The GRC Navigator

Published on 8 December 2025, PS25/20 finalises the FCA’s approach to Consumer Composite Investments (CCIs) and replaces the legacy EU KID/KIID disclosure regime with a new UK-specific PRIIPS framework for retail investment products. The regime takes effect on 6 April 2026.

• What changed: PS25/20 replaces the EU’s Key Information Document (KID) regime and Key Investor Information Document (KIID) regime with a new UK framework designed to improve disclosure clarity and comparability for retail investors. The framework applies to packaged retail investment products (PRIIPs) and UCITS products distributed to retail customers in the UK.
• Key information document (KID): A new standardised template that must be provided to retail customers before purchase. The KID is designed to be comprehensible to non-expert investors and covers product objectives, charges, risks, and past performance.
• Implementation date: 6 April 2026. Firms must transition from the EU KID/KIID templates to the new UK KID template by this date. Existing products must be updated; new products distributed from 6 April onwards must comply with the new regime immediately.
• Sectors affected: Asset managers, AFMs, UCITS managers, and wealth platforms distributing retail investment products must update their disclosure documentation, review charges calculations, and update investment product labelling systems.

Published on 3 November 2025 with an effective date of 1 December 2025, PS25/17 removes the Systematic Internaliser (SI) regime for bonds, derivatives, structured products, and emission allowances. The rules also end the matched principal trading (MPT) prohibition on multilateral trading facilities (MTFs). This is a competitiveness reform that reshapes post-trade behaviour in wholesale markets.

• SI regime removal: Dealers can no longer use the SI classification to avoid transparent pre-trade pricing requirements for bonds and derivatives. Firms moving away from SI status must transition to either authorised OTC trading or MTF trading. The practical effect is increased pre-trade transparency in fixed income and derivatives markets.
• MPT prohibition removal: MTFs can now engage in matched principal trading (where the MTF matches buyer and seller but does not take principal risk). This was previously prohibited on MTFs but allowed for OTC trading. The removal of the ban on MTF MPT increases the types of trading models available on multilateral venues.
• Effective date: 1 December 2025. Implementation is immediate. Firms affected by the SI removal must have transitioned their business models and trading infrastructure by this date.

Published on 21 November 2025, CP25/32 proposes comprehensive reforms to the UK MiFIR transaction reporting regime, including changes to reporting timelines, order reporting requirements, and trading venue obligations. The consultation seeks to modernise reporting infrastructure while maintaining regulatory oversight of market activity.

• Scope: The consultation covers transaction reporting timelines (moving from close of business same day to within 30 minutes of execution), order reporting changes for non-equity instruments, and revised definitions of certain transaction types.
• Implementation impact: Firms with transaction reporting infrastructure must assess whether their systems can meet more stringent reporting timelines. For large asset managers with significant trading operations, systems upgrades may be required.
• Closing date: CP25/32 is a summer 2026 consultation, meaning responses will be due in Q2/Q3 2026 with final rules expected in late 2026 or early 2027.

Published on 3 December 2025, PS25/25 updates the PRA’s supervisory statement on climate risk management, replacing SS3/19 with SS5/25. The updated guidance enhances expectations for how banks and insurers identify, assess, manage, and report climate-related risks across their operations.

• Key updates: Enhanced expectations for scenario analysis and stress testing, integration of climate risk into capital and liquidity planning, improved governance frameworks for climate risk oversight, and expanded reporting requirements for climate-related financial information.
• Scope: Applies to all PRA-regulated institutions (banks, building societies, and insurers). Asset managers are not directly in scope, but the climate risk expectations will cascade through investment management terms for PRA-regulated asset owner clients.
• Implementation: Firms should begin integrating the new expectations into their climate risk governance frameworks immediately. The PRA will incorporate the new expectations into its supervision in 2026.

Published on 17 November 2025, PS22/25 revises the leverage ratio framework for banks, raising the retail deposits threshold for the leverage ratio requirement from £50 billion to £75 billion with a three-year averaging period. The change is intended to reduce burden on smaller banks with significant retail deposit bases.

• Impact: Banks with retail deposits below £75 billion will have reduced leverage ratio compliance burden. The three-year averaging mechanism provides flexibility in meeting the new threshold.
• Implementation: Changes take effect in January 2026 and are retrospectively calculated using three-year averages commencing from January 2023.

On 8 December 2025, the British Business Bank announced a £100 million commitment to SV Health Investors SV8, a venture capital fund focused on scaling early-stage biotech and life sciences companies in the UK and Europe. The commitment underscores the government’s continued focus on life sciences as a growth sector and validates the venture capital model for early-stage healthcare innovation.

• Sector focus: SV8 targets early-stage biotech companies seeking Series A and Series B funding, with emphasis on companies developing therapeutics, medical devices, and diagnostics.
• Significance for LPs: The British Business Bank’s participation signals the continued attractiveness of UK-based life sciences investment as part of the government’s broader innovation strategy.

According to Hedge Fund Intelligence data published in Q4 2025, hedge fund launches accelerated significantly in Q3 2025, with 165 new funds launched in that quarter alone. Year-to-date 2025, the industry has seen 427 hedge fund launches, approaching record pace. The aggregate global hedge fund AUM reached $4.98 trillion as of end-Q3 2025.

• Strategy distribution: Relative Value Arbitrage strategies led with 70 launches, followed by Equity Hedge (47 launches) and Macro (41 launches). Event-driven and tactical allocation strategies also saw significant launch activity.
• Market context: The acceleration reflects investor appetite for alternative strategies in a period of geopolitical tension and macro uncertainty. The Iran conflict and oil price volatility have driven particular interest in macro and commodity-focused strategies.

The UK Investment Association published fund flow data for November 2025 showing total inflows of £530 million, representing a six-month high. Inflows were driven by fixed income funds (£280 million) and money market funds (£150 million), reflecting investor rotation towards yield-bearing assets amid uncertainty about the forward rate path.

• Asset class rotation: Equity fund outflows of £80 million offset the fixed income and money market gains, consistent with broader rotation trends observed in global markets during November and December.
• Fund manager implications: The November inflow data suggests investor appetite for funds offering current yield and capital stability. Managers with significant allocations in equity-heavy strategies should consider whether their positioning aligns with the flow momentum evident in fund distribution channels.

The Bank of England’s Monetary Policy Committee held interest rates at 4% in November 2025 on a 5-4 vote, and cut rates to 3.75% in December 2025 on a 5-4 vote. The December cut signals continued monetary easing as the MPC judges that disinflationary pressures justify rate reductions despite inflation remaining above target.

• November decision: The MPC voted 5-4 to hold rates at 4% in November, with four members voting for a 25 basis point cut. The decision reflected lingering inflation concerns and uncertainty about the disinflationary trajectory.
• December cut: The MPC voted 5-4 to cut rates to 3.75% in December, moving towards the three members’ preference for more aggressive easing. The vote breakdown signals ongoing debate about the pace of rate cuts, with the Committee split between more dovish members favoring faster easing and hawkish members preferring to hold longer.
• Signals: The December cut signals the MPC’s confidence that the disinflationary trend is established, allowing for rate reductions despite above-target inflation. Subsequent rate decisions will depend on inflation data, employment trends, and the transmission of monetary policy to the real economy.

Published in July 2025 (noted here as context for the regulatory environment of the November-December period), HM Treasury’s Financial Services Growth and Competitiveness Strategy, informally known as the “Leeds Reforms,” sets out a roadmap to make the UK a top global destination for financial services by 2035. The strategy is actively shaping FCA regulatory policy, with the FCA now instructed to apply growth and competitiveness objectives to its rulemaking alongside consumer protection and systemic stability.

• FCA secondary objectives: The FCA’s new secondary growth and competitiveness objective is now a live lens for FCA policy development. Consultations published after the strategy acknowledge the growth objective in their cost-benefit analysis and policy rationale.
• Implications: Regulations with a demonstrable growth cost may face reframing as competitive reforms rather than protective mandates. This is evident in several 2025 publications, including PS25/17 on SI regime removal and securitisation reforms.