May 2025

Key regulatory updates

Regulatory highlights

Updates to Regulatory Initiatives Grid: The regulators updated the Regulatory Initiatives Grid in April 2025 considering latest developments and plans for the next 24 months. Key initiatives include FCA review of historical Dear CEO Letters to streamline its supervisory communication, industry consultation regarding the guidance on PEPs, finalisation of interim rules on safeguarding for payment and e-money firms, a new legislation on cryptoassets, planned consultation papers on pension and retail investment advice, Open Finance roadmap and updates to cloud computing guidance.

Cost disclosures on CCIs supplied to investors to be simplified: The FCA published a Consultation Paper to simplify cost calculations and disclosures of Consumer Composite Investments (i.e. grouping of equities, indexes, or other investment securities in a standardised way for indirect investments, such as Packaged Retail and Insurance-based Investment Products).

New framework to replace EU assimilated rules applicable to AIFMs: The UK Treasury and FCA proposed changes to make Alternative Investment Fund Managers subject to a more proportionate set of rules based on certain thresholds.

Supervisory highlights

Multi-firm review of trading apps (neo-brokers): With trading apps gaining popularity, the FCA’s concerns are around target market analysis, inadequate fair value assessments, gamification, misleading disclosures, and appropriateness testing.

Retail banks’ treatment of customers in vulnerable circumstances Multi-Firm Review: The FCA’s recent multi-firm review of vulnerable customer treatment focuses on the cases where there is bereavement or a power of attorney. The review highlights a need for staff training regarding steps to take when customers are incapacitated or to adequately support such customers, and increased awareness on fraud and financial abuse for such events. The requirements of continuous oversight and designing customer journeys suitable to the needs of these people are also noted.

Operational resilience – beyond regulatory raincoats: The FCA Head of technology, resilience and cyber reflects on the lessons learned from Operational Resilience exercised after the passing of 31 March deadline. He notes that the focus is now shifted from compliance to embedding a culture of operational resilience. Firms are expected to demonstrate proactive planning, strong communication, sector-wide collaboration and senior-led resilience.

The FCA stops publishing Portfolio Letters: From 30 April 2025, the FCA stopped issuing portfolio letters. Instead, it will publish a small number of market reports.

Enforcement Highlights

Speeches about enforcement priorities: Therese Chambers’ (FCA Executive Director of enforcement and market oversight) two recent speeches outline enforcement priorities. The first speech notes that the focus for the next five years will be on fraud, illicit funds, market integrity, and crypto. The second speech centres on market abuse, highlighting the involvement of organised crime groups, which account for a quarter of all STORs, and the relevancy of unlawful disclosures.

PRA fines Mr. George Jay Hambro: The PRA fined a former Wyelands Bank Non-Executive Director for his failure to provide challenge on certain prudential concerns and to comply with the bank’s policy to manage the potential conflicts of interest risks due to potential/proposed transactions.

HSF Moscow Penalty: Key Lessons for Industry: This case offers clear lessons on sanctions compliance, with the significant penalty and detailed failings (due diligence, screening, and ownership controls) providing valuable insights for all firms. OFSI’s direct communication highlights the broader importance of these issues.

Key data trends