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 Money Laundering and Terrorist Financing (Amendment) Regulations 2026
On 10 June 2026, the Government published the Money Laundering and Terrorist Financing (Amendment) Regulations 2026 (SI 2026/621) (the Regulations). The Regulations amend the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (SI 2017/692) and related legislation, to make targeted changes to improve the effectiveness, proportionality and clarity of the UK's AML/CTF regime and ensure maintained compliance with FATF standards.
In particular, the Regulations:
- refines customer due diligence, enhanced due diligence and additional due diligence requirements;
- updates currency thresholds from euros to sterling;
- strengthens the regime for cryptoasset businesses, including change in control provisions and aligning with the new financial services regulatory regime for cryptoassets;
- reforms the Trust Registration Service requirements to close identified gaps, while introducing a de minimis exemption for low-value, low-risk trusts;
- brings the sale of “off-the-shelf” firms within the scope of regulated trust or company service provider activity;
- clarifies that a firm is excluded from the definition of an “insurance undertaking” to the extent it is carrying out or effecting a contract of reinsurance; and
- enhances information-sharing and cooperation between AML/CTF supervisors and other public bodies.
The Regulations come into force on 30 June 2026, however some of the amendments such as enhanced customer due diligence requirements and cryptoasset businesses come into force during 2027.
2. Government publishes legislation to begin the repeal of the EU-derived short selling regime
On 3 June 2026, the Government published the Financial Services and Markets Act 2023 (Commencement No. 14) Regulations 2026 (SI 2026/587) (the Regulations).
The Regulations are the latest step in the UK’s post-Brexit programme to replace assimilated EU financial services law with a domestic regulatory framework under FSMA 2023. In practical terms, the legislation begins the repeal of the EU-derived short selling regime from UK law and paves the way for the new legislative framework set out in the Short Selling Regulations 2025. For more information on the reformed UK Short Selling Regime, see our SpeedRead here.
The Regulations come into force on 13 July 2026.
3. EU Commission publishes delegated directive on payment for research and execution services
On 2 June 2026, the EU Commission published Commission Delegated Directive (EU) 2026/374 (Directive) regarding conditions for the provision of third-party execution and research services to investment firms that provide portfolio management or other investment or ancillary services.
In summary, the Directive requires firms operating a separate research payment account under MiFID II to meet various conditions relating to the operation of the account and provide certain information to its clients. The Directive also provides that investment firms' annual assessment of research, as required under MiFID II, be based on robust quality criteria.
The Directive comes into force on 22 June 2026.
Banking and Prudential
4. EU Commission publishes delegated regulation amending the calculation of contributions to resolution financing arrangements
On 3 June 2026, the EU Commission published Delegated Regulation (EU) 2026/440 (Regulation) amending Delegated Regulation (EU) 2015/63 as regards to the calculation of contributions of certain institutions, the deletion of a risk indicator and procedural modifications.
The Regulations introduce provisions relating to annual contributions of certain investment firms captured by Regulation (EU) 2019/2033, as well as a time limit for requests for restatements or revisions of information submitted for calculating annual contributions (including a transitional limitation for contribution periods preceding the 2026 contribution period).
The regulation entered into force on 6 June 2026, with most of the provisions applying from 1 January 2026. The provisions on investment firm annual contribution methodology and related supervisory authority obligations apply from 1 January 2027, and the provision regarding the transitional limitation period shall apply from 6 June 2026.
5. EU Commission adopts temporary adjustments to Basel III market risk rules to safeguard EU banks' competitiveness
On 4 June 2026, the EU Commission introduced targeted, time-limited amendments to the EU’s implementation of the Fundamental Review of the Trading Book (FRTB) – the new market risk capital framework for banks.
While the EU has fully implemented all other Basel III standards since 1 January 2025, delays in the FRTB implementation by major jurisdictions have raised concerns over competitive distortions for EU banks operating in global financial markets. Adjustments have been introduced to the FRTB through a delegated act, including a multiplier to temporarily offset capital impacts for EU banks adversely affected by the FRTB implementation.
The measures are subject to a scrutiny period and if no objection is raised, the measures will apply for three years from 1 January 2027.
Fund Management
6. FCA publishes update on reforms to the UK Money Market Fund Regulation
On 8 June 2026, the FCA published an update setting out next steps on issuing new rules and guidance on Money Market Funds (MMFs), following the Government's plans to replace the current rules. The update reflects responses to CP23/28 and is informed by the Bank of England's system-wide exploratory scenario exercise.
Subject to final consultation, the FCA is planning to make several changes, including to:
- introduce a requirement that all MMFs hold sufficient liquidity for adequate resilience;
- retain the present minimum weekly liquid assets (WLA) requirements;
- retain the current minimum daily liquid assets (DLA) requirements, with no plans for additional guidance on DLA levels;
- introduce delinking measures and enhanced Know Your Customer requirements on investor concentration and the risk of correlated withdrawal; and
- deliver a clear increase in the level of resilience expected of UK MMFs while making sure they can continue to meet the needs of investors.
The Government has set out its expectation that legislation for the repeal of the UK MMF Regulation will be introduced by the end of 2026, with the FCA planning to make new rules to this timescale.
Senior Managers and Governance
No recent updates.
Financial Crime
7. AMLA consults on draft guidelines on ongoing monitoring of business relationships
On 3 June 2026, the Anti-Money Laundering Authority (AMLA) published a consultation paper on draft guidelines on ongoing monitoring of a business relationship under Article 26(5) of Regulation (EU) 2024/1624 (AMLR). The AMLR mandates AMLA to issue guidelines on how obliged entities should perform ongoing monitoring of a business relationship, including the monitoring of transactions and activities carried out in the context of such relationship.
The draft guidelines set out:
- horizontal principles for all obliged entities across financial and non-financial sectors, clarifying how ongoing monitoring, including the monitoring of transactions and activities, should be designed and implemented in practice;
- expectations for keeping customer documents, data and information up to date, through periodic and event‑driven reviews, applied in line with a risk‑based approach;
- how obliged entities should design, implement and test monitoring frameworks to detect unusual or suspicious transactions and activities (i.e., proportionate approaches, including the use of manual, automated or semi-automated processes and controls and, where appropriate, advanced analytical tools); and
- expectations for the effective assessment and escalation of monitoring outputs.
The consultation closes on 3 September 2026. AMLA will publish final guidelines in Q4 2026.
8. FCA publishes responses to questions from firms on AML regulations for cryptoassets
On 3 June 2026, the FCA published its responses to questions on the interaction between the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and the forthcoming Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (FSMA) regime.
The key points addressed by the FCA include:
- firms that are registered under the MLRs should note that there will be no automatic conversion and that they will need to secure authorisation under FSMA;
- the FCA will start to accept applications for FSMA authorisation from 30 September 2026, with the application window closing on 28 February 2027;
- firms should plan for a financial crime assessment under the new FSMA regime;
- firms seeking FSMA authorisation must comply with the FCA’s expectations regarding systems and controls, governance and leadership; firms should maintain a risk-based AML framework that is proportionate and tailored to the firm’s cryptoasset activities; firms must take a risk-based approach to identifying and assessing ML/TF/PF risks that are specific to their cryptoasset activities;
- firms should be able to evidence that their transaction monitoring and surveillance arrangements are proportionate to the risks arising from their business model and risk profile;
- the Travel Rule obligations under the MLRs continue to apply concurrently with the new FSMA regime;
- firms should recognise that AML/CTF/CPF controls sit alongside other relevant financial crime obligations and risks, including sanctions and fraud;
- firms should recognise the close links between operational resilience and financial crime controls; and
- firms operating across multiple jurisdictions should ensure their UK AML framework meets UK regulatory requirements.
9. JMLSG consults on amendments to Part I of its guidance
On 1 June 2026, the Joint Money Laundering Steering Group (JMLSG) published a consultation on proposed amendments to Part I of its Guidance. The amendments reflect changes introduced by the Money Laundering and Terrorist Financing (Amendment) Regulations 2026.
The proposed revisions to Part 1 of the Guidance include:
- paragraph 2.9: clarification of the term ‘unusually’;
- paragraph 5.2.4A: introduction of a bank insolvencies exception;
- paragraph 5.3.142 and Annex 5-V: updates in relation to pooled client accounts; and
- paragraphs 5.3.94A and 5.3.99: changes in relation to acting on behalf of a customer.
The consultation closes on 29 June 2026.
Retail Services
10. FCA publishes further information for firms on the Motor Finance Compensation Scheme
On 11 June 2026, the FCA published a further information document to help firms understand and prepare for the Motor Finance Compensation Scheme (the Scheme), supplementing its earlier Policy Statement PS26/3 (for more information, see our SpeedRead here).
The further information document addresses queries received during the FCA's engagement, covering the Scheme's scope and application, the role of the Financial Ombudsman Service, CONRED provisions on relevant arrangements and exceptions, broker co-operation obligations, consumer communications, liability, redress calculations, and supervision and reporting requirements.
The FCA expects firms to read the document in the context of the ongoing legal challenge to the Scheme and monitor FCA announcements closely.
11. FCA consults on mortgage rule changes to support first-time buyers and underserved consumers
On 9 June 2026, the FCA published consultation paper CP26/18 on proposed changes to mortgage rules to help more people access mortgages, particularly first-time buyers and underserved consumers.
In particular, the FCA proposes the following to support consumers:
- widening access to interest-only and part interest-only mortgage lending;
- making it easier to raise mortgage finance in later life;
- lowering barriers for firms who want to lend to consumers with irregular income;
- encouraging lenders to take a more individualised/tailored approach when assessing the creditworthiness of customers with impairment in their credit history, rather than declining them based on a definition designed for debt consolidation and reporting purposes; lowering barriers for firms who want to lend in a foreign currency or to consumers with foreign income; and
- increasing flexibility for borrowers who want bridging finance, which can help break a lengthy sales chain or fund a renovation.
The consultation closes on 28 July 2026. The FCA aims to publish a policy statement in the second half of 2026.
12. HMT publishes Call for Evidence on access to banking services
On 8 June 2026, HM Treasury published a Call for Evidence for the Access to Banking Services Review, an independent review commissioned in May 2026 and chaired by Richard Lloyd. The review seeks to address whether declining access to in-person banking services is causing consumer detriment. While access to cash is protected by existing legislation, there are no existing protections for access to in-person banking services.
The objectives of the Call for Evidence include:
- to identify which in-person banking services are essential or important to consumers;
- to understand which groups need access to in-person banking services;
- to assess whether any detriment is being caused to consumers and the extent and materiality of this detriment; and
- to examine both the current provision (including existing mitigations) and the future trajectory of in-person banking services in the UK.
The Call for Evidence closes on 20 July 2026. The Chair will provide a report and recommendations to the Government in October 2026.
Digital Finance and Fintech
13. FCA publishes Emerging Technology Horizon Scan 2026
On 10 June 2026, the FCA published its Emerging Technology Horizon Scan 2026 (the Report). Whilst not regulatory guidance, the Report sets out three plausible ways emerging technologies could combine to create new outcomes for consumers, firms and markets – including through personalised intelligence, synthetic (in)security and programmable finance. It also highlights early signals of new risks and aims to support informed debate across the financial services ecosystem.
The Report also sets out several key trends, including:
- technological convergence is accelerating, changing how financial systems operate and creating new opportunities and risks;
- personalised intelligence could transform how consumers make financial choices, while empowering consumers also raises questions about autonomy and consumer protection;
- synthetic crime is evolving fast, exposing consumers and firms to new forms of fraud and deception; and
- programmable finance is reshaping financial infrastructure and enabling new markets.
Payments
14. FCA announces launch of UK Payments Initiative open banking scheme
On 2 June 2026, the FCA published a statement welcoming the launch of the UK Payments Initiative (UKPI) scheme, an industry-led commercial scheme for open banking payments. The UKPI scheme establishes a shared rulebook, commercial model and operational standards for flexible, automated or recurring account-to-account payments powered by open banking.
The FCA has also published a regulatory roadmap for open finance to build on data-sharing foundations established by open banking to give consumers and businesses greater control over their financial data. Subject to new legislation, the FCA also aims to consult on a long-term regulatory framework for open banking by the end of 2026.
ESG
15. FCA publishes quarterly consultation paper No. 52
On 5 June 2026, the FCA published its quarterly consultation paper (CP26/17).
In summary, the consultation proposes the following changes:
- following a post-implementation review of our climate disclosure rules for asset managers, life insurers and FCA-regulated pension providers, to make changes to the product-level disclosure requirements in ESG, with consequential amendments in other areas of the FCA Handbook;
- to amend FEES 4 Annexes 1A, 2A, 11A and 13 to set regulated income as the tariff base for Cryptoasset firms. To insert 3 additional rows to FEES 5 Annex 1R to account for new regulated cryptoasset activities;
- the Treasury published an approach to revoking provisions of the UK Capital Requirements Regulation (UK CRR) following the Financial Services and Markets Act 2023 (FSMA 2023). These proposals deal with consequential amendments to references to the definitions and provisions of the UK CRR in the FCA Handbook and Glossary of definitions;
- to allow certain authorised funds to hold cryptoasset exchange traded notes (cETNs) to a limit of 10% of scheme property;
- to delete the requirement for approvers of qualifying cryptoasset financial promotions to submit notifications following certain approvals, as the data shows that most of these promotions are compliant with our rules; and
- to simplify the scheduling rule for Section M of the Retail Mediation Activities Return (RMA-M) and to update guidance to complete FIN073.
The consultation closes on 13 July 2026. The FCA aims to finalise and implement the changes in the second half of 2026.
Other
16. FCA warns football clubs about sponsorship deals with unauthorised financial firms
On 3 June 2026, the FCA published an open letter to football clubs in relation to concerns about sponsorship arrangements between football clubs and firms operating cryptocurrency exchanges and trading platforms operating without FCA authorisation (unauthorised firms). In particular, the unauthorised firms appear to be providing regulated services without authorisation and making unauthorised financial promotions, which are criminal offences. The FCA has also written directly to football clubs, mainly in the Premier League.
The letter makes it clear that football clubs entering into sponsorship arrangements with unauthorised firms may face legal, operational, and reputational risk. The letter sets out the FCA's expectations for football clubs considering potential financial services firm sponsors, including to:
- understand the nature of services offered;
- understand the regulatory status of the sponsoring firm;
- check the FCA Firm Checker and Warning List;
- review their own regulatory position, including in relation to financial promotion; and
- consider financial crime concerns.
