• Consumer Duty: On 30 September 2025, the FCA responded to the request from the Chancellor in her July, Mansion House speech to report back on the application of Consumer Duty to wholesale firms. The FCA acknowledged concerns raised by firms on the application of the Consumer Duty to wholesale services and confirmed it plans to amend the rules to remove disproportionate burdens from wholesale firms. Detail of rule changes have not been provided but instead the FCA set out a four point action plan including steps the Treasury may wish to consider. Under the action plan the FCA committed to:
  • provide more clarity on its supervisory approach and expectations under the Consumer Duty when firms work together to manufacture products for retail customers;
  • consult on a plan to update the client categorisation framework. This is to allow firms to take clients outside the scope of the Consumer Duty where they have the knowledge, experience, sophistication or resources that mean they do not need retail protections;
  • consult on changes to rules on the application and requirements of the Consumer Duty including through distribution chains; and
  • propose to remove businesses with non-UK customers from the scope of the Consumer Duty.

The FCA also published two new Consumer Duty webpages. These set out both Consumer Duty priority focus areas for the FCA and an update on how the FCA is seeking to streamline requirements.  

The FCA has planned four cross-cutting projects in 2025/2026:  

1.  review of products and services outcome;
2. review of firms’ approaches to outcomes monitoring;
3. review of firms’ customer journey design; and 
4. review of the consumer understanding outcome. 

The FCA has also outlined sector specific priorities in respect of consumer investments which will include work focusing on:

tackling poor identification of clients with characteristics of vulnerability by wealth managers; expectations for wealth and advice firms when assessing fair value and risks to providing unsuitable advice. The FCA will also publish its findings in early 2026 on complex exchange traded products following its review of trading apps. Following the FCA’s announcement earlier this year that it would review model portfolio services (MPS) firms’ compliance with the Consumer Duty, the FCA confirmed that it expected to start work in Q4 2025 and to publish findings in summer 2026. See our earlier article on MPS for further detail regarding the review. 

Mansion House commitment on the Consumer Duty’s application to wholesale firms

• Targeted support: On 26 September 2025, the FCA published a consultation on consequential changes to the FCA Handbook to clarify how its proposals for targeted support (set out in CP25/26) work with existing requirements. The FCA’s proposed changes include (amongst others) clarifications on: the application of rules on charging and remuneration; and the interaction of the inducement rules such as amending the non-MiFID inducement rule so that the disclosure requirement applies when providing targeted support. The FCA also proposes a rule that issuers and product providers cannot offer or pay commissions in relation to targeted support. See our article on this topic.

CP25/26: Consequential Handbook changes following the proposals in CP25/17

• Regulatory perspectives and priorities for 2025: On 25 September 2025, Lucy Castledine gave a speech at the Personal Investment Management & Financial Advice Association Compliance Conference 2025. The speech focused on four priorities:

1. supporting growth by enabling investment. The speech emphasised the importance of collaboration with the FCA and requested firms to engage with the FCA on its proposals;
2. being a smarter regulator: predictable, purposeful and proportionate. The speech in particular discussed the FCA’s work in data decommissioning and its ambition to go further;
3. supporting customers to make informed decisions. The FCA confirmed that the targeted support pre-application support service has now opened (a month ahead of schedule), to allow firms to express a formal intention to apply to provide the service. This will allow the FCA to assess firms ahead of a formal application next year; and 
4. fighting crime by focusing on those who seek to use the fact that they are regulated to do harm. Ms Castledine discussed the FCA’s role in relation to online safety and finfluencers. 

Regulatory perspective and priorities for 2025 | FCA   

• MiFID Org repeal: As part of the Government’s commitment to reform the UK’s MiFID framework and streamline requirements by moving MiFID firm facing requirements into the FCA Handbook on 15 September 2025, a draft statutory instrument was published to retain the key definitions in the MiFID Org Regulation within domestic financial services legislation. The statutory instrument will come into force following coordination between Treasury and the FCA and the PRA in order to implement their rules replacing the firm-facing provisions from the MiFID Org Regulation at the same time. 

The Markets in Financial Instruments (Miscellaneous Amendments) Regulations 2025

Explanatory Memorandum

• Kate Collyer, FCA chief economist, speech on rebalancing risk to facilitate innovation and growth. On 15 September 2025, Kate Collyer gave a speech at Warwick Business School. The speech reiterated the FCA’s shifting approach to risk as well as highlighting the FCA’s reforms to promote growth including in relation to consumer investments.

Rebalancing risk to facilitate innovation and growth | FCA

• FCA approach to AI: On 9 September 2025, the FCA published a new webpage detailing their approach to AI. The FCA is continuing in its approach to rely on existing frameworks rather than implement specific regulations targeted at AI.

AI and the FCA: our approach | FCA

• Market Watch 83 and 84: On 8 September 2025, the FCA published Market Watch 83. The FCA shared its findings following its review of corporate finance firms that provide advisory and corporate broking services to small and mid-cap companies. The review focused on firms’ systems and controls for handling inside information about their corporate clients. The FCA set out its expectations for firms with respect to market soundings and personal account dealing and for smaller firms, their control environment.

On 30 September 2025, the FCA published Market Watch 84. This included the FCA’s observations on UK EMIR Refit implementation, change and vendor management as well as UK EMIR errors and omissions notifications. Although this edition focused on UK EMIR Refit, it will be relevant for firms subject to UK SFTR and UK MiFID transaction reporting requirements and more generally to other firms that are undertaking regulatory change projects.

Market Watch 83 | FCA

• Money Laundering Regulations (MLR): On 2 September 2025, HM Treasury published a draft statutory instrument (SI) and policy note on amendments to the MLRs following its March 2024 consultation paper. Relevant changes to the existing regime relate to enhanced due diligence requirements on complex transactions and high-risk third countries. The SI is expected to be laid before Parliament and take effect in early 2026.

Policy Note - MLRs draft statutory instrument technical consultation

• Treasury response to House of Lords report on the FCA’s and PRA’s secondary international competitiveness and growth objectives (the SICGO Report): On 2 September 2025, HM Treasury published its response to the SICGO Report addressing each of the recommendations made by the House of Lords. This included (amongst others) plans to address concerns about the application of the Consumer Duty for firms primarily engaged in wholesale activity as well as promising to provide an update on progress on the Government’s commitment to cut administrative costs to businesses by 25% by the end of Parliament. 

Growing Pains: clarity and culture change required

• Investment Firms Prudential Regime (IFPR) newsletter: On 1 September 2025, the FCA published its latest IFPR newsletter applicable to MIFIDPRU firms. This covered: 
  • Notifications of changes to an investment firm group: The FCA reminded MIFIDPRU firms that they must inform the FCA as soon as they become aware of the creation of an investment firm group or a change to their existing investment firm group. In the event of a change in control firms are still required to submit the MIFIDPRU 2 Annex 8R form once any acquisitions have been completed.
  • LLP CET1: The FCA set out issues that MIFID firms should consider for determining whether LLP profits qualify as CET1 capital. 
  • Calculation of K-factors: The FCA clarifies how firms should calculate certain K-factor requirements, using the assets under management (K-AUM) K-factor as a practical example.
  • ICARA and MIF007 reporting: The FCA reminds firms that the time period between completion of the ICARA and its approval by the governing body must be ‘reasonable’. It also highlights errors made by firms in the reporting of the Own Funds Threshold Requirement and the Liquid Assets Threshold Requirement.

IFPR Newsletter