Financial Services SpeedRead: 19 November 2025 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. Government publishes the Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2025

On 13 November 2025, HMT laid before Parliament the Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2025 (the Regulations). The Regulations, which were made on 11 November 2025, extend the post-Brexit UK-Gibraltar transitional passporting arrangements for financial services by one year. Such arrangements allow specified Gibraltar-based firms to provide financial services in the UK and facilitate reciprocal access for UK-based firms to Gibraltar's market, pending the establishment of the permanent Gibraltar Authorisation Regime under the Financial Services Act 2021. 

The Regulations come into force on 16 December 2025 and the transitional regime now runs to 31 December 2026, avoiding a cliff edge in 2025.

2. FCA publishes multi-firm review of contracts for difference providers

On 13 November 2025, the FCA published a multi-firm review of contracts for difference (CFD) providers to assess compliance with Consumer Duty's "Price and Value" outcome. The review sampled about a quarter of UK regulated manufacturers and distributors of CFDs.

Findings showed inconsistent application of the Consumer Duty. In particular, the review covered:

• fair value assessments (FVAs); 
• overnight funding charges;
• appropriateness testing and firms' use of "wealth bars";
• onboarding checks for vulnerable clients;
• industry approaches to / hedged client positions; and
• interest on clients' accounts.

The FCA is engaging with selected firms in the review and is considering further work in some areas identified from the survey. It encourages all firms manufacturing or distributing CFDs to retail clients consider the findings.

Our views on the report can be found here.

3. FCA publishes findings on risk assessment processes and controls in firms

On 11 November 2025, the FCA published their findings on good and poor practices by firms in meeting the existing risk assessment requirements. The assessment focused on business wide (BWRA) and customer risk assessments (CRA) across sectors such as building societies, platforms, custody / fund services, e money, and wealth managers.

Good practice examples identified in the report include:

• Identifying, understanding and assessing risk: examples of good practice included comprehensive risk assessment, annual detailed review, and tailored assessments; examples of bad practice included lack of detail, missing quantitative analysis, unclear processes, lack of evidence.
• Mitigating risk: examples of good practice included plan for compliance alongside growth, risk assessments, track actions to reduce risk, and risk considered throughout the business; examples of bad practice included growth that outpaces risk assessment, lack of records, rapid expansion.
• Managing risk: examples of good practice included senior oversight and challenge, continuity plans, clear methods to assess risk, regular review, and joined-up assessments; examples of bad practice included ack of evidence of senior oversight, narrow focus, ack of testing, static approach to assessment.

The FCA concluded the report by stating it will work with firms where weaknesses were found, while continuing supervisory monitoring to drive improvements.

4. Government publishes amending legislation to Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) Order 2025 (SI 2025/859)

On 5 November 2025, the Government published the Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) (No. 2) Order 2025 (SI 2025/1154) on Legislation.gov together with an explanatory note (the Order). The Order was made on 3 November 2025, before being laid before Parliament on 4 November 2025.

The Order amends the Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) Order 2025 (SI 2025/859), which provides for certain "buy-now-pay-later" (BNPL) agreements to become regulated credit agreements captured by the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544) (RAO). Under the Order, domestic premises suppliers are excluded from article 36A (credit broking) of the RAO when carrying on activities in relation to regulated BNPL agreements. The aim is to bring the treatment of these suppliers in line with that of other merchants, such that all credit broking activities carried on in relation to regulated BNPL agreements are now excluded from the RAO.

The Order also makes amendments relating to the transition to the new regime to regulate BNPL agreements (for which the regulatory commencement date is 15 July 2026), including how existing Part 4A permissions will be treated following the amendments to the RAO.

The Order will come into force on 3 December 2025.

5. FCA publishes speech on role of chief risk officer

On 5 November 2025, the FCA published a speech delivered by Sarah Pritchard, deputy chief executive of the FCA, at the launch of the Chief Risk Officer (CRO) network. The speech covers the role of the CRO and sets out the FCA’s agenda to rebalance risk in support of growth and innovation, underpinned by outcomes based rather than prescriptive regulation.

Pritchard describes the FCA’s new five year strategy and its four priorities: becoming a smarter regulator, supporting growth, tackling financial crime, and helping consumers navigate their finances. The speech invites CROs to identify and report regulatory barriers, including where industry practice may be more restrictive than the rules require.

The speech concludes that more calculated, controlled risk is needed to drive growth, and encourages CRO engagement with the FCA on busting the regulatory myths that hinder progress.

6. Government publishes the Berne Financial Services Agreement

On 31 October 2025, the Government published the Financial Services and Markets Act 2023 (Mutual Recognition Agreement) (Switzerland) Regulations 2025 (SI 2025/1145), together with an explanatory memorandum on its website. The regulations, which were made on 30 October 2025, implement the UK's commitments under the Berne Financial Services Agreement and provides for the mutual recognition in financial services between the UK and Swiss regimes.

The regulations come into force on 1 January 2026. Our wider report of the Berne Financial Services Agreement can be found here.

7. FCA multi-firm review of consolidation in the financial advice and wealth management sector

On 31 October 2025, the FCA published the findings of a multi firm review of consolidation across the financial advice and wealth management sector. The FCA recognised the benefits of consolidation such as pooled resources and expertise, stronger governance and improvements in financial resilience - but warned that rapid, poorly managed growth can lead to client harm, service disruption and disorderly failure.

Key risk areas include:

• groups which are not prudentially consolidated (including the use of offshore holding structures and goodwill being held outside the investment firm group);
• group debt structures weakening the resilience of regulated entities (particularly the use of double leverage when paired with guarantees or securities over regulated entities' assets); and
• groups failing to scale their compliance and governance infrastructure to keep pace with growth (including limited independent challenge and inadequate oversight of conflicts).

Good practices highlighted by the FCA include:

• clear group structures with strong governance and risk management, better enabling the group to achieve growth and deliver good outcomes to stakeholders;
• groups ensuring regulated entities were well resourced and resilient despite wider group debt; and
• comprehensive group wide risk identification, capturing capital and liquidity needs (including compliance with Internal Capital and Risk Assessment (ICARA) obligations).

The FCA set no new expectations but urged firms to compare their current arrangements against these findings, and consider reassessing their group structures and risk management to better support resilient growth, achieving Consumer Duty outcomes and timely change in control processes.

8. ESMA publishes guidelines compliance tables

On 29 October 2025, ESMA published three guidelines compliance tables tracking how national authorities across the EU and European Economic Area are complying with ESMA guidelines under the Markets in Crypto Assets Regulation (MiCA).

The compliance tables covered ESMA guidelines on:

• Reverse solicitation: situations in which a third-country firm is deemed to solicit clients established or situated in the EU and the supervision practices to detect and prevent circumvention of the reverse solicitation exemption under MiCA;
• Qualification of crypto-assets: the conditions and criteria for the qualification of crypto-assets as financial instruments; and
• Market abuse: supervisory practices to prevent and detect market abuse under MiCA.

The tables provide a jurisdiction by jurisdiction snapshot of whether the relevant competent authority complies or intends to comply with the guidelines, and comments on the implementation status.

Banking and Prudential

9. BoE publishes policy statement on UK leverage ratio requirement

On 12 November 2025, the BoE published a Prudential Regulation Authority (PRA) policy statement (PS22/5) providing feedback to the recent consultation paper on when the UK leverage ratio requirement (CP2/25). In the consultation, the PRA proposed to:

• increase the retail deposits threshold for the application of the requirement from £50 billion to £70 billion, to reflect increases in nominal UK GDP since its introduction; and
• keep the non-UK assets threshold unchanged at £10 billion.

Following the consultation, the PRA has made the following rule changes:

• increasing the retail deposits threshold from £50 billion to £75 billion;
• calculating the metric of firms’ retail deposits that is compared to the threshold will be calculated using a three-year averaging mechanism.

10. European Commission launches targeted consultation on market risk prudential framework

On 6 November 2025, the European Commission published a targeted consultation on the application of the EU’s market risk prudential framework (comprising the Basel III standards for market risk – also known as the fundamental review of the trading book (FRTB) – which were designed as a response to shortcomings in the market risk prudential framework post-financial crash).

Given the uncertainty of implementation timelines of the FRTB standards across other jurisdictions with internationally active banks, and the subsequent concerns regarding the international level playing field and impact on EU players, the European Commission launched this consultation to gather feedback on the implementation of the new market risk prudential requirements in the EU.

The consultation explores use of the empowerment under Article 461a of the Capital Requirements Regulation (CRR) to adopt a delegated act by end March 2026 which aims, via time-limited measures, to neutralise the negative impacts stemming from an uneven playing-field in the international implementation of the Basel III standards. Such empowerment allows changes for up to a duration of three years.

Further, the consultation discusses the use of the empowerment in Article 461a of CRR to introduce a multiplier for the overall market risk capital requirements that banks negatively impacted by the new rules (i.e. banks facing an increase in capital requirements for market risk) would be allowed to use to significantly limit their market risk capital requirements increases for three years.

Responses are invited via the Commission's online questionnaire by 6 January 2026.

11.  EBA finalises draft RTS on credit valuation adjustment risk of securities financing transactions

On 29 October 2025, the EBA published its final report containing draft regulatory technical standards under Article 382(6) Capital Requirements Regulation (CRR) on when credit valuation adjustment (CVA) risk from fair valued securities financing transactions (SFTs) is “material.”

The draft RTS specify an assessment based on a ratio that quantifies the increase of CVA risk arising from the inclusion of fair-valued SFTs in scope of the own funds requirements for CVA risk. The draft RTS set a materiality threshold at 5% for inclusion in the scope of the own funds requirements for CVA risk, and set frequency of assessment on a quarterly basis.

The draft RTS will be submitted to the European Commission for adoption and subsequent scrutiny by the European Parliament and Council before publication in the Official Journal.

Retail Services

12.  HMT publishes strategy for future retail payment infrastructure

On 7 November 2025, HMT published the Payments Vision Delivery Committee's (PVDC) strategy for future retail payments infrastructure. The strategy follows the PVDC's announcement in July 2025, where it set out a new model to deliver the next generation of UK retail payments infrastructure.

The strategy focuses on three pillars: innovation; competition; and security. The strategy also sets out the following five high-level strategic outcomes:

• consumers and businesses have a greater choice of innovative and cost-effective payment options that meet their needs;
• payments operate seamlessly as part of a diverse multi-money ecosystem, with interoperability between new and existing forms of digital money;
• consumers and businesses can trust that their payments are protected from fraud and wider financial crime;
• participant firms have fair, transparent and non-discriminatory access to the infrastructure – maximising competition and scope for innovation across the payments ecosystem; and
• the payments ecosystem is operationally and financially resilient.

Delivery of the new retail payments infrastructure will be a multi-year project co-ordinated between HMT, the BoE, the FCA and the Payment Systems Regulator.

13.  FCA extends consultation on motor finance compensation scheme; final rules expected early 2026

On 5 November 2025, the FCA published an update on its industry-wide compensation scheme for motor finance customers treated unfairly between 2007 and 2024.

Issues raised to date include the scheme period, the appropriate compensatory interest rate, independent mechanisms to ensure confidence (including the role of the Financial Ombudsman Service and possible alternatives), cost-effective participation for smaller firms or those with few eligible agreements, fraud prevention, and implications of manufacturer–captive lender relationships for new car lending.

The FCA has extended the consultation deadline until 5pm on 12 December 2025 and intends to publish final rules in early 2026.

Digital Finance and Fintech

14.  IOSCO finalises recommendations on neo brokers and investor protection

On 12 November 2025, the International Organization of Securities Commissions (IOSCO) published its final report on neo brokers, setting out a high level package of recommendations for securities regulators globally, including investor protection measures.

Please see our briefing published 12 November 2025 for further detail.

15.  European Parliament publishes draft report on the Digital Euro Regulation

On 3 November 2025, the European Parliament’s Committee on Economic and Monetary Affairs published a draft report on the proposed Digital Euro Regulation as part of the Single Currency Package. The Committee published a complementary report on the legal tender of euro banknotes and coins; and in addition published a third on the provision of digital euro services by payment service providers.

The reports propose, among other things:

• establishment of an offline digital euro described as a tokenised, device to device instrument offering privacy comparable to cash and resilience during connectivity outages;
• amendments to regulation on safeguarding universal cash access and acceptance; and
• amendments to regulation on the provision of digital euro services by payment providers in non-euro area Member States, suggesting supervisory controls.

ESG

16.  EU adjusts European Sustainability Reporting Standards phase ins and postpones certain disclosure requirements

On 10 November 2025, the European Commission published an amendment to Delegated Regulation (EU) 2023/2772 to postpone and adapt the application of certain European Sustainability Reporting Standards (ESRS) disclosure requirements.

The changes include amendments to transitional provisions for entities classified under "wave 1", which means they will not be subject to new reporting requirements beyond the requirements at the date of initial application.

The Regulation enters into force on the third day after publication in the Official Journal and applies to financial years beginning on or after 1 January 2025.

17.  European Commission "Call for Evidence" on climate and environmental delegated acts

On 7 November 2025, the European Commission published a "Call for Evidence" seeking feedback on targeted amendments to the EU Taxonomy Climate and Environmental Delegated Acts.

The initiative is planned as a package of two Delegated Regulations, which aim to improve the clarity, usability, legal certainty, and cost-effectiveness of the EU Taxonomy. They seek to address identified implementation challenges by clarifying technical screening criteria, including the ‘do no significant harm’ criteria, aligning them with recent updates of related EU legislation, and eliminating unnecessary complexity.

Timeline and next steps:

• a four week Call for Evidence runs in November 2025;
• Implementation Dialogue and “Reality Check” workshops are being prepared to collect input ahead of the adoption the Delegated Acts.; and
• the draft Delegated Acts will then be open for four weeks of public feedback, with consultation of the Platform on Sustainable Finance and the Member States Expert Group; planned adoption is in Q2 2026.

18.  EBA publishes final report on guidelines on environmental scenario analysis

On 5 November 2025, the EBA published its final report on its guidelines for environmental scenario analysis. The guidelines address the mandate under the Capital Requirements Directive (Directive 2013/36/EU) and CRR.

The guidelines aim to complement the EBA's existing guidelines on the management of ESG risks (published on 9 January 2025) by addressing the role of scenario analysis in improving institutions' resilience against environmental risks, starting with climate-related factors.

For institutions using the Internal Ratings-Based Approach for calculating the own funds requirements for credit risk, the report also highlights the way in which ESG risks are taken into account in the scenarios used for credit risk internal stress testing.

The guidelines focus on scenario analysis used to: (i) test an institution's financial resilience to severe shocks in the short-term and verify its capital and liquidity adequacy; and (ii) challenge the business model resilience of an institution, including in the medium to long term.

The guidelines will apply from 1 January 2027.

19.  ESAs publishes updated questions and answers on SFDR

On 4 November 2025, the Joint Committee of the European Supervisory Authorities (ESAs) published updated consolidated questions and answers on the Sustainable Finance Disclosure Regulation (Regulation (EU) 2019/2088) (SFDR). The document combines responses given by the European Commission to questions requiring interpretation of EU law, and responses regarding the practical implementation of the SFDR.

Key updates involved:

• scope issues of SFDR;
• Principal Adverse Impact (PAI) definitions of sustainable investment;
• financial product disclosures;
• taxonomy-aligned investment disclosures; and
• financial advisers and execution-only Fisheries Management Plans (FMPs).

Our report on ESAs' previous version of their questions and answers can be found here.

20.  TNFD issues first guidance on integrating nature into corporate transition plans

In November 2025, the Taskforce on Nature-related Financial Disclosures (TNFD) published guidance to help companies and financial institutions incorporate nature into their transition plans. The guidance translates the Kunming Montreal Global Biodiversity Framework's "halt and reverse biodiversity loss by 2030" mission into practical plan components, building on familiar climate transition planning approaches from Glasgow Financial Alliance for Net Zero and the Transition Plan Taskforce (TPT). For example, the TNFD disclosure guidance retains 16 of the 19 TPT recommended disclosures.

The TNFD guidance further covers:

• how an organisation can incorporate nature into its transition plan; and
• how information about nature in transition plans can be disclosed as a standalone report and within annual disclosures aligned with the TNFD recommendations.