The regulatory pipeline for UK financial services firms is fuller than it has been for a decade. Brexit created a divergence opportunity, the FCA has pursued its own reform agenda at pace, and several EU regimes continue to affect UK firms with EU-facing activity or EU group entities. The firms that navigate this well are those that get into preparation early — not those that wait for final rules before acting.
Below are the incoming changes with the most material implications for the firms we work with. Where exact dates are not yet confirmed, we indicate the expected window based on FCA and HMT publications.
Act now
UK crypto FSMA authorisation
AIFMD 2 substance requirements
Watch & monitor
SMCR Phase 2 (legislative)
Incoming regimes in detail
Now open
FCA PASS pre-application meetings (from 11 May 2026)
Summer 2026
FCA final rules published (policy statements from CPs)
30 Sept – 28 Feb 2027
FCA Part 4A application window — apply within this window or lose the right to continue operating
25 Oct 2027
New regime live — unauthorised firms must cease regulated cryptoasset activities
The legislative framework is now confirmed. The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 were made by Parliament on 4 February 2026 and bring cryptoassets within the FSMA regulatory perimeter. From 25 October 2027, no firm may carry out regulated cryptoasset activities in the UK without FCA authorisation. This is not a proposed change — it is enacted law.
The application window — 30 September 2026 to 28 February 2027 — is the only route for existing firms to secure transitional protection. Firms with applications submitted within this window can continue operating after October 2027 while the FCA determines their application. Firms that miss the window, or that have not applied by 28 February 2027, will need to cease regulated cryptoasset activities on 25 October 2027 with no transitional cover. The queue will be long and the FCA's assessment standards high. Applications submitted close to the deadline, or that are incomplete, risk not being determined in time.
The regulated activities are now defined in statute and include: operating a cryptoasset trading platform, dealing in cryptoassets as principal or agent, arranging deals in cryptoassets, safeguarding cryptoassets (custody), issuing qualifying stablecoins, and arranging cryptoasset staking. Each requires specific FCA permissions and fit and proper SMF holders. The FCA has consulted extensively across CP25/14 (stablecoins and custody), CP25/15 and CP25/42 (prudential), CP25/40 (trading platforms and intermediaries), CP25/41 (admissions, disclosures and market abuse), and CP26/13 (perimeter guidance, closes 3 June 2026). Final rules — the policy statements — have not yet been published but are expected before the application window opens in September.
Book a PASS meeting now: The FCA's Pre-Application Support Service (PASS) has been open since 11 May 2026. These free pre-application meetings let firms test their approach with the FCA before submitting. Slots will fill; request one without delay.
Perimeter mapping (CP26/13): Map all current and planned activities against the new regulated cryptoasset activities in the FSMA (Cryptoassets) Regulations 2026. Some activities that do not currently require authorisation will do so under the new regime. The FCA's perimeter guidance consultation (CP26/13, closes 3 June 2026) provides the most detailed current picture of the FCA's scope expectations.
Build the authorisation file now: A complete FCA Part 4A application requires a Regulatory Business Plan, a systems and controls framework, financial projections, the Regulatory Business Plan, SMCR mapping (SMF candidates for SMF 16 and SMF 17), wind-down analysis and MiFIDPRU modelling. None of this can be assembled in weeks. Start immediately.
AML/KYC material uplift: MLR-registered firms built their AML frameworks to meet MLR registration standards. FCA FSMA authorisation standards are materially higher — full AML risk assessment, KYC procedures, transaction monitoring, and sanctions screening that meet ongoing FCA supervisory expectations, not just the registration threshold.
Monitor summer 2026 policy statements: The FCA is expected to publish final rules on prudential requirements, conduct, market abuse and admissions before the September application window. These will define the complete obligations framework that your application must demonstrate readiness for. Watch for PS publications from summer 2026.
MLR registration still relevant: New entrants wanting to begin operating before the FSMA regime starts may still apply for MLR registration. From 30 September 2026, the FCA will accept FSMA application information as relevant to MLR registration — and firms will pay a single (higher) fee covering both.
EU implementation: April 2026
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UK equivalent under review. UK firms with EU AIFM delegation chains affected now.
AIFMD 2 introduces enhanced requirements around delegation arrangements, liquidity management tools (LMTs) and loan origination funds. For UK managers that delegate portfolio management from an EU AIFM, or that act as sub-adviser to an EU-authorised fund, the substance and oversight requirements are becoming significantly more demanding. The EU AIFM must be able to demonstrate it is genuinely managing the fund — not merely a letterbox entity.
Delegation chain review: Assess whether your current delegation arrangements meet the AIFMD 2 substance test. The EU AIFM must retain portfolio management expertise and oversight capability.
LMT policies: EU AIFMs must now have liquidity management tool policies for all open-ended funds — redemption gates, swing pricing, side pockets. Review and update fund documentation.
NPPR implications: UK managers marketing to EU investors via NPPR should assess how AIFMD 2 changes affect their host AIFM's obligations and the sustainability of the delegation model.
Expected: 2027
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FCA consultation CP24/2 published 2024. Final rules expected in 2026, implementation in 2027.
The FCA's review of UK MiFIR is the most significant overhaul of transaction reporting since MiFID II. Key changes include: revised reportable fields, changes to the instrument reference data regime, consolidated tape (a single source of post-trade transparency data), and potential changes to the systematic internaliser regime. For firms with established transaction reporting infrastructure, this will require a material rebuild — not a patch.
Infrastructure assessment: Map your current transaction reporting architecture. Understand which components are vendor-supplied (ARM) and which are in-house. Plan your change programme before the final rules are published.
Consolidated tape: Assess the impact on your best execution monitoring and reporting. The consolidated tape will change what data is available and how EBBO is calculated.
UK target: late 2027
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Accelerated Settlement Taskforce report published 2024. HMT and FCA committed to T+1 for UK equities.
The UK is moving to T+1 settlement for equities in line with the US (which moved in May 2024) and ahead of Europe (which is targeting 2028). For trading firms, this compresses the operational window for trade matching, affirmation and settlement instruction — particularly for cross-border trades where T+1 in the UK but T+2 in Europe creates a mismatch.
Operational review: Map your trade lifecycle from execution to settlement instruction. Identify where the current T+2 window is being consumed and what needs to accelerate.
Prime broker alignment: Discuss T+1 readiness with your prime broker(s). Settlement fails risk management and stock borrowing arrangements will need to adapt.
Cross-border trades: For strategies trading both UK and EU equities, develop a clear approach to the T+1/T+2 mismatch during the transition period.
FCA consultation expected: 2026
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UK is developing its own operational resilience framework. PS21/3 already applies. DORA-equivalent consultation expected.
The FCA's existing operational resilience framework (PS21/3, effective since March 2022) already requires firms to identify important business services, set impact tolerances, and demonstrate they can remain within those tolerances. A UK DORA-equivalent consultation is expected to go further — particularly on third-party ICT risk management and incident reporting. Firms that have done the minimum under PS21/3 will face a meaningful step-up.
Important business services mapping: Ensure your IBS mapping is current, tested and documented. Self-assessments must demonstrate you can stay within impact tolerances under a range of stress scenarios.
Third-party ICT risk register: Build this now — it will be required under any DORA-equivalent. For trading firms, this includes cloud providers, trading infrastructure, market data, and ARM/reporting vendors.
24 April 2026 — Live
Most Phase 1 changes in force: 12-week SMF rule, CRC extensions, SoR/MRM batching, regulatory references
10 July 2026 — Live
Reporting/process changes: SMF18 PR flexibility, enhanced SMCR threshold uplift, updated FCA forms
1 Sept 2026 · Late 2026+
Non-financial misconduct changes live. Phase 2 consultation (legislative) expected later in 2026
Phase 1 of the SMCR reform is now confirmed and partially in force. The FCA and PRA published PS26/6 and PS12/26 on 22 April 2026, implementing the first wave of reforms following the July 2025 consultations. The direction is simplification and proportionality — but the core architecture of individual accountability remains intact. The material question for most firms is not whether the regime is changing, but whether they have updated their procedures to reflect what has already changed.
12-week rule — already changed: Firms now have 12 weeks to submit an SMF application for a replacement (not to obtain approval). Update your succession and cover arrangements accordingly. Leavers no longer create an immediate gap emergency.
Criminal records checks — already changed: CRC validity extended from 3 to 6 months. CRCs no longer required for existing SMF holders moving within the same firm or group. Note: FCA forms will not be updated until 10 July 2026 — complete existing forms on the basis of the new rules in the meantime.
SoR and MRM batching — already available: Statements of Responsibilities and Management Responsibilities Map changes can now be submitted on a batched basis of up to every 6 months (only the latest version required). Internal records must still be kept current — the batching option affects FCA submission cadence, not internal governance.
From 10 July: SMF18 holders at solo-regulated firms may hold any prescribed responsibility. Enhanced SMCR thresholds are being raised in line with inflation — check whether your firm's classification is affected.
From 1 September: Non-financial misconduct changes (aligned with PS25/23) take effect. Conduct Rule breach reporting for individuals performing SMF functions (but not yet FCA-approved) must be reported as soon as reasonably practicable, not on an annual aggregated basis. Review and update your breach escalation and reporting procedures.
Phase 2 — watch: The FCA has said it expects to consult on Phase 2 later in 2026. HMT has confirmed it intends to introduce primary legislation as soon as parliamentary time allows. The most significant Phase 2 proposal is removal of the Certification Regime from FSMA — a bold structural change that would fundamentally alter SMCR's architecture. This is not yet law, but firms should avoid embedding Certification-heavy processes that would need complete redesign if it passes.
Preparing for what's coming
before the deadline arrives
Reg Advisers helps firms build compliance infrastructure that anticipates regulatory change — not just responds to it. A 30-minute call with James Lane will give you a clear sense of which incoming changes are most material for your firm.
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