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On 16 December 2025, the Financial Conduct Authority (FCA) published three further consultation papers (CPs) in relation to cryptoasset regulation: (1) CP25/40 – regulating cryptoasset activities; (2) CP25/41 – admissions and disclosures, and market abuse regime, for cryptoassets; and (3) CP25/42 – a prudential regime for cryptoasset firms.

Background

The Government plans to create a UK financial services regulatory regime for cryptoassets, including stablecoins, and on 15 December 2025 HM Treasury (HMT) announced that it had laid the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025 (the Regulations). The Regulations will establish new regulated activities for cryptoassets, such as operating a cryptoasset trading platform and issuing stablecoins. Further, the Regulations now also include details of new regimes in relation to admissions and disclosures, and market abuse. 

These proposals follow prior CPs published by the FCA in May 2025 in relation to both stablecoin issues and cryptoasset custody and initial proposals for prudential requirements and in September 2025 on the proposed application of existing FCA Handbook rules to firms conducting regulated cryptoasset activities.

CP25/40 – regulating cryptoasset activities

This CP sets out the FCA’s proposed rules and guidance for some of the new cryptoasset activities, introduced through the change in the legislation, which were not covered in earlier CPs. This consultation includes proposals in relation to:

  • Operating a cryptoasset trading platform (CATP): High-level expectations for location, incorporation, and authorisation of UK CATPs, with further detail to come in proposed guidance. Proposed rules for: access and operation of a UK CATP; mitigating the risks from direct retail access to UK CATPs; managing CATP-specific conflicts of interest; transparency and reporting requirements for UK CATPs, and the FCA signposts its high-level expectations for settlement.
  • Intermediaries: Proposed general execution requirements and other dealing rules and how they should be applied to cryptoasset firms, specific eligibility and execution requirements for retail client orders, requirements to address specific conflicts of interest; pre- and post-trade transparency as well as record keeping and client reporting requirements for cryptoasset intermediaries and, high level expectations for settlement arrangements.
  • CATPs and intermediaries: Increasing transparency to aid price formation and ensuring appropriate record keeping and reporting to clients.
  • Lending and borrowing: Retail access, consumer understanding, use of proprietary tokens, liquidity and counterparty risk, and record keeping requirements.
  • Staking: Proposing that regulated staking firms will be required to give retail clients information about the firm and its staking service and that firms will be required to provide the key terms of agreement relating to their staking service to retail clients and obtain the retail clients’ express prior consent in relation to those terms.
  • Approach for decentralised finance (DeFi): Proposals to apply the requirements in this CP and the wider cryptoasset regime to firms engaging in DeFi, where there is a clear controlling person(s) carrying on one or more of the new cryptoasset activities.

CP25/41 – admissions and disclosures, and market abuse regime, for cryptoassets

The FCA sets out that the Regulations will provide the foundation for a new regulatory regime for public offers of qualifying cryptoassets and their admission to trading on CATPs (the A&D regime) alongside a Market Abuse Regime for Cryptoassets (MARC), that both regimes will be introduced through the Designated Activities Regime (DAR) under Part 5A of the Financial Services and Markets Act 2000 and that the DAR framework enables the Government to ‘designate’ activities, and to give the FCA rule-making, supervisory and enforcement powers over these activities. The FCA further explains that the Regulations designate a range of activities including offering qualifying cryptoassets to the public, admitting qualifying cryptoassets to trading, prohibiting the use and disclosure of inside information and market manipulation regarding qualifying cryptoassets, and certain stablecoin-related activities.

In relation to this, the FCA highlights that its proposed rules and guidance, based on the designated activities set out in the Regulations, cover: the offering to the public of qualifying cryptoassets that are or will be admitted to trading on a CATP, the admission of qualifying cryptoassets to trading on CATPs, disclosure obligations relating to admissions to trading and the issuance of UK issued qualifying stablecoins,  and requirements to prevent, detect and disrupt market abuse in cryptoasset markets.

The FCA also makes clear that firms and individuals carrying on designated activities do not need to be authorised by the FCA unless they also carry out regulated activities, but that CATPs, intermediaries and other relevant market participants carrying out a designated activity will need to follow both the requirements of the Regulations and the FCA rules for that designated activity.

CP25/42 – a prudential regime for cryptoasset firms

The FCA sets out that in CP25/15 it introduced two new prudential sourcebooks – COREPRU and CRYPTOPRU and covered some aspects of the prudential regime for regulated cryptoasset firms, with a particular focus on stablecoin issuers and custodians of cryptoassets, but that this CP builds on those proposals and focuses on the remaining cryptoasset activities.

In this CP the FCA sets out its proposed prudential requirements for all cryptoasset firms that will need to be authorised and builds on proposals in its earlier CP25/15 to extend the scope of the proposals to the remaining cryptoasset activities, namely operating a CATP, staking, arranging deals, dealing as agent and dealing as principal in qualifying cryptoassets. It also contains additional proposals that were deferred from CP25/15 in relation to the overall prudential regime for cryptoasset firms.

In particular, this CP sets out proposals in relation to own funds requirements including permanent minimum requirements in relation to remaining activities and K-factor requirements in relation to remaining activities; overall risk assessment requirements; and requirements relating to the public disclosure of prudential information.

Next Steps

The FCA has asked for feedback on these proposals by 12 February 2026.

The FCA has also explained that final rules in relation to each of these consultations will be set out in policy statements in 2026, as per its Crypto Roadmap.

On 12 December 2025, the Financial Conduct Authority (FCA) published its final guidance on non‑financial misconduct (NFM) in financial services in Policy Statement PS25/23. In summary, the FCA is:

(i) amending its Code of Conduct (COCON) sourcebook to explain how NFM can be a breach of the conduct rules and make it easier for SMCR firms to interpret and consistently apply the rules; and

(ii) explaining how NFM forms part of the Fit and Proper test for Employees and Senior Personnel (FIT) sourcebook.

This new guidance will come into force on 1 September 2026.

Background

By way of background to PS25/23, in July 2025, in CP25/18, the FCA stated that it was expanding the scope of COCON in non-banks with effect from 1 September 2026 to more closely align the rules on NFM in banks and non-banks. At the same time, the FCA consulted on new guidance for banks and non-banks to assist in applying COCON and FIT in relation to NFM with responses due by 10 September 2025. The FCA stated that it would only publish the proposed guidance if there was clear support for it – recognising the increased costs of implementation and noting that guidance cannot cover every situation (for further detail on CP25/18, see our previous briefing here).

PS25/23 explains that feedback to the guidance consultation was extremely positive, with 95% of respondents requesting the FCA to make guidance in this area. The FCA is therefore publishing the guidance proposed in CP25/18 now, with minor amendments to reflect consultation feedback.

Changes from CP25/18

The amendments to the guidance to reflect consultation feedback include:

  • new examples and flow diagrams to help apply COCON consistently;
  • clearer alignment with employment law;
  • clarifying that managers’ accountability is relative to their knowledge and authority;
  • withdrawing or amending examples and factors that risked imposing disproportionate burdens; and
  • clarifying that firms are not expected to investigate trivial or implausible allegations or breach privacy law when assessing fitness and propriety.

The FCA emphasises that no guidance can cover every scenario and that firms will always need to exercise judgement.

Next steps

In terms of next steps, all firms affected by these changes should familiarise themselves with the new guidance at Appendix 1 of PS25/23.

The FCA states that this publication brings its policy work on NFM to a close. It will now focus on how firms are tackling it in practice.

The paper also confirms that the Prudential Regulation Authority is not taking forward any of the proposals in its 2023 consultation (CP18/23), including those on staff fitness and propriety. Instead, it will expect dual-regulated firms to consider the FCA’s guidance when assessing these.

On 11 December 2025, HM Treasury (HMT) and the Financial Conduct Authority (FCA) published updates intended to help consumers to get extra help with investments and pensions decisions, namely: HMT’s consultation response in relation to taking forward proposals related to targeted support to improve the availability and affordability of help with financial decision making, the FCA’s policy statement in relation to its proposals for targeted support (PS25/22), and the FCA’s consultation paper in relation to adapting its requirements for a changing pensions market (CP25/39).

HMT consultation response – targeted support

To enable the implementation of targeted support, HMT published a policy note setting out proposed changes to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 in July 2025.

HMT has now published its consultation response and sets out that responses were generally supportive of the proposed legislative changes to enable the implementation of targeted support and welcomed the introduction of targeted support.

HMT explains that the Government will now proceed to lay the draft statutory instrument (The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2026, as soon as Parliamentary time allows.

FCA PS25/22 – targeted support

The FCA consulted in June 2025 on detailed rules for a new regulated proposition for targeted support in pensions and retail investments.

The FCA has now published PS25/22 setting out near-final rules, with the aim of giving firms as long as possible to prepare for the new regime which is intended to allow firms to provide suggestions designed for groups of consumers with common characteristics to help them make important decisions across their pensions and investments. The framework covers the design, delivery and purpose of targeted support, with the aim of enabling consumers to receive high-quality, meaningful support in a range of circumstances.

The FCA also sets out that key changes it is making to the proposals include:

  • Amending the terminology of its purpose statement from ‘better outcomes’ to ‘better position’ to more clearly state the policy intent and avoid potential confusion with ‘good outcomes’.
  • Amending it rules and guidance on consumer segments, to require that firms do not use a level of detail that, broadly, a firm that provides investment advice would associate with a comprehensive consideration of a consumer’s characteristics or circumstances.
  • Evolving its position on targeted support and annuities, in particular allowing firms to direct consumers to whole of market annuity brokerages and not requiring a break between targeted support and annuity sales journeys.
  • Simplifying its rules and guidance on firms’ obligations for ongoing monitoring of the targeted support service, recognising the one‑off nature of targeted support.
  • Adding new disclosure requirements for firms to label the service as targeted support when delivering a ready‑made suggestion.
  • Amending its rules on charging, to remove the proposed requirement for firms to ensure that consumers understand the basis on which firms are remunerated for their provision of targeted support.
  • Amending its proposals on signposting to targeted support

The FCA explains that it is on track to enable firms to begin applying for permission to provide targeted support from March 2026, before the new rules come into effect, subject to legislation and expects the rules to take effect from 6 April 2026.

The FCA has also published two joint statements with: (1) the Financial Ombudsman Service, which clarifies how the FCA and the Financial Ombudsman Service will work together in the event of future complaints relating to targeted support and (2) the Information Commissioner’s Office, on how firms can communicate with consumers in the context of existing direct marketing rules.

FCA CP25/39 – changes to pensions requirements

The FCA is also consulting on rules to better support consumers using digital pension planning tools and consumers making non-advised decisions to transfer Defined Contribution (DC) pensions.

The FCA published a discussion paper in December 2024,  seeking feedback on whether and what further changes might be needed to certain aspects of the pensions regulatory framework. 

The FCA has explained that the proposals in CP25/39 are informed by the feedback it received and that it is proposing:

  • A new regime for interactive digital pension planning tools for in-force pensions.
  • A new process to support non-advised consumers to make informed decisions about whether and where to transfer or consolidate DC pensions. 

The FCA has asked for feedback on CP25/39 by 12 February 2026.

On 9 December 2025, the Financial Conduct Authority (FCA) published a consultation paper (CP25/37) setting out proposals designed to provide targeted clarifications of the FCA Handbook.

Background

The FCA sets out in CP25/37 that this consultation forms part of its Consumer Duty Requirements Review and that this follows its July 2024 call for input on its review of FCA requirements following the introduction of the Consumer Duty and is part of the workplan announced in it March 2025 feedback statement.

Proposals

The FCA explains that it is seeking to reduce administrative burdens on firms and to clarify its rules, and that CP25/37 sets out several individual proposals to support this aim, including:

  • Collective Investment Schemes Sourcebook (COLL) updates: Technical amendments to streamline in COLL 5, including clarifying rules about UK Undertakings for Collective Investment in Transferable Securities’ investment powers.
  • Clients Asset Sourcebook (CASS) amendments: Proposals to change record-keeping rules in CASS 6 and 7, including amending record keeping requirements for certain due diligence relationships, broadening the reconciliation rules, clarifying how the Consumer Duty applies where firms receive or hold client money or assets for retail clients, and adding flexibility in relation to the treatment of money held in client bank accounts relating to back interest earned.
  • Simplifying insurance and funeral plans rules: Proposals to remove certain product-specific rules, including the deletion of Product Oversight and Governance Sourcebook (PROD) 4.5 in relation to expectations for manufacturers and distributor in relation to value measures data and several payment protection insurance and packaged bank accounts-specific eligibility requirements, which the FCA considers are no longer required. The FCA are also proposing to remove certain requirements in relation to funeral plan product reviews.
  • Smaller firms’ guidance: The FCA are also seeking industry input on a proposal to create a smaller firms guide, in particular in relation to where firms have unmet needs for clearer FCA guidance.
  • Handbook references update: The FCA are also proposing to amend and update FCA Handbook references to Principles 6 and 7 to reflect the introduction of the Consumer Duty.

Next steps

The deadline for comments on CP25/37 is 27 January 2026.

On 3 December 2025, the Financial Conduct Authority (FCA) published Policy Statement 25/19: Improving the Complaints Reporting process (PS25/19).

In PS25/19 the FCA summarises the feedback it received to its earlier consultation (CP25/13) setting out proposals to improve the usefulness and comparability of the data it receives, while reducing unnecessary reporting burdens where appropriate. The FCA also sets out its final rules and guidance and sets out the next steps for implementation.

Key changes

The key changes include:

  • Consolidated complaints return: There will be a single, unified complaints return to replace five of the existing complaints returns (DISP 1 Annex 1, Consumer Credit Return (CCR), Funeral Plans (FP), Claims Management Companies (CMCs), and Electronic Money and Payment Services Return (PSR)). This will reduce duplication, improve consistency, and streamline reporting across the financial services sector.
  • Permission-based reporting: Complaints reporting will be based on firms’ permissions. A new targeted approach means firms will only need to complete the sections of the new return relevant to their regulated activities.
  • Simplified way to complete a nil return: The FCA are taking a proportionate approach and making it simpler for firms that have no complaints to report. The option to report nil complaints will be provided upfront at the start of the new return.
  • Removal of group reporting: Firms will now be required to submit complaints data at the individual legal entity level, increasing transparency and more accurate regulatory oversight.
  • Updated complaints taxonomy: Given the feedback the FCA received to CP25/13, the regulator has updated the complaints taxonomy originally shared in that consultation and in the prototype of the new return it provided alongside CP25/13. The FCA expects the revised taxonomy to improve how complaints are categorised and understood.
  • Identifying customers as vulnerable when firms report complaints: Firms must have regard to the FCA’s Vulnerability Guidance and the four drivers of vulnerability (health, life events, resilience and capability) when recording complaints data. Feedback to CP25/13, has led to the FCA requiring firms to report whether complainants are in vulnerable circumstances using the following two data points: (i) all complaints where the firm has identified the customer is in vulnerable circumstances, regardless of whether this was through customer disclosure or any other means, such as system inferred indicators; and (ii) all complaints where the complaint relates to or was caused by the firm’s failure to consider or respond to the customer’s characteristic(s) of vulnerability, regardless of how any such characteristics were identified.
  • Retain contextualised complaints data for Retail Banking, Insurance, Payment Services and Claims Management Companies (CMCs) firms only:  Firms in these sectors will continue to capture contextualised complaints data in a similar way to how they do now.
  • Fixed reporting periods: All firms will now report their complaints data on a fixed 6-monthly and calendar year basis. This replaces the use of each firm’s Accounting Reference Date. Firms currently reporting annually, namely, Funeral Plan providers, CMCs, Payment Service providers and some consumer credit firms, will now report twice a year.
  • Improved guidance for firms: The FCA will provide clearer and better guidance so firms can meet the new reporting requirements. This includes clearer definitions and clarifying key terms to promote consistency in how firms interpret and then report complaints.
  • Publishing individual firms data for firms reporting 500 or more complaints: The FCA is setting a threshold of 500 complaints or more above which it will publish the relevant firms’ data. So, generally, only the complaints data of larger firms will be published individually.

Next steps

The FCA states that those firms affected by the changes will need to make the appropriate internal process and system changes to meet the requirements.

Firms have 12 months to implement the changes following publication of PS25/19.

The FCA expects firms to work with it to deploy the new complaints return and make any necessary internal changes they need to in order to do so. The FCA will work with firms to enable the transition to the new complaints reporting process to be as smooth as possible.

The FCA will provide further communication about the new return and the user testing it will complete so that affected firms can adequately prepare for recording complaints from the first relevant reporting period under the new arrangements, namely 1 January to 30 June 2027. Further information is set out in Chapter 3 of PS25/19.

On 1 December 2025, the Financial Conduct Authority (FCA) published Consultation Paper 25/34 (CP25/34) on its proposed approach to Environmental, Social, Governance (ESG) ratings regulation.

Overview

Following publication of draft legislation by HM Treasury to bring ESG ratings within the FCA’s regulatory perimeter, the FCA have set out in CP25/34 its approach to developing the ESG ratings regime.

The FCA explained that as this will be a newly regulated sector it proposes to apply many existing baseline rules to rating providers that apply to most other FCA-regulated firms and introduce tailored rules where existing requirements are either not appropriate or not proportionate to address the risks of harm.

Summary of the regime

The FCA are proposing to apply the following baseline standards to ratings providers:

  • Threshold Conditions (COND): The FCA explained that rating providers should familiarise themselves with the Threshold Conditions (TCs) and the guidance in COND to fully understand how the TCs apply to them.
  • Principles for Businesses (PRIN): In broad terms, the Principles for Businesses will apply to rating providers, except for Principle 12 (Consumer Duty).
  • Systems and Controls (SYSC): The FCA proposes to apply SYSC rules to rating providers that focus on robust governance arrangements, staff competence and suitability for their roles, adequate compliance arrangements and controls for countering financial crime, managing risks, outsourcing and record keeping. The FCA do propose to make some modifications to the requirements in SYSC including that it is not proposing to apply SYSC 10 on conflicts of interest to ratings providers, but to have bespoke rules, and to apply certain outsourcing requirements as rules rather than guidance.
  • Senior Managers and Certification Regime (SM&CR):  The FCA is proposing to apply the existing SM&CR framework to rating providers and classifying them as ‘Core Firms’ and that branches of overseas rating providers will be subject to the third country branch application of the regime. The FCA also explains that it is consulting on applying this regime in its current form but that the applicable requirements will be updated to reflect any revised SM&CR requirements currently being considered.
  • General Provisions (GEN): The FCA is proposing to apply GEN, which includes rules covering the administrative duties of firms, to ratings providers.

The FCA also set out that it does not propose to introduce bespoke prudential requirements to ratings providers, but to rely on the relevant TCs and Principle 4 (Financial Prudence).

The FCA are also proposing to apply tailored rules to rating providers, in relation to the following areas:

  • Transparency: The FCA set out that it plans to introduce clear minimum disclosure requirements for product lines and individual ratings, with some of the rules requiring that disclosures be made public, while others must be made to ESG rating users and rated entities – with the option for ESG rating providers to make those public. The FCA also set out general expectations on how disclosures must be made.
  • Governance and Systems and Controls: The FCA is proposing rules aimed at ensuring that firms have robust processes and effective systems across the ESG ratings process, to support high-quality ESG ratings, and highlights that these tailored rules build on the baseline standards set out above. The rules relate, in particular, to quality control and methodology, data quality and accuracy, record keeping and personal transactions.
  • Conflicts of interest: The FCA is proposing a bespoke regime for rating providers in relation to conflicts of interest, in particular setting out expectations for rating providers to have policies and procedures in place to identify, prevent, manage and, where appropriate, disclose conflicts of interest.
  • Stakeholder engagement, complaints and dispute resolution: The FCA is consulting on introducing a set of tailored rules requiring rating providers to have appropriate engagement with stakeholders and an effective and transparent complaints-management approach, and also that firms will need to publish their approach to engagement and their complaints-handling procedure. The FCA do not propose extending the Financial Ombudsman Service’s compulsory and voluntary jurisdiction for complaints relating to ESG ratings nor provide Financial Services Compensation Scheme coverage.

The FCA are also consulting on new perimeter guidance (PERG in the FCA Handbook) to help firms understand the scope of the activity, which will cover what qualifies as an ESG rating and what constitutes the regulated activity of providing an ESG rating.

Next steps

The FCA has asked for feedback to CP25/34 by 31 March 2026 and aims to finalise and publish its final rules in a Policy Statement by Q4 2026.

The authorisation gateway will open in June 2027 and firms in scope of the regulation must be authorised to carry out ESG rating activity after 29 June 2028.

On 11 November 2025, the Financial Conduct Authority (FCA) published its findings following a multi-firm review focusing on risk assessment processes and controls in firms as part of its wider financial crime supervisory work.

Overview

The FCA set out examples of good and poor practice on how firms can assess, mitigate, and manage risk and made clear that this will be relevant for firms, money laundering reporting officers, senior managers and industry practitioners who are responsible for financial crime prevention, assessing risk and setting strategy.

The multi-firm review involved evaluating firms’ business-wide risk assessment (BWRA) and customer risk assessment (CRA) systems and controls against the Money Laundering Regulations 2017, Financial Crime Guide, Senior Management Arrangements Systems and Controls (SYSC), Joint Money Laundering Steering Group guidance and Financial Action Task Force guidance.

Key findings

The FCA gave examples of good and poor practice in a range of areas, including:

  • Identifying, understanding and assessing risk: The FCA found that while most firms had a BWRA many were not tailored to the specific business and some BWRAs oversimplified the risks firms were exposed to, failed to explain how each risk affected them, and often ignored specific money laundering sanctions, anti-bribery and corruption, proliferation financing and terrorist financing risks; some firms’ risk assessments were solely qualitative and were missing quantitative analysis; some BWRAs lacked clarity on how the firm identifies and assesses inherent risks; and, some firms were concluding their business as low risk or that controls were effective without evidence to support this.
  • Mitigating risk: The FCA also highlighted that in many firms financial crime risk was often considered in business strategy, growth and product development and some firms had a clear risk appetite that is closely linked to the BWRA; however, it also highlighted that the development of firms’ CRAs did not appear to be in line with business growth to ensure scalability, consistency and accuracy; some firms did not record BWRA actions or assign them owners; and, some firms rapidly expanded products, services and customers types without considering whether they still had appropriate controls.
  • Managing risk: The FCA set out that many firms recognised the importance of appropriate governance and oversight to ensure risk awareness and thorough risk assessments, and most firms had considered how they document and share their risk assessments, but that some firms did not document senior management discussion, challenge and approval of BWRAs; in some firms senior management understanding of financial crime risk mainly focused on fraud; there was limited or no testing and reviews of risk assessment processes when firms made enhancements, upgrades or automation; and, risk assessments were not sufficiently dynamic leading to outdated risk profiles adversely informing business strategy and decisions on control design.

Next steps

The FCA made clear that it expects firms to understand the risks they are exposed to and ensure they have robust financial crime systems and controls to manage and mitigate those risks.

The FCA also stated that it will continue to monitor firms through its supervisory work to drive improvements and reduce risk across the industry.

On 10 November 2025, the Financial Conduct Authority (FCA) issued a statement of its review into understanding and improving how credit builder products operate.

The FCA’s review focused on specific credit builder products that typically do not involve regulated credit which report consumers’ regular payments to credit reference agencies with the sole aim of helping consumers build their credit score or history.

The FCA mentions in its key findings that for most consumers there was little evidence of credit builder products significantly improving credit scores. In some cases firms reporting payments on these products to credit reference agencies potentially misrepresent a consumer’s financial circumstances. Where consumers are experiencing financial difficulty, the FCA found that these products are less likely to positively affect credit scores and may reduce the amount of income available for essential living expenses. And finally, the FCA found that the majority of credit builder products it looked at were unregulated credit, and firms often failed to clearly explain their limitations and risks.

The FCA will continue to work with firms offering these products and decide whether to take further action. The regulator has also engaged with credit reference agencies on new data reporting guidance to ensure only appropriate information is reported that accurately reflects repayment performance.