The regulatory initiatives grid – key takeaways

The latest version of the Regulatory Initiatives Grid highlights the growing impact of transformation across the sector. This trend aligns closely with one of the central themes of the FCA’s 2026/27 work programme: becoming a smarter regulator. Over time, this may help reduce costs for the industry and simplify firms’ reporting and compliance processes. In the short term, however, it is likely to place increased pressure on firms to assess and respond to this evolving landscape of regulatory change. Effective horizon scanning will therefore be critical to ensuring firms continue to meet regulatory expectations while pursuing their strategic objectives.

New initiatives

This year’s Regulatory Initiatives Grid includes 37 new initiatives since the previous publication. Seven of these are multi-sector initiatives (with low or unknown impacts), covering topics such as conduct, sustainable finance and financial resilience. Three new initiatives are high-impact, covering:

• Cryptoasset Resolution Regime – in H2 2026, the FCA will consult on new rules on resolution for cryptoasset custodians and stablecoin issuers for greater protection of client assets and backing assets.  
• Scale and consolidation in pensions – the government aims to improve scale across the pensions landscape and will issue secondary legislation consultations.  
• SIPPs Due Diligence and Pension Schemes Money and Assets Regime (PSM&A) – the FCA will consult on due diligence expectations for SIPP operators, and on a regime to safeguard pension scheme money and assets, with work expected in H1 2026 and a policy statement in H1 2027. 

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Multi-sector considerations – high impact 

Smart Data 

Open Banking has been in place for a number of years for the UK’s largest banks, but the FCA plans to extend it more broadly. Upcoming work includes an HM Treasury consultation paper (due Q2), covering assimilated payment services such as Open Banking and the use of stablecoins. In Q3, the FCA plans to consult on Open Banking Long-Term Regulatory Framework interface rules to establish effective technical and operational standards, with final rules due in Q1 2027.

Meanwhile, the FCA is also building on its Open Finance roadmap, published in April 2026. Open Finance will ultimately allow consumers to share their data across a broader range of financial products such as investments or pensions, giving them greater choice and access to more tailored products. While this can boost competition, it remains unclear how firms will be incentivised to share data, and the FCA is expected to work with HM Treasury in 2027 to explore options for a regulatory framework, with delivery expected by 2030.

Work in this space will be enabled by the Treasury’s Data (Use and Access) Act Statutory Instrument, which is to be laid in Parliament in Q4 2026. The Act will give the FCA the power to regulate Open Finance and oversee a central governing body (to be established).

Transforming Data Collections

In a similar vein, regulators are continuing their joint programme to transform data collection (also known as the Future Banking Data initiative). This is a broad rethink of how regulatory reporting works through four key strands: to streamline reporting, improve regulatory interactions, standardise data and develop a future data collection strategy. A number of changes were put forward in the FCA’s quarterly consultation paper (CP25/35), with further engagements planned over the next year.

In time, this could improve the quality and consistency of data returns. However, it will ultimately require a fundamental change in firms’ data infrastructure and data governance capabilities.

Senior Managers & Certification Regime (SM&CR) 

SM&CR reforms aim to create a more proportionate regime. The first phase is already well underway, with the final policy statements in place and remaining changes to take effect by 10 July 2026. In Q3/Q4, firms can look ahead to regulatory consultations on further reforms, which will build on HMT’s work to date. Current proposals include removing the Certification Regime, reducing the number of senior management functions that require approval, introducing more flexible rules over Statements of Responsibilities and making changes to the conduct rules. 

ESG ratings regulation

Work is ongoing to bring Environmental, Social and Governance (ESG) ratings providers within the FCA’s regulatory perimeter. Bringing them in line with the International Organization of Securities Commissions (IOSCO) recommendations, the new rules aim to improve clarity, transparency and reliability of ESG ratings.

HMT finalised legislation in October 2025, followed by an FCA consultation last December, looking at methodology transparency, conflict management, governance, systems and controls. The FCA plans to publish the final rules in Q4, with the authorisation gateway opening in June 2027 and a go-live date of 29 June 2028.  

These changes will bolster ongoing work across the financial sector to establish robust sustainable finance infrastructure, enhance the integrity of the financial sector and offer greater consumer protection. Wider key initiatives include adopting emerging good practice from the Climate Financial Risk Forum (CFRF) and implementing the UK Sustainability Reporting Standards (with a policy statement due in Autum 2026 for in-scope firms).  

Appointed Representatives regime legislative reforms 

HMT consulted on the Appointed Representatives (AR) regime in February 2026, with a number of proposed reforms to strengthen and enhance it. Moving forward, firms will need to obtain a permission to act as a principal. Meanwhile,  appointed representatives are likely to fall under SM&CR and be subject to Financial Ombudsman Service jurisdiction (where principals aren’t liable).

While these proposals are expected to improve conduct, support Consumer Duty and boost customer protection, they could prove especially challenging for offshore models. Overseas ARs will be under pressure to meet FCA requirements (regardless of geographic jurisdiction), while principals must continue to demonstrate effective oversight and governance of ARs. 

These changes are subject to primary legislation, with an FCA consultation to follow in due course. 

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Sector-specific initiatives 

The Regulatory Initiatives Grid also includes a number of high-impact, sector-specific initiatives, as outlined below. These initiatives reflect targeted regulatory focus on key risk areas, and firms may need to prioritise these workflows to meet evolving supervisory expectations.

Key priorities for banking and capital markets 

In terms of ongoing work, banks are continuing with their implementation of Basel 3.1, or the Small Domestic Deposit Takers (SDDT) regime, with a deadline of 1 January 2027 for most elements. The key exception is internal model approach rules under Basel 3.1, which are effective from 1 January 2028.

Consumer protection also remains a key area of regulatory focus, with ongoing work to reform the Consumer Credit Act 1974. HMT published its final policy statement in May 2026, with Government legislation to follow. Crucially, HMT hasn’t (yet) updated provisions relating to unfair relationships or intermediary-led journeys, as these areas are complex and underpinned by a significant body of case law.  

Alongside this, firms continue to prepare for the regulation of Buy Now Pay Later products, which comes into force on 15 July 2026 and introduces affordability checks, stronger governance standards and greater alignment with the Consumer Duty.

In the wholesale markets sector, firms continue to prepare for a move to T+1 settlement cycles for securities trades (from 11 October 2027). They’re also currently awaiting final rules on updated requirements for central counterparties under the European Market Infrastructure Regulation (EMIR); and awaiting the final policy statement (due H2 2026) for streamlining transaction reporting requirements for the Markets in Financial Instruments Regulation. 

In addition to the above, the Regulatory Initiatives Grid notes several papers to look out for across the banking and capital markets sectors, including: 

• The mortgage rule review on responsible lending consultation (Q2 2026) and final rules (Q4 2027), with further mortgage consultations due in H1 2027.
• PRA consultation (Q4 2026/Q1 2027) on estimating loss given default and probability of default in residential mortgages, with the policy statement expected in Q3/Q4 2027.
• Further consultations on resolution reporting (Q4 2026), liquidity treatment of non-UK covered bonds (H2 2026), and a second policy statement on amendments to the large exposure framework (Q4 2026).
• Updates on the Wholesale Market Review with the equity consolidated tape policy statement (July 2026) and the consultation on equity market structure and transparency (July 2026). 

Key priorities for the insurance sector

The final pure protection market study findings are due in Q3 2026, focusing on fair value, commission and competition across the insurance sector. While the interim report did not propose any major market interventions, firms may expect further scrutiny over key areas such as pricing, commission and distribution.

Meanwhile, the sector continues work on the Dynamic Insurance Stress Test (DyGist). The live exercise is now complete and work is shifting to final data submissions, with the results due by the end of the year. Alongside this, the sector is due to implement new Solvency II liquidity reporting requirements by 30 September 2026, to help improve supervision of liquidity risks. 

Amid ongoing growing concerns about climate risk, insurance firms should continue to hone SS5/25 implementation and monitor emerging good practice from the Climate Financial Risk Forum, including the Adaptation Working Group.

The Regulatory Initiatives Grid also highlights key papers, including: 

• The prudential treatment of funded reinsurance, with a policy statement due in H1 2027 and an expected implementation date of 1 July 2027.
• Simplifying the insurance rules consultation paper (Q2 2026), with a policy statement to follow in Q4.
• The regulation of captive insurance, with a consultation paper due in summer 2026 and planned implementation in 2027. 

Key priorities for investment management 

The FCA is continuing its work on liquidity risk management for funds, to align with IOSCO and Financial Stability Board guidance. Following last year’s consultation on Undertakings for Collective Investment in Transferable Securities (UCITS) and Non-UCITS retail schemes, the FCA will follow up with a consultation on retail funds investing in illiquid assets (Q3 2026). 

The regulator’s also reviewing data collection for asset managers and funds and will consult on a new reporting regime in Q3 2026. 

Other notable publications in the Regulatory Initiatives Grid include: 

• An FCA consultation (Q2 2026) on registration of authorised fund assets to introduce greater flexibility around depositary asset registration rules (particularly for private markets assets).
• HMT to publish a draft statutory instrument, with an FCA consultation to follow (mid-2026), covering the repeal and replacement of AIFMD. 
• The FCA is reviewing solo remuneration rules in light of its simplification and growth agenda, with a consultation paper due in Q3 2026. 

Key priorities for payments and cryptoassets 

The Payments Vision Delivery Committee published the Payments Forward Plan in February 2026, reflecting the ongoing need for payments regulation tp keep pace with industry and technological change. This includes bringing cryptoassets within the FCA’s regulatory perimeter (from October 2027). Alongside this, the FCA is adapting long-standing CASS and safeguarding rules to cover cryptoassets activity, and finalising the stablecoins regime (Q2 2026). 

Meanwhile, the Payment Systems Regulator (PSR) is continuing its market review of card scheme and processing fees, with final decisions on cross-border interchange fees (Q4 2026), the Information, Transparency, and Complexity (ITC) and pricing governance remedies (June 2026), and Regulatory Financial Reporting remedies (October 2026).

Other upcoming publications noted in the regulatory initiatives grid include:

• A consultation paper on the Cryptoasset Resolution Regime due in Q3 2026 (as mentioned above).
• HMT’s consultation (Q2 2026) on modernising payments assimilated law, with the consultation response due later in the year. 

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Key priorities for pensions and retirement income 

In addition to the new pensions initiatives mentioned above, there’s a significant pipeline of ongoing and planned work across this sector, aimed at improving value for savers and strengthening governance. The high-impact guided retirement policy is a key initiative, which requires trustees to provide default retirement pathways to simplify decision-making and help defined contribution (DC) savers access their benefits.

Other key developments include the rollout of the Value for Money framework for defined contribution workplace pension schemes, further work on the contractual override mechanism under the Pension Schemes Act 2026, and the new administration strategy from The Pensions Regulator (TPR).

Key updates to look out for include: 

• Work to give schemes greater flexibility over defined benefit surplus release, with a government consultation due in summer 2026 and guidance from the Pensions Regulator due in April 2027.
• FCA consultation on the pensions charge cap, to assess how performance fees could disincentivise higher‑return investments. 

Next steps 

The latest Regulatory Initiatives Grid highlights the breadth of priorities across the financial services sector, driven by industry and technological developments, alongside a commitment to proportionate but effective regulation.While transformation is perhaps the biggest change, it has been a priority for the financial sector for some time,so many firms have change initiatives well underway. However, it is essential to stay on track to meet evolving regulatory expectations and keep pace with emerging technologies. Rushed transformation frequently leads to higher costs in the longer term and outcomes that do not fully support firm’s broader strategic goals.

Effective horizon scanning is therefore critical to ensure that iterative regulatory changes (driven by new rules, regulatory simplification and transformation initiatives) remain aligned with business strategy. 

For further information on the Regulatory Initiatives Grid, contact Paul Staples.