Financial Regulation Weekly Bulletin - 8 October 2026

General

Financial Conduct Authority

FCA’s treatment of whistleblowers – APPG on Investment Fraud and Fairer Financial Services calls for independent investigation – 6 October 2026

The All-Party Parliamentary Group (APPG) on Investment Fraud and Fairer Financial Services, chaired by John McDonnell MP, has published a statement calling for an independent, non-conflicted investigation into the FCA’s handling of whistleblowers, following the death of whistleblower Simon Andriesz.

The APPG is calling on the FCA to fund an independent evaluation of its handling of whistleblowers, criticising the FCA’s earlier 2021/2022 internal survey, which drew 21 responses from 68 people surveyed out of 1,041 whistleblowers in the relevant period, as allowing the regulator to ‘mark its own homework’. The statement includes testimony from other whistleblowers describing delay, retaliation and poor treatment, and warns that if the FCA refuses to cooperate the APPG will consider conducting its own call for evidence.

In parallel, the FCA has published a blog by Stephen Braviner Roman, General Counsel and Chief Risk Officer, on how it interacts with whistleblowers, reporting that whistleblowing reports rose 22% last year and that the FCA provided feedback on each of the 1,252 reports it closed, 42% of which led to direct action to manage or reduce harm. The FCA has asked Lea Paterson, a newly appointed independent non-executive director, to review how it interacted with Mr Andriesz and to identify lessons, with any findings expected to be shared early 2027.

Compliance functions at corporate finance firms – FCA publishes blog – 8 October 2026

The FCA has published a blog, authored by its Head of Trading Venues and Corporate Finance Firms, setting out the findings of a survey of corporate finance firms’ compliance functions and their ability to challenge the business effectively. The survey, which was foreshadowed in the FCA’s Regulatory Priorities Report, was sent to 411 firms and received 382 responses.

The FCA found encouraging practice across the sector but also identified scope for greater compliance involvement and independent challenge. Most respondents are small firms (64% have nine or fewer employees), and 63% operate a compliance function that is not dedicated solely to compliance and carries other business responsibilities, which can create conflicts of interest, for example, where compliance also plays a role in revenue generation. The FCA emphasises that arrangements should be proportionate to the nature, scale and complexity of the business, subject to the delivery of high standards of conduct and effective conflicts management. The FCA further notes that the second line of defence must scale as a firm grows or takes on public markets roles such as acting as an Alternative Investment Market (AIM) nominated adviser, Aquis Stock Exchange (AQSE) corporate adviser or broker, or listing sponsor.

Although 90% of firms use some form of third-party compliance support, the FCA reminds firms that responsibility for regulatory compliance remains with the relevant senior management function holder and that firms must maintain effective oversight of third-party support, ensuring they understand the advice received. While most firms carry out the key activities the FCA expects (and 47% carry out all of the activities covered by the survey), the widest gaps were in the practices that “bring compliance culture to life”, including arrangements for staff to raise concerns safely, breach registers, complaints monitoring, compliance attendance at and reporting to management body meetings, and the inclusion of regulatory compliance in staff performance assessments, which 140 firms reported not doing.

The FCA will engage further with selected firms to understand the adequacy and effectiveness of their compliance resources and to explore gaps in practice. The FCA expects firms to use the findings from the survey to reflect on their arrangements and identify where improvement is needed.

Council of the European Union 

Market Integration and Supervision Package – Council of the EU publishes Presidency compromise – 5 October 2026

The Council of the EU has published a Presidency note (13777/26) presenting a compromise text on the Market Integration and Supervision Package (MISP) for agreement on a general approach. MISP is a key initiative within the EU’s Savings and Investments Union aimed at deepening and integrating European capital markets. The package amends more than 18 files covering trading, post-trade activities, asset management, the Distributed Ledger Technology (DLT) Pilot Regime, settlement finality and the European Securities and Markets Authority (ESMA) supervision and governance.

Key features include the introduction of ‘Pan-European Market Operators’ and ‘Significant Trading Venues’ under direct ESMA supervision, the transfer of significant central clearing counterparties, central securities depositories and crypto-asset service providers to ESMA, and an expansion of the scope of market data available to investors within the consolidated tape for shares and exchange-traded funds (ETFs). The compromise also moves the settlement finality framework from a directive to a regulation, raises the DLT Pilot Regime activity thresholds (with the main regime threshold increased to EUR 300 billion, with a possible future increase to EUR 500 billion through a Commission delegated act), and establishes a new full-time, independent ESMA Executive Board to manage operations and take entity-specific decisions concerning directly supervised entities, alongside the existing Board of Supervisors, which is responsible for regulatory strategy, decisions and supervisory convergence.

The funding of the budget increase (and corresponding national competent authority contributions), and the definition of Significant Trading Venues, remain subject to political resolution. The package was due to be considered at the Economic and Financial Affairs Council (ECOFIN) on 9 October 2026, with interinstitutional agreement targeted by the end of 2026.

Back to top

Securities and markets

European Commission

Organisational requirements of trading venues and circuit breakers – European Commission adopts Delegated Regulation – 1 October 2026

The European Commission has adopted a Delegated Regulation (C(2026) 6845) amending the regulatory technical standards in Delegated Regulation (EU) 2017/584 (RTS 7) as regards certain organisational requirements of trading venues and circuit breakers under MiFID II (Directive 2014/65/EU). The amendments reflect changes to MiFID II made by the Digital Operational Resilience Directive (EU) 2022/2556 and by Directive (EU) 2024/790.

The Delegated Regulation clarifies that RTS 7 applies only to trading venues where order submission and matching is facilitated by electronic means and removes ICT-related requirements now covered by the Digital Operational Resilience Act (DORA). It also establishes common principles for circuit breakers, requiring venues to deploy trading halts or price collars (or, for other trading systems, suitable alternative arrangements), to adopt and review a calibration methodology, to publish information on the design and functioning of their circuit breakers, and to report the underlying parameters to their competent authority each year using a prescribed template.

The Regulation will enter into force on the third day following its publication in the Official Journal of the European Union and remains subject to scrutiny by the European Parliament and the Council.

European Securities and Markets Authority 

Provision of crypto-asset services in relation to non-MiCA-compliant asset-referenced tokens and e-money tokens – ESMA publishes opinion – 8 October 2026

The European Securities and Markets Authority (ESMA) has published an opinion setting out its supervisory expectations for the provision of crypto-asset services in relation to asset-referenced tokens (ARTs) and e-money tokens (EMTs), also known as stablecoins, that do not comply with the Markets in Crypto-Assets Regulation (MiCA). The opinion is addressed primarily to national competent authorities (NCAs) to promote supervisory convergence and complements the existing European Commission Q&A 2404 and ESMA’s earlier public statement on the same subject.

ESMA considers that authorised crypto-asset service providers (CASPs) should not provide any crypto-asset service in relation to non-MiCA-compliant ARTs or EMTs, as doing so would be incompatible with a CASP’s obligation under Article 66(1) of MiCA to act honestly, fairly and professionally in the best interests of clients. This expectation applies to the full range of MiCA services, individually or in combination, including operating a trading platform, exchange services, execution, reception and transmission of orders, placing, advice, transfer, custody and portfolio management, and ESMA considers that warnings, disclosures or client acknowledgements would not adequately address the risks arising from the absence of issuer-level safeguards. CASPs should implement appropriate technical, contractual and organisational controls to prevent EU clients from acquiring or increasing positions in such tokens.

Where NCAs identify remaining legacy exposures, they should require remediation as soon as possible and no later than three months after the date of publication of the opinion, with any continued services strictly limited to the sell-only, conversion, transfer, withdrawal or safekeeping functions necessary for an orderly wind-down.

Third-country CSDs – ESMA issues public statement on extended transitional period – 7 October 2026

 The FCA has published Policy Statement PS26/19 setting out final rules to align listed issuers’ sustainability and climate disclosures with the UK Sustainability Reporting Standards (UK SRS), the UK-endorsed versions of the IFRS S1 and IFRS S2 standards issued by the International Sustainability Standards Board (ISSB). These rules will replace the existing disclosures aligned with the Task Force on Climate-related Financial Disclosures (TCFD).

Following broadly supportive feedback to CP26/5, the FCA has adopted a comply-or-explain approach across all of UK SRS, including UK SRS S2 climate disclosures and Scope 3 emissions. This is a change from the consultation, which had proposed mandatory UK SRS S2 disclosures. The rules apply to issuers in the equity shares (commercial companies) (UKLR 6), equity shares (international commercial companies secondary listing) (UKLR 14), certificates representing certain securities/depositary receipts (UKLR 15), non-equity shares and non-voting equity shares (UKLR 16) and equity shares (transition) (UKLR 22) categories. In-scope issuers must include UK SRS disclosures or explanations in their annual financial report, state whether and where they have published a climate-related transition plan (or explain why not), and disclose whether they have obtained third-party sustainability assurance.

The rules apply to accounting periods beginning on or after 1 January 2027 and transitional reliefs allow a one-year deferral of Scope 3 disclosures and a two-year ‘climate-first’ deferral of UK SRS S1 non-climate disclosures, both falling away for accounting periods beginning on or after 1 January 2029. The FCA intends to publish updated information regarding its supervisory approach to UK SRS in the second half of 2027, in time for the first reporting season under the new rules.

Financial Conduct Authority 

Preparing for the new transaction reporting regime – FCA publishes consultation paper – 2 October 2026

The FCA has published a consultation paper (CP26/34) on guidance, transitional provisions and consequential amendments to support the new UK transaction reporting regime, which comes into force on 3 April 2028 following the rules made in PS26/15. The Treasury plans to repeal the UK Markets in Financial Instruments Regulation (MiFIR) transaction reporting legislation, enabling the FCA to deliver a streamlined framework based on the Market Conduct sourcebook (MAR) 13, MAR 14 and MAR 15.

The paper consults on seven new areas of guidance for a planned Transaction Reporting User Pack, covering client indicator field, conditional single-sided reporting, meaning of a ‘transaction’, branch execution, equity swaps, strike price and package transactions. It also consults on transitional provisions (a new MAR TP 5), and on consequential amendments to the Glossary, the Conduct of Business sourcebook (COBS), MAR, the Recognised Investment Exchanges sourcebook (REC), the Senior Management Arrangements, Systems and Controls sourcebook (SYSC) and Technical Standards, as well as the possible removal of instruments only tradeable on EU trading venues from FCA Financial Instrument Reference Data System (FIRDS). Draft schema files and validation rules have been published on the Market Data Processor webpage to help firms prepare.

The deadline for responses is 6 November 2026. A further consultation on the Transaction Reporting User Pack is planned for Q1 2027, with a final User Pack to be published by 3 April 2027.

Back to top

Insurance

European Commission

Simplified calculation of the risk margin under Solvency II – European Commission adopts delegated regulation – 8 October 2026

The European Commission has adopted a Commission Delegated Regulation amending Delegated Regulation (EU) 2015/35 (the Solvency II Delegated Regulation) as regards the simplified calculation of the risk margin (C(2026) 7016 final). The amendment ensures that the simplified methods in Article 58 remain consistent with the updated risk margin formula introduced into Article 37(1) by Delegated Regulation (EU) 2026/269, which adds a new exponential, time-dependent factor to the computation of the Solvency Capital Requirement, intended to reduce the sensitivity of the risk margin to interest rate changes for long-term liabilities.

The Regulation will enter into force on the twentieth day following its publication in the Official Journal of the European Union and will apply from 30 January 2027, aligning with the date of application of Delegated Regulation (EU) 2026/269.

European Insurance and Occupational Pensions Authority

Outcomes-focused supervision of IBIP sales and disclosures – EIOPA publishes consultation paper – 8 October 2026

The European Insurance and Occupational Pensions Authority (EIOPA) has published a consultation paper on a draft Supervisory Statement on the outcomes-focused supervision of insurance-based investment product (IBIP) sales processes and pre-contractual disclosures. The draft Statement is addressed to national competent authorities (NCAs) and seeks to complement compliance-based supervision with a more proportionate, risk-based focus on whether existing safeguards under the Insurance Distribution Directive (IDD), the packaged retail and insurance-based products (PRIIPs) Regulation and the Sustainable Finance Disclosure Regulation (SFDR) operate effectively in practice, without introducing new regulatory requirements.

The draft Statement encourages NCAs to assess the practical effectiveness of safeguards across the customer journey, including the relevance and sufficiency of the information collected for demands-and-needs, suitability and appropriateness assessments; whether disclosures support informed decision-making having regard to their timing, volume, complexity and presentation; the substance of personal recommendations; the oversight of distributors and distribution channels, including remuneration and incentive structures; and post-sale indicators such as complaints, early lapses and surrenders. EIOPA notes that collecting additional information, documentation or process steps does not necessarily improve consumer outcomes, and that supervisory attention should focus on weaknesses that materially affect consumer understanding.

The deadline for comments is 4 January 2027.

(Re)insurance undertakings related to private equity – EIOPA publishes supervisory statement – 6 October 2026

EIOPA has published a supervisory statement (EIOPA-BoS-26/388) setting out EU-wide supervisory expectations for the authorisation and ongoing supervision of (re)insurance undertakings related to private equity (PE). Addressed to national competent authorities under the Solvency II Directive, it responds to the growing trend of PE firms acquiring insurers and reinsurers.

The statement sets expectations for acquisitions of qualifying holdings, portfolio transfers and mergers, as well as for ongoing supervision, on a risk-based and proportionate basis. It flags particular risks arising from the PE business model, including short time horizons and exit strategies misaligned with policyholders’ long-term interests, reallocation of assets towards private credit and illiquid assets, material use of (often third country) reinsurance, high leverage and collateralised acquisition debt, balance-sheet over-optimisation, and complex or opaque ownership structures and conflicts of interest. EIOPA encourages supervisors to require robust governance and independence, to scrutinise intragroup and related transactions on an arm’s length basis, and to promote early dialogue with proposed PE acquirers.

The statement is accompanied by an impact assessment.

Recent Cases

Fiduciary duty of disclosure and informed consent – Court of Appeal hands down judgment – 2 October 2026

In GI Globinvestment Limited and another v XY ERS UK Limited, the Court of Appeal unanimously dismissed an appeal concerning whether the lower court erred in finding that the investment consultant, XY, had not breached fiduciary duties owed to its clients. Members of the di Montezemolo family and a family investment vehicle, who had invested in products and a fund connected to XY’s owner, suffered losses as a result of adverse market conditions in March 2020.

Giving the leading judgment, Newey LJ (with whom Asplin and Popplewell LJJ agreed) held that a fiduciary is not subject to a freestanding, positive duty to disclose all information relevant to its principal’s affairs; a failure to disclose does not of itself found an independent claim for breach of fiduciary duty, but is instead relevant to whether the principal has given informed consent (through having adequate information) that provides a defence to the no-conflict and no-profit rules. Applying the Supreme Court’s analysis in Hopcraft v Close Brothers Ltd [2026] AC 877, the Court upheld the finding that these sophisticated investors had been given sufficient information to have given informed consent.

Back to top