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Risk & Compliance Report For the Week Ending: September 26, 2025

Executive Summary


The UK is shifting towards bilateralism, forming tailored financial agreements with key non-EU partners. The UK-Switzerland Berne Financial Services Agreement and UK-Australia Financial Regulatory Forum highlight a push for global partnerships based on mutual recognition. This strategy provides market access and introduces new supervisory cooperation layers to facilitate compliance.


There is a clear cross-jurisdictional need for data innovation and standardisation, as demonstrated by initiatives such as the EU’s “Better Data Sharing Regulation,” the UK’s efforts to improve SME credit data, and the Bank of England’s requirement for enhanced ISO 20022 payment messages. This global push for higher-quality, structured, shareable data creates opportunities for innovation, such as the FCA’s Smart Data Accelerator, but also presents operational challenges in data governance and infrastructure.


A UK-led initiative advances regulatory efficiency, improving post-Brexit competitiveness. PRA and BoE consultations suggest phasing out banking and resolution reporting templates, promising long-term savings but requiring short-term investments to mitigate transitional risks associated with legacy system decommissioning.

Fourth, prudential and market harmonisation in the EU deepens. The Single Resolution Board’s guidance shifts focus to operational readiness. Updates to EMIR and MiFID II refine market oversight. An EIOPA Chair speech highlights tension between sustainability goals and burden reduction, creating strategic uncertainty for insurers’ data strategies.


Finally, consumer protection scrutiny is increasing in the UK retail market, indicating that the Financial Conduct Authority’s (FCA) Consumer Duty is moving into a more assertive enforcement phase. A high-profile super-complaint in the home and travel insurance sectors, combined with the FCA’s swift progress on a new “targeted support” framework for pensions and investments, places firms’ consumer outcomes under an unprecedented level of scrutiny.

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Key Developments at a Glance

Development

Jurisdiction(s)

Affected Sector(s)

Primary Risk/Opportunity

Key Deadline/Action Date

UK-Switzerland BFSA MoU

UK, Switzerland

Insurance, Investment Services

Opportunity: Reduced regulatory barriers for cross-border wholesale business. Risk: Non-compliance with enhanced information-sharing protocols.

BFSA entry into force: Early 2026. FCA Handbook consultation: Imminent.

First UK-Australia Regulatory Forum

UK, Australia

Banking, Pensions, Digital Assets, Sustainable Finance

Opportunity: Future regulatory alignment simplifying cross-border operations. Risk: Underestimating the pace of convergence in digital assets and ESG.

Ongoing bilateral engagement.

PRA/BoE Reporting Deletions

UK

Banking

Opportunity: Significant reduction in long-term reporting costs. Risk: Short-term project costs and operational risks of decommissioning systems.

PRA: 31-Dec-2025. BoE: pre-April 2026.

SRB Resolvability Testing Guidance

EU

Banking

Risk: Failure to demonstrate operational readiness for resolution could trigger mandatory remedial actions from the SRB.

Immediate implementation of testing programmes is required.

Which? Super-Complaint

UK

Insurance

Risk: Acute reputational damage and high probability of FCA market study and enforcement action on claims handling and policy terms.

FCA response required within 90 days.

FCA “Targeted Support” Consultation

UK

Personal Pensions, Investment Services

Opportunity: New commercial model to serve the mass market. Risk: Significant liability and compliance risk in navigating the advice/guidance boundary.

Consultation closes: 17-Oct-2025. Final rules: Dec-2025.

1. European Union Developments


Focus on Data Interoperability, Bank Resolvability, and Prudential Sustainability Oversight


a) ECON Recommendation on Better Data Sharing Regulation (2023/0363(COD))

  • Development: The ECON Committee’s recommendation for a second reading effectively signals the final legislative stage for the regulation on amending ESRB, EBA, EIOPA, and ESMA reporting requirements.

  • Technical & Professional Implication: The Regulation’s core objective is to establish a ‘report-once’ framework, reducing redundancies by facilitating data reuse among authorities. Firms must anticipate forthcoming technical standards specifying data formats and submission protocols. IT and data governance functions should begin mapping existing regulatory reporting data flows to identify opportunities for consolidation and prepare for adjustments to their reporting taxonomies and data architecture to align with the new interoperability standards.

b) SRB Finalises Operational Guidelines on Bank Resolvability Testing

  • Development: The Single Resolution Board (SRB) has published its final operational guidance, aligning with EBA guidelines on improving resolvability under the Bank Recovery and Resolution Directive (BRRD).

  • Technical & Professional Implication: This guidance operationalises the SRB’s expectations for demonstrating resolvability. Banks within the Single Resolution Mechanism (SRM) must integrate these standards into their recovery and resolution planning (RRP). This requires a granular review of multi-annual testing programs, internal governance for crisis management, and the technical infrastructure supporting these tests. A failure to demonstrate adequate testing of operational continuity, bail-in readiness, and data integrity during a resolution scenario constitutes a significant prudential risk.

c) EIOPA Speech on Climate Risks and Sustainability

  • Development: The EIOPA Chair raised material concerns that the proposed voluntary nature of sustainability reporting for a majority of firms under the EU’s simplification package could create significant data gaps, impeding the adequate supervision of systemic climate-related risks.

  • Technical & Professional Implication: This signals a potential divergence between legislative intent (burden reduction) and supervisory expectations. For insurers and other financial firms, relying solely on the legislative minimum (voluntary reporting) may create conduct and reputational risk. The prudent course of action is to maintain momentum in developing robust data collection and reporting capabilities aligned with existing frameworks (e.g., CSRD/ESRS), anticipating that supervisors will use their powers to request this data to fulfil their prudential oversight mandate.

d) Delegated Regulation on CCP Colleges Published (Amending (EU) 876/2013)

  • Development: A Commission Delegated Regulation amending the Regulatory Technical Standards (RTS) for the functioning of supervisory colleges for Central Counterparties (CCPs) has been published in the Official Journal of the European Union.

  • Technical & Professional Implication: This amendment, stemming from EMIR 3, formalises enhanced governance and information-sharing protocols within CCP supervisory colleges. While primarily impacting CCPs and their competent authorities, it aims to increase supervisory convergence. For clearing members, this should translate to a more harmonised and predictable supervisory environment for systemically important financial market infrastructures.

e) ESMA Updates Commodity Derivatives Reporting Instructions (MiFID II, Article 58)

  • Development: ESMA has released an updated technical specification, including XML schemas and reporting instructions, for the weekly position report of commodity derivatives, effective April 1026.

  • Technical & Professional Implication: This constitutes a mandatory update to the MiFID II position reporting framework. Trading venues and investment firms must allocate technical resources to reconfigure their data extraction, transformation, and submission systems to comply with the new schema. Failure to meet the 2026 deadline will result in a breach of regulatory reporting obligations under Article 58 of MiFID II.


2. United Kingdom Developments


Focus on Regulatory De-scoping, International Cooperation, and Conduct Risk


a) PRA & BoE Consult on Deletion of Regulatory Reporting Templates

  • Development: The PRA (CP21/25) and the Bank of England have launched coordinated consultations proposing the deletion of numerous reporting templates, including a significant portion of FINREP and several returns. Related to resolution

  • Technical & Professional Implication: This initiative represents a material reduction in regulatory reporting scope. Firms should conduct a detailed impact analysis to quantify the operational savings. Compliance and technology teams must plan for the decommissioning of associated data feeds, ETL processes, and reporting logic within their regulatory data architecture. December 31, 2025, implementation of prompt action to adjust processes ahead of the Q4 2025 reporting cycle.

Summary of UK Regulatory Reporting Changes

Consultation Paper

Regulating Authority

Key Templates/Rules Affected

Primary Objective

Proposed Implementation Date

Estimated Impact for Firms

PRA CP21/25

PRA

34 FINREP templates; 2 COREP templates; PRA109; Consolidation of FINREP rules.

Reduce reporting burden, simplify the Rulebook, and enhance UK competitiveness.

31-Dec-2025

Significant long-term cost reduction; Short-term project costs for decommissioning IT processes and adapting to the new rule structure.

BoE CP on COREP13

Bank of England

6 COREP13 templates (Z 02.00, Z 03.00, Z 04.00, Z 05.01, Z 05.02, Z 06.00).

Reduce resolution reporting burden by removing duplicative or unnecessary data requests.

Pre-April 2026 reporting cycle

Immediate relief from preparing specific resolution reports; Need to track consolidation of some data points into revised PRA MREL templates.

b) Which? Super-complaint on Home and Travel Insurance

  • Development: The FCA has received a super-complaint from Which? Alleging significant consumer detriment in the retail insurance markets, citing failures in claims handling and weak enforcement of existing rules.

  • Technical & Professional Implication: This action significantly elevates the conduct risk profile for all home and travel insurers. The complaint effectively alleges widespread breaches of the FCA’s Consumer Duty (specifically, the consumer outcomes on products and services, and consumer support). Firms must immediately initiate proactive internal reviews of their claims handling metrics, policy wordings (for fairness and clarity), and sales processes to ensure and evidence compliance. The likelihood of an FCA market study or thematic review, which could potentially lead to Section 166 (Skilled Person) reviews, is now substantially higher.

c) UK-Switzerland MoU under the Berne Financial Services Agreement (BFSA)

  • Development: UK and Swiss financial authorities have executed a Memorandum of Understanding (MoU) establishing a framework for supervisory cooperation for cross-border activities under the BFSA.

  • Technical & Professional Implication: The BFSA establishes a novel outcomes-based mutual recognition framework. This MoU provides the operational backbone for information sharing and supervisory deference between the authorities. UK firms intending to leverage the BFSA for Swiss market access must monitor the forthcoming FCA Handbook consultation. The MoU necessitates robust compliance and record-keeping for all cross-border activities, as information gateways between the FCA/PRA and FINMA will be fully operationalised.

d) First UK-Australia Financial Regulatory Forum

  • Development: The inaugural joint forum between UK and Australian authorities prioritised collaboration on digital assets, sustainable finance, and open finance.

  • Technical & Professional Implication: For global firms, this signals a commitment to regulatory harmonisation between two key jurisdictions. The focus on stablecoins and sustainable finance disclosures suggests that firms should anticipate greater alignment in future rule-making, particularly concerning asset classification, risk management, and disclosure taxonomies.

e) Pensions & Investments: “Targeted Support” and PCLS Clarification

  • Development: The FCA is advancing its Advice Guidance Boundary Review (AGBR) with a consultation on the “Targeted Support” framework and has issued a statement clarifying the application of cancellation rights to Pension Commencement Lump Sums (PCLSs).

  • Technical & Professional Implication:

    • Targeted Support: This newly specified activity will require firms to implement carefully calibrated controls to operate within the guidance boundary without providing regulated advice. The framework will necessitate new compliance monitoring, record-keeping, and reporting functions.

    • PCLS: The FCA’s statement clarifies that cancellation rights are not automatically triggered by a PCLS transaction itself, but depend on the contractual structure. Pension providers must review their customer journey and contract variations to ensure their application of COBS cancellation rules is compliant and clearly communicated to consumers.

f) Other Key Developments

  • HM Treasury Consultation on Commercial Credit Data: Proposed amendments to the Small and Medium-Sized Business (Credit Information) Regulations 2015 could mandate changes to data formatting and submission periodicity for designated banks, aiming to reduce information asymmetries in the SME lending market.

  • FCA Smart Data Accelerator: This initiative offers a regulatory sandbox environment for firms to test API-driven open finance use cases with synthetic data, facilitating policy co-creation with the regulator.

  • Delay to Bond CTP: The legal challenge to the CTP appointment introduces uncertainty to the timeline for the consolidated tape. However, firms must remain focused on compliance with the separate, and unaffected, bond post-trade tranDecember 1ule changes taking effect on December 1 DDecember 1ecember 10022, in CHAPS: The November 2027 mandate for enhanced data (Purpose Codes) requires CHAPS Direct Participants to undertake significant development work to enrich payment messages, enabling better straight-through processing (STP) and analytics.



 
 
 

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