Your guide to this week in regulation

Having taken on board extensive industry and consumer feedback, the motor finance redress scheme will soon be live after a short implementation period. The Financial Conduct Authority’s (FCA’s) publication of its final rules are a much-anticipated moment of clarity for the industry and will inevitably bring added momentum and urgency to firms’ redress programmes.

More widely, the FCA has released its annual work programme for 2026-2027, as it seeks smarter efficiencies amidst a broadening remit, not least through its own use of AI.

Elsewhere this week, the Bank of England and Prudential Regulation Authority (PRA) have recently finalised a package of changes to firms’ resolution reporting and disclosure requirements which are intended to reduce the regulatory burden. And finally, we pick up latest thinking from the FCA on investment trusts aligned to its reform programme for UK capital markets.

Motor finance redress confirmed

The FCA has confirmed it will proceed with an industry‑wide redress scheme for customers who were treated unfairly in motor finance agreements where commission arrangements were not properly disclosed. The scheme follows court findings that some firms breached the law and is intended to deliver redress more quickly and consistently than firm‑by‑firm complaints handling.

The scheme will cover regulated motor finance agreements entered into between April 2007 and November 2024. The FCA estimates around 12.1 million agreements fall within scope, with firms expected to pay approximately £7.5bn in compensation. Eligibility has been tightened following consultation to ensure redress is proportionate and focused on cases where customers suffered actual financial loss.

Key points for firms include: 

• proactive identification and contact of affected customers
• revised approaches to calculating redress, including caps to avoid over‑compensation, and
• closer regulatory scrutiny during implementation.

Alongside the scheme, the FCA has launched a multi‑agency taskforce to address poor practices by motor finance claims firms.

Read our guide to the motor finance redress scheme final rules

Read the FCA statement on motor finance redress scheme

Read the FCA's press release

Read more on the taskforce

FCA sets out its Annual Work Programme

The FCA has published its Annual Work Programme for 2026/27, setting out the next phase of its strategy to become a smarter, more efficient and data‑led regulator. The programme focuses on reducing unnecessary burden on firms while improving the FCA’s ability to identify harm earlier and act more quickly.

A central theme is greater use of data and technology. The FCA plans to integrate artificial intelligence into regulatory workflows, including authorisations and supervision, with people remaining responsible for decisions. It also intends to expand the Supercharged Sandbox, enabling firms to test innovative products using high‑quality synthetic data.

Other notable developments include: 

• removal of three regular data returns and reduced frequency for others;
• faster and more predictable authorisation processes; and
• greater use of My FCA as a single digital point of engagement.

The FCA has also confirmed that its overall fees increase will be limited, with a modest rise well below inflation.

Firms should review the work programme against their plans.

Read more on the next phase of FCA regulation

Read the Annual Work Programme 2026-27

BoE eases bank failure reporting

The Bank of England and the PRA have announced changes to reporting and disclosure requirements under the UK bank resolution regime, aimed at reducing burden while maintaining a credible approach to bank failure planning.

Key changes include an increase in the Resolution Assessment Framework threshold from £50bn to £100bn in retail deposits, meaning fewer firms will be subject to the most detailed resolution reporting and disclosure requirements. Smaller domestic deposit takers will also move to reviewing recovery plans every two years rather than annually.

Additional reforms will: 

• simplify MREL reporting templates;
• remove certain resolution reporting requirements; and
• improve the clarity and usefulness of Pillar 3 resolvability disclosures.

Implementation will be phased from April 2026 through to January 2027, depending on the specific change.

Read more on reporting and disclosure requirements for bank failure regime

Investment trust governance under scrutiny

The FCA has published a blog setting out its expectations on governance, voting and conflicts of interest within investment trusts. The intervention follows concerns about how boards and managers handle significant votes, particularly where conflicts may arise.

The FCA emphasises that boards must act independently and in the best interests of investors, especially when considering continuation votes, fee arrangements or changes to investment mandates. It also highlights the importance of transparency, robust challenge and clear disclosure of conflicts involving directors, managers or connected parties.

Key messages include: 

• conflicts should be identified early, actively managed and clearly disclosed;
• voting processes must be fair, well‑governed and properly documented; and
• firms should ensure investors receive clear, timely information to support informed decision‑making.

The FCA stresses that strong governance is essential to maintaining trust in the investment trust structure and protecting market integrity.

Read more on Investment Trust governance

My FCA completes first year

The FCA has marked the first anniversary of My FCA, its single digital sign‑in service for regulated firms. The platform is now used by all FCA‑authorised firms and is a central part of the regulator’s wider digital transformation programme.

My FCA brings together key regulatory tasks, including firm details, regulatory reporting and communications, into one secure access point. The FCA reports strong uptake over the past year and continues to migrate additional services onto the platform.

The regulator views My FCA as a key enabler of: 

• simpler, more consistent engagement with firms;
• reduced duplication and administrative effort; and
• improved data quality and supervisory oversight.

Further functionality is planned as part of the FCA’s 2026/27 work programme, supporting its aim to make regulation more efficient and proportionate.

Read more on My FCA