• Information request to the Adviser & Intermediaries sector: The FCA’s May regulation round up reported that the FCA will shortly be sending out an information request to firms in the Adviser & Intermediaries sector as part of its aim to minimise the regulatory reporting burden on firms.

Regulation round-up - May 2025

• Regulatory requirements, directions and limitations: On 29 May 2025, the FCA confirmed that it is reviewing and updating the requirements, directions and limitations applied to over 9,000 firms. The FCA stated that where “immaterial updates” are required, it will make these automatically. Where “substantive changes” are required, the FCA will contact firms to determine an efficient way of making the change. The changes will take place over the next few months and amendments may result in changes to firm information displayed on the FS Register. 

FCA updates to requirements, limitations and directions | FCA

• Cryptoasset regulation: Following the Treasury’s issue of draft legislation for regulating cryptoassets in April 2025, the FCA published an accompanying FCA discussion paper on 2 May. On 28 May 2025, the FCA published two further consultations: (i) on proposed rules and guidance for the activities of issuing a qualifying stablecoin and safeguarding qualifying cryptoassets; and (ii) on the prudential requirements for qualifying stablecoin issuers and cryptoasset custodians.

DP25/1: Regulating cryptoasset activities | FCA

CP25/14: Stablecoin issuance and cryptoasset custody

CP25/15: A prudential regime for cryptoasset firms 

• Complaints reporting: On 22 May 2025, the FCA published a consultation paper consulting on proposals to improve the way regulated firms report customer complaints to the FCA and the changes to the associated complaints reporting rules. Key proposals include consolidating five existing returns into a single return and revisions to the complaint categories. Responses should be submitted by 24 July 2025. 

CP25/13: Improving the complaints reporting process

• Growth strategy and the rebalancing of risk: On 20 May 2025, the FCA’s director of market oversight, Dominic Holland, delivered a speech at the Association of Corporate Treasurers Annual Conference 2025 entitled “rebalancing risk to fuel growth”. Mr Holland discussed the FCA’s commitment to rebalancing risk across the industry and the need for a balance to be struck to allow for decreasing the regulatory burden but not at the expense of consumer protection. The speech mentioned in particular:  
  • the need for collaboration between firms and the FCA so that the FCA may help with capital raising and growing business and the economy; 
  • reducing the regulatory reporting burden;
  • fuelling growth through reform of the primary market;
  • digitisation and the FCA’s desire to hear from firms on AI, regulation of crypto and fund tokenisation; and
  • the move to T+1 settlement. 

Rebalancing risk to fuel growth | FCA

• Final rules on investment research for UCITS, AIFMs and Small AIFMs / CIS operators: On 9 May 2025, the FCA published its final rules on the payment of research by fund managers. The new rules allow fund managers to pay for investment research using a joint payment option for research and execution services. The finalised rules are generally in accordance with those set out in the consultation paper published in November 2024, except for the inclusion of adjustments to the guardrail requirements. In particular, the FCA has allowed more flexibility by adjusting the guardrail of research budgets so that it can be applied either at the fund level or aggregated across a fund range that is appropriate to firms’ investment processes for managing the investments of the fund(s). 

PS25/4: Investment research payment optionality for fund managers | FCA

• Review of business models: On 8 May 2025, the FCA published its findings from a review of business models for smaller asset managers and alternative investment fund managers (with less than £1 billion AuM). The FCA set out examples of good practice focusing on: high-risk investments, investor journey controls and investor classifications; conflicts of interest; and the application of the Consumer Duty to relevant business models. 

Smaller asset managers and alternatives business model review: our findings | FCA

• Consumer Duty – International payment pricing transparency: On 1 May 2025, the FCA published details of good and poor practice regarding how firms, whose services involve currency conversion, communicate the costs of international payments. 

Consumer Duty: International payment pricing transparency – good and poor practice | FCA