Financial Services SpeedRead: 13 March 2026 edition

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 announces review of UK Listing Rules for investment entities

On 3 March 2026, the FCA published a statement announcing a review of certain aspects of the UK Listing Rules as they apply to specific types of investment entities. The review follows the FCA's Primary Markets Effectiveness Review, which explored which types of investment entities could be eligible to be listed.

Through this review, the FCA will assess whether changes should be made to the eligibility criteria for investment entities seeking to list. The FCA will also conduct targeted work to assess how its rules, in the context of company law, ensure that boards support strong shareholder rights and engagement, and manage conflicts of interest.

The FCA plans to set out proposals in a consultation paper and to complete the work by the end of the year.

2. ESMA publishes statement on identifying derivatives within the scope of the national product intervention measures on CFDs

On 24 February 2026, ESMA published a statement reminding firms of their obligation to assess whether their products fall within the scope of existing product intervention measures on contracts for differences (CFDs). The statement follows ESMA's observation of increased offerings of derivatives, often marketed as perpetual futures or perpetual contracts, providing leveraged exposure to underlying values, including crypto-assets such as Bitcoin or Ethereum.

Such derivatives are likely to fall within the scope of permanent national product intervention measures mirroring ESMA's temporary measures adopted in 2018. Where derivatives meet the definition of a CFD, firms must comply with the applicable product intervention requirements, including: leverage limits; a mandatory risk warning; a margin close-out and negative balance protection; and the prohibition of monetary and non-monetary benefits.

The statement also highlights that:

• given their complexity, derivatives are expected to have a narrow target market, supported by an aligned distribution strategy;
• when providing non-advised services, an appropriateness assessment must be carried out in accordance with the relevant requirements for complex financial instruments; and
• firms should take appropriate steps to identify, prevent, or manage conflicts of interest that may arise from the offering of derivatives such as perpetual futures/contracts.

3. EU Commission publishes delegated regulations on fund liquidity management tools and equity transparency

On 27 February 2026, the EU Commission published three delegated regulations in the Official Journal addressing fund management and market transparency. Delegated Regulations (EU) 2026/465 and 2026/466 specify the characteristics of Liquidity Management Tools (LMTs) under the revised AIFMD and the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive respectively. Delegated Regulation (EU) 2026/482 amends rules on determination of what constitutes a liquid market for equity instruments; the obligation to provide market data on a reasonable commercial basis; the size specific to the instrument for the purposes of obligations for systematic internalisers; and the definition of and disclosure for post-trade risk reduction services.

The LMT regulations set out tools intended to support EU fund managers to manage the liquidity of funds, including suspension mechanisms, redemption gates, notice period extensions, redemption fees, swing pricing, dual pricing, anti-dilution levies, redemption in kind and side pockets.

Specifically, Delegated Regulation (EU) 2026/482:

• amends provisions on liquid market determination by replacing the "free float" criterion with a market capitalisation criterion;
• deletes Chapter II and article 18 of Delegated Regulation (EU) 2017/567 (as regards the data provision obligations for trading venues and systematic internalisers and publication requirements for portfolio compression);
• specifies post-trade risk reduction services (including compression, rebalancing and basis risk optimisation); and
• deletes Article 16 of Delegated Regulation (EU) 2017/567, which specifies certain systematic internaliser obligations for non-equity instruments.

The LMT regulations enter into force on 19 March 2026 and apply from 16 April 2026, with a one-year transitional period for funds constituted before that date. Delegated Regulation (EU) 2026/482 entered into force on 2 March 2026 and its Article 1(4) applies from 23 August 2026.

4. BoE publishes consultation paper on mobilisation framework for new CCPs

On 4 March 2026, the BoE published a consultation paper setting out its proposed approach to using its requirements and permissions powers to facilitate a discretionary mobilisation stage for new central counterparties (CCPs). The consultation paper follows the BoE's July 2025 approach to onboarding new financial market infrastructure (FMI) firms, which clarified that new FMIs, including CCPs, could pursue the discretionary stage of mobilisation, which takes place after a firm has been authorised or recognised. The consultation paper seeks views on the BoE's draft statement of policy, which sets out how the BoE will impose de minimis limits and, where appropriate, grant permissions to modify or waive certain rules during the mobilisation period for CCPs.

The consultation paper sets out the BoE's proposed approach to using its requirements and permissions powers as follows:

• de minimis limits may include limits on the scope and volume of clearing activity, CCP membership, and loss and/or risk metrics, thereby constraining activity to levels suitable for live testing rather than business-as-usual operations;
• all rules in the BoE's CCP Rulebook, excluding the Fundamental Rules, are potentially in scope for modification or waiver during mobilisation;
• the BoE expects new CCPs to hold at least £1 million in capital during mobilisation in most cases;
• mobilisation is expected to last up to 12 months, with CCPs required to notify the BoE at least three months in advance of exiting; and
• the mobilisation application provides a streamlined process for prospective CCPs to apply for both voluntary requirements and permissions alongside their recognition application.

The consultation closes on 4 June 2026. The final statement of policy will enter into effect at the same time as the final CCP rules, expected no earlier than the end of the first half of 2026.

5. FCA publishes Quarterly Consultation Paper No. 51 on miscellaneous amendments to its Handbook

On 6 March 2026, the FCA published Quarterly Consultation Paper No. 51 (CP26/8), proposing various amendments to its Handbook. The paper addresses a broad range of updates across multiple sourcebooks, including:

• CASS: consequential amendments to CASS 1, 7 and 8, following the proposed changes to the definition of designated investment business, to ensure the rules work for cryptoasset activities and the wider new crypto regime;
• MAR: transferring some provisions in Article 17 of RTS 1 into the framework now provided by MAR 11A so that more equity transparency provisions are available and more clearly expressed in a single location; disapplying private rights of action under section 138D of FSMA 2000 for specified MAR chapters; and adding a Classification of Financial Instruments code for overnight interest swaps and fixed floating interest rate swaps;
• PRM: amending the rules for the new Public Offers and Admissions to Trading regime to clarify the scope of certain obligations and exemptions;
• MIFIDPRU: amending the prohibition on non‑cash distributions on own funds instruments for FCA investment firms; and
• UK Listing Rules: minor changes to UK Listing Rules, in response to recent feedback.

The consultation closes on 13 April 2026 for Chapters 2–4 and 6–9, 20 April 2026 for Chapter 5 (PRM), and 23 March 2026 for Chapter 10 (UK Listing Rules).

Banking and Prudential

6. EBA publishes draft implementing technical standards on third-country branch supervisory reporting

On 5 March 2026, the EBA published its final report and draft implementing technical standards (ITS) specifying the supervisory reporting requirements for third-country branches (TCBs) under Articles 48k and 48l of Directive 2013/36/EU, as amended by Directive (EU) 2024/1619 (CRD VI).

The draft ITS set out two annexes of standardised templates:

• Annex I covers information requirements concerning the TCBs themselves; and
• Annex II addresses information requirements regarding their head undertaking.

The draft ITS will apply from 28 March 2027, with the first reporting reference date set at 31 March 2027.

7. HM Treasury publishes the Credit Institutions and Investment Firms (Miscellaneous Definitions) (Amendment) Regulations 2026

On 4 March 2026, HM Treasury published the Credit Institutions and Investment Firms (Miscellaneous Definitions) (Amendment) Regulations 2026 (the Regulations), which restate key definitions from the UK Capital Requirements Regulation (UK CRR). The Regulations form part of the UK's ongoing programme under the Financial Services and Markets Act 2023 to repeal and replace assimilated EU financial services law.

The Regulations amend FSMA 2000 so as to:

• restate definitions including "CRR firm", "UK parent financial holding company", "UK parent mixed financial holding company", "financial holding company", "financial institution" and "mixed financial holding company";
• insert a new definition of "Part 4A investment firm" into section 417, restating the former "investment firm" definition from article 4 of the UK CRR; and
• insert a new Schedule 19D, restating certain activities falling within the former "Annex 1 activities" definition in article 4 of the UK CRR.

Consequential amendments are also made to the Banking Act 2009, the Financial Conglomerates and Other Financial Groups Regulations 2004, the Bank Recovery and Resolution (No. 2) Order 2014 and the Securitisation Regulations 2024.

The Regulations come into force on 1 January 2027.

8. BoE publishes policy statement on extending RTGS and CHAPS settlement hours

On 24 February 2026, the BoE published a policy statement confirming its decision to extend Clearing House Automated Payment System (CHAPS) settlement hours by moving the start of settlement from 06:00 to 01:30. The policy statement follows the BoE's July 2025 consultation paper on extending settlement hours and forms part of the Future Roadmap for Real-Time Gross Settlement (RTGS), designed to unlock the renewed system's technical capabilities.

Following feedback to the consultation, the BoE confirmed that:

• Early morning CHAPS extension: the BoE will proceed with the extension of CHAPS settlement hours, enabling settlement from 01:30 under an optional participation model, with go-live targeted for September 2027, subject to final confirmation of the planned timelines with impacted CHAPS Direct Participants
• A later CHAPS contingency window: the BoE will not make any changes to the evening contingency window given limited demand. Consideration of a longer weekday operating window will be incorporated into the longer-term roadmap towards near 24x7 settlement; and
• Additional bank holiday settlement: the BoE will explore a refined proposal alongside the relevant external stakeholders to assess the demand, benefits and feasibility of enabling both CHAPS and net settlement on certain bank holiday Mondays.

The BoE aims to publish a consultation paper in Spring 2026 exploring the potential for near 24x7 extension of RTGS/CHAPS settlement hours. The early morning extension changes are expected to go live in September 2027.

9. Government publishes the Financial Services and Markets Act 2000 (Exemption) (Amendment) Order 2026

On 25 February 2026, the Government published the Financial Services and Markets Act 2000 (Exemption) (Amendment) Order 2026 (SI 2026/157) (Order). The Order amends the Financial Services and Markets Act 2000 (Exemption) Order 2001 (SI 2001/1201) (Exemption Order) to exempt the British Business Bank plc, certain of its subsidiaries, and the National Housing Bank Limited from the general prohibition set out in section 19 of FSMA 2000, which provides that no person may carry on a regulated activity within the UK without being an authorised person or an exempt person.

Under the Order, the British Business Bank plc and nine of its subsidiaries are added to Part 1A of the Schedule to the Exemption Order, meaning they will be exempt from the general prohibition in respect of all regulated activities specified in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544). This provides a comprehensive solution that removes barriers created by requiring FSMA perimeter testing on new initiatives, reducing costs and enabling timely delivery of the British Business Bank's expanded mandate under its Five-Year Strategic Plan (2025–2030). The National Housing Bank Limited, which will provide debt, equity and guarantee instruments to facilitate housing development and regeneration, is also added to Part 1A of the Schedule.

The Order will come into force on 27 March 2026.

10. Government publishes the Financial Services and Markets Act 2023 (Commencement No. 13) Regulations 2026

On 26 February 2026, the Government published the Financial Services and Markets Act 2023 (Commencement No. 13) Regulations 2026 (SI 2026/174) (Regulations). The Regulations are the 13th commencement regulations made under the Financial Services and Markets Act 2023 (FSMA 2023) and form part of the UK's ongoing programme to revoke and replace assimilated EU financial services law.

Under the Regulations, section 1(1) of FSMA 2023 is brought into force in relation to the revocation of Articles 4, 4A, 4B and 5 of Regulation (EU) No 575/2013 on prudential requirements for credit institutions and investment firms (Capital Requirements Regulation). These articles provide for definitions used in the Capital Requirements Regulation. Certain definitions in Article 4 are revoked separately by virtue of regulation 3 of the Financial Services and Markets Act 2023 (Commencement No. 12 and Saving Provisions) Regulations 2026 (SI 2026/45).

The Regulations will come into force on 1 January 2027.

11. Government publishes the Capital Requirements Regulation (Market Risk Transitional Provision) Regulations 2026

On 4 March 2026, the Government published the Capital Requirements Regulation (Market Risk Transitional Provision) Regulations 2026 (the Regulations). The Regulations form part of the UK's implementation of Basel 3.1 and facilitate a PRA-led approach to capital requirements by introducing a transitional provision for internal model requirements relating to market risk. The Regulations insert new Article 465A into the UK Capital Requirements Regulation, which responds to delays in other major jurisdictions' implementation of the market risk elements of Basel 3.1.

Under the Regulations, credit institutions and Part 4A investment firms must not apply specified PRA internal model approach rules during the transitional period from 1 January 2027 to 31 December 2027. During this period, institutions may continue using their existing market risk models or adopt the new standardised approaches. HM Treasury retains the power to extend the transitional period by regulations, subject to the negative procedure.

The Regulations will come into force on 30 December 2026.

12. PRA publishes policy statement on recognised exchanges policy and transfer of main indices

On 5 March 2026, the PRA published policy statement (PS6/26) on recognised exchanges policy and the transfer of the main indices list to the PRA Rulebook. The policy statement provides feedback to consultation papers CP3/25 and CP19/25. Respondents generally welcomed the proposals and the flexibility for firms to recognise overseas exchanges for their own purposes. The policy statement contains the PRA's final rules and revokes supervisory statement SS20/13 in its entirety.

The policy statement confirms the following changes:

• conditions for identifying recognised exchanges or assets traded on these exchanges under Article 4(1)(72)(c) of the Capital Requirements Regulation will require firms to assess an exchange and market structure condition and, in respect of the relevant asset traded or listed on that exchange, an asset liquidity condition;
• the definition of "higher risk equity exposure" will be amended so that, for the listing condition, an equity exposure will only be classified as higher risk if it is not listed on an exchange meeting the exchange and market structure criteria;
• the list of main indices will be restated as a new definition in the PRA Rulebook Glossary Part, with minor amendments to reflect changes in the index market (most notably, the S&P NZX 15 Index will be replaced with the S&P NZX 10, and the MSCI Russia Index and Russian Traded Index will be removed from the main indices list); and
• consequential amendments will be made to the Counterparty Credit Risk Part and Credit Risk Mitigation Part of the PRA Rulebook.

The recognised exchanges conditions and revocation of SS20/13 will take effect on 1 July 2026. The amended definition of higher risk equity exposure, restated main indices list and consequential amendments will take effect on 1 January 2027, alongside the implementation of the Basel 3.1 standards.

Payments

13. HM Treasury publishes Payment Forward Plan for 2026-2028

On 26 February 2026, the Payments Vision Delivery Committee published the Payments Forward Plan, setting out a coordinated regulatory roadmap for the UK payments sector over the next three years. The plan builds on the Government's National Payments Vision and has been developed in collaboration with the BoE, FCA and Payment Systems Regulator (PSR), providing a consolidated view of planned payments-related initiatives.

The Payments Forward Plan covers a wide-ranging programme of work across retail payments, wholesale payments and digital assets. Key initiatives include the modernisation of payments services regulation through a review of assimilated payments law, including the Payment Services Regulations and E-Money Regulations. The plan also addresses stablecoin regulation, Open Banking reforms, digital pound development, and enhancements to retail payments infrastructure. Further workstreams cover APP fraud measures, anti-money laundering reforms, and safeguarding requirements for non-bank payment service providers.

HM Treasury consultation is expected in Q2 2026. Going forwards, the Payments Vision Delivery Committee has agreed to add an enhanced focus on payments to the Regulatory Initiatives Grid in its first 2027 publication.

Senior Managers and Governance

No new updates.

Financial Crime

14. Government publishes fraud strategy for 2026-2029

On 9 March 2026, the Home Office published its Fraud Strategy 2026-2029, setting out a comprehensive system-wide approach to disrupting fraud, safeguarding individuals and businesses, and delivering justice. Fraud is identified as the largest reported crime type in England and Wales, representing 45% of all crime, with economic and social costs reaching at least £14.4 billion in 2023–2024. The Government has committed over £250 million between 2026 and 2029 to implement the strategy, which is structured around three pillars: Disrupt, Safeguard, and Respond.

The strategy sets out the following key initiatives:

• launching the Online Crime Centre in April 2026, a public-private partnership backed by £31 million in funding, to share data and coordinate interventions that address online fraud at scale;
• introducing a Fraud Victims Charter in 2027 to set national standards for victim support, response times and communication pathways;
• proposing judge-only trials for the most complex fraud cases by the end of this Parliament to address delays in bringing serious offenders to justice;
• requiring the FCA to share best practice recommendations in relation to authorised push payment fraud and exploitative money laundering, with HM Treasury to repeal existing Strong Customer Authentication technical standards to enable a more agile, outcomes-focused approach; and
• mandating electronic invoicing for all VAT invoices from April 2029 to reduce the risk of interception-based fraud.

15. Home Office publishes call for evidence on economic crime information sharing

On 9 March 2026, the Home Office published a call for evidence seeking stakeholder input on the UK's economic crime information sharing framework. The document aims to identify legal, operational and cultural barriers to effective data sharing across public and private sectors to combat fraud, money laundering and corruption. The call for evidence supports the Government's Economic Crime Plan 2 initiatives and responds to recommendations from Jonathan Fisher KC's Independent Review of Disclosure and Fraud Offences.

The call for evidence focuses on five key areas:

• private-to-private information sharing, including the effectiveness of the Economic Crime and Corporate Transparency Act 2023 provisions and the under-utilised "Super SAR" model under section 11 of the Criminal Finances Act 2017;
• private-to-public information sharing, including the Suspicious Activity Reports regime under the Proceeds of Crime Act 2002 and whether the "suspicion" threshold should be amended to "reasonable grounds to suspect";
• public-to-public information sharing, including whether a broad legal gateway similar to the Digital Economy Act 2017 should be introduced for economic crime purposes;
• cross-border information sharing challenges arising from fragmented legal regimes and operational complexity; and
• the role of new technologies, including artificial intelligence and automation, in detecting and acting upon economic crime information.

The consultation closes on 18 May 2026.

Retail Services

16. FCA publishes annual Regulatory Priorities report for consumer investments

On 4 March 2026, the FCA published its annual Regulatory Priorities report for consumer investments, setting out key areas of focus for advisers, wealth managers, SIPP operators, investment platforms, and other consumer investment firms. The Regulatory Priorities reports are a new series of FCA annual reports (replacing previous 'portfolio letters'), setting out the regulator's key focus areas for each sector (see entry 28 for further detail). The FCA also published a speech by Lucy Castledine (Director of Consumer Investments at the FCA) highlighting key FCA priorities for consumer investments, which was delivered at the TISA Inclusive Investing Conference 2026.

The Regulatory Priorities report identifies four FCA priorities for consumer investments:

1. building a stronger investment culture;
2. strengthening trust;
3. securing good customer outcomes; and
4. strengthening financial crime controls.

In the report, the FCA emphasises the importance of firms providing clear risk disclosures and balanced communications with respect to risks and rewards. Firms are expected to maintain effective controls to prevent fraud, money laundering, and market abuse, including enhanced surveillance and financial crime risk assessments on appointed representatives.

The report sets out a timeline of key regulatory developments in 2026, which the FCA considers align with the four priorities listed above. For example, for the "building a stronger investment culture" outcome, the FCA notes that (i) the authorisations gateway for targeted support opened on 2 March 2026, with the go-live date of the regime 6 April 2026; and (ii) responses to the FCA's discussion paper on expanding consumer access to investments are due by 6 March 2026.

17. FCA publishes policy statement on rules for 'targeted support'

On 27 February 2026, the FCA published a policy statement (PS25/22) containing final rules for the new specified activity of targeted support. The new framework seeks to address the "advice gap", with the FCA estimating that around 23 million consumers are currently underserved by the markets for advice and guidance.

The FCA also published joint statements with the Financial Ombudsman Service (FOS) and the Information Commissioner's Office (ICO), clarifying how complaints and direct marketing rules will apply in the context of targeted support. For further detail, please see our previous FSS entry summarising these publications here.

As opposed to personalised advice (which is based on a holistic assessment of the customer's characteristics), firms authorised to provide targeted support will be able to provide specific, actionable suggestions designed for groups of consumers with common characteristics, where such recommendations aim to put customers in a 'better position'.

Firms can apply for permission to provide targeted support from 2 March 2026, with the regime going live on 6 April 2026. The FCA's pre-application support service (PASS) is available to firms intending to apply for a targeted support permission.

18. FCA publishes good practice and areas for improvement on Consumer Duty board reports

On 24 February 2026, the FCA published its findings on good practice and areas for improvement on firms' approach to completing annual Consumer Duty board reports. The update builds on the FCA's first annual review in December 2024, which assessed 180 firms across retail banking, wholesale, insurance, payments, consumer investments and consumer finance sectors.

Under the Consumer Duty, firms must prepare reports for their governing bodies, setting out results of the firms' monitoring of customer outcomes and any actions identified from such monitoring. The guidance identified five areas for improvement:

1. Better data quality: Some firms lacked sufficient data (or sufficient quality of data) to justify conclusions or give governing bodies adequate assurance that firms are meeting their obligations under the Duty. In some instances, management information (MI) was not accompanied with sufficient information to illustrate that the data constitutes evidence of good outcomes;
2. Comprehensive view across distribution chains: Reports often failed to evidence that appropriate information had been shared across distribution chains with third parties;
3. Analysis of different customer types: Some firms did not adequately consider outcomes for different customer groups, including those with characteristics of vulnerability;
4. Challenge from the board: Effective board challenge was not always evident, with some reports appearing to treat boards as a "rubber stamp"; and
5. Taking effective action: Some action plans and improvements were not accompanied by further details such as timescales, action owners, and clarity on the data that would be used to evidence good outcomes.

19. FCA publishes consultation paper on credit information market remedies

On 25 February 2026, the FCA published a consultation paper (CP26/7) outlining proposed remedies to improve the credit information market following its Credit Information Market Study (CIMS) report of December 2023. The proposals aim to enhance the coverage, quality and consistency of credit information, enabling better consumer outcomes, improved competition in retail lending markets and more effective credit decision-making. The consultation sets out new FCA Handbook rules for mandatory data sharing with designated consumer credit reference agencies (DCCRAs), alongside requirements to improve data accuracy and dispute resolution.

The FCA's key proposals include:

• introducing mandatory reporting requirements for firms undertaking certain regulated credit and mortgage activities, requiring those that share consumer credit information with at least one DCCRA to share all available information with all DCCRAs (proposed to be Equifax, Experian and TransUnion);
• requiring firms to share consumer credit information with DCCRAs at least once per month and to share both positive and negative data where available;
• requiring firms to respond to credit reference agencies within 14 days when notified of a dispute under section 159 of the Consumer Credit Act 1974; and
• introducing requirements for firms to report satisfied County Court Judgments (CCJs) and Decrees to the Courts or Registry Trust when they become aware debts have been paid in full.

The consultation closes on 1 May 2026 and the FCA proposes an implementation period of 12 months following publication of its policy statement.

20. FCA publishes statement on motor finance compensation scheme implementation

On 4 March 2026, the FCA published a statement providing further details on its proposed compensation scheme for motor finance customers who were treated unfairly regarding undisclosed commission arrangements. The FCA is considering over 1,000 consultation responses and, if the scheme goes ahead, expects to publish final rules in late March 2026.

The statement sets out the following key points:

• the FCA is likely to introduce an implementation period of three months, extending to five months for older agreements, though firms may process claims sooner;
• consumers who complained before the scheme starts will no longer be asked to opt out, and will instead receive a determination from their lender within three months of the implementation period ending;
• consumers will be able to accept redress offers immediately, rather than waiting for a final determination; and
• firms will not be required to use recorded delivery for customer communications, with alternative channels permitted subject to fraud safeguards.

The FCA continues to advise consumers that there is no need to use a claims management company, noting that doing so may result in losing over 30% of any compensation.

Digital Finance and Fintech

21. FATF publishes targeted report on stablecoins and unhosted wallets

On 3 March 2026, the Financial Action Task Force (FATF) published a targeted report on the money laundering, terrorist financing and proliferation financing risks associated with stablecoins and peer-to-peer transactions conducted via unhosted wallets.

The report identifies vulnerabilities in both primary and secondary stablecoin markets and outlines good practices for jurisdictions and the private sector to mitigate illicit finance risks. It sets out key findings and recommended actions, including:

• stablecoins accounted for 84 per cent of illicit virtual asset transaction volume in 2025, surpassing Bitcoin as the dominant asset for cybercrime-related on-chain transactions;
• peer-to-peer transactions via unhosted wallets represent a key vulnerability, as they occur without the involvement of AML/CFT-obliged intermediaries;
• jurisdictions should apply FATF Recommendation 15 to entities involved in stablecoin arrangements, ensuring stablecoin issuers, intermediary VASPs and other relevant participants are subject to clear, enforceable AML/CFT obligations;
• stablecoin issuers are encouraged to implement technical measures enabling them to block, freeze and withdraw stablecoins, and to embed AML/CFT controls in smart contracts; and
• jurisdictions should prioritise developing robust technical capabilities for supervisors and law enforcement, including blockchain analytics tools.

22. FCA publishes direction on relevant application period for cryptoasset permissions

On 27 February 2026, the FCA published a direction specifying the relevant application period for firms seeking a cryptoasset permission under section 55U FSMA, as required by regulation 52 of the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026.

Under the direction, the relevant application period will commence at 9:00am on 30 September 2026 and will end at 11:59pm on 28 February 2027. This five-month window is the period during which firms wishing to undertake the new cryptoasset regulated activities may submit applications to the FCA for the relevant cryptoasset permission. The FCA retains the power under regulation 52 to amend or replace the direction in order to extend the relevant application period. The full commencement date for the cryptoasset regulations is 25 October 2027.

In parallel, the FCA has published a detailed Q&A document responding to questions raised at its January 2026 "Authorisations introductory" webinar on the new cryptoasset regime. The Q&A explains the scope of the new FSMA regime (including activities such as issuing qualifying stablecoins, safeguarding qualifying cryptoassets, operating trading platforms, dealing as principal/agent, arranging and staking), how it will apply to UK and overseas firms, and the transition for existing MLR registered and FSMA authorised firms. It also sets out the FCA’s expectations and timelines for applications: firms applying within the specified application period can expect their applications to be determined before go live and, if already operating in the UK, may rely on a saving provision to continue business if their application is still being assessed at commencement; firms applying after the window risk being placed into a transitional provision under which they cannot take on new UK customers or new business with existing customers until authorised.

The Q&A further covers prudential proposals, custody and safeguarding standards, Consumer Duty expectations, reporting, outsourcing, and the support available to prospective applicants, including pre application meetings through the FCA’s Pre Application Support Service (PASS) from July 2026 and access to the FCA’s innovation services.

23. FCA publishes guidance for cryptoasset firms on use of s.21 financial promotions approvers

On 27 February, the FCA published guidance for cryptoasset firms that are currently using the services of an FCA-authorised firm to approve their cryptoasset financial promotions under s.21 FSMA.

The guidance outlines the implications of the new cryptoasset regime, and sets out the transitional provisions that will apply depending on when firms submit their authorisation applications, as follows:

• cryptoasset firms that apply for authorisation during the application period (30 September 2026 to 28 February 2027) may continue using their s.21 approver until their application is determined;
• firms that do not apply during this window may continue using a s.21 approver only until the new regime commences; and
• cryptoasset firms that fail to apply for authorisation before the new regime must run-off their UK cryptoasset business before commencement or risk breaching the general prohibition under s.19 FSMA or acting without permission under s.20 FSMA.

The FCA also clarifies that once a cryptoasset firm is authorised, it may communicate its own financial promotions without needing a separate s.21 approver.

ESG

24. HM Treasury publishes good practice guide on TCFD-aligned reporting

On 5 March 2026, HM Treasury published a good practice guide on Task Force on Climate-Related Financial Disclosures (TCFD)-aligned reporting for public sector organisations. The guide supports preparers of TCFD-aligned disclosures by highlighting good practice, common pitfalls, and helpful guidance, with examples from government departments and Arms' Length Bodies.

25. FCA publishes guidance on good and poor practice for sustainability labels

On 27 February 2026, the FCA published a webpage on how to use sustainability labels, as well as a press release on good and poor practices with respect to the Sustainability Disclosure Requirements (SDR) regime. The SDR labelling regime, which has been in place since July 2024, seeks to help consumers navigate the sustainable investment market and reduce risks of greenwashing.

The publications address the criteria for using sustainability labels, and set out examples of good and poor practice with respect to the fund authorisations process, including (without limitation):

• products using any of the four labels (Sustainability Focus, Sustainability Improvers, Sustainability Impact, and Sustainability Mixed Goals) must meet general criteria including a clear, specific and measurable sustainability objective, with at least 70% of assets invested in accordance with that objective;
• the FCA emphasises that good disclosures are clear, concise and avoid complex terms, while poor disclosures include vague objectives such as "contribute to SDGs" or "create value for society" without specificity; and
• firms must also ensure their disclosures accurately reflect what the product invests in, supported by robust, evidence-based standards.

26. EU adopts directive amending corporate sustainability reporting and due diligence requirements

On 26 February 2026, EU Parliament and EU Council published Directive (EU) 2026/470 as regards corporate sustainability reporting and due diligence requirements. The Directive follows the EU Commission's simplification agenda and aims to reduce administrative burdens while maintaining the policy objectives of the European Green Deal.

Under the Directive:

• the scope of mandatory sustainability reporting is limited to undertakings exceeding €450 million net turnover and 1,000 employees on average during the financial year. This threshold also applies to credit institutions and insurance undertakings; and
• for due diligence obligations, the turnover threshold is raised to €1.5 billion and the employee threshold to 5,000 employees.

The Directive also introduces protections for undertakings with fewer than 1,000 employees in reporting undertakings' value chains, including a statutory right to decline information requests exceeding voluntary reporting standards. Additional amendments include the removal of sector-specific European Sustainability Reporting Standards (ESRS), the deletion of requirements to adopt reasonable assurance standards, and the repeal of transition plan provisions under the due diligence framework.

Member States must transpose provisions relating to sustainability reporting amendments by 19 March 2027 and due diligence amendments by 26 July 2028. Due diligence obligations will apply from 26 July 2029, with reporting requirements applying from financial years starting 1 January 2030.

Other

27. FCA launches Regulatory Priorities reports for regulated sectors

On 24 February 2026, the FCA published the first of nine new annual Regulatory Priorities reports, replacing the FCA's previous portfolio letter publications. The reports are part of the FCA's drive to streamline how it communicates sector-specific priorities to firms. Previously, firms were required to navigate more than 40 portfolio letters to understand FCA expectations. The reports contain the following features:

• each report provides sector-specific priorities and outlines relevant upcoming FCA work over the next year;
• the reports are designed with one-page priority summaries and direct links to further detail;
• reports will be published on an annual cycle, helping firms stay up to date with regulatory developments; and
• boards and chief executives should review the reports and act on the priorities identified, where relevant to their business models.