Author: Deirdre Waslsh, Assistant Consultant
The Financial Services Regulatory Initiatives Forum has published the tenth edition of the Regulatory Initiatives Grid , setting out the regulatory landscape facing UK financial services firms over the next 24 months. Whilst the Grid contains a broad range of initiatives, several developments are likely to have particular significance for investment firms and wealth managers.
Key Themes Emerging from the 2026 Grid
- Growth and Competitiveness Continue to Drive Regulatory Reform
The FCA’s secondary objective to facilitate international competitiveness and growth continues to influence regulatory policymaking. Regulators are increasingly expected to consider the cumulative burden of regulation and assess whether existing requirements continue to achieve their intended outcomes. For firms, this presents both opportunities and challenges. While some reforms may reduce regulatory friction, firms should not interpret the competitiveness agenda as signalling reduced supervisory expectations. The FCA has consistently emphasised that growth and consumer protection are not mutually exclusive objectives.
- Consumer Duty Is Moving into its Supervisory Phase
Nearly three years after Consumer Duty came into force for open products and services, it continues to shape regulatory expectations across the retail financial services sector. The FCA’s focus has now shifted from implementation to evidence. Supervisors increasingly want firms to demonstrate:
- How they monitor consumer outcomes;
- Whether management information identifies foreseeable harm;
- How boards challenge poor outcomes;
- Whether firms can evidence fair value;
- How vulnerable customer considerations are embedded within decision-making processes.
Recent FCA communications suggest that firms relying on process-based compliance may face greater scrutiny than those able to demonstrate measurable customer outcomes.
Investment firms should expect continued supervisory focus on:
- Platform fees;
- Adviser charging structures;
- Product governance arrangements;
- Customer communications;
- Ongoing service propositions;
- Retirement income solutions.
- Technology,AIand Digital Innovation Are Rising Up the Regulatory Agenda
The Grid reflects increasing regulatory attention on technology-enabled financial services. Although the UK has not adopted a dedicated financial services AI regime, regulators are becoming increasingly focused on how firms govern emerging technologies. Areas likely to receive greater scrutiny include:
- Algorithmic decision-making;
- Automated investment processes;
- Surveillance technologies;
- Financial crime monitoring tools;
- Customer support systems;
- Data governance frameworks.
- Operational Resilience Remains a Supervisory Priority
Operational resilience has transitioned from implementation to ongoing supervision. Following the March 2025 deadline for firms to remain within impact tolerances for important business services, regulators are increasingly focused on testing the effectiveness of firms’ resilience frameworks. Key areas of focus include:
- Important business service mapping;
- Scenario testing;
- Third-party dependency management;
- Cloud outsourcing arrangements;
- Incident response frameworks;
- Board oversight and governance.
- Sustainable Finance Expectations Continue to Evolve
The sustainable finance agenda remains firmly embedded within the UK’s regulatory framework. The FCA continues to develop and implement measures designed to improve transparency and reduce the risk of greenwashing. Firms offering ESG-related products should ensure that sustainability claims remain capable of being substantiated and supported by robust evidence.
Investment firms should continue monitoring developments relating to:
- Sustainability Disclosure Requirements (SDR);
- Investment label regimes;
- Anti-greenwashing requirements;
- Sustainability-related marketing materials;
- Product governance arrangements.
Key Regulatory Initiatives Investment Firms Should Watch
Market Abuse Reform
The UK continues to review elements of the market abuse framework following Brexit. Market participants should monitor developments relating to:
- Market abuse reporting obligations;
- Insider list requirements;
- Disclosure regimes;
- Surveillance expectations.
Although wholesale reform is not anticipated, firms should expect incremental changes aimed at improving proportionality while maintaining market integrity. Compliance teams should continue reviewing surveillance frameworks and escalation procedures to ensure they remain aligned with evolving expectations.
UK CSDR and Settlement Discipline
Post-trade reform remains an important area of regulatory development. Changes to the UK Central Securities Depositories Regulation (CSDR) framework may affect firms involved in securities settlement processes and transaction reporting obligations. Firms should monitor developments carefully and assess whether operational changes may be required to support future settlement discipline requirements.
Financial Promotions and Finfluencers
The FCA continues to intensify its supervision of financial promotions, particularly those distributed through digital channels and social media. Recent enforcement activity demonstrates that regulators remain concerned about:
- Misleading investment promotions;
- Inadequate risk disclosures;
- Social media marketing;
- Influencer activity;
- Unauthorised promotions.
Cryptoassets and Digital Asset Regulation
The UK continues to develop its long-term regulatory framework for cryptoassets. The Grid highlights ongoing work relating to:
- Cryptoasset trading activities;
- Custody arrangements;
- Stablecoins;
- Market abuse controls;
- Prudential requirements;
- Consumer disclosures.
Firms operating in the digital asset sector should anticipate increasing alignment between cryptoasset regulation and traditional financial services regulation. Governance, financial crime controls and operational resilience arrangements are likely to remain key supervisory priorities.
Consolidated Tape and Market Structure Reform
The FCA’s work on improving market data accessibility continues through initiatives relating to consolidated tapes and broader wholesale market reforms. The objective is to improve transparency and market efficiency by providing investors with easier access to trading information across venues. Although implementation will take time, firms should continue monitoring developments as these reforms may influence trading, reporting and best execution arrangements.
What Should Firms Be Doing Now?
Against the backdrop of continued regulatory change, firms should ensure they have effective horizon-scanning and regulatory change management processes in place. Practical steps include:
- Mapping relevant initiatives against business activities;
- Identifying implementation deadlines and consultation periods;
- Conducting impact assessments for high-priority reforms;
- Reviewing regulatory change governance frameworks;
- Ensuring adequate resourcing across compliance, legal and risk functions;
- Providing regular updates to boards and senior management;
- Maintaining clear audit trails demonstrating implementation efforts.
How Complyport Can Help?
- Ongoing Compliance and Regulatory Advisory Service: For firms requiring ongoing support, Complyport provides retained compliance services and regulatory advisory assistance. Our consultants work alongside firms to address day-to-day regulatory challenges, respond to FCA developments, prepare for regulatory reviews and maintain effective compliance arrangements in an increasingly complex regulatory environment.
- Training and Awareness: Keeping staff informed of regulatory developments is critical to maintaining a strong compliance culture. Complyport delivers tailored training programmes covering topics such as Consumer Duty, operational resilience, financial promotions, market abuse, conduct risk, SMCR and emerging regulatory developments. Training can be delivered to Boards, Senior Managers, Compliance teams and front-office staff, ensuring firms remain aware of their regulatory obligations and responsibilities.
- Policies and Procedures: As new regulatory requirements emerge, firms may need to update existing policies, procedures and governance documentation. Complyport assists with drafting and reviewing compliance manuals, regulatory policies, Board terms of reference, operational resilience documentation, Consumer Duty frameworks and financial promotions procedures to ensure they remain fit for purpose.
Contact Us
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