On 19 March 2026, the Financial Conduct Authority (FCA) published its Regulatory Priorities reports in relation to: (i) wholesale markets, and (ii) wholesale buy-side priorities.

Overview

The FCA is introducing 9 annual Regulatory Priorities reports to replace its portfolio letters. So far, the FCA has published Regulatory Priorities reports for insurance, consumer investments, pensions, retail banking, mortgages, consumer finance and wholesale buy-side and wholesale markets.

Each report outlines the FCA’s priority areas of focus for firms in that sector. However, firms will need to consider which priorities and recommendations apply to them based on their business model, including other business lines that could be included in other Regulatory Priorities reports.

FCA priorities

The Regulatory Priorities report in relation to wholesale markets includes the following priorities:

  • Improve the resilience of firms and markets: the FCA explains that it expects firms to strengthen operational resilience; improve third-party and technology risk oversight; ensure trading controls are robust; and bolster liquidity management and financial resilience. The FCA also explains that introduce a range of measures including introducing new rules for reporting operational incidents and information on material third parties; consult on rules and guidance in 2026 to strengthen the resilience of markets during an outage as part of its broader consultation on equity market structure and transparency;and consult on market risk capital requirements for investment firms, in Q4 2026.
  • Enhance efficient, competitive and innovative markets: the FCA sets out that it expects firms to support market reforms and transparency initiatives and modernise trading and post-trade infrastructure including by preparing for T+1 settlement, dematerialisation of shares, and digitalisation of market processes and considering how technology can streamline operations and reduce settlement risks. The FCA also sets out that it will publish final rules to support issuance and investment in securitisation, on rule in relation to an equity consolidated tape, on client categorisation and conflicts of interest ad a feedback statement on proposed changes to the short-selling regime, and that it will also consult on equity market structure and transparency, and on amending rules on unconnected research.
  • Enable the safe and responsible adoption of new technology: the FCA highlights that it expects firms to engage with regulatory sandboxes and industry initiatives; implement robust governance for emerging technologies and manage third-party and data risks. The FCA highlights that in relation to this it will, for example, operate the Digital Securities Sandbox, alongside the Bank of England, to enable firms to experiment with digital ledger technology and tokenisation in a controlled environment and develop more clarity on how digital securities markets will evolve, which will include the Digital Gilt Instrument (DIGIT) Pilot and finalise a cryptoasset regulatory regime publishing final policy statements on our cryptoasset regime in 2026.
  • Prevent financial crime and market abuse: the FCA makes clear that it expects firms to strengthen financial crime controls; ensure effective oversight of appointed representatives and implement policies to manage financial crime risks arising from their activities. Be vigilant for new sources of financial crime risk and Enhance surveillance and conduct oversight. The FCA sets out that it will continue financial crime assessments on topics including sanctions, terrorist financing and proliferation financing and continue engagement on improving the UK transaction reporting regime with a policy statement expected in Q3 2026.
  • Ensure firms effectively manage conflicts of interest and conduct oversight: the FCA expects firms to identify and manage conflicts of interest; and strengthen conduct oversight and accountability. In addition, it will take certain actions including that it will initiate a broad supervisory strategy to address and mitigate conflicts and inadequate conduct in trading and originating activities of wholesale banks in securities markets including multi-firm reviews of market soundings, prime services, executing in emerging markets, allocation of primary market fixed income products and quantitative investment strategies and review its wholesale conduct rules to ensure they are clear and proportionate and propose changes where rules did not achieve the intended outcome and review its position on payment for order flow in 2026.

The Regulatory Priorities report in relation to wholesale buy-side includes the following priorities:

  • Evolve regulation to foster growth and innovation and serve changing consumer needs: the FCA expects firms to implement robust governance for emerging technologies by establishing clear accountability, risk management and oversight for the use of AI, DLT and other new technologies. The FCA sets out that it will consult on plans for a proportionate regulatory regime for alternative investment fund managers; transform the regulatory data model for asset managers and funds to make the regime more proportionate; work to digitise and simplify its fund authorisation process for a more efficient gateway process and experience for firms; progress its work on tokenisation, by finalising policy work on enabling tools and the direct to fund model; support the safe and responsible adoption of new technologies through the Digital Securities Sandbox; and consult on streamlining product-level Task Force on Climate-related Disclosures.
  • Deliver good outcomes to consumers: the FCA has made clear that firms should embed the consumer duty, apply a consumer lens to products and services, provide clear communications to investors, and maintain strong oversight of appointed representatives. It further explains that it will, in particular, progress its multi-firm review of model portfolio services; continue working on of our small asset managers and alternatives business model review; finalise its policy in relation to client categorisation and conflicts of interest; and consult on clarifying the application of the Duty across distribution chain and to wholesale firms and will issue a consultation mid-year.
  • Reinforce consistent, high standards across private market investing: the FCA expects firms to review and update governance and processes for valuations, ensure robust processes are in place for identification, management and mitigation of conflicts of interest. • Align product development frameworks for retail products and retirement solutions with Duty expectations. The FCA explains that it will, for example, continue engaging with private markets firms to discuss valuation practices, managing conflicts of interest, risk management and plans to broaden retail access to private markets products responsibly and that its multi-firm review of conflicts of interest in private markets firms is ongoing and so this year it will communicate good practice to the market to communicate what matters most for achieving good outcomes for investors and market integrity.
  • Preserve market integrity and resilience to disruption: the FCA highlights that firms should strengthen operational resilience and embed it into processes such as new product design and change management; maintain robust incident response and recovery plans; assess and manage dependencies on material third party providers, ensuring robust due diligence and ongoing monitoring of resilience capabilities; and strengthen governance frameworks to manage the firm’s impact on markets. In particular, the FCA explains that it will finalise its policy on enhancing fund liquidity risk management for UCITS and non-UCITS retail schemes; consult on enhancing fund liquidity risk management for alternative investment funds under AIFMD; and finalise rules on improving the UK transaction reporting regime, with a policy statement expected in Q3 2026.