Financial Regulation Weekly Bulletin - 24 September 2026

Banking and finance

UK Parliament (House of Commons Treasury Committee)

Financial Inclusion Strategy - Treasury Committee publishes report, together with Government and FCA responses -18 September 2026

The House of Commons Treasury Committee has published a report (HC 621) containing the government's and the FCA's responses (dated 14 September 2026) to the Treasury Committee's earlier report on its inquiry into HM Treasury's financial inclusion strategy (dated 14 July 2026 and previously reported in this Bulletin).

Full details of the government’s response to each of the Treasury Committee’s recommendations are set out in an appendix. Among other things, the government refers to the work already being conducted by the Financial Inclusion Committee and the Delivery Partners Forum, which monitor progress in delivering the strategy’s key interventions. The government also states that it will use the Financial Services and Markets Bill to introduce a power protecting access to banking services if its current review supports intervention, but it will not commit to broader new reserve powers or explicit intervention triggers. It does not commit to publishing a pilot-to-scale plan for the financial inclusion strategy within six months, as the Committee’s report has recommended. Instead, the strategy's two-year review will provide a forward-looking assessment of next steps. Both the government and the FCA reject the Treasury Committee’s call for broad, firm-level financial inclusion metrics, and instead prefer to strengthen the existing evidence base.

European Commission

Private credit activities of banks and NBFIs - European Commission calls for advice from ESAs - 24 September 2026

The European Commission has sent a letter (dated 21 September 2026) and an accompanying call for technical advice to the EBA, EIOPA and ESMA (together, the European Supervisory Authorities (ESAs)) on private credit activities and exposures of EU banks and non-bank financial intermediaries (NBFIs).

The Commission seeks advice about the lending and investment exposure of EU banks and NBFIs to private credit activities within the EU and third countries. Private credit for these purposes includes direct lending operations, as well as investments in legal vehicles that perform lending activities or in instruments backed by loans. NBFIs in scope include: (i) insurance companies; (ii) pension funds; and (iii) investment funds. The Commission also requests a description of: (i) the gaps in the existing reporting framework around private credit activities; (ii) the level of participation in these activities by retail investors; and (iii) a mapping of interconnection between banks and NBFIs through private credit activities. The Commission has asked for the advice within six months (in other words, by March 2027).

You can read our briefing from earlier this year on navigating developments in the regulation of the private credit here. 

European Banking Authority 

Management of third-party risk related to non-ICT services - EBA publishes final report and guidelines -18 September 2026

The European Banking Authority (EBA) has published its final report (EBA/GL/2026/09) on draft guidelines for the sound management of third-party risk related to non-information and communication technology (ICT) services. The guidelines will replace the EBA's 2019 guidelines on outsourcing with a view to ensuring alignment with the Regulation on digital operational resilience for the financial sector ((EU) 2022/2554) (DORA). The draft guidelines apply to third-party arrangements (TPAs) provided by third-party service providers (TPSPs) and their subcontractors, focusing on the provision of critical or important functions. Among other things, they will allow firms to store relevant information relating to both ICT and non-ICT services in a single register.

The guidelines will be translated into the official EU languages and published on the EBA website. The final version will have a two-year transition period to give firms time to amend their existing TPAs and update the register for non-ICT TPAs.

European Central Bank 

Bank licence applications - ECB publishes updated Guide -18 September 2026

The European Central Bank (ECB) has published an updated guide on its assessment of licence applications for credit institutions, replacing its 2019 version. The guide applies to all applications for a licence to become a credit institution under the Capital Requirements Regulation (575/2013) (CRR), including initial authorisations, bridge bank applications and licence extensions. It is intended to assist applicants in navigating the applicable legal and regulatory framework (including EU directives, as well as EBA technical standards and guidelines).

The guide is not legally binding and does not replace any legal requirements under EU or national law.

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Insurance

Financial Conduct Authority 

Market study on distribution of pure protection products to retail customers - FCA publishes final report - 21 September 2026

The FCA has published its final report on a market study into the distribution of pure protection products to retail customers (MS24/1.5). The market study assessed whether competition in the distribution of pure protection products (such as life insurance, critical illness cover, and income protection) works well for consumers.

The FCA found that the market generally delivers positive outcomes for consumers who actively hold pure protection products, with high claims acceptance rates, extensive product variety, and relative stability of new business premiums. That said, it also found that a significant protection gap persists, leaving millions of consumers vulnerable to unforeseen life events and financial hardship. The FCA defines the protection gap as the shortfall between the financial protection consumers need against adverse life events and the actual coverage in place. The FCA considers this gap to be driven by demand-side factors (including low consumer awareness and understanding) and supply-side factors (including friction in the sales process, underwriting complexity, and a limited availability of products for consumers with more complex needs).

The FCA will address the issues it has identified through a remedies package running from Q4 2026 through to late 2027, which will involve collaboration between the regulator, industry bodies, public sector entities, and third-sector organisations. The work will generally focus on groups who are disproportionately unprotected such as: (i) renters; (ii) the self-employed and gig economy workers; (iii) those on lower incomes; and (iv) people with pre-existing medical conditions. Among other things, the Money and Pensions Service and the Digital Property Market Steering Group will prompt people to think about protection at key moments, with the FCA exploring how other bodies might help put protection on people’s radar. The Protection Distributors' Group will lead a consumer awareness campaign, targeted at groups who are less likely to take out protection products. The Association of Mortgage Intermediaries will lead work to help advisers improve how they discuss protection with their customers. Subject to sufficient interest, the FCA also plans to run a TechSprint in Q3 2027 to explore technology-enabled solutions to the protection gap. Expressions of interest are invited by 13 November 2026. Further details are in Chapter 3 of the final report.

The FCA has also published findings on switching, claims experiences, and fair value in the protection market. Generally, it found that competition works well in the market, but it has reminded firms of requirements and good practice under the Consumer Duty and its product governance rules. Annex 2 describes positive examples of firms’ remuneration arrangements and fair value assessments, based on a sample submitted as part of the pure protection market study.

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