This month's highlights include proposed changes to the appointed representative regime, crypto-related changes to the FCA's Client Assets sourcebook, the EBA's opinion on the interaction between PSD2 and MiCA, and the Payment Forwards Plan.

• General
• Digital assets
• Payment services and systems
• Consumer credit and mortgages
• Consumer Duty
• AI
• Operational resilience
• Enforcement
• Financial crime
• This month's question

General

FCA opens authorisation gateway for targeted support

On 2 March 2026, the FCA opened its authorisation gateway for targeted support. The gateway is designed to enable people’s banks, pension providers, or other financial firms that are authorised for targeted support to provide suggestions designed for groups of consumers with common characteristics to help consumers make important decisions across their pensions and investments.

The FCA expects firms to be ready to offer the new service upon the ruling introducing gateway taking effect on 6 April 2026.

Katharine Braddick appointed as PRA Chief Executive and BoE Deputy Governor for Prudential Regulation

On 27 February 2026, the Bank of England (BoE) announced the appointment of Katharine Braddick as the Chief Executive of the PRA and BoE Deputy Governor for Prudential Regulation for a five-year term.

Ms Braddick, who will succeed Sam Woods when his term ends in June 2026, currently works at Barclays as Group Head of Strategic Policy and senior adviser to the CEO. She will not be involved in any supervisory or enforcement decisions involving Barclays for a period of six months from the date on which she becomes Deputy Governor for Prudential Regulation.

FCA publishes webpage on Regulatory Priorities to replace portfolio letters

On 24 February 2026, the FCA published a new webpage introducing its 9 Regulatory Priorities reports. The reports will replace the existing portfolio letters and will set out key specific priorities for each sector regulated by the FCA.

The 9 sector reports to be published are:

• insurance

• consumer investments

• pensions

• retail banking

• mortgages

• consumer finance

• wholesale buy-side

• wholesale markets

• payments.

The sector reports for insurance, consumer investments and pensions were published on 24 February 2026, 4 March 2026 and 10 March 2026 respectively; the remaining reports are to be published later this month.

FCA publishes video guides to assist with authorisation and registration applications for payments and digital asset firms

On 19 February 2026, the FCA published short video guides to help firms improve applications for authorisation or registrations as payments or digital asset firms.

The guides cover:

• expectations of an MLRO (payments and digital asset firms)

• application process (payments and digital asset firms)

• preventing financial crime (payments firms)

• governance (payments firms).

FCA consults on reforming securitisation framework

On 17 February 2026, the FCA launched a consultation on its proposed changes to the rules in the Securitisation Source (SECN) of the FCA Handbook. The proposals focus on simplifying due diligence requirements, streamlining transparency requirements as well as additional changes relating to risk retention, exceptions to resecuritisation ban and the application of the credit granting criteria.

The FCA expects the new requirements will enter into force six months after the final rules are made.

The consultation closes on 18 May 2026. 

FCA publishes whistleblowing data for Q4 2025

On 16 February 2026, the FCA published the whistleblowing data for Q4 2025.

Key points to note include:

• Between October and December 2025, it received 281 new whistleblowing reports (down from 405 in Q3 2025 and 292 in Q3 2024).

• The majority of reports were submitted via the online reporting form (131). The other channels being email (85), telephone (46), letter (8) and other (11).

• 66% of whistleblowers shared identity details with the remaining choosing to remain anonymous.

• The reports contained a total of 788 allegations in total. The top 10 categories were:

During the period, the FCA closed 282 reports with the following action being taken:

HM Treasury launches consultation on appointed representative regime changes

On 12 February 2026, HM Treasury (HMT) published a consultation paper setting out its proposed changes to the legislative framework for the appointed representatives (AR) regime. This follows the publication of HMT's policy statement on the AR regime in August 2025, which we covered in our September 2025 update, and takes into account feedback HMT received to its Call for Evidence in December 2021, which we covered in our January 2022 update.

New principal permission

• There will be a new regulatory gateway for authorised firms that wish to become principals to apply for a new permission.  This is expected to be modelled on the s.21 approver regime, which is found in s. 55NA of FSMA 2000.
• Existing firms will not be required to apply for new permission – the FCA will be able to vary or withdraw the permission if necessary.
• Existing principal firms may be limited to having permission for appointing Introducer ARs only.
• New firms will be able to apply for the principal permission in their Part 4A applications.

• The detailed requirements applying to the contractual relationship between principals and their ARs, as well as requirements relating to the FS register, will be set out in FCA rules.  Currently this is dealt with in primary legislation (FSMA) and secondary legislation (FSMA (Appointed Representatives) Regulations 2001). 

• The government proposes to repeal the legacy MiFID-based tied-agent regime.

Extending the jurisdiction of FOS to ARs

• The jurisdiction of the Financial Ombudsman Service (FOS) will be extended to ARs where there is a complaint relating to the acts or omissions of the AR, for which the principal is not responsible.  The government considers that this is needed to protect consumers, albeit a small percentage, who would otherwise have no access to the FOS to resolve disputes and says this extension should be triggered as a "measure of last resort".  Complaint handling arrangements would still remain the responsibility of the principal firm.

• The government is proposing that the FOS should be able to ensure an AR is joined as a party to FOS complaints where the principal disputes its responsibility for the AR's action and to involve an AR in the investigation of a such a complaint.

• No changes to the Financial Services Compensation Scheme (FSCS) framework are currently contemplated to take into account the impact of a consumer seeking FSCS assistance if the cost of FOS redress against an AR leads to the AR's failure.  This is because the government does not expect such claims to have a material impact on the cost of FSCS compensation.  Indeed, it points out that "the number of FOS cases involving an AR where the FOS concludes the principal firm cannot be held responsible is very small and has been declining in recent years."  

• ARs will be brought within the SMCR – this picks up a topic covered in the previous administration's Call for Evidence in December 2021.

Senior Managers and Certification Regime (SMCR)

• ARs will be brought within the SMCR.

• General conduct rules would apply directly to ARs (except ancillary staff).

• Principals will be required by the FCA to apply fitness and propriety requirements, as determined by the FCA, to their ARs.  This should reduce the current approx. 38,000 persons who need approval under the Approved Persons Regime (the predecessor to SMCR, which currently applies to ARs).

• The FCA will be able to create a new AR Senior Management Function (SMF) in principal firms to reflect the responsibilities principal firms take on when appointing ARs and therefore making the SMF holder directly accountable for overseeing the principal's ARs. 

The consultation closes on 9 April 2026.

FOS publishes Q3 2025/26 complaints data on financial products and services

On 5 February 2026, the Financial Ombudsman Service (FOS) published its quarterly complaints data on financial products and services for the period October to December 2025 (Q3 2025/26), together with a press release.

During this period, the FOS received 47,300 new complaints, an increase of 1,000 from the 46,300 complaints received in the previous quarter (Q2 2025/26), but with a year-on-year decrease from the 68,400 complaints received in the same period last year.

The FOS highlights that the most complaints received during Q3 related to current accounts and represented 8,500 (18%) of the total Q3 complaints. The remaining four most complained about products were as follows:

The FOS also notes that professional representatives brought 4% (2,100) of the new cases in Q3 compared to 9% in the previous quarter (Q2 2025/26) and 43% in the same period last year. The FOS highlights a correlation between the introduction of the new charging model for professional representatives for bringing cases and the significant reduction in complaints received in the Q1 and Q2 2025/26.

ESMA launches consultation on amendments to market abuse delay in inside information disclosure guidelines

On 19 February 2026, the European Securities and Markets Authority (ESMA) launched a consultation requesting feedback on proposed amendments to its guidelines on the delay in disclosure of inside information under the Market Abuse Regulation (MAR). The proposed amendments are intended to align the guidelines with the upcoming changes to the disclosure regime. 

• Guideline 1 amendments. To ensure consistency with the European Commission's list of protracted processes, ESMA proposes to delete those legitimate interests which relate to a protracted process contained in that list. ESMA is seeking market participants' views on whether situations where the financial viability of the issuer is in grave and imminent danger and immediate disclosure would seriously prejudice measures aimed at restoring financial viability, should be maintained as a case of legitimate interest. Additionally, ESMA proposes to add three new categories of legitimate interest to justify a delay in disclosure. 

• Guideline 2 proposals. ESMA proposes to remove Guideline 2 on "situations in which delay of disclosure of inside information is likely to mislead the public" in its entirety, as it is no longer covered by ESMA's mandate.

The consultation closes on 29 April 2026.

ECB and ESRB issue joint report analysing financial stability risks from linkages between banks and the non-bank financial intermediation sector

On 12 February 2026, the ECB and ESRB published a joint report analysing financial stability risks from linkages between banks and the non-bank financial intermediation sector.

Key points to note include:

• NBFI entities fund approximately 15% of euro area bank balance sheets, with short-term funding accounting for a large part of this, whilst total asset-side linkages to NBFI entities amount to about 10% of total bank assets. The short-term nature of such funding, combined with the homogeneity of NBFI funding providers and limited substitutability, means that loss of NBFI funding could create significant challenges for banks in periods of market tension.

• EU insurers and pension funds are stable long-term investors in bank debt, but their preferences may lead to cliff-edge effects.

• Credit exposures to potentially leveraged NBFI entities are concentrated in G-SIBs, with around €432 billion, or 26%, of identifiable euro area bank exposures to NBFI entities directed towards leveraged entities such as hedge funds and securities trading firms.

• In repo markets, euro area banks lend mainly to North American hedge funds and broker-dealers, often in US dollars. Stress test analyses indicate that in a severe asset price shock scenario, deterioration in NBFI counterparty credit quality could lead to a substantial increase in capital requirements.

• The structure of bank-NBFI linkages highlights the need for sufficient risk-bearing capacity among euro area G-SIBs. Capital headroom and liquidity buffers would reduce the need for such procyclical actions, enabling banks to act as shock absorbers rather than amplifiers of financial stress.

It was observed that the limited availability of data on balance sheets and the financial risk of NBFI is a key gap, and data on exposures outside the EU and transactions taking place outside the EU are largely missing.

European Commission launches consultation and call for evidence on the competitiveness of single banking market

On 11 February 2026, the European Commission published a targeted consultation on the competitiveness of the single banking market as part of its Savings and Investments Union (SIU) strategy. A call for evidence has been published alongside the consultation.

The consultation seeks feedback on the state of the banking sector with such feedback intended to assist the European Commission's work to develop a single market in banking, improve capital mobility across the EU and improve the international competitiveness of the EU banking sector.

The consultation focus on three key topics:

• Banking and competitiveness. This section requests general feedback regarding the contribution by the banking sector to a more competitive EU economy. Questions raised focus on the competitiveness of banks, driving factors of competitiveness, competition in the banking markets (both within the EU and globally), cross-border activity, the role of banks in capital markets and the role of digitalisation in driving competitiveness.

• The single market and the banking union. This section requests feedback on the drivers and barriers to market integration in the banking sector, and the current design and potential outstanding features of the banking union.

• Complexity and effectiveness of the regulatory framework. This section requests feedback on the level of complexity in the EU banking regulatory and supervisory framework and its effectiveness. 

The deadline to provide responses to the consultation is 19 April 2026.

The call for evidence running in parallel to the consultation closes on 11 March 2026.

ESMA publishes 2027-2029 programming document

On 5 February 2026, ESMA published its 2027-2029 programming document. The programming document sets out ESMA's work programme for the coming years. ESMA notes that key priorities during the 2027-2029 period are the implementation of the Savings and Investments Union (SIU) initiative, and the Simplification and Burden Reduction agenda.

Points to note include:

• ESMA will continue working closely with national supervisors and EU institutions to promote a common approach to emerging risks, technological development and structural changes in financial markets.

• ESMA's planned work on implementing the Savings and Investment Union (SIU) will include using upcoming reforms to review and streamline its guidance and Level 2 instruments, reducing complexity whilst supporting innovation and competitiveness.

• ESMA's direct supervisory responsibilities are being significantly expanded, including in relation to consolidated tape providers, ESG rating providers and critical ICT third-party providers.

• Key milestones identified include the transition to T+1 settlement in October 2027 and the strengthening of central counterparty supervision. The SIU package is expected to have a significant impact from 2029 onwards.

• On data and digital priorities, ESMA plans the phased implementation of the European Single Access Point (ESAP), with Phase 1 publicly rolled out in Q3 2027, alongside expansion of the ESMA Data Platform and the use of AI-powered supervisory tools. The MiCA integrated monitoring tool is also expected to be operational for competent authorities in Phase 1, with a Phase 2 roll-out anticipated in 2027 subject to Board approval. 

IOSCO Work Program 2026

On 9 February 2026, the International Organisation of Securities Commissions (IOSCO) published its Work Program for 2026. Building on its 2025 work program, the new initiatives the IOSCO intends to undertake include:

• addressing issues related to the fragmentation of OTC derivatives reporting

• work on the impact of market microstructures on liquidity and key developments relating to the trading hours extension on equity trading venues

• collaborating with the FSB in the follow-up work relating to the implementation of recommendations on liquidity management in open-ended funds (OEFs) and Money Market Funds (MMFs)

• convening a discussion among its members to share insights on operational resilience and third-party dependencies, considering, among other things, cross-border cooperation on cyber and outsourcing risks in securities markets

• exploring the increasing availability of novel products to retail investors, and the risks and opportunities of the novel products identified

• developing a supervisory tool kit and guidance for firms on disclosures and governance in respect of AI.

Additionally, the IOSCO will launch a Techsprint aimed at generating innovative tools and fostering investor resilience through sharing good practices and the development of scalable communication materials to help investors with navigating market turbulence and identifying investment fraud.

Back to contents

Digital assets

FCA crypto regime update

Proposed amendments to the FCA's Client Assets sourcebook

On 6 March 2026, the FCA published a quarterly consultation paper (CP26/8), which includes proposed amendments to its Client Assets sourcebook (CASS) in relation to cryptoasset activities.

The changes are needed because of unintended consequences of:

• an expansion of the definition of "designated investment business" in CP25/25 (application of FCA Handbook for regulated cryptoasset activities – part 1) to cover specified qualifying cryptoasset activities

• proposals in CP26/4 (application of FCA Handbook for regulated cryptoassets activities – part 2), which mean references to "qualifying cryptoasset activities" would encompass activities relating to both qualifying cryptoasset activities and specified investment activities.

The FCA is proposing to amend CASS 7 to:

• clarify that money arising from the safeguarding of client cryptoassets should be treated as client money

• clarify that money held in backing funds accounts for stablecoins should not be treated as client money

• amend guidance on the alternative approach to client money segregation to include transactions involving cryptoassets

• prohibit firms undertaking specified qualifying cryptoasset activities from allowing professional clients to opt out of CASS 7 protections

• disapply the delivery versus payment (DvP) exemption related to the use of commercial settlement systems, where the delivery obligation relates to a cryptoasset.

It is also proposing to:

• amend CASS 1 to specify that money held under different regimes, including CASS16, should be segregated separately

• amend CASS 8 to clarify that where a firm is safeguarding client cryptoassets in accordance with CASS 17, it does not also have to comply with the mandate rules in CASS 8 in respect of those client cryptoassets.

Comments on the proposals must be submitted by 13 April 2026.

Application gateway

On 27 February 2026, the FCA published a direction specifying the application gateway dates for firms wishing to carry on the new cryptoasset regulated activities under the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026.

The application gateway will open at 09:00 on 30 September 2026 and close at 23:59 on 28 February 2027.

The FCA has also published responses to questions received by firm during its introductory webinar to the new regime.

Use of s.21 approvers

On 27 February 2026, the FCA published a new webpage on the use of s.21 approvers for approval of cryptoasset financial promotions.

On 27 February 2026, the FCA published a direction specifying the application gateway dates for firms wishing to carry on the new cryptoasset regulated activities under the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026.

• The application gateway will open at 09:00 on 30 September 2026 and close at 23:59 on 28 February 2027.

• The FCA have also published responses to questions received by firm during its introductory webinar to the new regime and a new webpage on the use of s.21 approvers for approval of cryptoasset financial promotions. 

EU and international digital assets developments

FATF targeted report on stablecoins and unhosted wallets

On 3 March 2026, the Financial Action Task Force (FATF) published a targeted report on recommended practices for jurisdictions and the private sector to mitigate the misuse of stablecoins for money laundering (ML), terrorist financing (TF) and proliferation financing (PF).

The report warns that stablecoins have become a common feature of ML, TF and PF schemes involving virtual assets, particularly through peer-to-peer (P2P) transactions via unhosted wallets, with only a limited number of jurisdictions having implemented targeted regulatory frameworks for entities operating in the stablecoins ecosystem that account for the features distinguishing stablecoins from other virtual assets.

The FATF encourages full implementation of Recommendation 15 (R.15) on new technologies to ensure all relevant participants in stablecoin arrangements are subject to clear AML/TF obligations.

Key recommendations include:

• Stablecoin issuers should adopt risk-based technical and governance controls, including the ability to freeze, burn or withdraw stablecoins in the secondary market and to conduct customer due diligence at redemption.

• Supervisory and law enforcement authorities should develop strong technical capabilities, including expertise in smart contract functionalities, blockchain analytics tools and monitoring of risks from P2P transactions via unhosted wallets.

• Competent authorities should have the tools and legal frameworks necessary for fast domestic and international co-operation, including established channels, memorandums of understanding and mechanisms enabling rapid information exchange.

• Public-private partnerships should be established to strengthen co-operation on typologies, risk indicators and emerging threats, as well as more tactical partnerships to support investigations.

ECON publishes draft digital assets report

On 23 February 2026, the European Parliament's Committee on Economic and Monetary Affairs (ECON) published a draft report on the challenges posed by digital assets for the competitiveness and integrity of the EU's financial system.

The report sets out several risks for the digital assets sector:

• Cryptoassets. The report highlights that data capabilities need to be strengthened, calls for increased supervisory dialogue on significant multi-functional groups (MFGs) and emphasises the need to align MiCA policy framework for significant non-bank MFGs. It also highlights the role of cryptoassets in anti-money laundering and counter-terrorism financing regulations and sanctions evasion.

• Stablecoins. The report highlights that the MiCA prohibition against issuers of e-money tokens and CASPs from directly or indirectly granting interest in relation to e-money tokens, the inability of stablecoins to be able to directly access central banks, and the absence of public deposit guarantees, are significant stablecoin devaluation risks. The Commission is called on to urgently propose legislation providing legal clarity on the possibility of multi-issuance of stablecoins by an EU and a non-EU entity and implement strong prudential safeguards, robust co-operation arrangements and enhanced crisis management protocols.

• Other. The report highlights other risk factors that impact the competitiveness of digital assets, including the reliance by the EU on non-EU service providers for DLT infrastructure, and the US administration's treatment of digital assets.

ESMA publishes updated MiCA compliance table

On 20 February 2026, ESMA published an updated compliance table relating to the guidelines for reverse solicitation.

EBA opinion on PSD2 and MiCA interplay

On 12 February 2026, the European Banking Authority (EBA) published an opinion on actions for national competent authorities (NCAs) to take at the end of the nine-month transition period set out in its June 2025 No Action Letter (NAL) regarding the relationship between PSD2 and MiCA, which we covered in our July 2025 update.  The transition period ended on 2 March 2026.

In the opinion, the EBA advises NCAs how to proceed in the different scenarios that arise for a crypto-asset service provider intending to continue undertaking EMT transactions that qualify as a payment service following this date.

The EBA notes that since the publication of the NAL, more than 100 CASPs have approached NCAs informally or applied to be authorised as payment service providers.

Back to contents

Payment services and systems

PVDC publishes Payments Forward Plan

On 26 February 2026, the Payments Vision Delivery Committee (PVDC) published the Payments Forward Plan (the Plan). The Plan is a regulatory roadmap for the payments sector over the next three years, detailing the ongoing and upcoming work across retail payments, wholesale payments and certain aspects of digital assets.

Important points to note from the plan include:

• A consultation is expected on the review to retained EU law relating to payments in Q2 2026 (which will include the approach to open banking and stablecoin payments), and the FCA intends to publish a parallel engagement letter in the same quarter . A related payments statutory instrument is expected to be laid in parliament in 2027/2028. 

• A consultation is expected between Q2-Q3 on options to increase the statutory fee cap for systemic payment systems in the future and will consult on any proposals.

• Consultation on the work of the Retail Payments Infrastructure Board (RPIB) will be published in spring 2026.

• FCA policy statement on rules for stablecoin issuance is expected between Q2-Q3 2026.

• This year, HM Treasury and the BoE expect to publish a blueprint which explains the proposition for a digital pound and a decision on the future of the digital pound, informed by an assessment of the blueprint and case for digital pound.

Bank of England policy statement on extending RTGS and CHAPS operating hours

On 24 February 2026, the Bank of England (BoE) published a policy statement on extending Real-Time Gross Settlement (RTGS) and CHAPS operating hours. 

Important points to note: 

• The BoE will proceed with proposals for an early morning extension (EME) for CHAPs settlement hours with the start of settlement moving from 06:00 to 01:30. The EME is expected to be in place by September 2027 and participation will be optional.

• The BoE will not progress the proposal for an extension to the evening contingency window further at this stage. Instead, it will incorporate this proposal into the longer-term roadmap for extended hours and near 24x7 settlement. 

• Consideration of a longer weekday operating window will be incorporated into the longer-term roadmap towards near 24x7 settlement.

• The BoE will continue to explore bank holiday settlement with a narrower focus centring on enabling both CHAPS and net settlement on certain bank holiday Mondays. Next steps will include further engagement with stakeholders to assess the impacts of this refined option.

PSR fines Bank of Ireland for failure to implement Confirmation of Payee requirements

On 19 February 2026, the PSR published its decision notice issued to the Bank of Ireland (BOIUK), imposing a fine of £3,779,330 for its failure to implement Confirmation of Payee (CoP) requirements.

Between 31 October 2023 and 7 January 2025, BOIUK failed to:

• implement CoP by the required deadline set out in Specific Direction 17 (SD17), exposing customers to a greater risk of fraud and misdirected payments during the period of non-compliance. As a result, transactions made to over 1.14 million new payees were impacted and approximately £6.9 billion of transactions were sent without the CoP coverage required under SD17.

• BOIUK failed to have a system in place to send CoP requests on its Banking 365 system until 10 February 2024 and on its Business On Line system until 7 January 2025. This meant BOIUK customers using the relevant systems to make payments were not protected by a CoP system until these respective dates.

The PSR does not consider BOIUK’s non-compliance to have been deliberate or reckless either in relation to the potential customer impact or in relation to BOIUK’s regulatory obligations. However, it considers that BOIUK should have organised its systems and resources to ensure compliance within the prescribed timeframe and maintained contingency plans to manage the foreseeable risk of non-compliance.

The fine was subject to a 30% early settlement discount, reducing the fine from £5,399,100.

Bank of England policy statement on fees regime for 2025/26 FMI supervision

On 19 February 2026, the Bank of England (BoE) published a policy statement on supervisory fees charged for financial market infrastructures (FMIs) for 2025/26.

The BoE consulted on its proposals for the fee rates to meet its 2025/26 funding requirement for FMI supervisory activity in October 2025. It received six responses and is adopting the proposals as set out in the consultation paper, including the new Category 3 ratio for UK payment systems.

Important points for payments systems are:

• Firms fed back on the proposal to introduce, in a future year, a new Category 3 ratio for UK payment systems to align with the other FMI types where this already exists. The feedback acknowledged that lower ratios for Category 3 firms would help encourage innovation by easing entry for new entrants if they are smaller, lower risk systems.

• The Bank will provide more details the new Category 3 for UK payment systems later this year in the 2026/27 FMI fees consultation paper.

• As noted in the 2025/26 consultation, HM Treasury is exploring options to increase the statutory fee cap for payment systems and will consult on any proposals in due course.

• The ratios for allocating fees between the different categories of FMIs for 2025/26 remain the same as for the 2024/25 fee year and are confirmed in Table A of the policy statement.

• Table B sets out the expected charge for each category of FMI for the 2025/26 fee year. 

Back to contents

Consumer credit and mortgages

Motor finance compensation scheme to include implementation period

On 4 March 2026, the FCA confirmed that in light of the scale and complexity of its proposed motor finance compensation scheme and the feedback it has received, if the scheme is approved, an implementation period of three months (increasing to five months for older agreements) will be provided to lenders.  Firms can choose to process claims sooner.

It also plans to streamline the process for consumers and firms as follows:

• Consumers who complain before the scheme starts will no longer be asked if they wish to opt out. Instead, within three months of the end of the implementation period, their lender should tell them whether they're owed compensation, and how much.  

• Consumers receiving a redress offer will be able to accept it immediately, rather than waiting for a final determination.  

• Firms will not be required to write to customers via recorded delivery. The FCA will allow a range of channels that best meet consumers' needs with appropriate safeguards to prevent fraud.

FCA consults on credit information market study remedies

On 25 February 2026, the FCA published a consultation paper on its proposed new remedies following its credit information market study. The consultation focuses on FCA-led remedies consisting of new Handbook rules to improve the coverage and quality of credit information.

The FCA is requesting feedback on the following proposals:

• Remedy 2A. The FCA proposes the implementation of new mandatory reporting requirements for firms undertaking certain activities to share consumer credit information with DCCRAs, with all in-scope firms who share any consumer credit information with at least one DCCRA being required to share all consumer credit information with all DCCRAs. The FCA proposes that an in-scope firm will be categorised as such by reference to their activities, with proposed in-scope activities to include regulated credit agreements, regulated mortgage contracts, home purchase plans, home reversion plans. regulated sale and rent back agreements, P2P agreements in relation to a borrower (facilitated by firms operating an electronic system in relation to lending), and home finance transactions facilitated by P2P platform operators. The proposed framework does not capture consumer credit lending to HNW individuals, regulated credit agreements for business lending purposes, or Consumer Buy-To-Let (CBTL). However, the FCA encourages out-of-scope firms to consider whether better consumer outcomes could be achieved by increased sharing of credit information. It is proposed that firms subject to the mandatory reporting requirement must share all relevant information at least once a month.

• Remedy 2D. The FCA proposes that firms subject to mandatory reporting must have systems and processes in place to ensure shared information is as accurate as possible, tested before submission, and monitored for systemic errors. Where inaccuracies are identified, firms must take prompt corrective action across all CRAs with whom the information was shared. Where a CRA notifies a firm that it has received a dispute under section 159 of the Consumer Credit Act 1974, the firm will have to investigate and respond to the CRA within 14 days with sufficient information for the CRA to determine whether to remove, amend, or take no action on the disputed data. This requirement is proposed to apply broadly to relevant mortgage and credit firms, not only those subject to mandatory reporting, and regardless of whether the CRA is designated. The FCA also proposes to introduce a requirement for firms undertaking certain regulated activity to report satisfied CCJs/decrees in relation to a debt to the courts/RT (regardless of whether they are caught by the mandatory reporting requirement). The regulated activities include, amongst others, consumer credit lending, debt collecting, in relation to regulated credit agreements, debt administration, in relation to regulated credit agreements, and operating an electronic system for lending in relation to a borrower under a P2P agreement.

The new regime if adopted will commence 12 months after the policy statement is published. 

Whilst the FCA is not consulting on Remedy 2C and Remedy 3A as set out in the final report to the credit information market study, it sets out in the consultation paper, proposed next steps and expectations of firms on signposting under the Consumer Duty.

The deadline to provide responses to the consultation is 1 May 2026.

FCA publishes final report on premium finance market study

On 3 February 2026, the published the final report relating to its premium finance market study. The final report sets out the FCAs findings following its two-year study assessing the effectiveness of the premium finance market and in particular whether consumers are receiving fair value. The final report confirms that the FCA does not intend to impose further rules changes or market interventions.

The final report noted that, despite improvements, customers are still paying higher prices, however, the FCA found no evidence of harm arising from premium finance exclusivity arrangements, and that competition for broker contracts remains active.

The FCA noted its expectation that firms continue to critically assess the extent to which their individual contractual arrangements comply with the Consumer Duty fair value requirements.

Back to contents

Consumer Duty

New Consumer Duty webpage published

On 24 February 2026, the FCA published a new Consumer Duty webpage. The webpage sets out the three cross-cutting rules and the four outcomes the FCA expects firms to deliver.

The three cross-cutting rules that explain how firms should act to deliver good outcomes are:

• Firms must act in good faith towards customers. This includes treating customers honestly and fairly. 

• Firms must avoid causing foreseeable harm. This involves identifying and mitigating risks to customers before they materialise. 

• Enable and support customers to pursue their financial objectives. This includes providing clear information and effective support to customers.

The cross-cutting rules apply across all areas of firm conduct and should inform and help firms interpret the four outcomes: governance of products and services, price and value, consumer understanding, and consumer support. 

As part of the webpage, the FCA provides examples of what meeting the four outcomes looks like in practice. 

FCA updates good and bad practices for smaller firms' consumer duty board reports

On 24 February 2026, the FCA updated its webpage providing examples of good and bad practice for consumer duty board reports to help smaller firms in meeting their requirements.

The updates relate to:

• Governance. Smaller firms lacking dedicated compliance and audit functions may benefit from having a knowledgeable "critical friend" to provide impartial feedback on their approach to the consumer duty. This may include informal benchmarking, identifying practical improvements and supporting forward-looking activities such as horizon-scanning. Clear documentation setting out who is responsible for embedding and monitoring the Duty will support accountability and help ensure good consumer outcomes.

• Monitoring and outcomes. Where proportionate, firms should look for opportunities to draw insights from external data sources, including the Financial Ombudsman Service and relevant trade bodies.

• Actions taken to comply with Duty obligations. Smaller firms with limited resources may find external experts, including trade bodies, helpful in advising on effective actions. Additionally, building feedback into their interactions with customers could help firms make timely changes and check they are meeting the Consumer Duty.

• Future business strategy. Although smaller firms may encounter fewer customers with different specific needs, the FCA still expects firms to learn from transactions with different groups of customers to ensure they deliver good outcomes in the future.

Back to contents

AI

EIOPA report on use of GenAI across EU insurance sector

On 2 February 2026, the EIOPA published a report setting out its findings from a market study on the use of generative AI (GenAI) within the EU insurance sector. The report is based on responses to the EIOPA EU market-wide survey launched in 2025.

Findings of note include:

• Gen AI adoption is widespread and growing rapidly. 65% of insurance undertakings are already actively using Gen AI systems, with a further 23% planning to implement them within the next three years. However, adoption is still in its early stages, with 64% of reported use cases currently in the proof-of-concept or experimentation stage and only 32% having advanced to production.

• Efficiency is driving adoption. Insurers are primarily adopting Gen AI systems to enhance the efficiency of internal processes and reduce costs, followed by enhancing customer interactions and improving decision-making.

• Privacy, regulation, and talent are the key barriers. Data privacy and security concerns, regulatory compliance (such as the GDPR), and a lack of skilled talent are the most significant reported challenges to implementation.

• Back-office operations focus. 64% of the reported use cases are for internal back-office applications.

• Risks. "Hallucinations" are the top-cited risk with insurers identifying inaccurate outputs as the main risk of Gen AI systems, followed by cybersecurity risks, data protection, and lack of explainability. 

• Policy adoption. Almost half of insurance undertakings (49%) have developed a dedicated AI policy to guide the use of Gen AI systems, constituting a twofold increase compared to 2023, when only 25% had one in place.

• AI Act support. The majority of insurers surveyed view the AI Act's provisions about Gen AI systems as useful for ensuring provider reliability.

Back to contents

Operational resilience

IAIS finalises application paper on operational resilience objectives and toolkit

On 12 February 2026, the International Association of Insurance Supervisors (IAIS) published the final version of its application paper on operational resilience objectives and a supporting toolkit.

The objectives provide an outcomes-based articulation of the application of the Insurance Core Principles (ICPs), while the toolkit provides a selection of practices that could be used to achieve those objectives. The three objectives against which the IAIS provides practice examples are provided are: 

• Objective 1. Governance and risk management.

• Objective 2. Key elements of a sound approach.

• Objective 3. Supervisors.

Back to contents

Enforcement

Influencers fine for issuing unauthorised financial promotions

On 20 February 2026, the FCA published a press release confirming that seven social media influencers have been sentenced after each pleading guilty to one count of issuing unauthorised financial promotions.

Five of the individuals were fined an amount ranging between £600 to £3,750. The remaining two individuals received discharges, and all seven were ordered to pay costs ranging from £1,000 to £5,778.18.

The FCA has published finalised guidance on financial promotions on social media to clarify its expectations for when firms and influencers use social media to communicate financial promotions, and to address emerging consumer harm from use of social media.

Back to contents

Financial crime

Government publishes fraud strategy 2026-2029

On 9 March 2026, the Home Office published its fraud strategy 2026-2029, which sets out the approach the government will be taking to combat fraud against individuals and businesses.

Key points to note include:

• The launch of a public-private Online Crime Centre, which will bring together specialists from the government, police, intelligence agencies, banks, mobile networks and major tech firms "to share data and collaborate on interventions that eliminate online fraud at scale" (from Q2 2026).

• Working with the telecommunications, online and financial services sectors to deliver interventions that address their vulnerability to criminal exploitation (from Q1 2026). 

• The launch of a Call for Evidence on economic crime information sharing (closes on 18 May 2026).  This will support work to create a public-private data strategy.

• The launch of Call for Evidence in 2026 on unauthorised fraud.

• The FCA will share best practice recommendations relating to preventing APP fraud and money mule activity.

• The government will formulate metrics for measuring the prevalence of fraudulent activity in financial services, and the sector's performance in removing and/or blocking such activity.

• Parliament time permitting, HM Treasury will repeal the existing Strong Customer Authentication technical standards, enabling the FCA to include the key standards in its rules and guidance using "a more agile, outcomes-focused approach".

• The National Cyber Security Centre will carry on its work with standard bodies and technology providers to speed up the adoption of passkeys.

• The government will increase its use of sanctions.

OPBAS report identifies areas where anti-money laundering supervisors can improve

On 3 March 2026, the OPBAS (the Office for Professional Body AML Supervision) published its 2024/2025 supervisory report setting out progress and themes from its supervisory work on anti-money laundering supervision by legal and accountancy Professional Body Supervisors (PBSs). The report also looks ahead to OPBAS's priorities for the coming year, including preparations for the transition to the FCA becoming the single AML/CTF supervisor for selected professional services . See our previous update for more information on the FCA AML/CTF supervisory role. 

• Standards at PBSs have improved, providing a strong foundation on which to build a new regulatory model. However, some poor practice persists, with PBSs reporting recurring common breaches by those they supervise, and some PBSs still potentially taking an overly member-centric approach hindering robust supervision.

Areas of good practice identified are:

• Governance. PBSs have relatively mature governance arrangements, and all PBSs clearly separated their supervisory functions from their advocacy and disciplinary functions. However, PBSs need to improve their management information, with some needing to do more to evidence how their MI is used to track and challenge delivery of AML strategy.

• Risk-based approach. PBSs are exploring use cases for technology and AI to inform their risk-based approach.

• SARs. OPBAS found that the sample of SARs submitted by PBSs were of good quality, providing confidence in the quality of reviews that PBSs themselves undertake on their supervised population.

Areas of bad practice identified are:

• Governance. PBSs need to improve their management information, with some needing to do more to evidence how their MI is used to track and challenge delivery of AML strategy.

• Risk-based approach. OPBAS encourages PBSs thinking about AI to make sure it is robustly tested and uses relevant and accurate data sources, and that PBSs can show evidence of how they manage associated risks.

• Supervision. PBSs still report common breaches including inadequately documented policies and procedures, customer due diligence failures, and absent or inadequate firm-wide risk assessments, with some PBSs still taking an overly member-centric approach or assisted compliance view.

• Enforcement. PBSs continue to perform poorly in their enforcement approach relative to other Sourcebook areas, with some PBSs not undertaking consistent, proportionate and sufficiently dissuasive disciplinary measures, and some overly relying on "assisted compliance" to correct failures. In 2025, OPBAS used its enforcement power of public censure for the first time against a PBS that failed to meet the UK's money laundering requirements.

• SARs. OPBAS found that some PBSs could improve by maintaining a clear internal SARs policy with tailored training and regularly reviewing a representative sample of their supervised population's SARs.

OFSI consults on ownership and control test in UK financial sanctions regulations

On 16 February 2026, the Office of Financial Sanctions Implementation (OFSI) published a Call for Evidence seeking views on how UK financial sanctions regulations on ownership and control are applied in practice.

OFSI is seeking view on three core areas, being, the prevalence of "hypothetical control" in financial sanctions cases, the practical challenges of implementing the control test, and whether existing legal concepts and typologies of control are helpful in applying ownership and control regulations.

OFSI is particularly interested in evidence and practical examples of the impact that implementing the control test has on compliance costs, legal risk and business decisions, including de-risking.

The call for evidence closes on 13 April 2026.

FATF publishes the outcomes from February 2026 plenary

On 13 February 2026, the Financial Action Task Force (FATF) published the outcomes from its February 2026 plenary meeting, together with an updated list of jurisdictions under increased monitoring and a list of high-risk jurisdictions subject to a call for action.

Points to note include: 

• Kuwait and Papua New Guinea were added to the list of jurisdictions under increased monitoring.

• The plenary discussed and adopted reports of the FATF mutual evaluations of Austria, Italy, and the joint FATF-Asia-Pacific Group (APG) mutual evaluation of Singapore. The reports will be published in April – May 2026 following a global quality and consistency review.

• The FATF approved a paper on cyber-enabled fraud which highlights the escalating fraud threat facing the globe, and the harm done to victims.

• The plenary approved two new reports, to be published in March 2026, that will help countries address emerging risks and support responsible innovation in finance. 

• Specific areas of focus were agreed for the FATF to deliver on its mandate to help jurisdictions keep pace with evolving threats and ensure that crime does not pay. The strategic priorities will be presented to FATF Ministers for endorsement at the upcoming FATF Ministerial meeting in April. 

FCA webpage on reporting suspected sanctions evasion by regulated firms

On 12 February 2026, the FCA updated its webpage on how to report suspected sanctions evasion. The webpage provides information on the three reporting channels for submitting information about firms listed on the Financial Services Register or other registers or companies with UK listed securities.

• Reports concerning current or previous employers should be directed to the FCA's whistleblowing team.

• Authorised firms reporting issues at their own firm with no anonymity required, should review the reporting procedures set out in SUP15.

• Firms or professionals with information about potential or actual sanctions evasion by another firm or individual should fill out the FCA's report wrongdoing or misconduct form.

AMLA consults on draft RTS for harmonised supervision under MLD6 and AML Regulation

On 9 February 2026, the EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) published three consultation papers on draft regulatory technical standards (RTS) under the EU's new AML framework.

• Consultation on draft RTS on Pecuniary Sanctions, Administrative Measures and Periodic Penalty Payments. AMLA proposes that supervisors assess the seriousness of a breach through the application of a list of indicators. Additionally, it proposes that breaches should be classified into one of four categories focused on order of severity. The consultation closes on 9 March 2026.

• Consultation on draft RTS on Customer Due Diligence. The draft sets out proposed proportionate, risk-based CDD measures aimed at harmonising the application of AML/CFT requirements across the EU. The consultation closes on 8 May 2026.

• Consultation on draft RTS on Identifying Business Relationships, Occasional and Linked Transactions, and Lower Thresholds.  The criteria in the draft RTS is proposed to apply to all obliged entities across both the financial and non-financial sectors, with some criteria universal and others tailored to specific categories of obliged entities. AMLA has the option under the AML Regulation to set additional lower CDD thresholds for occasional transactions but has chosen not to exercise this option at this stage. The consultation closes on 8 May 2026.

OFSI updates guidance on financial sanctions enforcement and monetary penalties

On 9 February 2026, the Office of Financial Sanctions Implementation (OFSI) issued updated guidance on financial sanctions enforcement and monetary penalties.

Key changes to the guidance are:

• Early account scheme (EAS). A new section has been added introducing the EAS.

• Case assessment. The case assessment framework has been revised to provide a clearer classification of breaches through a four level seriousness model. A new ‘strategic priority of the regime’ case factor has been introduced, updates have been made to the intention, knowledge and reasonable cause to suspect and circumvention factors, and the ‘knowledge of sanctions’ factor has been renamed to ‘knowledge and management of financial sanctions risk’. Professional facilitation, failure to apply for a licence and failure to respond to an information request have been removed as case factors.

• Monetary penalty process and settlement scheme. The methodology for calculating monetary penalties has been updated to incorporate the new voluntary disclosure and co-operation discount (up to 30%), the Settlement Scheme discount (20%), and the EAS discount (up to 20%). 

• Financial hardship. A new policy has been added explaining how OFSI will consider claims of financial hardship in exceptional circumstances. The guidance confirms that the burden of demonstrating financial hardship lies with the subject.

• Fixed monetary penalties. A new section sets out how the £5,000 and £10,000 fixed monetary penalties for information, reporting and licensing offences will be implemented.