisional agreement to shorten securities settlement cycle to T+1

On 18 June 2025, the Council of the EU and European Parliament published a provisional agreement to amend the Central Securities Depositories Regulation, reducing the standard securities settlement cycle from two business days (T+2) to one business day after the trade date (T+1).

This change aims to boost the efficiency and competitiveness of EU capital markets by aligning settlement practices with global standards, and by addressing post-trading barriers identified in recent reports (including the Draghi and Letta reports).

Under the agreement, certain securities financing transactions (SFTs) will be exempt from the T+1 requirement if structured as single transactions with two linked operations, ensuring the exemption cannot be used to circumvent the new rules while recognising the unique nature of SFTs.

The new rules are expected to take effect from 11 October 2027, pending formal adoption.

Banking and Prudential

6. European Commission and Parliament publish regulation amending the requirements for securities financing transactions under the net stable funding ratio in the Official Journal of the European Union

On 25 June 2025, Regulation 2025/1215 amending the CRR (the Regulation) was published in the Official Journal of the European Union.

The Regulation amends Article 510 of the CRR and makes the current transitional ratio levels of short-term securities financing transactions and unsecured transactions with a residual maturity of less than six months permanent.

The Regulation also requires the EBA to report to the EU Commission every five years on the appropriateness of the treatment.

The Regulation entered into force on 26 June 2025 and applied from 29 June 2025.

7. ESMA publishes call for evidence on simplifying transaction reporting

On 23 June 2025, ESMA published a call for evidence (CfE) as part of its aims to integrate, streamline, and simplify regulatory reporting requirements without compromising the robustness of supervisory oversight.

ESMA identifies two simplification options for transaction reporting:

• Option 1 - Removal of duplication: Removing overlaps with (most notably) EMIR and MiFIR (with potential expansions to MiFID), without amending the reporting channels/infrastructures for data collection. ESMA anticipates the implementation of this option could take up to five years, and would involve either delineating the scope of reporting based on:

• the type of trading, i.e. whether the instrument is exchange-traded or OTC; or
• events, i.e. transactions vs post-trading reporting.

• Option 2 - Report once principle: A unified template for reporting information that was previously distributed across various regimes. ESMA anticipates this approach could take 5-7 years and would apply either to MiFIR, EMIR and SFTR specifically, or extend to further regimes.

Feedback on the CfE can be submitted until 19 September 2025, and ESMA will publish its final report by H1 2026.

Fund Management

8. ESMA publishes Discussion Paper on integrated reporting

On 23 June 2025, ESMA published a discussion paper on integrated collection of funds' data. The aim of the report will be to improve data efficiency, consistency and effectiveness by identifying and addressing any duplication and inconsistency across reporting frameworks in the asset management sector and broader financial sector.

ESMA is exploring several options to integrate reporting obligations under AIFMD, the UCITS Directive, the Regulation on money market funds (MMF Regulation), and ECB statistical frameworks. These options range from enhanced data use across existing frameworks to the development of a fully integrated, modular EU-wide reporting structure. The paper emphasises the importance of harmonising data semantics through a common data dictionary, streamlining reporting flows and data sharing arrangements, and standardising reporting formats.

ESMA is seeking comments from stakeholders until 21 September 2025. Feedback will inform ESMA’s recommendations to the European Commission, with a final report on the development of an integrated collection of supervisory data expected in the second quarter of 2026. The discussion paper has also been published alongside ESMA's call for evidence on simplification of transaction reporting and final reports on data under MiFIR II (see entry 7 above). ESMA will consider the outcome of its work on financial transaction reporting in this separate workstream on integrated reporting under AIFMD and the UCITS Directive.

Senior Managers and Governance

No new entries.

Financial Crime

9. Upper Tribunal upholds the FCA's decision to ban ex-Barclays CEO

On 26 June 2025, the Upper Tribunal upheld the FCA’s permanent prohibition on James Edward Staley from holding senior management and significant-influence functions under the Senior Managers and Certification Regime.

The FCA stated that Mr Staley acted recklessly by approving an October 2019 letter to the regulator that contained misleading statements about the nature of his friendship with Jeffrey Epstein and the recency of their contact. His actions were found to have breached individual conduct rule ICR 1 (integrity), ICR 3 (duty to be open and cooperative with regulators) and senior manager conduct rule SMCR 4 (disclosure).

The Tribunal found that:

• Mr Staley acted recklessly when signing off the letter;
• Mr Staley had a clear motive for downplaying the relationship; and
• It was not credible that Mr Staley did not think that the letter would mislead the FCA.

The Tribunal also reduced the FCA’s proposed financial penalty from £1.8 million to £1.1 million, reflecting Barclays’ withholding of deferred share awards to which Mr Staley could have been entitled.

Mr Staley has 14 days to seek permission to appeal the ruling.

10. FCA secures convictions against two individuals for insider dealing and money laundering offences

On 19 June 2025, the FCA announced that it had secured convictions against Redinel and Oerta Korfuzi for insider dealing and money laundering offences worth over £1 million.

The FCA stated that Mr Korfuzi, a former research analyst at an asset management firm, conspired with his sister to use confidential, price-sensitive information to trade in the shares of at least 13 companies ahead of market announcements between December 2019 and March 2021. The trades were executed through accounts held by Ms Korfuzi and two other individuals, using CFDs to profit from anticipated share price drops. The pair were separately convicted for money laundering, making over 176 deposits from cash received from the proceeds of criminal activity.

The FCA stated that its market monitoring systems detected the suspicious trading, despite Mr Korfuzi's efforts to conceal his involvement in the trading.

Mr and Ms Korfuzi will be sentenced on 4 July 2025. The FCA intends to seek confiscation orders to recover the proceeds of the crime.

Retail Services

No new entries.

Digital Finance and Fintech

11. European Commission adopts regulatory technical standards on asset-referenced tokens and e-money tokens

On 27 June 2025, the European Commission adopted a Delegated Regulation containing RTS that supplement MiCAR by establishing minimum requirements for liquidity management policies and procedures for issuers of asset-referenced tokens and e-money tokens.

The RTS set out procedures for issuers to identify, measure, and manage liquidity risk, including to ensure they have adequate reserve assets to meet redemption requests at all times (including under stress scenarios). Issuers must develop early warning indicators, maintain contingency plans, and regularly conduct liquidity stress tests, including reverse stress testing to assess the resilience of their liquidity profiles. The regulation also mandates the segregation of liquidity management policies for each token issued and requires measures to avoid concentration of reserve assets with any single custodian.

These requirements apply to significant issuers and, where required by competent authorities, to non-significant issuers. Issuers within scope will need to review and, where necessary, update their liquidity management frameworks to comply with the new requirements.

The Council of the EU and European Parliament will scrutinise the regulation, which would then enter into force twenty days after its publication in the Official Journal of the European Union.

12. ESMA publishes report on the DLT Pilot Regime

On 25 June 2025, ESMA published a report on the Distributed Ledger Technology (DLT) Pilot Regime. The report provides an assessment of the functioning of the DLT Pilot Regime and advises the EU Commission on whether it should be extended, expanded, amended or made permanent.

The report notes that uptake of the DLT Pilot Regime remains limited, with minimal live trading activity and only three authorised infrastructures. However, experimentation with DLT-based models for trading, settlement and compliance have been stimulated by the DLT Pilot Regime.

It notes some frictions to uptake, including lack of interoperability and access to central bank money, and provides some recommendations relating to making the DLT Pilot Regime more attractive to the market and permanent.

The EU Commission consulted on the DLT Pilot Regime as part of the wider consultation on the Savings and Investments Union, and is expected to present its own report to the European Parliament within three months of receiving ESMA's report. The next steps for the DLT Pilot Regime will be confirmed on the basis of the EU Commission's recommendations.

13. BoE publishes new webpage on DLT Innovation Challenge

On 23 June 2025, the BoE published a new webpage on the DLT Innovation Challenge (the Challenge). Through the Challenge, the BoE intends to engage with the private sector to better understand the implications of incorporating DLT into wholesale central bank settlement. The Challenge is a collaboration with the Bank for International Settlements Innovation Hub London Centre.

Applications are open to all organisations from the technology, payments, banking, retail sectors, as well as other relevant sectors until 23 July 2025.

Following the Challenge, there will be a showcase of aspects of the work at an event in October 2025.

Payments

14. FCA publishes findings of multi-firm review on risk management and wind-down planning for EMIs and PIs

On 26 June 2025, the FCA published a webpage on its findings of a multi-firm review on risk management and wind-down planning of payment institutions (PIs) and e-money institutions (EMIs). The review focused on enterprise-wide risk management, liquidity risk management, and group risk, as well as the integration of wind-down planning into firms’ broader risk frameworks.

The FCA found that while firms have made some progress in embedding elements such as stress testing and establishing risk appetites, overall risk management frameworks remain underdeveloped and are often not commensurate with the scale and complexity of firms’ activities. In particular, enterprise-wide risk management frameworks are frequently inadequate, liquidity risk management is immature, and group risk is not sufficiently considered. The review also highlighted that wind-down plans are often disconnected from risk management frameworks, lacking sufficient detail, credible triggers, and realistic assessments of the resources required for an orderly market exit.

The FCA’s findings are intended to clarify existing requirements and provide EMIs/PIs with examples of good practice and areas for improvement. The FCA will continue to engage with the sector to support the development of effective risk management and wind-down planning capabilities.

15. ESMA publishes Q&A on the shared order book model under MiCAR

On 20 June 2025, ESMA published a new Q&A on the shared order book model under MiCAR, confirming that EU crypto-asset trading platforms that are operated by crypto-asset service providers (CASPs) authorised under MiCAR and must not pool their order books with non-EU platforms operated by unauthorised CASPs. Such pooling would constitute the unauthorised provision of crypto-asset services in the EU.

ESMA considers managing an order book to fall within the scope of the crypto-asset service defined in Article 3(1)(18) of MiCAR. The guidance further notes that, pursuant to Articles 59, 60, and 63 of MiCAR, any person managing a shared order book must be authorised as a crypto-asset service provider or have notified its intention to operate a trading platform for crypto-assets.

16. Council of the EU agrees its position on an updated EU payment services framework

On 18 June 2025, the Council of the EU published a press release confirming it has agrees its position on a legislative package updating the EU payment services framework, including a new Payment Services Regulation and amendments to the existing Payment Services Directive (PSD2).

The proposed rules address, among others:

• payment fraud / ‘spoofing' fraud: payment service providers will be required to share information related to fraud and implement systems that allow for the verification of IBAN numbers against account names prior to the execution of transfers;
• transparency requirements: fees and exchange rates associated with ATM transactions will need to be disclosed prior to a transaction. Additional provisions have been introduced to improve transparency around payment card scheme fees and rules, to enable consumers and businesses to make more informed decisions; and
• technological developments: innovative payment service providers will have improved access to necessary bank account information, subject to safeguards.

The Council will commence negotiations with the European Parliament to finalise the legislative text.

ESG

17. Department for Energy Security and Net Zero publishes consultation on climate transition plan requirements

On 25 June 2025, the Department for Energy Security and Net Zero published a consultation on climate-related transition plan requirements.

Key areas for feedback include:

• approaches to designing and implementing transition plans, including what it means to be aligned with the Paris Agreement’s 1.5°C goal; and
• options for regulation that avoid unnecessary burdens, such as requiring entities to explain non-disclosure, mandating the development and disclosure of transition plans, or requiring implementation of such plans.

The consultation is open until 17 September 2025.

Other

18. EU Commission publishes Delegated Regulation in relation to DORA

On 18 June 2025, the Official Journal of the EU published Commission Delegated Regulation (EU) 2025/1190 supplementing Regulation (EU) 2022/2554 of the European Parliament and of the Council with regard to regulatory technical standards specifying:

• the criteria used to identify financial entities required to perform threat-led penetration testing (TLPT);
• the requirements and standards governing the use of internal testers;
• the requirements in relation to the scope, testing methodology and approach for each phase of the testing, results, closure and remediation stages; and
• the type of supervisory and other relevant cooperation needed for the implementation of TLPT and the facilitation of mutual recognition.

The Delegated Regulation will come into force on 8 July 2025.

19. FCA publishes Policy Statement on data decommissioning

On 27 June 2025, the FCA published Policy Statement (PS25/7) on data decommissioning, confirming the removal of certain reporting and notification requirements for regulated firms. This follows on from its Consultation Paper (CP25/8) published on 16 April 2025 (see our previous entry detailing the CP here).

The Policy Statement sets out the immediate decommissioning of three key data collections:

• FSA039 (Client money and client assets);
• Section F of the Retail Mediation Activities Return (RMAR); and
• Form G (an individual adviser complaints notification).

The FCA will also remove 70 pages of outdated guidance from the Handbook, including references to data collections that have already been decommissioned and guidance relating to EEA firms.

The decommissioned returns will be removed from RegData on 11 July 2025, and firms affected by these changes are not required to take any action. The FCA will continue to review other regulatory returns for potential decommissioning and is consulting on further changes, with a deadline for responses of 30 June 2025.

Authors: Penny Chamberlain, Junior Associate; Tiegan Cormie, Junior Associate; Roni Fass, Junior Associate; Anjali Naik, Legal Apprentice