Your guide to this week in regulation

This week sees a collection of major regulatory developments, with implications across wholesale markets, consumer credit and cryptoassets.

In response to its 2025 Mansion House speech commitment, we lead with the Financial Conduct Authority’s (FCA’s) consultation for substantial changes to scope and proportionality across the Consumer Duty, including for wholesale markets. 

In another major milestone, the FCA has published its landmark rules for the crypto industry (effective October 2027) in one of the most significant expansions of its perimeter in recent memory.

Elsewhere, Buy Now Pay Later (BNPL) regulation shortly arrives on 15 July 2026, bringing 11 million UK consumers within scope, including under the Consumer Duty.

We conclude this week with the FCA’s recent consultation on listing rules for closed-ended investment funds, and a recent speech describes the longer trajectory towards consumer credit reform.

Consumer Duty scope narrows for wholesale 

The FCA has published proposals to narrow the scope of the Consumer Duty for wholesale markets, responding to industry feedback that the current regime generates unnecessary cost and complexity where retail consumer protection is not at risk. The regulator is consulting on three changes:

• clearer boundaries for activities such as market making, custody and safeguarding, which will generally fall outside the Duty's scope
• clarified accountability along distribution chains, removing duplication between firms working together
• a narrower territorial scope, excluding business conducted for genuinely non-UK customers from the Duty's requirements

For many investment banks, the territorial change alone will remove a significant proportion of relevant revenues from scope. The FCA confirms the Duty remains focused on retail outcomes and plans a further consultation on client classification later in 2026. Firms should assess the impact of these proposals on their operating models and respond to the consultation.

Read more on Refining the Consumer Duty to give greater confidence to wholesale firms

Read more on non-UK business removed from Consumer Duty scope

FCA sets final crypto framework 

The FCA recently published its final rules for cryptoasset regulation, marking the most significant expansion of the regulator's oversight in over a decade. 

The rules cover trading platforms, custodians, intermediaries, stablecoin issuers and firms arranging staking. All firms must meet financial resilience requirements, including capital adequacy and annual stress testing. New market integrity rules address insider trading and market manipulation, and crypto firms will fall under the Consumer Duty. Retail customers will gain access to the Financial Ombudsman Service for the first time. Stablecoin rules were published jointly with the Bank of England. 

Capital requirements for non-systemic stablecoin issuers were reduced from 2% to 1% of issued value following consultation. The full regime takes effect on 25 October 2027. Firms may attend FCA pre-application meetings from July 2026 and must submit authorisation applications between 30 September 2026 and 28 February 2027. Firms should begin perimeter analysis, governance reviews and authorisation planning now.

Read more on FCA setting landmark crypto rules to cement the UK's place as a global hub

Buy Now Pay Later regulation begins 

The FCA's BNPL regulation of takes effect on 15 July 2026, bringing a market worth over £13 billion and used by around 11 million UK adults into the regulatory perimeter for the first time. BNPL lenders must now be FCA-authorised and comply with the Consumer Duty. Key obligations include:

• proportionate affordability assessments before credit is extended
• clear upfront disclosure of payment schedules, amounts due and consequences of missed payments
• support for customers in financial difficulty, with signposting to free debt advice
• access to the Financial Ombudsman Service for complaints

Firms without existing consumer credit permissions that registered for the Temporary Permissions Regime before 1 July 2026 may continue to operate while their full authorisation application is assessed. The FCA has signalled it will monitor outcomes closely and has been clear that lenders must not extend credit to those unable to repay.

Read more on why stronger BNPL protections are the right step for consumers

Investment trust listing rules under review 

The FCA has launched a consultation on targeted changes to the UK Listing Rules for closed-ended investment funds, covering 264 fund listings with total assets under management of £217 billion. The proposals address three conflict-of-interest scenarios:

• extending to newly appointed investment managers the same fee and strategy protections that currently apply to existing managers
• recognising links between a director and the substantial shareholder that proposed their board appointment, to strengthen board independence
• preventing a substantial shareholder who is also the investment manager from voting on material changes to investment policy

The FCA states the changes are proportionate and designed to ensure rules operate consistently as market structures evolve, with particular focus on protecting minority shareholders. The consultation closes on 14 August 2026 and the FCA aims to finalise rules before year end. Firms and fund boards should review the proposals and consider whether they affect current governance arrangements.

Read more on FCA consulting on targeted changes 

Credit reform agenda takes shape

Alison Walters, the FCA's director of consumer finance, used her Credit Week speech to set out the FCA's vision for the credit market as statutory and regulatory reform converges. The Financial Services and Markets Bill, introduced to Parliament in May 2026, will repeal the majority of the Consumer Credit Act 1974 and transfer rule-making to the FCA, enabling a more flexible, outcomes-focused regime. 

The FCA intends to consult on the key parts of the framework previously set out in legislation. Walters confirmed the FCA is working closely with the government on the shape of the reformed regime and will monitor cost-of-living pressures alongside market reform. She emphasised that a well-functioning credit market depends on collective action across industry, regulators and government, and that BNPL regulation is a step towards a more trusted, joined-up framework. Firms across consumer credit should engage with the FCA's consultations as the reformed framework takes shape.

Read more on shaping the future of the credit market