UK/EU Investment Management Update (October 2026)

In this Sidley Update, we cover, on the UK side, the Financial Conduct Authority (FCA) consultation on the new Markets in Financial Instruments Regulation transaction reporting regime; the opening of the cryptoasset authorisation gateway and further developments on the incoming UK cryptoasset regime; FCA enforcement and supervisory developments concerning contracts for difference firms, anti-money laundering (AML) requirements and the Upper Tribunal decision upholding the FCA ban of Crispin Odey; the FCA and Bank of England feedback on tokenisation in wholesale markets; and new UK sustainability and climate-related reporting requirements.

On the EU side, we cover updates concerning market abuse, the 2027 work programmes of the European Securities and Markets Authority (ESMA), European Banking Authority (EBA), and European Insurance and Occupational Pensions Authority; developments concerning prospectus disclosure requirements; changes to EU sustainability reporting standards; the publication of final draft AML regulatory technical standards; and EBA and ESMA responses to the European Commission review of the Markets in Crypto-Assets Regulation.

1. UK — MiFIR Transaction Reporting

2. UK — Cryptoassets

3. UK — Enforcement

4. UK — General Updates

5. UK — ESG

6. EU — Market Abuse/PredictionMarkets

7. EU — General Updates

8. EU — Private Credit

9. EU — Prospectus Regulation

10. EU — ESG

11. EU — AML

12. EU — Cryptoassets

13. EU — Operational Resilience

 

1.UK — MiFIR Transaction Reporting

FCA consults on guidance and transitional provisions for new transaction reporting regime

On 2 October 2026, the Financial Conduct Authority (FCA) published consultation paper CP26/34, proposing guidance, transitional provisions, and consequential amendments to support implementation of the new transaction reporting framework under the UK Markets in Financial Instruments Regulation ((EU) No 600/2014) (MiFIR). The consultation follows the final transaction reporting rules outlined in policy statement PS26/15, as covered in our August 2026 Update, which will take effect on 3 April 2028.

The FCA proposes to consolidate relevant existing materials on transaction reporting, instrument reference data, and order recordkeeping into a Transaction Reporting User Pack, including relevant EU guidelines and Q&As. The FCA is consulting on several areas as detailed below and has also published draft reporting schema and validation rules to assist firms’ preparations, which are available on an FCA webpage.

Points of particular relevance include the following:

• Conditional single-sided reporting (CSSR). The proposed guidance explains how the optional CSSR framework operates in practice. Where the relevant conditions are met (including that both firms are MiFIR transaction reporting firms and have a preexisting written agreement governing the provision of the required information), the receiving firm reports the transaction instead of the sending firm. In particular, the FCA explains the allocation of reporting responsibilities between sending and receiving firms, information-sharing requirements, the treatment of client allocations, the approach relating to aggregated client orders, and geographical branch execution considerations. The guidance also explains how the new fields identifying the sending firm should be completed.
• Client indicator fields. The FCA proposes guidance on the new client indicator fields for buyers and sellers, which will replace the existing fields identifying the country of the relevant branch. The proposed guidance includes examples covering dealing on own account to execute a client order, matching two client orders and executing a client transaction with another reporting firm.
• Branch execution. The FCA proposes that firms should not determine whether a transaction has been executed through a UK branch solely by reference to a trader’s physical location but rather consider broader supervisory, governance, and operational arrangements. The FCA’s expectation is that client details should be reported even where the client relationship is managed by a non-UK branch.
• Derivatives reporting. The guidance addresses acquisitions and disposals by reference to changes in economic exposure, including increases or decreases in notional amounts and partial or full terminations. For equity swaps, the FCA clarifies that the price field should use the reference price of the direct underlying instrument rather than the spread on the financing rate. The FCA also proposes guidance on structuring equity swap reports.
• Package transactions. The guidance explains that firms should link separate reports for reportable legs using a common package identifier. Unlike the previous concept of a “complex trade,” package transactions do not require a single price or simultaneous execution. Where possible, the package identifier should mirror that used for the same transactions under the UK version of Regulation (EU) No 648/2012 (UK EMIR).
• Other proposals. The FCA is also considering removing financial instruments tradeable only on EU trading venues from its Financial Instrument Reference Data System before 3 April 2028, subject to HM Treasury (HMT) making the necessary legislative changes. The consultation also proposes consequential amendments to the FCA Handbook and technical standards, including removing data elements being taken out of transaction reporting from certain related recordkeeping requirements across the Handbook and relevant technical standards.

From 3 April 2028, firms will need to use the new reporting formats, including for late submissions and corrections relating to earlier transactions. However, firms will not be expected to supply information that was not required when the transaction was executed or to reformat historical order and transaction records.

The consultation closes on 6 November 2026. The FCA will consult on the full Transaction Reporting User Pack in Q1 2027 and will aim to publish the final version by 3 April 2027.

2. UK — Cryptoassets

FCA opens authorisation gateway for cryptoasset firms

On 30 September 2026, the FCA announced that it had opened the application gateway for firms seeking authorisation under the UK’s new regulatory regime for cryptoassets.

As discussed in our July 2026 Update and our Sidley Update, UK Cryptoasset Regulation — Action Points for 2026–27, the new regime will come into force on 25 October 2027 and will bring firms carrying on newly regulated cryptoasset activities within the FCA’s full authorisation and supervisory framework. The FCA published its final rules and guidance for the new regime in June 2026, covering areas including consumer protection, safeguarding, market integrity, and financial resilience. The FCA has emphasised that authorisation will not be automatic and that applicants will need to demonstrate that they meet the relevant regulatory requirements. The FCA is continuing to offer preapplication support, including optional discussions with firms and on-demand webinars, to assist firms in preparing their applications.

Firms that intend to continue carrying on regulated cryptoasset activities in the UK once the new regime takes effect should submit their applications by 28 February 2027. The FCA expects to determine applications submitted during the application period before commencement of the regime. However, an existing firm that applies during the application period may continue providing cryptoasset services, including taking on new business, while its application remains under consideration if the FCA has not reached a decision by 25 October 2027.

The opening of the gateway is a key implementation milestone for firms currently active in the UK cryptoasset market. Such firms should consider progressing their authorisation applications and ensuring that their governance, systems and controls, safeguarding arrangements, and financial resources are capable of meeting the standards that will apply under the new regime.

FCA publishes new cryptoasset perimeter guidance

On 16 September 2026, the FCA published final guidance on the application of the UK cryptoassets regulatory perimeter, which has been incorporated into the FCA Handbook as a new chapter (PERG 18) and will come into force on 25 October 2027.

PERG 18 addresses the scope of new regulated activities, such as issuing qualifying stablecoins, operating a qualifying cryptoasset trading platform, dealing or arranging in qualifying cryptoassets, and arranging cryptoasset staking. It also includes guidance on territoriality, available exclusions, and the anti-money laundering (AML) and financial promotions frameworks.

Existing registrations or permissions under the Financial Services and Markets Act 2000 (FSMA), the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs), the Payment Services Regulations 2017, or Electronic Money Regulations 2011 will not convert automatically when the new regime comes into force. Firms should seek appropriate authorisation if carrying on regulated cryptoasset activities by way of business in the UK that are not covered by an exclusion or exemption. Firms seeking to rely on the transitional arrangements must apply for authorisation or variation of permission by 28 February 2027.

The FCA noted that the test for the business element is narrower than the equivalent test under FSMA. The relevant cryptoasset activity must itself be a part of the business — therefore merely buying, holding, or staking cryptoassets should not by itself require authorisation.

Amendments to UK cryptoasset regulatory regime laid before Parliament

On 15 September 2026, HMT laid the draft Financial Services and Markets Act 2000 (Cryptoassets) (Miscellaneous Amendments) Regulations 2026 (the Regulations) before Parliament. The Regulations will amend the perimeter of the regulatory regime for cryptoassets as set out in the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (detailed in our May 2026 Update).

The key amendments are as follows:

• Stablecoins. Certain transfers of UK-qualifying stablecoins will be excluded from the dealing and arranging activities (notably, where such stablecoins are held briefly to complete a payment). These exclusions will not cover lending, borrowing, or exchanges for other qualifying cryptoassets.
• Stablecoin backing assets. An authorised issuer’s arrangements for holding backing assets will be excluded from existing safeguarding and administration activities.
• Financial promotions. Issuing a qualifying stablecoin will be a controlled activity under the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005.

The Regulations will need to be approved by Parliament before they can be made into law and, if approved, will come into force with the wider regime on 25 October 2027.

FCA publishes COREPRU and CRYPTOPRU guidance on overall risk assessments

On 30 September 2026, the FCA published final non-Handbook guidance FG26/9 and FG26/10 on the overall risk assessments required under COREPRU 7 and CRYPTOPRU 7. Both sets of guidance will come into force on 25 October 2027.

FG26/9 is intended to illustrate how firms subject to COREPRU should consolidate their business model, risk appetite, systems and controls, financial resources, stress testing, and wind-down planning when assessing whether they hold adequate own funds and liquid assets. The FCA emphasises that the overall risk assessment should be proportionate to the nature, scale, and complexity of the firm’s business, focusing on risks capable of causing material harm, with a dynamic framework embedded in strategic decision-making and updated on an ongoing basis. The guidance also sets out the FCA’s expectations regarding stress testing and wind-down planning; stress testing should be forward-looking and include sufficiently severe but plausible firm-specific and market-wide scenarios. A firm’s own assessment of its financial resource thresholds will remain subject to FCA review through the Supervisory Review and Evaluation Process, following which the FCA may impose additional requirements.

FG26/10 identifies a range of risks that CRYPTOPRU firms may need to consider, including market, leverage, credit, liquidity, operational and concentration risk, and circumstances in which those risks may interact. Firms should assess risks by reference to their particular business model and consider whether mitigants remain effective under stress. The FCA provides detailed expectations on stress testing, recovery, and wind-down planning, including the use of reverse stress testing to identify the point at which the business model is no longer viable, and to inform recovery and wind-down triggers. Firms should also maintain an appropriate contingency funding plan and, when assessing liquidity, prepare a 90-day cashflow forecast and a stressed version of that forecast.

3. UK — Enforcement

Upper Tribunal upholds FCA’s Crispin Odey ban

On 14 September 2026, the Upper Tribunal published its decision upholding the FCA’s ban of Crispin Odey from the financial services industry for a lack of integrity. Odey was the founder and majority owner of Odey Asset Management (OAM).

The FCA action concerned Odey’s conduct in connection with violating a final warning relating to his conduct. Odey dismissed the executive committee of OAM when it attempted to proceed with the disciplinary process and refused engagement with any internal body that did not promise to retain him. For further details on the FCA’s original enforcement decision, please see our April 2025 Update.

Odey challenged the FCA’s decision in the Upper Tribunal, which upheld all five of the allegations made by the FCA, particularly that Odey had acted without integrity in his dealings with OAM, its clients, and its investors. It also noted that Odey had been threatening towards FCA staff and not candid with the regulator. The Upper Tribunal upheld the FCA’s decision to impose a financial penalty (reduced from £1.83 million to £1.53 million), and the FCA subsequently issued its Final Notice on 30 September 2026.

FCA takes action against CFD firms over misuse of UK authorisation

On 25 September 2026, the FCA announced that 21 contracts for differences (CFD) firms have closed since 2025 following supervisory action concerning the misuse of UK regulatory permissions, with a further three firms in the process of cancelling their permissions.

The FCA’s concerns relate to CFD firms carrying out limited business in the UK while using their FCA-authorised status to lend credibility to linked overseas entities. The FCA noted that this can create a misleading impression that consumers are dealing directly with a UK-regulated firm and benefit from UK regulatory protections when this is not the case.

The FCA has taken a range of actions against the firms concerned, including restricting trading activities, requiring independent reviews of their businesses and, in the two most serious cases, opening enforcement investigations. The FCA director of sell-side supervision stated that the FCA will intervene where firms blur the lines between their UK-regulated activities and overseas businesses.

FCA publishes notice of decision to cancel firm’s registration as an Annex 1 financial institution

On 7 September 2026, the FCA published a notice of decision to cancel HR Bank Limited’s (HR Bank) registration as an Annex 1 financial institution. As an Annex 1 firm supervised by the FCA for AML purposes but not otherwise FCA-authorised, HR Bank was required to comply with the MLRs, including compliance with any written notices from the FCA.

Between 10 July 2024 and 6 August 2025, HR Bank failed to respond to any communication attempts by the FCA requesting information in relation to the FCA’s financial crime supervision strategy. HR Bank was invited to make representations to the FCA about the Notice of Proposed Cancellation of its registration as an Annex 1 financial institution in June 2026 but did not do so. The FCA accordingly cancelled the firm’s registration, which took effect immediately on 7 September 2026, due to a material failure to provide information and a breakdown in its relationship with HR Bank.

Accordingly, nonengagement with requests for information from the FCA may be grounds for action independently of any substantive AML failings. As detailed in our September 2026 Update, the FCA sent information requests to 900 Annex 1 firms in August 2026 and announced its intention to take longer to evaluate firms’ applications to become an Annex 1 institution. The FCA warned that firms are relying too heavily on the financial crime controls of parent companies and added that individual entities within a group must each assess whether controls were appropriate for them.

FCA opens investigation into firm for suspected offences under MLRs

On 16 September 2026, the FCA announced that it had opened an investigation into potential offences by Euro Exchange Securities UK Ltd (EES) under the MLRs. The offences under investigation relate to activity undertaken between 1 February 2020 and 4 June 2026.

The FCA is investigating whether EES failed to take adequate steps to identify and assess the risks of money laundering in relation to its services, delivery channels, and customers, including their geographic areas of operation. In addition, the FCA is considering whether EES failed to establish and maintain policies, controls, and procedures to mitigate the risks of money laundering, including those that relate to customer due diligence, monitoring controls, internal governance, allocation of responsibilities, and recordkeeping. The investigation follows earlier supervisory interventions by the FCA against EES; in June 2026, the FCA required EES to cease carrying on regulated electronic money or payment services after identifying serious concerns with how EES had operated its business, with significant risks of financial crime.

4. UK — General Updates

FCA accepts commitments from 11 commodity futures traders and closes competition investigation

On 18 September 2026, the FCA published its decision to accept binding commitments offered by 11 day traders who trade commodity futures. The competition aspects concerned the exchange of potentially sensitive information relating to trading strategies and how these trading strategies were potentially coordinated. In June 2026, the FCA had consulted on its intention to accept the commitments (as detailed in our July 2026 Update).

The FCA’s investigation, which opened in July 2023, concerned the period between November 2019 and May 2020 during which the relevant traders were operating as independent contractors through a trading arcade but all as members within the same trading group. The FCA considered whether information exchanges may have reduced uncertainty between notionally competing traders and influenced their decision to align trading conduct. Accordingly, there may have been an infringement of the Competition Act 1998 as each trader was considered a separate undertaking and should have acted independently.

The final commitments, which will remain in force for five years, relate to information exchange (limiting information the traders can disclose or accept), annual compliance training/FCA reporting commitments, and a commitment to pay £1 million to the Crisis and Resilience Fund within three months. The final commitments address the FCA’s competition concerns and do not require intensive third-party oversight.

FCA and BoE publish feedback on tokenisation in wholesale markets

On 14 September 2026, the FCA and Bank of England (BoE) published Feedback Statement FS26/1 summarising responses to their previous joint Call for Input on the future of tokenisation in wholesale markets (as covered in our June 2026 Update). The FCA and BoE intend to use the feedback to develop a tokenisation roadmap, to be published later in 2026.

Broadly, respondents agreed with the regulators’ approach to developing tokenised markets. The FCA stated that post-trade was the main opportunity, particularly by enabling collateral to move more efficiently between market participants. There was also an emphasis on legal, regulatory, and cross-jurisdictional interoperability. The FCA intends to consult on rules for safeguarding relevant specified investment cryptoasset in H1 2027. It has also launched a Call for Input on the tokenisation of gold, including its use cases in wholesale markets and the application of certain regulatory perimeters, for which responses are due 23 October 2026.

House of Lords Financial Services Regulation Committee launches inquiry into regulatory sandboxes

On 17 September 2026, the House of Lords Financial Services Regulation Committee (the Committee) launched an inquiry into regulatory sandboxes in financial services and published an associated call for evidence seeking opinions from firms that had and had not participated in sandboxes, by 23 October 2026.

The inquiry will consider the purpose and impact of regulatory sandboxes in UK financial services, including how regulators and firms use regulatory sandboxes and whether they drive innovation in the industry. The chair of the Committee noted that there had been relatively little evaluation of how sandboxes operated in practice and what effects they had despite the introduction of new types of sandbox. The Committee is particularly focusing on the value for money of sandboxes, why firms choose whether to participate, how sandboxes affect wider market safeguards and accountability, and how the UK’s use of sandboxes compares with other jurisdictions’ and sectors’ approaches.

HMT and Home Office publish AML and Asset Recovery Strategy

On 15 September 2026, HMT and the Home Office published the Anti-Money Laundering and Asset Recovery Strategy (the Strategy). The Strategy sets out the government’s priorities for strengthening the UK’s response to money laundering and attempts to recover criminal assets. The government has committed £500 million over a three-year period to recruit 500 additional officers across police forces, the National Crime Agency, and the Crown Prosecution Service. The Strategy also includes greater resources on recovering illicit funds from organised crime, disrupting money laundering networks, increased investment in financial intelligence capabilities, and enhanced cooperation with international partners.

FCA publishes findings from its Defence, Security, and Resilience Lab

On 7 September 2026, the FCA published its findings from the Defence, Security, and Resilience Lab (DSR Lab), held in partnership with the Ministry of Defence. The DSR Lab tested the resilience of firms in managing deliberately challenging scenarios and sought to enable firms to understand how hostile activity, supply chain disruption, and dual-use technologies could affect market integrity.

The DSR Lab concluded that there are multiple shared dependencies across firms, including communications networks, satellite systems, and public sector databases. The FCA highlighted that it was important for firms to consider whether backup systems were genuinely independent or shared the same points of failure. The FCA set out questions to help firms map out their exposure to systemic risk and improve resilience. Suggested areas of inquiry include considering systemic vulnerabilities (internal, external, or supply chain dependencies), resilience of backup systems, crisis communications, risk of contagion, access to defence sector expertise to support defence, dual-use clients’ access to finance, and for investors asking investee companies about their resilience measures. These points merely serve as a starting point and do not change firms’ regulatory obligations.

5. UK — ESG

FCA finalises UK SRS reporting rules for listed companies

On 30 September 2026, the FCA published policy statement PS26/19, finalising changes to the sustainability disclosures of listed companies as previously consulted on (as detailed in our February 2026 Update). These rules replace the existing Task Force on Climate-related Financial Disclosures framework with reporting against the UK Sustainability Reporting Standards (UK SRS).

The FCA has adopted a “comply-or-explain” approach to both UK SRS S1 and S2, which cover sustainability matters and climate-related information respectively. This is a change from the consultation proposal, which would have required mandatory reporting for most climate-related disclosures, alongside permitting explanations for non-disclosure of Scope 3 emissions and wider sustainability information. As such, firms that are in scope must provide relevant disclosures or explain the requirements not met, reasons for not doing so, and any steps to address the omissions. Firms with a primary UK listing must state whether they have published a climate transition plan and its location or explain why one is not published. Issuers obtaining voluntary third-party sustainability assurance must disclose information about that assurance.

These rules apply to accounting periods from 1 January 2027, with first reports expected in 2028. Transitional relief allows companies to defer disclosures about Scope 3 emissions for one year, and non-climate sustainability disclosures under UK SRS S1 for two years. The FCA also published Primary Market Bulletin 66 on 30 September 2026, outlining its consultation on related guidance changes addressing the application of the comply-or-explain framework, with responses due by 28 October 2026.

FCA publishes changes to product-level climate reporting

On 25 September 2026, the FCA published Handbook Notice 144. Among other updates, the FCA announced changes to its product-level climate reporting framework for asset managers, life insurers, and FCA-regulated pension providers, following its previous consultation (as covered in our July 2026 Update). There are separate requirements for retail communication and institutional client information requests:

• Retail communications. Firms must periodically assess whether climate-related risks could materially affect a product’s performance or returns. If any risks are identified, these must be included in communications to retail clients alongside general information about the product’s risk and financial returns.
• Institutional client requests. Firms must provide at minimum Scope 1, 2, and 3 greenhouse gas emissions data where an eligible client requests it to meet their own climate disclosure obligations. This applies to one request per client per product per calendar year, but clients can seek further information beyond this requirement.
• Supporting information. The FCA guidance provides that firms should supply any additional climate data reasonably needed for the client’s reporting. This should also include an explanation of data coverage and quality where reasonably practicable and permitted by data-use arrangements. Any responses should be timely, appropriately presented, and accompanied by explanations of limitations.

The requirements on retail communications took effect on 25 September 2026, and the requirements on institutional client requests will apply from 30 June 2027.

6. EU — Market Abuse/Prediction Markets

European Commission consults on draft Delegated Regulation under MAR

On 21 September 2026, the European Commission (the Commission) launched a consultation on a draft Delegated Regulation amending the regulatory technical standards (RTS) governing buy-back programmes and stabilisation measures under Regulation (EU) No 596/2014 on market abuse (MAR). The amendments reflect changes made to Article 5 of MAR under the EU Listing Act and are intended to simplify reporting and disclosure requirements.

The draft RTS contain amendments that would

• Require issuers to report buy-back transactions to the competent authority of the relevant market in terms of liquidity in aggregated form.
• Require public disclosure of buy-back transactions in aggregate form by the end of the seventh daily market session after the transaction, with information retained on the issuer’s website for five years.
• Align the treatment of stabilisation transactions with the new buy-back framework for aggregated disclosure and reporting only to the competent authority of the relevant market.

The consultation closes on 19 October 2026.

ESMA highlights prevalence of insider trading in prediction markets

On 10 September 2026, the European Securities and Markets Authority (ESMA) published its semi-annual Trends, Risks and Vulnerabilities Risk Monitor Report, which included an analysis noting the risks arising from the rise in activity on prediction markets. For further analysis on this issue from a US perspective, please refer to the recent episode of The Sidley Podcast, Wanna Make a Bet? What Businesses Should Know About Insider Trading and the Prediction Markets.

ESMA notes that prediction markets (platforms on which participants trade event contracts linked to the outcome of future events depending on whether a specified outcome occurs) have rapidly increased in activity from late 2024. Traditional exchanges and market infrastructure providers have been increasing their interest in the sector through investments, partnerships, and plans to launch prediction-style contracts linked to financial and macroeconomic indicators. U.S. authorities have approved many of these launches, whereas prediction markets have not gained significant traction in the EU, particularly due to EU restrictions on the marketing and sale of event contracts. The major prediction market platforms are generally based outside of the EU.

Depending on their characteristics, in the EU event contracts may qualify as gambling products, qualify as financial instruments under Directive 2014/65/EU (MiFID II), or fall within the scope of the Markets in Crypto-Assets Regulation (MiCA) if based on distributed ledger technology (DLT) and not qualifying as financial instruments. Furthermore, if event contracts qualified as financial instruments, they would generally be classified as derivatives and fall under measures relating to binary options (which are subject to a permanent ban in both the EU and UK). ESMA highlights that despite platforms prohibiting the use of virtual private networks (VPNs) to circumvent geo-blocking, the practical effectiveness of VPN restrictions is uncertain.

ESMA warns of a range of investor protection and market integrity concerns around prediction markets, which may expose inexperienced retail investors to financial risks. Market manipulation is another key concern, especially on DLT-based platforms that operate based on limited identity verification. In particular, ESMA cites examples of insider trading, manipulation of underlying reference data, and discretionary resolution mechanisms being applied by platforms.

ESMA notes the integration of prediction markets with new digital ecosystems such as cryptoassets, decentralised finance (DeFi), and artificial intelligence (AI). A lack of intermediaries, supervisory oversight, or central governance structures is a challenge for regulators attempting to curtail volatility and coordinated trading behaviour; as such, ESMA stresses that continued monitoring is warranted given a need for an evolving regulatory approach.

7. EU — General Updates

ESMA, EBA, and EIOPA publish 2027 annual work programmes

On 28 September 2026, ESMA published its annual work programme for 2027, focusing on the priorities of implementing the Savings and Investments Union (SIU), regulatory simplification, and more effective supervision. Key initiatives:

• Reporting simplification. ESMA will progress integrated transaction and fund reporting, including draft RTS and implementing technical standards, scheduled for Q2 2027, for a single reporting framework under Directive 2011/61/EU on alternative investment fund managers (AIFMs) and Directive 2009/65/EC on undertakings for collective investment in transferable securities (UCITS).
• Fund supervision. ESMA will continue its common supervisory action on the risk management functions of AIFMs and UCITS management companies. It also plans to complete the follow-up to its Brexit relocation peer review.
• Retail and sustainable investment. ESMA plans to continue to streamline key information documents under Regulation (EU) No 1286/2014 on packaged retail and insurance-based investment products (the PRIIPs Regulation), review Q&As and fund naming guidelines under Regulation (EU) 2019/2088 on sustainability‐related disclosures (the SFDR) and provide technical advice on value for money and undue costs.
• Market integration. ESMA stated that it will support the EU financial sector’s transition to T+1 settlement on 11 October 2027, and the changes to its mandate after the Market Integration and Supervision Package has been agreed. ESMA will also support implementation of the EU Retail Investment Strategy (RIS).
• Other items of note. ESMA also highlighted consolidation of its supervision of environmental, social, and governance (ESG) rating providers, its expanded responsibilities under the amended Benchmarks Regulation ((EU) 2016/1011), and furthering work on cryptoassets and AI.

On 30 September 2026, the European Banking Authority (EBA) published its Work Programme for 2027, covering, among other areas, the following planned activities:

• Private credit and non-bank financial intermediaries (NBFIs). The EBA plans a joint call for advice on private credit in Q1 2027 and will continue to monitor banks’ exposures to NBFIs, including private credit and private equity.
• Investment firms. The EBA expects to progress RTS in Q2 2027 concerning waivers from investment firm authorisation and the threshold at which investment firms are reclassified as credit institutions.
• Securitisation. The EBA is preparing for mandates expected to arise from the EU’s securitisation reforms, including work on disclosure templates, risk retention, and supervisory convergence.
• Digital finance and tokenisation. The EBA intends to extend its analysis of tokenised settlement assets to the provision of tokenised investment products by EU banks and to continue monitoring the use of asset-referenced tokens and e-money tokens in centralised and decentralised applications, including lending and borrowing.
• Other priority areas. The EBA will continue work on supervision and oversight of cryptoassets, operational resilience, AI, and integrated regulatory reporting, reflecting its broader focus on simplification and supervisory convergence.

On 29 September 2026, the European Insurance and Occupational Pensions Authority (EIOPA) also published its draft Single Programming Document for 2027-29, including its Annual Work Programme for 2027. The programme reflects EIOPA’s strategy towards 2030 and is organised around three broad priorities: strengthening EU single market integration, enhancing market and societal resilience against risks, and delivering simpler, more efficient regulation and supervision. EIOPA expects to work with the other European Supervisory Authorities (ESAs) on a substantial number of policy mandates under the RIS, including in relation to the PRIIPs Regulation, as well as the revised SFDR framework, operational resilience measures, and supervisory convergence on pensions.

ESRB speech on Europe’s financial resilience and growth potential

On 2 October 2026, the First Vice-Chair of the European Systemic Risk Board (ESRB) delivered a keynote speech (the Speech) at the ESRB annual conference on strengthening Europe’s financial resilience and growth potential. The Speech noted the emerging risks to Europe’s financial system that continue to require close monitoring, including the links between AI and cyberattacks and possible risks to the equity and credit markets arising from the current AI investment boom, as well as climate-related and geopolitical risks.

The Speech also focused on the need for deeper and more integrated European capital markets, highlighting the role of the SIU. Against this background, the Speech discussed whether a common European safe and liquid asset could support deeper capital markets, with potential benefits including providing a benchmark for pricing bonds and derivatives, creating safe collateral usable across EU member states, attracting global investors, and providing a safe haven during periods of market stress. Any such design would, however, need to preserve incentives for fiscal discipline and avoid creating new risks for national sovereign bond markets.

8. EU — Private Credit

Commission requests technical advice on private credit activities of EU banks and NBFIs

On 24 September 2026, the EBA published a call for technical advice from the Commission requesting joint technical advice from the ESAs on the private credit activities and exposures of EU banks and NBFIs. The Commission’s request reflects concern that rapid growth, limited transparency, and interconnectedness of banks and NBFIs may make it difficult for supervisors to identify risks. In particular, the request notes the high rates of redemption requests well above historical averages since the beginning of 2026.

The assessment will provide information on the exposure of EU banks and NBFIs to private credit in the EU and third countries, as well as any gaps in the supervisory reporting framework, the extent of retail investor participation, and how interconnected the system is. The ESAs have been asked to deliver their assessment of activities and risks within six months. On the basis of the advice given, the Commission will consider whether a one-off and targeted data collection from selected entities is necessary to fill in any gaps in the data.

9. EU — Prospectus Regulation

ESMA publishes Prospectus Regulation disclosure package

On 9 September 2026, ESMA published a package of materials under Regulation (EU) 2017/1129 (the Prospectus Regulation) to reflect changes introduced by the EU Listing Act. The package outlines new measures intended to promote supervisory convergence and contribute to burden reduction efforts and includes the following:

• Consultation on disclosure guidelines. ESMA launched a consultation paper on amendments to its guidelines on disclosure requirements under the Prospectus Regulation. These changes aim to clarify disclosure expectations and to simplify the requirements. The consultation will close on 9 November 2026, with final guidance planned to be issued in the second quarter of 2027.
• Q&As. ESMA published updated Q&As reflecting the amended Prospectus Regulation with further clarifications, and obsolete content removed.
• Guidelines on product supplements. ESMA published a Final Report with Guidelines establishing a unified approach on whether a supplement for a base prospectus introduces new securities.
• RTS on prospectus summaries. ESMA published a Final Report on revised RTS governing key financial information in prospectus summaries.

10. EU — ESG

EU Parliament Committee adopts draft report on SFDR 2.0

As discussed in our December 2025 Update, the Commission published its SFDR 2.0 proposal in November 2025. On 10 September 2026, the European Parliament Economic and Monetary Affairs Committee (ECON) adopted its report on the proposal by the Commission to amend the SFDR and the PRIIPs Regulation. ECON stated that the report is in favour of reducing regulatory burdens and lowering costs without weakening the credibility of green investments.

The ECON report supports the replacement of the existing SFDR disclosure regime based on Articles 6, 8, and 9 with three product categories — sustainable, transition, and ESG basics. It also proposes changes to the eligibility criteria and disclosure requirements for those product categories. ECON proposes that transition products moving investments towards companies not yet classed as sustainable should not include those earning revenue from certain activities, with a limited exception for companies investing heavily in environmentally sustainable activities. ECON’s position would also permit sovereign debt within the Article 7 transition category, subject to a 15% cap.

Each categorised product would be required to disclose its investments’ principal adverse impacts (PAIs) on sustainability. All three categories would exclude firms that violate human rights or humanitarian law. Products falling in the ESG basics category would also be required to disclose their exposure to the fossil fuel sector. The report proposes extending the application date from 18 to 24 months. Existing obligations not retained under SFDR 2.0, such as entity-level PAI reporting, would cease to apply upon entry into force.

In particular, ECON also agreed to provide an opt-out for alternative investment funds marketed exclusively to professional investors and to take out of scope financial advice and portfolio management. ECON also proposes an exemption for qualifying closed-ended funds established and distributed before the application of SFDR 2.0. Firms offering categorised products would be required to review their due diligence and monitoring processes annually.

The ECON negotiating mandate is due to be announced at the start of the European Parliament’s October plenary session, with the possibility of a final text being reached by the end of Q4 2026.

EU Platform on Sustainable Finance responds to ESMA consultation on Taxonomy disclosures

On 22 September 2026, the EU Platform on Sustainable Finance (PSF) published an initial brief on ESMA’s consultation on targeted reforms to key performance indicators (KPIs) under Delegated Regulation (EU) 2021/2178 made under Regulation (EU) 2020/852 (the Taxonomy Regulation). The consultation forms part of the Commission’s wider review of the Taxonomy Regulation disclosure framework. The PSF recommendations include introducing a two-tier approach under which only certain operational expenditure disclosures would remain mandatory, removing the weighted-average consolidated KPI for group reporting and incorporating further clarifications relating to climate change adaptation.

Publication of simplified EU sustainability reporting rules

On 21 September 2026, two Commission Delegated Regulations were published in the Official Journal of the European Union (OJEU) as part of the omnibus simplification package for corporate sustainability reporting:

• Commission Delegated Regulation (EU) 2026/1563, which enters into force on 10 November 2026, will replace the existing European Sustainability Reporting Standards (ESRS) with revised standards intended to simplify sustainability reporting. The revised ESRS will apply for financial years beginning on or after 1 January 2027. For financial years beginning in 2026, reporting undertakings may elect to apply the existing or revised standards, with specified transitional reliefs also available.
• Commission Delegated Regulation (EU) 2026/1560, which entered into force on 24 September 2026, establishes a voluntary sustainability reporting standard for undertakings that are not subject to mandatory reporting requirements. It also introduces a “value chain cap,” limiting the sustainability information that companies subject to mandatory reporting may request from undertakings in their value chains with no more than 1,000 employees. The value chain cap will apply for financial years beginning on or after 1 January 2027.

11. EU — AML

AMLA finalises draft RTS under the AML Regulation

On 1 October 2026, the EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) published three final reports containing draft RTS under Regulation (EU) 2024/1624 (the AML Regulation). The RTS follow previous consultations by AMLA, as covered in our March 2026 Update and May 2026 Update. The RTS cover the following areas:

• Customer due diligence (CDD) requirements. Draft RTS under Article 28(1) of the AML Regulation specifies the information and requirements necessary for obliged entities to perform CDD. Following consultation, AMLA has made revisions including clarifying that the requirements should be applied in a proportionate and risk-based manner.
• Business relationships and transactions. Draft RTS under Article 19(9) of the AML Regulation setting out criteria for identifying business relationships, occasional transactions and linked transactions. AMLA has made revisions following consultation to improve the clarity of the requirements.
• Group-wide requirements. Draft RTS under Articles 16(4) and 17(3) of the AML Regulation governing group-wide requirements and additional measures for branches and subsidiaries in third countries. AMLA has amended the proposals following concerns raised by respondents regarding the implementation of certain provisions.

The Delegated Regulations containing the draft RTS, which will now be submitted to the Commission for adoption, will enter into force 20 days after publication in the OJEU.

12. EU — Cryptoassets

EBA and ESMA respond to Commission’s targeted consultation on review of MiCA

A previous targeted consultation by the Commission on MiCA explored MiCA’s scope, the stablecoin and cryptoasset provider regimes, and activities outside of the regulatory perimeter (see our June 2026 Update for an overview of the consultation). ESMA and the EBA have since responded to the consultation, as set out below.

On 24 September 2026, the EBA published its response to the consultation. The EBA’s response covered the following:

• Stablecoins. The EBA considered the existing requirements for issuers of asset-referenced and e-money tokens to be broadly appropriate. It recommended a dedicated regulatory and supervisory approach for third-country multi-issuer arrangements as well as a review of the proportion of assets that issuers must hold as bank deposits in reserve.
• Scope. The EBA stated that the Commission needed to clarify MiCA’s definitions and its boundaries in relation to the EU’s other financial services legislation.
• Lending. The EBA supports regulating the lending and borrowing of cryptoassets. It highlights risks arising from highly leveraged market-making that could cause contagion, and the risks of losses to consumers. The suggested requirements include disclosures, leverage limits, and a certification regime.
• Supervision. The EBA calls for the reporting requirements for token issuers and cryptoasset service providers (CASPs) to be reviewed to support risk monitoring. The EBA also noted the interactions among MiCA, the proposed EU payments framework, and supervisory cooperation.

On 30 September 2026, ESMA published its own response, proposing a series of amendments intended to reduce legal uncertainty and regulatory arbitrage, simplify aspects of the framework, and strengthen supervisory convergence:

• Cryptoasset classification. ESMA proposes clearer rules on token classification and a mechanism allowing ESMA, in consultation with the EBA where relevant, to issue binding opinions on the classification of cryptoassets, including on its own initiative where recurring issues arise.
• DeFi. ESMA proposes a new regulated service for CASPs that provide clients with access to DeFi protocols, alongside greater clarity on the circumstances in which arrangements are sufficiently decentralised to fall outside MiCA.
• Staking, lending, and borrowing. ESMA proposes targeted conduct, disclosure, safeguarding, and risk-management requirements. In relation to staking, ESMA does not consider that the activity should automatically be treated as lending or investment management and proposes that the requirements should depend on the degree of intermediation, control, and pooling involved.
• CASP authorisation and prudential requirements. For MiFID II investment firms using the MiCA Article 60 notification route, ESMA proposes that transfer services equivalent to already-authorised investment services should not require a separate CASP authorisation under Article 63. ESMA also proposes closer alignment between MiCA prudential requirements and the EU’s separate prudential rules for investment firms.
• Other proposals. Other proposals address unauthorised stablecoins, cryptoasset marketing and influencers, cost transparency, product intervention, and additional powers in relation to unauthorised or fraudulent providers. ESMA also suggests that an optional EU-level “28th regime” could provide a common framework for issuing, transferring, and settling tokenised securities across EU member states as demand for DLT native issuance develops.

13. EU — Operational Resilience

EBA publishes final Guidelines on third-party risk management

On 18 September 2026, the EBA published updated Guidelines on the sound management of third-party risk related to non-ICT services, intended to provide a more proportionate framework aligned with Regulation (EU) 2022/2554 on digital operational resilience (DORA). The EBA Guidelines focus on third-party arrangements supporting critical or important functions, where disruption would materially impair the performance of a financial entity. By concentrating requirements on these higher-risk arrangements, the EBA aims to reduce operational and supervisory burdens associated with less material third-party arrangements.

In particular, the EBA Guidelines cover the steps to be taken by firms for the whole life-cycle of third-party arrangements to ensure consistency with DORA, including risk assessment and due diligence, contracting, subcontracting, ongoing monitoring, documentation, and exit strategies. A two-year transitional period will apply to support implementation of the new framework.