Financial Services SpeedRead: 13 February 2026 edition
13 February 2026
Welcome to the latest edition of the Financial Services SpeedRead, a collection of bite-sized updates designed to help you keep on top of key regulatory developments in financial services over the preceding fortnight. Please get in touch if you want to explore any of the topics covered in this fortnight's edition of Financial Services SpeedRead in more detail.
Financial Markets
1. FCA publishes final report on premium finance market study
On 3 February 2026, the FCA published the final report of its Premium Finance Market study (PFMS) (MS24/2). The publication follows the interim findings published on 22 July 2025 (MS24/2.2).
The FCA found that:
- Since the introduction of the Consumer Duty, the average Annual Percentage Rate (APR) has fallen by 4.1 percentage points since 2022, saving customers an average of £8 on a typical motor policy and £3 on a typical home policy per year.
- For firms that the FCA directly challenged, the average APR reduction was 7.0 percentage points.
- Across the market, the FCA reports customers saving approximately £157 million per year.
The FCA will continue to monitor APRs using regulatory data and engage with outlier firms through supervision, where appropriate.
2. FCA launches review into long-term impact of AI on retail financial services
On 27 January 2026, the FCA published an engagement paper aiming to review how advances in artificial intelligence (AI) could transform retail financial services in the long-term. The review builds on the FCA's existing AI work, including its AI Discussion Paper, AI Sprint, and AI Lab.
The review aims to explore the following four themes:
- Future evolution of AI technology: the evolution of AI technology, including agentic and autonomous systems;
- Future impact of AI on markets and firms: the impact on markets and firms, including competitiveness and market structure;
- Future consumer trends: future consumer trends, including delegation of decisions to AI agents; and
- Future regulatory approach: how the regulatory approach may need to evolve.
The review does not propose new AI-specific regulation, but will consider how existing frameworks such as Consumer Duty, the Advice Guidance Boundary reforms, the Senior Managers & Certification Regime (SM&CR), Operational Resilience requirements and the Critical Third Parties (CTP) regime may need to adapt as AI evolves.
The consultation is expected to close on 24 February 2026. The final recommendations will be reported to the FCA Board in summer 2026, followed by an external publication.
3. FCA publishes statement on next steps for establishing a bond consolidated tape provider
On 28 January 2026, the FCA announced it has signed a contract with Etrading Software (ETS) to deliver the UK bond consolidated tape, following a decision by the High Court in December 2025 to lift a freeze on the contract award.
ETS has launched a website setting out milestones and technical information for contributors and users, and the FCA will support ETS and market participants ahead of a planned June 2026 launch while continuing to defend the legal challenge.
Banking and Prudential
No updates.
Senior Managers and Governance
No updates.
Financial Crime
4. FCA publishes Enforcement Watch highlighting publicity policy and case priorities
On 28 January 2026, the FCA published the first edition of its Enforcement Watch newsletter, covering insights and themes from its enforcement work since the updated Enforcement Guide was published on 3 June 2025. The newsletter explains how the FCA's updated publicity policy operates in practice, including the factors determining when the regulator will name firms or individuals under investigation. It also outlines current enforcement case priorities and emphasises the FCA's international partnerships in tackling cross-border misconduct.
In priorities flagged, the FCA notes that it is investigating firms in the following areas (among others):
- Unauthorised business: suspected unauthorised businesses, where entities provide cryptoasset services while not registered under the MLR;
- Fair value: six potential Consumer Duty breaches by firms, particularly in relation to fair value for consumers;
- Inadequate oversight: suspected systems and controls failings, where authorised firms may have caused harm through inadequate oversight of systems or relying on third party providers that did not meet standards;
- Adequacy of controls: concerns around the adequacy of firms' financial crime controls; and
- Consumer investment and asset management: investigating five consumer investment and asset management firms on: (i) misleading consumers and third parties with false statements and (ii) failing to recognise conflicts of interest.
5. HMT publishes response to OFSI enforcement consultation
On 27 January 2026, HMT published a consultation response regarding proposed reforms to the Office of Financial Sanctions Implementation's (OFSI) enforcement processes. The original consultation, published on 22 July 2025, detailed OFSI's overall aim of resolving enforcement cases more efficiently, as well as having a more transparent system for how OFSI assesses cases.
Following consultation on five reform proposals, OFSI will proceed with all measures from the original consultation, incorporating respondent feedback, as follows:
- Case assessment matrix and voluntary disclosure discounts: OFSI will publish a new case assessment matrix to improve transparency and simplify OFSI's enforcement processes, and replace the current discount for voluntary self-disclosure with a 'Voluntary Disclosure and Co-operation discount' of up to 30% for all penalty cases (as opposed to the current maximum discount of 50% in serious cases);
- Settlement scheme: OFSI will proceed to introduce a settlement scheme, under which OFSI will be able to resolve monetary penalty cases through a time-limited, negotiated settlement;
- Early Account Scheme (EAS): OFSI will proceed to introduce an EAS that will enable subjects to provide a full and complete account of potential breaches, together with all relevant materials and evidence in return for a discounted penalty;
- Information, reporting and licensing offences: OFSI will proceed to introduce penalties for information, reporting and licensing offences in public guidance, rather than penalties set out in legislation. The penalty amount for these offences will be fixed at either £5,000 or £10,000 (in line with the proposals in the consultation); and
- Statutory maximum penalties: OFSI will seek to increase penalty maximums from the higher of £1 million and 50% of the value of the breach to the higher of £2 million and 100% of the value of the breach. The increase will not come into effect until legislation is passed, subject to Parliamentary time.
Most of these proposals will be taken forward and implemented shortly. However, measures such as increases to penalty statutory maximums will require legislative changes and thus Parliamentary approval in due course.
Retail Services
No updates.
Digital Finance and Fintech
6. ESMA publishes guidelines on assessment of knowledge and competence under MiCA
On 28 January 2026, ESMA published final guidelines setting out the criteria for the assessment of knowledge and competence of staff providing advice or information about crypto-assets or crypto-asset services under the Markets in Crypto-Assets Regulation. In particular, the guidelines provide important guidance to assist crypto-asset service providers (CASPs) in meeting their obligations to act in the best interest of their clients.
In summary, the guidelines provide various obligations on CASPs to ensure the knowledge and competence of staff providing relevant services meets the relevant regulatory and legal requirements and business ethics standards. The guidelines cover:
- criteria for staff giving information about crypto-assets or crypto-asset services;
- criteria for staff giving advice about crypto-assets or crypto-asset services;
- organisational requirements for assessment, maintenance and updating of knowledge and competence; and
- illustrative examples of the application of certain aspects of the guidelines.
The guidelines take effect six months after publication. CASPs are not required to report on their compliance with the guidelines.
7. FCA published an update on the application period for the new cryptoasset regulatory regime
On 6 February 2026, the FCA published an update on the application period for firms that want to undertake new cryptoasset regulated activities. The FCA confirmed that the application period will be open from 30 September 2026 to 28 February 2027.
The update follows various FCA publications on helping firms prepare for the new regime under the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025 (FSMA). The new regime is expected to come into force on 25 October 2027.
ESG
No updates.
Other
8. HMT publishes press release about landmark agreements secured after first UK–China Financial Working Group
On 3 February 2026, HMT published a press release announcing landmark agreements secured after the first UK-China Financial Working Group meeting in Beijing, held on 31 January 2026.
The UK and China agreed a set of measures to deepen financial cooperation at the inaugural meeting during the Prime Minister’s visit, aimed at supporting British jobs, easing UK–China trade and strengthening London’s status as a leading global financial hub. The forum brought together UK and Chinese government and regulatory authorities, alongside industry representatives, creating a formal mechanism for structured, technical dialogue on financial policy.
The visit followed the 2025 UK-China Economic and Financial Dialogue, which secured tangible benefits, including new licences and quota allocations for UK financial services firms. Major commitments secured during this forum include:
- Second renminbi (RMB) clearing bank in the UK: the Bank of China’s London Branch was designated as the UK's second RMB clearing bank, expanding services for UK businesses trading with China and reinforcing London’s role as a leading global centre for cross border finance;
- Innovative green finance cooperation: agreements to pursue innovative financing, such as RMB denominated sovereign biodiversity bond issuance, cementing the City’s role as the global hub for green finance; and
- Regulatory cooperation: technical discussions held between UK and Chinese regulators around deepening cooperation on financial stability, supervision and regulatory developments in both markets.
The next edition of the UK-China Financial Working Group forum is expected to take place in London later in 2026.
