UK/EU Investment Management Update (March 2026)

In this Sidley Update, we cover, on the UK side, significant enforcement actions by the Financial Conduct Authority (FCA) and Office of Financial Sanctions Implementation, HM Treasury’s consultation on reforms to the Appointed Representatives regime and FCA initiatives including reforms to the securitisation framework (with the Prudential Regulation Authority), the new “Regulatory Priorities” reporting approach, a notable UK High Court judgement regarding springboard injunctions in a team move scenario, prioritisation of defence-focused fund authorisations, enhanced transparency of UK equity trading data ahead of the consolidated tape, and international cooperation agreements.

On the EU side, we analyse European Securities and Markets Authority (ESMA) supervisory and rulemaking activity under the European Market Infrastructure Regulation (EMIR 3), its supervisory briefing on algorithmic trading, consultation on revised Market Abuse Regulation guidelines on delayed disclosure, consultation on suitability assessments for management bodies, and enforcement action against a trade repository for EMIR and Securities Financing Transactions Regulation breaches. We also cover ESMA’s withdrawal of Markets in Financial Instruments Directive II/Markets in Financial Instruments Regulation market data guidelines, EU Anti-Money Laundering Authority consultation on customer due diligence standards, European Commission consultation on the Shareholder Rights Directive, and ESMA’s statement on contracts for differences product intervention measures in the context of crypto-linked derivatives.

 

1. UK — Enforcement

2. UK — Government

3. UK — FCA

4. UK — Securitisation

5. UK — Employment

6. UK — Markets

7. UK/EU — Proprietary Trading

8. EU — European Commission

9. EU — AIFMD

10. EU — ESMA

11. EU — MiFID II/MiFIR

12. EU — EMIR / SFTR

13. EU — AML

14. EU — Cryptoassets

15. International/Cooperation

 

1. UK — Enforcement

OFSI imposes a penalty on UK bank for breaching Russia sanctions

On 26 January 2026, the Office of Financial Sanctions Implementation (OFSI) published a penalty publication notice, detailing the penalty of £160,000 it had imposed on 10 November 2025 on a major UK bank (the Bank), a subsidiary of a large UK banking group.

The penalty was imposed due to the Bank’s breaches of the Russia (Sanctions) (EU Exit) Regulations 2019 (Russia Regulations), detailing sanctions related to the Russian Federation and certain sanctioned individuals. In particular, the Bank breached Regulation 11 (dealing with funds) and Regulation 12 (making funds available) by processing 24 payments, totalling £77,383.39, to or from a personal current account held by an individual designated under the Russia Regulations.

The UK banking group formally disclosed the breaches on behalf of its subsidiary in March 2023, and as a result, OFSI applied the full 50% voluntary disclosure discount to the penalty.

 

Upper Tribunal upholds FCA bans and fines for reckless adviser and fund manager

On 18 February 2026, the Upper Tribunal upheld Financial Conduct Authority (FCA) decisions to ban Stephen Joseph Burdett and James Paul Goodchild from working in regulated financial services and to impose financial penalties, resulting in Burdett’s receiving a fine of £265,071 and Goodchild’s receiving a fine of £47,600.

The pair, who held senior roles at Synergy Wealth Limited and Westbury Private Clients LLP respectively, were banned by the FCA from working in financial services because Burdett recklessly exposed 232 pension holders with funds worth over £10 million to unsuitable, high-risk portfolios managed by Goodchild, including a large concentration in a single offshore property developer. Following intervention by the FCA in 2016, both firms went into liquidation, and the Financial Services Compensation Scheme has paid out over £1.4 million to victims.
The Upper Tribunal concluded the individuals’ conduct showed little regard for clients and criticised their misleading reporting and portfolio descriptions, such as “cautious” and “balanced” for high-risk products.

Upper Tribunal upholds FCA decision regarding manipulative trading strategies

On 3 February 2026, the FCA announced that the Upper Tribunal had upheld the FCA’s earlier decision that Rangecourt SA (formerly known as Banque Havilland), Edmund Rowland, the former London CEO, and Vladimir Bolelyy, a former employee, had acted without integrity. The Upper Tribunal agreed with the FCA’s imposition of fines of £4 million, £352,000, and £14,200, respectively, and banning the individuals from working in financial services.

Banque Havilland planned a trading strategy to affect the Qatari Riyal and break its peg to the U.S. dollar through manipulative trading strategies and, as a result, to harm the broader Qatari economy. Banque Havilland intended to present this strategy to a sovereign wealth fund, and Rowland and Bolelyy were instrumental in this misconduct.

FCA restricts financial adviser from carrying out regulated activities

On 5 February 2026, the FCA announced that it had imposed restrictions on Advantage Wealth Management Ltd (AWM), an independent financial adviser, preventing it from disposing of assets or conducting regulated activities without the FCA’s written consent.

The FCA’s action follows its concerns that AWM is not being managed in a way ensuring that its affairs are conducted in a sound and prudent manner. The FCA raised concerns including the following:

• Treatment of customers — the circumstances in which many AWM customers had their investments moved into cash holdings.
• Appropriate resources — whether AWM has or will have appropriate financial resources.
• Level of cooperation — lack of cooperation by AWM with the FCA.

FCA issues legal proceedings to stop alleged unlawful promotion of cryptoassets in the UK

On 10 February 2026, the FCA announced that it has begun legal proceedings against global crypto exchange HTX (formerly known as Huobi) in relation to its alleged unlawful financial promotions of cryptoasset services to UK consumers. On 4 February 2026, the High Court granted the FCA permission to serve the proceedings out of the jurisdiction and by alternative means.

Despite the FCA’s previous warnings, HTX has continued to promote its crypto services to UK consumers on its website and on various social platforms. HTX has not been authorised or exempt from the relevant financial promotions rules under Section 21 of the Financial Services and Markets Act 2000 (FSMA). The FCA’s announcement also commented on HTX’s opaque organisational structures that conceal the identities of its owners and website operators and that it has ignored the FCA’s repeated attempts to engage. While HTX has started to restrict new UK customers from registering with it since the commencement of legal proceedings, the FCA stated that it is not satisfied that ongoing breaches will be remediated effectively.

For consumer protection, the FCA requested that HTX’s social media accounts be blocked to UK-based consumers and its applications be removed from the Google Play and Apple Stores in the UK. HTX has also been placed on the FCA’s Warning List.

2. UK — Government

HM Treasury launches consultation on Appointed Representative regime

On 12 February 2026, HM Treasury (HMT) published a consultation paper setting out proposals tightening the oversight on the Appointed Representatives (AR) regime. This follows from the policy statement published on 11 August 2025. For details on the policy statement, see our August 2025 Update.

HMT continues to view the AR regime as providing a proportionate and cost-effective way to allow firms to conduct regulated activities without formal authorisation but proposes to amend the legislative framework to better protect consumers of AR firms. Some of the main changes proposed include the following:

• New FCA permission for acting as principal firm. HMT proposes to establish a new regulatory gateway for principal firms, such that existing authorised firms would require separate permission from the FCA to act as principal. To implement the gateway, HMT proposes to add a new permission regime similar to that in Section 55NA of the FSMA, which requires authorised firms to seek separate FCA permission before being allowed to approve financial promotions made by non-authorised persons. The gateway will allow the FCA to grant, vary, and cancel a firm’s permission to act as principal without affecting the firm’s primary permissions.
• FCA to set detailed requirements on contractual relationship between principals and ARs. HMT considers it more proportionate for the FCA to set detailed rules on the contractual relationship between principal firms and their ARs, and the inclusion of ARs on the Financial Services Register.
• Bringing ARs within scope of the Senior Managers & Certification Regime (SMCR). Currently, the conduct of senior staff within principal firms is governed by the SMCR, but the conduct of staff within ARs is governed by the “approved persons” regime (the conduct regime that applied to all authorised firms before the introduction of SMCR). HMT proposes to remove the legacy approved persons regime and bring ARs within the scope of the SMCR through the following:

• SMCR individual conduct rules will apply to all ARs (except ancillary staff), mirroring the application in principal firms.
• Principal firms will be required to apply “fit and proper” assessments to their ARs, but such assessment will not require FCA approval, as is currently the case for ARs under the “approved persons” regime.
• Principal firms will be required to implement a new AR senior management function to reflect the principal’s responsibilities related to the effective management and oversight of ARs.

Note that the SMCR is also subject to consultation; for details, see our August 2025 Update.

The consultation closes on 9 April 2026.

UK government launches call for evidence on ownership and control test

On 16 February 2026, the UK government, through OFSI, launched a call for evidence on the application of the ownership and control test under the UK Financial Sanctions Regulations. The exercise seeks industry input on how the test operates in practice and where firms face challenges in implementing the regime.

OFSI has invited evidence and practical examples addressing, in particular, how frequently “hypothetical control” arises in real financial sanctions cases; the impact of the test on compliance costs, legal risk, and business decision-making (including de-risking); and whether existing legal concepts and typologies of control assist firms in applying the ownership and control framework.

OFSI states that the evidence gathered will inform its assessment of whether the current approach is sufficiently clear, effective, and proportionate, with the aim of ensuring that UK financial sanctions remain robust while workable for legitimate businesses.

The call for evidence closes on 13 April 2026.

UK launches Investment Management Taskforce

On 12 February 2026, the Investment Association announced the first meeting of the Investment Management Taskforce. The taskforce is chaired by the Economic Secretary to the Treasury and is attended by the FCA and 13 leading UK asset and wealth managers.

The taskforce aims to foster collaboration among government, regulator, and industry. It will benchmark its progress against the government’s Financial Services Competitiveness and Growth Strategy, with a special focus on improving further retail investment in the UK.

The first crucial area overseen by the taskforce will be technology-related opportunities. It will take forward the fund tokenisation work completed by the previous iteration of the taskforce, with the objective of developing a world-class digital ecosystem.

3. UK — FCA

FCA sets out “Regulatory Priorities” approach to replace Portfolio Letters

On 24 February 2026, the FCA published a blog post setting out a revised framework for communicating its regulatory priorities to regulated firms, including the launch of “Regulatory Priorities” reports, starting with the insurance sector.

The initiative forms part of the FCA’s broader strategy to become a more effective and efficient regulator and the changes intend to improve clarity, reduce burden, and make supervisory expectations more accessible for regulated firms.

Nine Regulatory Priorities reports, covering each sector at a higher level, will replace more than 40 legacy portfolio letters and are designed to provide concise, one-page summaries of key regulatory priorities with direct links to the detailed information firms need.

The FCA emphasised that firms should review the reports closely to ensure that their firms are aligned with current regulatory expectations. The regulator also reaffirmed its commitment to ongoing engagement with industry to refine and evolve its communications and supervisory practices.

FCA announces prioritisation of authorisation of defence-focused funds

On 9 February 2026, the FCA announced via its fund authorisation webpage that it will prioritise applications for authorisation from defence-focused funds. Such applications will be reviewed ahead of other fund authorisation applications (although the FCA noted that this does not guarantee faster decisions or alter its general statutory timelines).

The FCA confirmed that all existing regulatory standards will continue to apply and that the revised approach will not affect service standards for other authorised fund applications.

The announcement reflects the FCA’s statutory objective to protect and enhance the integrity of the UK financial system, with defence and resilience identified as core to market integrity. The FCA stated that it will continue to work with government and industry partners to embed national security considerations within the financial system.

FCA publishes good and poor practice for firms using labels under the UK Sustainability Disclosure Requirements (SDR) and investment labelling regime

On 27 February 2026, the FCA published guidance on examples of good and poor practices for each of the four sustainability investment labels under the SDR regime (Sustainability Focus, Sustainability Improvers, Sustainability Impact, and Sustainability Mixed Goals). The guide sets out practical examples of disclosures observed by the FCA in the context of fund authorisations. It is intended to assist firms in scope of the SDR regime with meeting the labelling and pre-contractual disclosure requirements of SDR.

Key themes include the need for clear, specific, and measurable sustainability objectives; consistency between a fund’s investments and its chosen label; robust evidence-based standards; appropriately defined key performance indicators; and disclosure of material negative outcomes and stewardship strategy. For more information on the SDR regime, see our Sidley Update Final Rules on UK Sustainability Disclosure Requirements and Investment Labels — Key Takeaways for Asset Managers.

4. UK — Securitisation

FCA and PRA consult on reforms to UK securitisation framework

On 17 February 2026, the FCA, in coordination with the Prudential Regulation Authority (PRA), published Consultation Paper CP26/6: Rules for reforming the UK Securitisation Framework. The consultation marks the next stage in ongoing efforts to simplify and recalibrate the UK securitisation regime and forms part of parallel proposals by both regulators aimed at making the UK securitisation rulebook more proportionate, flexible, and coherent for market participants.

The FCA consultation sets out proposals to reduce complexity and unnecessary compliance burdens, including simplifying due diligence and transparency requirements for authorised firms involved in securitisation markets, aligning reporting templates more closely with Bank of England (BoE) loan-level data templates, and streamlining underlying exposures templates. The proposals also seek to retain high standards to support market integrity, innovation, and competition, while fostering a more favourable environment for issuers and institutional investors.

The PRA has published a parallel consultation (CP2/26) with broadly aligned objectives, proposing reforms to securitisation conduct requirements for PRA-authorised firms with the aim of reducing prescriptive elements and lowering compliance costs, including changes to reporting, due diligence, and capital treatment provisions.

Both consultations are open for comment until 18 May 2026. The regulators have indicated that final rules are expected to be published later in 2026, with implementation targeted for the second quarter of 2027.

5. UK — Employment

Employment Post-Termination Covenants

In the recent case of Guy Carpenter v. Willis [2026] EWHC 361 (KB) (judgement dated 20 February 2026), the High Court has reaffirmed that springboard injunctions in a team move scenario are corrective, not punitive, even where there has been a breach of a post-termination restrictive covenant. Their purpose is strictly to remove any ongoing unlawful competitive advantage. If the advantage has expired or its impact is limited, no injunction will be granted.

In this case, 22 employees, including two directors, resigned from Guy Carpenter and joined Willis. Although the court found (i) the former directors improperly provided employee information to assist recruitment and (ii) Willis was liable for dishonest assistance, inducing breach of contract, and unlawful means conspiracy (limited to misuse of employee information), there was no misuse of client information or unlawful solicitation. The only unlawful advantage identified was that some departures occurred earlier than they otherwise would have, which had expired by the time of the judgment. On this basis, as there was no continuing advantage, no injunction was granted. The court also rejected broad client restrictions, noting that the employees were already subject to notice, garden leave, and 12-month post-termination covenants. There was no evidence of client loss, and the proposed restrictions were overly wide and commercially uncertain.

Although arising in the reinsurance broking context, the principles in Guy Carpenter v.Willis are directly relevant to investment managers and other financial services firms facing team moves. Investment management businesses often rely heavily on portable talent, investor relationships, and coordinated hiring strategies. This case signals that courts will require clear evidence of ongoing competitive advantage — such as investor solicitation or misuse of confidential information — before granting springboard or client-based injunctions. Existing contractual protections (notice, garden leave, and post-termination restrictions) will significantly influence whether additional equitable relief is justified.

6. UK — Markets

FCA pledges to publish all trading data on London-listed shares

On 9 February 2026, in an interview with the Financial Times, the FCA announced its plan to publish all trading for London-listed shares. This is in response to the “drastic under-reporting” of market liquidity that is frequently cited as a reason why companies have shifted their primary listings to New York. The FCA estimates that there are 270 million transactions in UK shares recorded on the London Stock Exchange central order book, while the total notional amount of share trading during the period should be around four times as large.

The FCA has been engaging with various market participants to collect and publish data on all UK share trades, including those done over the counter (OTC) on dark pools and via systematic internalisers. However, this is an interim measure in advance of the UK’s planned equity consolidated tape that seeks to aggregate and publish equity trading data from all relevant venues. The consolidated tape is due to launch in 2027.

UK bond consolidated tape provider publishes draft terms

On 2 February 2026, ETS Connect UK, the UK bond consolidated tape provider, announced the publication of its draft user contract and associated fee schedule for the UK bond consolidated tape, providing market participants early visibility to the framework governing access to UK bond consolidated tape data.

ETS Connect UK will provide UK bond consolidated tape data at low/no cost to individual users, academic institutions, and firms with revenues of less than £50 million, with firms with higher revenues being charged up to £300 a month, based on exact revenue. The fees are lower compared with levels seen in the United States, where users of the TRACE system may be charged up to US$7,500 a month for enterprise access.

LSE publishes final versions of rules and guidance governing the Private Securities Market

On 5 February 2026, the London Stock Exchange (LSE) published the final versions of the Private Securities Market Rulebook (Rulebook) and the Private Securities Market Handbook (Handbook). This follows from the draft Rulebook and Handbook published in August 2025, which confirmed the LSE to be an operator of a Private Intermittent Securities and Capital Exchange System (PISCES). For more information on the legal framework for PISCES, see our September 2025 Update.

The LSE has made the following amendments to the Rulebook based on responses on the draft Rulebook:

• Language has been added to Rule 2.3.8 to clarify that shares must remain eligible for electronic settlement only during an auction window.
• Guidance has been added to Rule 3.1.1 such that any communications by a Private Securities Market company outside of the Private Securities Market Disclosure Portal fall outside of the scope of the rules.
• Clarifications have been added to the introduction section and Rule 3.9.3 along with other minor changes.

The notice confirms that the Rules and the Handbook will become effective from the date of this notice.

7. UK/EU — Proprietary Trading

BoE steps up scrutiny on banks’ management of principal trading firm exposure

On 2 February 2026, BoE published the keynote speech delivered by Rebecca Jackson, BoE’s Executive Director for Authorisations, Regulatory Technology and International Supervision, at an event hosted by the Association of Foreign Banks. Entitled “Frenemies at the gates,” the speech focused on a rapidly changing market landscape, shaped by advances in technologies and increasing importance of principal trading firms.

Jackson noted that such firms have a dual relationship with traditional banks. On the one hand, they create business opportunities for banks, as they rely on banks for financial leverage, clearing, treasury and payment facilities, and market access. On the other hand, they pose new competition to banks’ trading desks, in particular in segments such as foreign exchange and credit.

The BoE also observed that risks of proprietary trading may still revert to banks indirectly: Many such firms use the same bank to satisfy their need for leverage, which they subsequently utilise to engage in market making and clearing services. As such, the BoE indicated that the market risks that post-global financial crisis (GFC) reforms sought to displace have not been removed from the system but have been shifted into new counterparty risk.

New law providing access for non-EU market makers to German exchanges enters into force

On 9 February 2026, the German Financial Centre Promotion Act (Standortfördergesetz or StoFöG) was published in the Federal Law Gazette, and its key provisions entered into force on 10 February 2026. The StoFöG provides a number of new measures intended to increase the competitiveness and attractiveness of Germany as a financial centre.

Of note, the StoFöG introduces a revised regulatory framework for third-country (i.e., non-EU) regulatory market makers that is expected to enhance access to German-regulated trading venues such as Eurex. Subject to certain conditions, the framework exempts non-EU market makers from the previous requirement to establish a physical entity in Germany (or obtain individual exemptions) to provide liquidity through German trading venues.

On 16 February 2026, Eurex published a press release about the StoFöG, noting it is “now actively engaging with firms in the UK, Switzerland, North America, and Asia to ensure they can swiftly capitalize on this new opportunity to access Europe's leading derivatives markets.”

8. EU — European Commission

European Commission launches consultation and call for evidence on Shareholder Rights Directive

On 11 February 2026, the European Commission (the Commission) published a consultation ahead of the review of the Shareholder Rights Directive (SRD). It has also published a call for evidence. The review is set out in the context of the Commission’s aim to simplify regulation, reduce burdens on businesses, and improve EU competitiveness. The review will focus on the following areas:

• shareholder identification, information transmission, and the exercise of shareholder rights
• transparency of institutional investors, asset managers, and proxy advisers
• general meetings and shareholder rights in those meetings

The Commission notes challenges including the lack of common response to digital developments in the market, the lack of common shareholder definitions in the EU, and inefficiencies in shareholder identification and voting processes. In response to the challenges, the Commission proposes to focus on improving corporate governance, particularly through the use of digital technology. It also proposes to facilitate the flow of information and exercise of rights among shareholders, companies, and intermediaries.

The consultation is set out in the form of a questionnaire consisting of mostly multiple-choice questions. A legislative proposal is expected to be published in Q4 2026. The consultation and the call for evidence both close on 6 May 2026.

Commission launches consultation on barriers to exiting private equity investments

On 2 March 2026, the Commission launched a targeted consultation on private equity exits, seeking evidence on how to make it easier for investors in EU private companies to sell their stakes in a timely, predictable, and fairly priced manner. The consultation serves to support the Commission’s work under the Savings and Investments Union strategy, which seeks to improve and integrate European capital markets and unlock more private financing opportunities for companies to strengthen the EU economy’s innovation and growth. The consultation is open until 27 April 2026 and is primarily aimed at private equity and growth capital funds and private companies (with other stakeholders also invited to respond).

The Commission notes that notwithstanding recent reforms to improve the attractiveness of EU public markets, private equity investors can face practical impediments to exiting investments where an initial public offering is not available or where valuations and liquidity are insufficient to support a transaction. The consultation therefore explores (i) barriers to exits in EU private markets, (ii) the merits and potential design features of a platform for secondary trading of private company shares (including potential disclosure, investor protection, and market integrity safeguards), and (iii) whether such a platform could also be used to raise new equity capital.

The consultation document also outlines potential regulatory approaches, including time-bound or permanent “sandbox” models (with possible disapplication of certain financial-services legislation) or a bespoke regime (lex specialis) for this form of intermittent trading while noting that platform operators would likely need to be authorised and supervised.

9. EU — AIFMD

Commission Delegated Regulation on characteristics of liquidity management tools published in the Official Journal

On 27 February 2026, a Commission Delegated Regulation, containing regulatory technical standards (RTS) supplementing the Alternative Investment Fund Managers Directive (AIFMD), was published in the Official Journal of the European Union.

Annex V of the AIFMD contains a harmonised list of liquidity management tools. Alternative investment fund managers are required to select at least two liquidity management tools from this list for potential use to protect the interests of their investors. The RTS in the Commission Delegated Regulation specifies the characteristics of such liquidity management tools, which are suspension of subscriptions; repurchases and redemptions; redemption gates; extension of notice periods; redemption fees; swing pricing; dual pricing; anti-dilution levy; redemption in kind; and side pockets.

The Commission Delegated Regulation will enter into force on 19 March 2026 and apply from 16 April 2026.

10. EU — ESMA

ESMA publishes supervisory briefing on algorithmic trading in the EU

On 25 February 2026, the European Securities and Markets Authority (ESMA) published a supervisory briefing on algorithmic trading across EU markets, providing updated high-level observations and expectations for firms engaged in algorithmic and high-frequency trading activities. The briefing reflects ESMA’s ongoing focus on the operational resilience, governance, and risk-management aspects of trading using automated systems.

ESMA noted common issues observed across trading venues and investment firms, including shortcomings in governance arrangements, model and parameter testing, pre- and post-trade controls, and monitoring of algorithm performance.

The report reiterates core expectations for firms’ algorithmic trading systems, stressing the importance of effective risk controls, kill switches and circuit breakers, thorough change management processes, and comprehensive documentation of development and testing. The briefing also underlines the need for senior management oversight and for firms to integrate algorithmic trading risks into their broader governance and risk-management frameworks.

ESMA launches consultation on streamlining inside information disclosure

On 19 February 2026, ESMA launched a consultation on proposed amendments to its Guidelines under the Market Abuse Regulation (MAR) concerning the delay in the disclosure of inside information, with the aim of simplifying and aligning the regime with changes introduced by the EU Listing Act.

The proposed revisions to the Guidelines reflect the amended MAR disclosure framework, under which, from June 2026, issuers will no longer be required to immediately disclose inside information relating to protracted processes before those processes are completed.

ESMA also proposes to clarify and expand the list of legitimate interests justifying delayed disclosure. These would include circumstances where a public authority requests non-disclosure, where additional time is needed to collect or verify information, or where an issuer is involved in multiple procurement processes for similar contracts.

In addition, ESMA proposes to delete the current guidance on the “no misleading the public” condition, which the Listing Act has removed from MAR. Under the revised regime, delayed disclosure must instead not contradict the issuer’s most recent public announcement on the same matter.

The consultation closes on 29 April 2026, and ESMA intends to publish a final report with new Guidelines in Q4 2026.

ESMA and EBA consult on revised suitability assessment requirements

On 25 February 2026, ESMA and the European Banking Authority (EBA) launched a public consultation on revised joint guidelines on the assessment of the suitability of members of the management body and key function holders for banks and Markets in Financial Instruments Directive (MiFID II) investment firms. The revised guidelines form part of a broader package to enhance harmonisation of suitability assessments and strengthen supervisory convergence across the EU.

The draft revised guidelines will apply to credit institutions within the scope of the Capital Requirements Directive and investment firms within the scope of MiFID II. They propose updates to how competent authorities and institutions assess suitability (including the notions of sufficient time commitment, honesty, integrity, and independence of mind of a member of the management body; adequate collective knowledge, skills, and experience of the management body; and adequate human and financial resources devoted to the induction and training of such member), mandatory suitability assessments for key roles such as heads of control functions and chief financial officers, and strengthened guidance relating to third-country branches.

In addition, the revised approach seeks to enhance links with the EU’s updated anti-money laundering and counter-terrorist financing framework.

The consultation closes on 25 May 2026. A public hearing on the revised guidelines is scheduled for 15 April 2026.

ESMA publishes programming agenda for 2027–29

On 29 January 2026, ESMA published its Programming Document for years 2027–29, where ESMA notes that the upcoming years will be shaped by a rapidly evolving regulatory and market landscape and broader economic and geopolitical developments. Against such background of uncertainty, ESMA states its continuing commitment to ensuring efficient and consistent across the EU, strengthening investor protection, and supporting orderly and resilient financial markets.

In addition to its general objectives, ESMA will contribute to the EU’s broader political priorities, such as enhancing the functioning of capital markets, improving transparency, and reducing unnecessary regulatory burdens. In the context of the various initiatives to build the Savings and Investment Union (SIU), ESMA pledges to improve the use of its regulatory, supervisory, and convergence tools to remain proportionate, effective, and aligned with future needs in addition to engaging in preparatory work to implement the legislative proposals that constitute the SIU package.

11. EU — MiFID II/MiFIR

ESMA withdraws MiFID II/MiFIR market data guidelines

On 23 February 2026, ESMA announced the withdrawal, with immediate effect, of its guidelines on MiFID II/Markets in Financial Instruments Regulation (MiFIR) obligations relating to market data. The decision forms part of ESMA’s broader efforts to simplify the rulebook and reduce compliance burdens for market participants and is driven by the entry into force of new RTSs on the obligation to make market data available to the public on a reasonable commercial basis, which entered into force on 23 November 2025.

Market data providers authorised before that date are subject to a transitional period until 22 August 2026, to allow existing contractual arrangements to be aligned with the new framework.

Commission Delegated Regulation on equity transparency under MiFIR in the Official Journal

On 27 February 2026, the Commission Delegated Regulation 2026/482 amending the Delegated Regulation 2017/567 was published in the Official Journal of the European Union. The Commission Delegated Regulation reflects amendments to MiFIR made by MiFIR II in relation to equity transparency. In particular, the Commission Delegated Regulation introduces amendments relating to the following points:

• The determination of what constitutes a liquid market for equity instruments;
• The obligation to provide market data on a “reasonable commercial basis”;
• The size specific to the financial instrument for the purposes of obligations for systematic internalisers; 
• The definition of, and disclosure for, post-trade risk reduction.

The Commission Delegated Regulation will enter into force and apply on 2 March 2026. However, the deletion of provisions regarding the provision of market data on a “reasonable commercial basis” will apply only from 23 August 2026.

12. EU — EMIR / SFTR

ESMA fines REGIS-TR €1.37 million for EMIR and SFTR breaches

On 19 February 2026, ESMA fined trade repository REGIS-TR, S.A. a total of €1,374,000 for seven infringements of its obligations under the European Market Infrastructure Regulation (EMIR) and the Securities Financing Transactions Regulation (SFTR). The decision marks ESMA’s first enforcement action in relation to SFTR breaches and the largest fine imposed to date on a trade repository. ESMA also issued a public notice and required REGIS-TR to remedy outstanding infringements.

ESMA found that REGIS-TR failed to comply with key organisational and operational requirements under EMIR and SFTR, including deficiencies in policies and procedures, shortcomings in organisational structure affecting business continuity under SFTR, failures to identify and mitigate operational risk, and breaches relating to the confidentiality and misuse of data reported under EMIR. The regulator concluded that the infringements resulted from negligence.

ESMA emphasised that compliance by trade repositories with EMIR and SFTR is critical to ensuring high-quality data for supervisory authorities and safeguarding the stability and integrity of EU financial markets.

ESMA publishes documentation on EMIR 3

ESMA consults on post-trade risk reduction services under EMIR 3

On 26 February 2026, ESMA launched a consultation on draft RTS setting out the requirements for post-trade risk reduction (PTRR) services to benefit from the conditional exemption from the clearing obligation introduced under EMIR 3.

The draft RTS specify the conditions PTRR services must meet for OTC derivative transactions to qualify for the exemption, focusing on three service types currently used in the market: compression, portfolio rebalancing, and basis risk optimisation.

ESMA is seeking feedback on key elements of the framework for PTRR service providers, including transparency to participants, algorithm safeguards, execution of PTRR exercises, controls, record-keeping, and how relevant authorities should monitor use of the exemption. ESMA notes that the RTS are intended to prevent circumvention of the clearing obligation while supporting simplification and burden reduction objectives by leveraging current market practices.

Responses are due by 20 April 2026. ESMA expects to submit the draft RTS to the Commission in Q4 2026.

ESMA publishes draft RTS on clearing thresholds under EMIR 3

On 25 February 2026, ESMA published a draft RTS setting out new and revised clearing thresholds (CTs) under EMIR 3 for endorsement by the Commission.

Under the final draft RTS, ESMA has retained five CT categories and clarified the timing of position calculations, allowing firms to apply the new thresholds during their usual assessment windows or earlier if they choose to benefit sooner from the updated regime. The draft RTS also increase the thresholds for certain asset classes — including commodity, interest rate, and credit derivatives — compared with earlier proposals in the consultation paper published in April 2025, reflecting recent price developments, inflation, and other market factors. ESMA has also confirmed that changes to hedging exemptions cannot be addressed in the RTS and would require amendments at the regulatory level.

13. EU — AML

EU Anti-Money Laundering Authority publishes consultation on customer due diligence rules

On 9 February 2026, the Anti-Money Laundering Authority (AMLA) published consultation on the draft RTSs on customer due diligence requirements. This RTS sets out how entities should verify customer identity and conduct ongoing monitoring in a risk-based and proportionate way. AMLA seeks to harmonise standards for the financial and non-financial sector in the Union and with a special focus on capturing the views of the non-financial sector. The draft RTS encourages flexibility and simplification, prompting the obliged entities to determine the most effective and proportionate measures.

The consultation is published for a three-month period, during which AMLA will continue to engage with relevant stakeholders.

14. EU — Cryptoassets

ESMA publishes statement on firms’ obligations regarding perpetual futures

On 24 February 2026, ESMA issued a statement reminding firms of their obligations under existing product intervention measures on contracts for differences (CFDs) amid rising offerings of derivatives that may fall within the scope of those measures, including perpetual futures.

The statement has been published in response to increased marketing of leveraged products, including perpetual futures, which often provide similar economic exposure to underlying assets and, in many cases, to crypto-assets.

The statement reiterates ESMA’s previous position that where such derivatives meet the definition of a CFD, they remain subject to applicable product intervention requirements, including leverage limits, mandatory risk warnings, margin close-out protections, negative balance protection, and the prohibition of monetary and non-monetary benefits for retail clients. Firms are reminded to assess whether newly offered products fall within the scope of the measures and to ensure ongoing compliance.

15. International/Cooperation

Basel Committee publishes analysis of synthetic risk transfers

On 17 February 2026, the Basel Committee on Banking Supervision (BCBS) published a report analysing synthetic risk transfer (SRT) transactions.

The report notes that SRT markets have grown rapidly over the last decade and have become an important source of capital relief for corporate credit risk, estimating that in the U.S., UK, Canada, and the euro area, protected assets total around €750 billion (around 1.1% of total bank assets).

The BCBS observed that while post-GFC reforms appear to have resulted in SRT structures that are simpler and subject to greater scrutiny than pre-GFC transactions, SRTs are still at risk of potential “blind spots,” including around disclosure and SRT financing activities, concluding that such transactions merit continued supervisory monitoring as the market continues to grow.

UK and China deepen cooperation in financial services

On 3 February 2026, HMT announced that following the first UK-China Financial Working Group in Beijing, the UK has reached enhanced cooperation agreements with China in financial services.

As part of the cooperation, the RMB-related financial market infrastructure in London has been strengthened and a greater range of financial services to be provided cross-border between UK and China businesses is promised.

FCA exchanges letter of cooperation with India financial services centre

On 11 February 2026, the FCA announced that it has signed an Exchange of Letters with the International Financial Services Centres Authority in India. The letter sets out both parties’ intention to share regulatory expertise and best practice to improve the development of financial services in respective markets and to deepen the links between Gujarat International Finance Tec-City and the UK financial markets.

Information to be shared includes the following:

• Information about the development of regulation for financial products, financial services, and institutions;
• Information on regulatory and supervisory frameworks and ongoing policy or regulatory initiatives;
• Mutual cooperation on sustainable finance and fintech;
• Mutual cooperation to support the development of capital markets, asset management, and wholesale banking.