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. EU Commission publishes delegated regulation on streamlined prospectus format and content
On 13 August 2026, the EU Commission published Delegated Regulation (EU) 2026/1061, amending Delegated Regulation (EU) 2019/980 as regards the standardised format, sequence, streamlined content, scrutiny and approval of prospectuses. The Regulation follows the adoption of Regulation (EU) 2024/2809, which sought to make EU public capital markets more attractive for companies and facilitate access to capital for SMEs. The amendments significantly streamline prospectus disclosure requirements, modelled after the lighter EU Growth prospectus regime which expired on 5 March 2026.
Under the Regulation, a single registration document and securities note replace the previously separate retail and wholesale schedules for non-equity securities, reducing the number of required annexes. A new standardised format and sequence is introduced for equity and non-equity prospectuses drawn up as single documents. The Regulation also sets a maximum overall scrutiny timeline of 90 working days (100 for SMEs) from the competent authority's receipt of the initial application for approval of a draft prospectus to its final approval decision.
The Regulation entered into force on 16 August 2026.
2. FCA publishes blog update on market participants' readiness for T+1 securities settlement
On 13 August 2026, the FCA published a blog update on its expectations regarding market participants' readiness for the UK's move to a T+1 securities settlement cycle on 11 October 2027. The blog update follows the FCA's earlier Dear CCO letter (see here) and sets out findings from the FCA's engagement with buy-side and sell-side firms, financial market infrastructures, and third-party service providers.
The FCA highlights the following key findings in this regard:
- most market participants have met the FCA's expectations, having finalised project plans and advanced implementation efforts, with some already completing system changes;
- however, some participants are considerably behind and, without urgent remediation, are unlikely to be ready for the transition; and buy-side readiness remains a particular concern, with most buy-side firms yet to begin implementation work.
The FCA notes that well-prepared firms are able to identify their settlement failure rates, the main reasons for settlement failures, and any efforts being made to lower failure rates ahead of the transition.
Ahead of the October 2027 effective date, the FCA will closely monitor implementation efforts and expects participants to demonstrate clear evidence of their implementing systems and process changes, and considering testing strategies.
3. FCA publishes policy statement on changes to information flows for UK equity IPOs
On 5 August 2026, the FCA published a policy statement (PS26/16) on changes to information flows for UK equity initial public offerings (IPOs). The policy statement follows the FCA's consultation paper CP26/14, which proposed amendments to COBS 11A rules originally introduced in 2018 to improve quality and availability of information during the UK equity IPO process and address perceived risks of bias in research coverage (see our previous SpeedRead here). The FCA acknowledged that these changes had instead added to market risk and cost for issuers.
Following feedback to CP26/14, the FCA has confirmed the following key changes to the COBS rules:
- removal of the seven-day waiting period between the publication of an approved registration document or prospectus and the publication of connected research under COBS 11A.1.4FR; and
- removal of the requirement for syndicate banks to share the same information with unconnected analysts as they do with their own research analysts under COBS 11A.1.4BR – COBS 11A.1.4ER.
The changes came into force immediately on 5 August 2026. The FCA reminded firms and issuers that they retain the option to engage unconnected analysts during the IPO process on a commercial basis, but this is no longer mandated.
4. FCA publishes policy statement on amendments to the UK transaction reporting regime
On 3 August 2026, the FCA published a policy statement (PS26/15) setting out its final rules and guidance on amendments to the UK transaction reporting regime. The policy statement follows from the FCA's consultation paper (CP 25/32) and HMT's intention to repeal the onshored MiFIR firm-facing provisions and replacing these with new FCA rules in the Market Conduct sourcebook (see our previous SpeedRead on the consultation paper here).
Following feedback to the consultation paper, the FCA has confirmed the following key changes to the transaction reporting regime:
- reducing the number of transaction reporting fields from 65 to 52;
- removing reporting obligations for financial instruments which are only tradeable on EU trading venues;
- removing foreign exchange (FX) derivatives from the scope of reporting requirements; and
- reducing the default back reporting period from five to three years (which the FCA anticipates will lower the number of submitted transaction reports by a third).
The new regime will come into force on 3 April 2028. The FCA states it will take a "flexible supervisory approach" in certain areas, such as not taking action against firms which do not submit transaction reports for reportable financial instruments only tradeable on EU trading venues from 3 August 2026, until the effective date of the rules. The FCA will also publish draft schema, validation rules and new guidelines in October 2026 in respect of the new requirements.
5. FCA advances package of equity market transparency reforms
On 31 July 2026, the FCA published a package of reforms intending to improve transparency, strengthen access to market-wide information and support confidence in UK equity markets. The package follows the launch of the UK bond consolidated tape in June 2026 and forms part of the FCA's wider programme of capital markets reform.
The package comprises the following key elements:
- CP26/31 confirms the framework for a future equity consolidated tape (CT), which will bring together trading information from across the market into a single source, with delivery targeted within 18 months (and seeks views on including a standalone systematic internaliser best bid and offer on the CT);
- CP26/30 consults on targeted market structure reforms and sets out how market quality will be monitored, seeking views on the indicators the FCA should track; and
- the FCA has launched a market activity reporter for shares, providing visibility of overall UK equity market activity each day while the full CT is being developed.
The consultations for both CP26/30 and CP26/31 close on 16 October 2026.
Banking and Prudential
6. European Commission rejects draft regulatory technical standards on timing of prior permission to reduce own funds
On 19 August 2026, the EC published its decision to reject the EBA's draft Regulatory Technical Standards (RTS) amending Delegated Regulation (EU) No 241/2014 on the timing for applications for prior permission to reduce own funds and eligible liabilities instruments under Regulation (EU) No 575/2013 (see our previous SpeedRead here). The RTS proposed shortening the standard assessment period for competent and resolution authorities from four months to three months.
The EC considers it disproportionate to revise the existing RTS solely for the proposed change, noting that a number of competent and resolution authorities already process approvals in shorter timeframes in practice. The EC suggested that the EBA consolidate the proposed adjustment into the broader, more comprehensive review of the prior permission regime that the EBA has already launched. The EBA may amend and resubmit the draft RTS in the form of a formal opinion within six weeks; absent resubmission, the rejection becomes definitive.
7. EBA publishes no-action letter on the boundary between the trading book and banking book under the third FRTB Delegated Act
On 3 August 2026, the EBA published a no-action letter and technical considerations to support the implementation of the market risk framework for EU banks. The measures address issues arising from the European Commission's third Delegated Act under the Fundamental Review of the Trading Book (3rd FRTB DA) framework, adopted on 4 June 2026, which modifies the calculation of own funds requirements for market risk from 1 January 2027 for a three-year period. The no-action letter and technical considerations will become relevant once the 3rd FRTB DA enters into force.
The no-action letter sets out the following key points:
- competent authorities (CAs) should not prioritise supervisory or enforcement action in relation to the FRTB boundary framework provisions governing the allocation of instruments between the trading book and banking book, until the earlier of 31 December 2029 or the application of a legislative proposal modifying those provisions;
- institutions applying the institution-specific multiplier introduced by the 3rd FRTB DA may determine their own funds requirements on the basis of the Capital Requirements Regulation II (CRR2) boundary framework, avoiding operationally complex parallel application of multiple boundary concepts;
- institutions not applying the multiplier are afforded the same flexibility to use the CRR2 boundary framework, ensuring a level playing field within the EU; and
- reporting on the composition of the trading book and reclassifications between books will continue to be suspended until the calculation of own funds requirements is based on the FRTB boundary framework.
The European Commission has confirmed its intention to proceed with a legislative proposal in the first quarter of 2027 to provide the necessary legal certainty on the application of the boundary provisions.
8. FCA Blog: Strengthening resilience across an increasingly interconnected financial system
On 28 July 2026, the FCA published a joint blog post with the PRA on operational resilience across the financial system following the designation of the first critical third parties (CTPs) under the new oversight regime. The blog highlights the increasing reliance of firms on common third party service providers and the system-wide risks this creates, noting the CrowdStrike outage in 2024 as an example of how disruption at one provider can affect many organisations simultaneously. Key points addressed in the blog include:
- in 2025, 27% of incidents reported to the FCA by firms were attributed to a third party issue, and 37% of those were cyber-related;
- designated CTPs must identify and manage risks relating to the critical services they provide, test their resilience arrangements, and engage openly with regulators and firms during incidents;
- the new regime is intended to promote greater transparency between CTPs and their UK financial services clients, including through joint testing exercises and sharing of self-assessments; and
- the new regime accompanies existing firm-level operational resilience requirements by adding a system-wide perspective.
Given the regime is now live, the FCA and PRA encouraged firms to continue to consider how they identify, test and manage dependencies in critical services. Designated CTPs should engage openly with regulators and firms, including through testing and information sharing.
Fund Management
9. FCA publishes policy statement on enhancing fund liquidity risk management
On 13 August 2026, the FCA published a policy statement (PS26/17) finalising targeted amendments to the liquidity risk management framework for Undertakings for Collective Investment in Transferable Securities (UCITS) schemes and non-UCITS retail schemes (NURS). In its consultation (CP25/38), the FCA proposed enhancements aligned with the Financial Stability Board's 2023 revised recommendations and IOSCO's May 2025 recommendations on liquidity risk management for funds.
Following feedback to CP25/38, the FCA has confirmed the following key changes:
- authorised fund managers (AFMs) of UCITS schemes and NURS must have anti-dilution tools available for use, being swing pricing or a dilution levy for single-priced funds, with modified rules for dual-priced funds;
- the derogation from the eligible market test for recently issued transferable securities is reduced from one year to 20 business days;
- new Handbook guidance on calibration of anti-dilution tools based on vertical slicing as a baseline; and
- AFMs must conduct liquidity stress testing under both normal and exceptional market conditions, supported by new guidance incorporating a UK version of ESMA's stress testing guidelines.
The new rules come into force on 1 February 2027.
Senior Managers and Governance
No recent updates.
Financial Crime
10. FCA bans senior manager for lack of honesty and integrity
On 18 August 2026, the FCA published a press release regarding its final notice prohibiting Howard Roland Duckett from performing any function in relation to any regulated activity.
Mr Duckett was approved to perform the SMF 3 (Executive Director) and SMF 16 (Compliance Oversight) functions at Beauforce Corporation Limited, a debt management firm. On 13 November 2020, the High Court disqualified Mr Duckett from acting as a company director for 10 years, having found that he failed to maintain adequate accounting records whilst a de facto director of an unrelated company. The Court also found that Mr Duckett repeatedly lied on oath and attempted to rely on fabricated evidence, including falsely claiming that a fictitious individual was responsible for running the business. Mr Duckett subsequently failed to disclose his disqualification to the FCA, as required by COCON 2.2.4R.
The FCA concluded that Mr Duckett evidenced a serious lack of honesty and integrity, and his reputation is such that he is not fit and proper to perform regulated activities. Mr Duckett referred the FCA's Decision Notice to the Upper Tribunal; however, the reference was subsequently struck out. The FCA has imposed a full prohibition order against Mr Duckett and withdrawn his approval. No financial penalty was imposed.
11. FCA fines and bans CEO and managing director for false and misleading statements made in attempted acquisitions
On 14 August 2026, the FCA published a press release regarding its final notices to Mr Paul Vincent Taylor and Ms Esmerelda Toni. In the final notices, the FCA fines Mr Taylor a penalty of £489,000, and Ms Toni a penalty of £121,200.
Mr Taylor and Ms Toni both held Senior Management Functions at Blue Horizon Asset Management Limited. Between December 2023 and October 2024, Mr Taylor dishonestly made false and misleading statements and falsified documents in the course of two commercial negotiations, with Ms Toni knowingly assisting in certain instances. In each case, the statements and documents falsely represented that Mr Taylor was the ultimate beneficial owner of a bond portfolio worth over €200 million.
The FCA concluded that both individuals breached Individual Conduct Rule 1 (the requirement to act with integrity) and are not fit and proper. As a result, both have been prohibited from performing any function in relation to any regulated activity.
12. FCA publishes statement on increased scrutiny of Annex 1 firms
On 7 August 2026, the FCA published a statement setting out concerns about financial crime risks among Annex 1 firms, including unregulated lenders, safe custody providers, money brokers and financial leasing companies. These firms are required to register with the FCA for anti-money laundering purposes.
Key points set out in the statement include:
- the FCA is concerned that some Annex 1 firms rely too heavily on parent company financial crime controls rather than implementing controls tailored to their own risks and operations;
- the FCA is closely scrutinising registration applications and firms should expect these to take longer;
- information requests have been sent to around 900 Annex 1 firms to improve understanding of their activities, business models and risks; and
- regulated firms should conduct due diligence on Annex 1 firms they deal with, including seeking direct confirmation of registration status.
The FCA will use this intelligence to identify and disrupt financial crime risks in the sector.
Retail Services
13. FOS publishes policy statement on modernising the redress system
On 11 August 2026, the Financial Ombudsman Service (FOS) published a policy statement responding to its joint consultation with the FCA (CP26/9) on modernising the redress system (see our previous SpeedRead here). The reforms aim to streamline the complaints process so that the service can focus on the cases it was set up to resolve. The policy statement confirms the following changes:
- an amendment to DISP 3.6.4R clarifying that decisions are based on the standards applicable at the time of the act or omission, effective from 1 October 2026;
- new powers to dismiss complaints not appropriate for the service, including those better suited to court or where there has been no financial loss, also effective from 1 October 2026;
- a new registration stage to ensure complaints are ready for investigation, to be piloted from October 2026 beginning with fraud and scams casework; and
- retention of "good industry practice" in DISP 3.6.4R pending the Financial Services and Markets Bill.
The instrument making the relevant amendments to DISP, the Redress Reforms (No 2) Instrument 2026 (FOS 2026/6), is set out in an appendix to the policy statement and will come into force on 1 October 2026. The FOS and the FCA will publish joint thematic reviews later this year.
14. FCA publishes review findings on firms' approach to outcomes monitoring under the Consumer Duty
On 27 July 2026, the FCA published a good and poor practice document setting out findings from its review into firms' approaches to monitoring consumer outcomes under the Consumer Duty. The FCA reviewed board reports, information requests and survey responses from 56 firms across various sectors, examining strategy, data use and governance. The review forms part of the FCA's ongoing work to embed the Consumer Duty and ensure firms deliver good outcomes in practice.
Key findings from the review include:
- governance arrangements were inconsistent, with limited evidence of board challenge driving improvements;
- some firms' frameworks lacked clear structures for identifying poor consumer outcomes or understanding their causes;
- effective firms used data and management information to identify risks, make decisions and test whether interventions improved outcomes; and
- the strongest approaches had clear definitions of good outcomes linked to specific stages of the customer journey.
Firms should use the review to assess whether their monitoring gives a clear view of customer outcomes and leads to timely, effective action.
Digital Finance and Fintech
No recent updates.
Payments
15. PSR consults on removing the expiry date and expanding the scope of Specific Direction 17 on Confirmation of Payee
On 30 July 2026, the Payment Systems Regulator (PSR) published a consultation paper (CP26/2) on proposed amendments to Specific Direction 17 (SD17). SD17 requires certain payment service providers to implement Confirmation of Payee (CoP), which verifies payee account details to reduce misdirected payments and authorised push payment fraud. SD17 is due to expire on 1 November 2026.
The PSR proposes the following key amendments to SD17:
- removing SD17's expiry date so that it remains in force beyond 1 November 2026, subject to review within five years;
- expanding the scope of SD17 to place all payment service providers currently offering CoP on equal regulatory footing, including those that offer it on a voluntary basis; and
- requiring newly directed providers to comply with the direction by 31 December 2026.
The consultation closes on 20 August 2026.
ESG
No recent updates.
Other
No recent updates.
