Alongside global macro themes which are also on the FCA’s priorities and agenda, including crypto regime build-out, AI/tech initiatives and further work on operational resilience and reporting, the below are the key themes that the FCA has been active in publishing materials on to round off the year.
Thematically, there still exists a tension the FCA’s consumer protection objective vs the growth objective and a drive towards deregulation and outcomes-based compliance.
Q4 UK Regulatory Publication Themes
Sustainable finance, ESG data and ratings
FCA consults on regime for ESG ratings providers (CP25/24)
The FCA has published proposals for bringing ESG ratings providers into the perimeter, focusing on transparency of methodologies, conflicts management and governance, and aligning many requirements to existing FCA standards for regulated firms. The regime builds on the UK secondary legislation already laid in 2025 to make ESG ratings a regulated activity.
Practical considerations
- Asset managers and hedge funds that rely heavily on third-party ESG scores will need to think about vendor due diligence, data lineage and governance in a more formal way.
- Fintechs building tools on top of ESG ratings may find their upstream data providers subject to new rules and potential changes in service, methodology disclosure and pricing.
Cryptoassets, tokenisation and digital markets
Application of FCA Handbook to regulated cryptoasset activities (CP25/25). FCA is consulting on how existing Handbook rules will apply to newly regulated cryptoasset activities once HMT’s RAO changes go live (e.g. issuing qualifying stablecoins, custody, operating trading venues and other in-scope services). This is the main bridge between the UK’s policy intent on crypto and day-to-day conduct, prudential and systems/controls expectations.
Fund tokenisation (CP25/28). The FCA has consulted on rule changes to support tokenised authorised funds, including the “Blueprint” model (DLT-based unitholder registers) and a roadmap for future models (tokenised assets/cashflows, direct-to-fund dealing). Feedback closed in November–December, with final rules expected in H1 2026. [read our financial crime implications paper here]
Practical considerations
- For managers: tokenisation is no longer theoretical, FCA expects more serious operating model thinking around record-keeping, transfer agency, governance and investor outcomes.
- Tokenisation of real assets applies much broader than what people think. This isn’t just about ‘crypto’ and ‘bitcoin’. Firms should take a look at how this looks for their strategy, and how their business model, funds and products might be impacted by tokenisation.
- For fintechs/RegTechs: clear opportunities around registry tech, connectivity and oversight tooling for tokenised structures.
- For crypto-adjacent startups: CP25/25 strongly indicates the “FS-style” expectations (governance, prudential, market abuse, financial crime) for incoming crypto businesses.
Market structure, prudential and reporting
Short selling – CP25/29 on the new UK regime. FCA has consulted on firm-facing requirements under the new UK Short Selling Regulations, covering T+1 reporting timing, guidance on determining issued share capital, exemptions and emergency powers. Policy statement expected in 2026.
IFPR – PS25/14 and FCA thematic work on prudential consolidation. FCA has simplified and consolidated the definition of regulatory capital for IFPR firms (no change in amounts, but clearer rules) and has published findings from its review of prudential consolidation in acquisitive wealth/IFPR groups (double leverage, weak group governance, use of offshore structures, etc.).
Client categorisation and financial crime controls. Multi-firm work on client categorisation in corporate finance firms and on financial crime controls has highlighted tick-box categorisation, poor evidence, misuse of FPO exemptions, and weak BWRAs/CDD. FCA has flagged that learnings are relevant beyond corporate finance into investment management and wealth.
Practical considerations
- Asset managers/hedge funds need to keep an eye on short-selling, IFPR, T+1 settlement and prudential consolidation as part of broader market-structure and treasury planning.
Retail markets
Final Rules for Consumer Composite Investments (PS25/20). The ‘replacement’ of the UK PRIIPs regime and a shift away by the FCA from prescriptive, formula-driven disclosures toward clearer, decision-useful information that reflects how products actually behave in practice. The main shifts will be around risk, performance and costs.
Practical considerations
- Those distributing products to retail investors (directly or indirectly) should expect a re-think in disclosure architecture. Engage with your third party service providers where you have outsourced disclosure drafting, and think through the practical impact against the PS25/20 methodologies.
Consumer Duty Requirements Review: update published In March 2025, the FCA set out steps they would take to simplify the requirements of firms in a Feedback Statement FS25/2, responding to comments from their July 2024 Call for Input. On December 9th, the FCA published an update to where they are with their intentions aligning to their broader strategy priority to support growth. The Consumer Duty review is intending to provide more flexibility, more predictability and improved efficiency for firms.
Practical considerations
- Firms to keep abreast of published changes in the coming days, weeks and months including a policy statement on the review of value assessments (Q4 2025) and a guide for smaller firms (Q1 2026) to assess any potential simplifications or betterment of processes that can be made.
Q4 UK enforcement themes
Conflicts of interest and governance – BlueCrest case
FCA secured ~US$101m in redress for investors in a fund sub-managed by BlueCrest Capital Management (UK) LLP, finding that conflicts between an external fund and an internal fund were not managed fairly and disclosures were inadequate. FCA opted for public censure rather than a fine, but emphasised the centrality of robust conflicts frameworks for asset managers.
Market abuse / insider dealing
FCA fined and banned Neil Sedgwick Dwane for deliberate insider dealing related to securities in ITM Power Plc, reinforcing the continued focus on individual accountability.
Financial crime controls and transaction reporting
2025 as a whole has seen continued emphasis on MiFIR transaction-reporting quality, financial crime controls and governance, with notable penalties including Sigma Broking’s £1.087m fine earlier in the year for transaction-reporting breaches, and Nationwide’s more recent £44m fine, and an FCA narrative in speeches and newsletters about data quality and BWRAs.
Practical Considerations
- For managers: conflicts management, surveillance and transaction-reporting controls are very much in the “repeat-offender” bucket for enforcement. Review controls, ensure you take learnings from enforcement action.
- For startups with lean teams: FCA’s criticism of missing or “static” BWRAs is a reminder that documentation and live governance matter as much as tooling. Review controls, ensure you take learnings from enforcement action.