Financial Regulation Weekly Bulletin - 22 October 2026

Banking and finance

UK Parliament

Financial Services and Markets Bill - Economic Secretary to the Treasury writes to Treasury Committee - 15 October 2026

Lucy Rigby, Economic Secretary to the Treasury, has written to Dame Meg Hillier, Chair of the House of Commons Treasury Committee, following the introduction of the Financial Services and Markets Bill in the House of Commons. The letter, published on 20 October 2026, summarises the purpose and objectives of the Bill, which received broad cross-party support during its passage through the House of Lords.

The letter states that the Bill will:

•    help ensure future access to in-person banking services, with the government intending to restore in the Commons a version of the power to do so that was removed by amendment in the House of Lords;
•    enable credit unions to expand by reforming the common bond;
•    consolidate the regulatory framework, including by abolishing the Payment Systems Regulator and transferring its functions to the FCA;
•    reduce the overall burden of the Senior Managers and Certification Regime;
•    update the statutory framework underpinning the ring-fencing regime;
•    modernise consumer protections and redress arrangements, including reforms to the Financial Ombudsman Service; and
•    enable the government to expand the FCA’s supervision of anti-money laundering and counter-terrorist financing, currently spread across 22 professional body supervisors, and enable the Home Office to seize more illicit cryptoassets.

Basel Committee on Bank Supervision

Window dressing in the G-SIB framework - Basel Committee publishes final amendments - 16 October 2026

The Basel Committee on Banking Supervision (BCBS) has published final amendments to its assessment framework for global systemically important banks (G-SIBs) to address “window dressing”, the practice of temporarily lowering the values of certain indicators around reporting dates, which results in an underestimation of a bank’s systemic importance. The amendments revise chapter SCO40 of the Basel Framework and will be implemented in two steps.

The central change requires banks in the G-SIB assessment exercise to calculate stock G-SIB indicators using an average of values over the reporting year, rather than year-end values. The averaging frequency (daily, month-end or quarter-end) will depend on the indicator and on whether a bank is a G-SIB or near-G-SIB (a bank with a G-SIB score above 100 basis points in the previous year). At a minimum, all banks must use an average of quarter-end values for stock indicators, and national authorities retain discretion to require higher-frequency reporting. The BCBS has also agreed to increase the G-SIB reporting and disclosure threshold in the leverage ratio exposure measure from EUR 200 billion to EUR 350 billion.

The revised EUR 350 billion threshold will be implemented from 2027 (the end-2026 assessment exercise), while the averaging requirements apply from 1 January 2030. A transitional period will run from 1 January 2028, during which banks will report both financial year-end values and, on a best-efforts basis, their averaged values.

G-SIB methodology review - Basel Committee publishes consultation - 16 October 2026

 The BCBS has issued a consultative document proposing to incorporate into the G-SIB framework its 2022 agreement on the treatment of cross-border exposures within the European Banking Union (EBU). The consultation forms part of the BCBS’s periodic review of the G-SIB assessment methodology in chapter SCO40 of the Basel Framework.

Under the 2022 agreement, a parallel set of G-SIB scores is calculated for EBU-headquartered G-SIBs. These scores may inform the exercise of supervisory judgement in determining bucket allocations, recognising 66% of the score reduction that would result from treating intra-EBU exposures as domestic exposures. Any downward adjustment of an EBU-headquartered G-SIB is limited to a single bucket, and the parallel scores do not affect any bank’s classification as a G-SIB or the scores or bucket allocations of banks outside the EBU. The proposals would amend SCO40 and the G-SIB assessment reporting instructions to formalise this existing treatment.

As the proposals formalise the existing treatment of EBU exposures, the revisions would apply with immediate effect once finalised. The deadline for comments is 14 January 2027.

HM Treasury

Overseas Prudential Requirements Regime - HM Treasury makes restatement regulations - 22 October 2026

The Treasury has made the Overseas Prudential Requirements Regime (Credit Institutions and Investment Firms) Regulations 2026 (SI 2026/1116) (the OPRR Regulations), accompanied by an explanatory memorandum.

The OPRR Regulations restate, with modifications, the equivalence provisions currently contained in the UK Capital Requirements Regulation (UK CRR), consolidating a range of fragmented equivalence regimes inherited from the UK’s past membership of the EU into a single Overseas Prudential Requirements Regime (OPRR). The OPRR Regulations were made on 21 October 2026 and come into force on 1 January 2027, when the revocation of the relevant UK CRR articles takes effect.

The OPRR Regulations restate the Treasury’s powers under relevant articles of the UK CRR. They also preserve the overall scope and effect of existing equivalence decisions by treating the jurisdictions listed in the Schedule, which are currently deemed equivalent, as designated under the new regime. Regulation 3 confers a power on the Treasury to designate overseas jurisdictions. The power is exercisable only where the designation is compatible with specified outcomes, including UK financial stability, the safety and soundness of CRR firms, and effective competition or UK international competitiveness. In most cases, the PRA will determine the precise prudential treatment.

The OPRR Regulations make two targeted changes to the scope of the existing regime: (i) exposures to overseas exchanges may be treated as exposures to institutions only where the relevant overseas banking regulator treats them in the same way, failing which the PRA may set a treatment reflecting the underlying risk (typically as exposures to corporates); and (ii) the “third-country investment firm” definition is replaced with a new “overseas investment firm” definition aligned with the Investment Firm Prudential Regime. The regime is also extended to cover overseas eligible covered bonds as a new category of exposure, although any preferential treatment would arise only on a future designation.

Further consequential amendments arising from the revocation of the relevant UK CRR provisions will be made in a separate instrument before the end of the year. Any future designation of a jurisdiction, including in relation to covered bonds, will require a further statutory instrument and parliamentary approval.

Building society seals, document execution and the wholesale funding limit - HM Treasury makes assimilation order - 22 October 2026

The Treasury has made the Building Societies Act 1986 (Assimilation to Company Law and Changes to Funding Limit) Order 2026 (SI 2026/1115) (the Order), accompanied by an explanatory memorandum. The Order amends the Building Societies Act 1986 (the Act) to assimilate the rules on common seals and the execution of documents to the equivalent provisions of the Companies Act 2006. It also makes targeted changes to the wholesale funding limit calculation in section 7 of the Act. The Order was made on 21 October 2026 and comes into force on 1 January 2027.

The Order also includes a statutory review clause requiring the Treasury to review the measures and report by the end of 2031, with subsequent reviews at intervals of no more than five years.

Bank of England

New model of independent reviews - Bank of England writes to parliamentary committees - 12 October 2026

David Roberts, Chair of Court of the Bank of England, has written to the Chairs of the House of Commons Treasury Committee, the House of Lords Financial Services Regulation Committee and the House of Lords Economic Affairs Committee. The letter, published on 20 October 2026, outlines a new model for independent reviews that places greater emphasis on reviews led by external experts, with the aim of strengthening the independence of the Bank’s review processes and Parliament’s ability to scrutinise the Bank’s performance.

The Bank’s Court approved the new model at its September meeting for implementation after the close of the current work programme of the Bank’s Independent Evaluation Office (IEO). The change reflects concerns raised by some stakeholders as to whether the IEO’s independence could be undermined by its location within the Bank.

The IEO will publish one final review, evaluating the Bank’s approach to FMI regulation and supervision, which is expected in December 2026.

Payment Systems Regulator

Confirmation of Payee - PSR publishes policy statement removing the expiry date from Specific Direction 17 - 22 October 2026

The Payment Systems Regulator (PSR) has published a policy statement (PS26/2) confirming its decision to remove the expiry date from Specific Direction 17 (SD17), which requires most payment service providers (PSPs) to provide the Confirmation of Payee (CoP) account name-checking service. SD17 was otherwise due to expire on 1 November 2026, and removal of the expiry date means directed PSPs will continue to be obliged to provide CoP services.

The PSR has given Specific Direction 17a (SD17a), in force from 22 October 2026, which varies SD17 by deleting its expiry date and making consequential changes so that the direction continues in force until varied or revoked. SD17a does not alter the scope of SD17 and does not bring PSPs that provide CoP voluntarily into scope. The PSR considers the removal to be appropriate and proportionate because CoP is a network service whose effectiveness depends on broad participation by sending and receiving PSPs. Allowing SD17 to lapse would remove the only regulatory requirement to provide it. CoP is now widely adopted, with more than 320 organisations offering CoP checks (representing over 99% of organisations initiating Faster Payments transactions) and over two million checks completed each day.

The PSR will review the requirement to provide CoP in five years and may do so earlier if significant developments affecting CoP or the wider payments landscape warrant it. It also favours expanding CoP to a wider group of PSPs, including current voluntary providers, and it will engage with affected firms to test the potential governance, compliance and legal costs before consulting on any resulting proposal.

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Asset Management

Financial Conduct Authority 

Expanding consumer access to investments - FCA publishes feedback statement (FS26/3) - 16 October 2026

The FCA has published a feedback statement (FS26/3) summarising responses to its discussion paper (DP25/3) on how its rules and regulatory framework can support a stronger investment culture for consumers investing without an adviser. The statement sets out the FCA’s planned next steps, which it intends to take forward in a proportionate and sequenced way rather than all at once.

The FCA will review its financial promotion rules for high-risk investments, working with stakeholders to assess the harm caused by inconsistencies in the treatment of products with similar risks, such as contracts for difference and leveraged exchange-traded products. It confirms that peer-to-peer agreements should remain within the restricted mass market investment category, and that it does not regard a derivative giving exposure to a share as equivalent to a fractional share. The FCA also notes that the high-net-worth and self-certified sophisticated investor exemptions in the Financial Promotion Order are a matter for HM Treasury, with which it will continue to engage on the consumer harms it associates with self-certification.

The FCA plans to consult in the first half of 2027 on its rules and guidance on risk information for mainstream investments. It also plans to review how the appropriateness assessment works in practice with stakeholder engagement during 2027, and to publish the findings of its multi-firm review of model portfolio services by the first quarter of 2027.

Applications and notifications for UK authorised funds - FCA publishes user guide - 21 October 2026

The FCA has published a user guide (version 1.0) explaining how firms should submit applications and notifications for UK authorised funds through its online Connect system. The guide covers applications to authorise a new scheme (authorised contractual schemes, authorised unit trusts and investment companies with variable capital), requests to change an existing authorised fund, and notifications of an approved change (Form FN).

The guide reflects the transition of authorised fund applications and notifications to Connect and walks firms through the process, including locating the form, downloading and uploading the relevant application forms and supporting documents, and completing the submission declaration. It sets out practical requirements such as document naming conventions (scheme name - document type - date), file-format and special-character restrictions, a 30-document (or zip-file) limit for key investor information, and the automatic deletion of draft applications left untouched for three months.

The relevant forms will not be available in Connect until the service goes live on 2 November 2026, and firms will be unable to access the application journey before that date.

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Enforcement 

Financial Conduct Authority 

LIBOR/EURIBOR-related bans - FCA publishes statement - 16 October 2026

The FCA has published a statement on its regulatory action against individuals whose benchmark manipulation convictions have recently been overturned by the Court of Appeal. The statement concerns the prohibition orders (bans) that the FCA imposed on four former traders in connection with the manipulation of LIBOR and EURIBOR.

The FCA states that, as these convictions formed the basis on which it took its action, it has revoked the bans of Colin Bermingham, Philippe Moryoussef, Jonathan Mathew and Christian Bittar, and removed the associated Final Notices from its channels. It confirms that it will take no further action against these individuals in relation to this matter. This follows the FCA’s decision last year to discontinue proceedings against Tom Hayes and revoke Carlo Palombo’s ban after the Supreme Court quashed their convictions.

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