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The FCA has used the first fortnight of March to lay the foundations of a new supervisory communication framework. Between 4 and 12 March, the regulator published four sector-specific Regulatory Priorities reports covering consumer investments, pensions, retail banking, and mortgages, replacing the portfolio letter model that served since 2020. For fund managers and authorised corporate directors, the consumer investments report published on 4 March is the critical document: it signals that MPS firm reviews, Consumer Duty assessments, and AI sandbox testing sit at the top of the supervisory agenda for 2026. Simultaneously, the FCA fined John Wood Group PLC £12,993,700 on 4 March for publishing misleading financial statements across three reporting periods, concluding its investigation in just nine months and reinforcing a clear message that enforcement pace is accelerating.
On the prudential side, the PRA published PS6/26 on recognised exchanges policy on 5 March, while the joint FCA-PRA operational resilience framework moved closer to finalisation with PS26/2 and PS7/26 published on 18 March. Apollo announced the launch of its CG Global Diversified Credit LTAF on 10 March, the first such fund targeting UK DC pension schemes. The Iran conflict has pushed oil prices towards $110–$113 per barrel, forcing the Bank of England to hold rates at 3.75% on 19–20 March. For boards and compliance teams, the consultation deadlines alone – from CP26/8 closing on 13 April to CP26/6 on securitisation closing on 18 May – require coordinated response strategies across multiple functions.
The FCA Rewrites Supervisory Communication: Regulatory Priorities Reports Replace Portfolio Lettersdummyanimatedrotating
Between 4 and 12 March 2026, the FCA published four of a planned nine sector-specific Regulatory Priorities reports, covering consumer investments (4 March), pensions (10 March), retail banking (12 March), and mortgages (12 March). Reports for consumer finance, wholesale markets, and payments are expected by month-end. These reports replace the Dear CEO and portfolio letter model that characterised FCA communications since the pandemic era, and they represent a structural shift in how the regulator signals supervisory intent.
- Consumer investments (4 March): Sets four priorities: building a stronger investment culture, strengthening trust, securing good customer outcomes, and strengthening financial crime controls. Specific actions include MPS firm reviews, Consumer Duty assessments, AI sandbox testing through the AI Live evaluation programme, and Long-Term Asset Fund (LTAF) implementation support.
- Pensions (10 March): Focuses on ensuring pension scheme members receive good outcomes from workplace pensions. The FCA will prioritise value-for-money assessments and suitability of advice pathways, particularly as DC pension schemes gain access to new asset classes through LTAFs.
- Retail banking and mortgages (12 March): The retail banking report signals Q4 cash access regime review output in Q2 2027, SMCR review with HMT and PRA in H1 2026, and a crypto roadmap. The mortgages report indicates H1 consultations on the Mortgage Rule Review.
- Forward programme: An SM&CR review is planned for H1 2026, alongside Consumer Duty supervisory consultation mid-2026, and continued expansion of the Overseas Funds Regime and cryptoasset regulatory framework.
The shift from portfolio letters to annual Regulatory Priorities reports is not merely presentational. Portfolio letters were backward-looking compliance checklists. These reports are forward-looking supervisory playbooks, complete with timelines and specific review commitments. For CCOs planning their 2026 compliance monitoring programmes, each report should be mapped against the firm’s business activities within 30 days of publication. The consumer investments report alone contains at least six distinct supervisory workstreams that could generate information requests or thematic reviews before year-end.
Fund boards should treat these reports as the primary reference point for anticipating supervisory engagement. The old question was: have we responded to the portfolio letter? The new question is: have we aligned our governance framework to the priorities the FCA has told us it will examine this year? The second question is harder to answer, and that is precisely the point.
Regulatory Updates
FCA Publishes Quarterly Consultation Paper No. 51 (CP26/8)dummyanimatedrotating
Published on 6 March 2026, CP26/8 proposes miscellaneous Handbook amendments across multiple chapters. While quarterly consultations are often dismissed as housekeeping, this edition contains amendments with direct operational relevance for fund managers and investment firms.
- CASS and cryptoassets: Consequential amendments to CASS 1, 7, and 8 to align client assets rules with the new designated investment business definition covering cryptoasset activities. As the FCA builds the crypto regulatory framework, the extension of CASS protections to digital asset custody is a structural development, not a footnote.
- UK EMIR clearing threshold: Proposes raising the commodity derivatives clearing threshold to €5 billion, reflecting higher commodity prices. Firms with commodity derivative exposures near the current threshold should model the impact.
- UK CRR own funds: Adjusts the prohibition on non-cash distributions for FCA investment firms to match Article 73 of UK CRR, correcting an unintended exclusion of existing capital instruments introduced by PS25/14.
- Consultation deadlines: Chapters 2 to 4 and 6 to 9 close on 13 April 2026. Chapter 5 (MAR transparency) closes on 20 April 2026. Chapter 10 closed on 23 March 2026.
The CASS amendments for cryptoassets deserve close attention. The FCA is not waiting for the full crypto regime to embed before extending custody protections. CCOs at firms considering cryptoasset services should be stress-testing their CASS arrangements against these proposed changes now, not after the rules are finalised.
FCA Launches Listing Rules Review for Investment Entitiesdummyanimatedrotating
On 3 March 2026, the FCA announced a review of certain aspects of the UK Listing Rules as they apply to investment entities. Following the Primary Markets Effectiveness Review, stakeholders have argued that the eligibility criteria, particularly around risk-spreading requirements, may be unduly restrictive for certain investment vehicles. The FCA will also assess how the rules, in the context of company law, ensure boards support strong shareholder rights and manage conflicts of interest.
- Scope: The review will examine eligibility criteria for listed investment entities, with a focus on risk-spreading requirements that stakeholders consider disproportionate for certain closed-ended fund structures.
- Governance focus: A parallel workstream will assess how listing rules interact with company law to support shareholder engagement and conflict management at board level.
- Timeline: The FCA plans to set out proposals in a consultation paper and complete the work by end of 2026.
For investment trust boards and fund managers sponsoring listed vehicles, this review is overdue. The post-reform listing regime has inadvertently created barriers for certain investment entity structures that were well-served under the previous framework. NEDs on investment trust boards should be briefing their sponsors and advisers now on the specific restrictions they want the FCA to address, ahead of the consultation paper.
FCA Signals Motor Finance Compensation Scheme Design with Implementation Perioddummyanimatedrotating
On 4 March 2026, the FCA set out its emerging approach to the motor finance compensation scheme, having reviewed over 1,000 consultation responses. If the scheme proceeds, final rules are expected in late March 2026. The FCA signalled a likely 3-month implementation period, extending to 5 months for older agreements, alongside streamlining measures designed to accelerate consumer redress while reducing operational burden on firms.
- Scale: The scheme is designed to ensure millions of consumers receive compensation in 2026, making it one of the largest retail redress exercises in FCA history.
- Streamlining: Consumers who complained before the scheme starts will no longer be asked to opt out. Firms will not be required to use recorded delivery. Consumers can accept offers immediately rather than waiting for final determinations.
- CMC enforcement: The FCA has removed or amended over 800 misleading advertisements from claims management companies since January 2024 and intervened with 5 CMCs.
The motor finance scheme is not directly an asset management story, but it establishes a template for mass redress that the FCA could apply to investment products. The operational design choices here, particularly the use of implementation periods and streamlined acceptance processes, will inform how the regulator approaches any future large-scale redress exercise in the investment space. Compliance teams should study this model.
FCA Publishes Consumer Understanding Review: Good Practice and Areas for Improvementdummyanimatedrotating
On 13 March 2026, the FCA published findings from its review of firms’ approaches to consumer understanding under the Consumer Duty (PRIN 2A.5). The review identifies specific good practices and areas for improvement, providing a clear supervisory benchmark for firms assessing their Consumer Duty compliance.
- Good practice: Use of multiple data sources (call listening, complaints, chat transcripts, website analytics, drop-off rates) to identify where customers struggle. A/B testing of communications. One firm targeted 80% or higher correct recall of key points.
- Weaknesses identified: Inconsistent governance, unclear use of management information, weak feedback loops, and insufficient testing that results in cosmetic rather than evidenced improvements.
- Practical requirement: Firms must demonstrate a monitor-change-test-record feedback loop that connects data insights to documented actions with measured impact.
This review is the FCA showing its workings on what Consumer Duty compliance actually looks like in practice. Fund managers who have treated the Duty as a documentation exercise should be concerned. The FCA is looking for evidence of iterative improvement, not static compliance frameworks. Boards receiving Consumer Duty MI should ask one question: does our data show we are getting better, or does it merely show we are measuring?
OPBAS Report Finds AML Supervisors Improving but Enforcement Still Lackingdummyanimatedrotating
Published on 3 March 2026, the latest OPBAS report assesses the 25 Professional Body Supervisors (PBSs) responsible for AML oversight in the accountancy and legal sectors. The report finds that PBSs are more effective than at any time since OPBAS was established in 2018, but enforcement remains the persistent weakness. OPBAS is concerned that the dual role of some PBSs as both membership organisations and supervisors hinders effective disciplinary action.
- Transition ahead: In 2025, the Government decided the FCA will assume direct AML/CTF supervision of the accountancy and legal sectors, replacing the PBS model entirely. This fundamental structural change will consolidate financial crime oversight under a single supervisory authority.
The shift of AML supervision from professional bodies to the FCA is one of the most significant structural changes in UK financial crime oversight in a decade. For fund managers with relationships to legal and accountancy firms, the supervisory expectations that apply to those service providers are about to change materially. NEDs with dual roles on professional body boards should be preparing for transition.
Portfolio letters told firms what the FCA had found. Regulatory Priorities reports tell firms what it will look for.Asad Bukhory
PRA Developments
PS6/26: Recognised Exchanges Policy and Transfer of Main Indicesdummyanimatedrotating
Published on 5 March 2026, PS6/26 finalises the PRA’s approach to incorporating recognised exchange definitions and the main indices list into the PRA Rulebook. The policy introduces a new Recognised Exchanges (CRR) Part, establishing a dynamic and flexible framework for firms to assess which overseas exchanges qualify for prudential purposes.
- New framework: Firms will assess recognised exchanges based on asset liquidity, reflecting the prudential risks of different market structures. This replaces a static list approach.
- Main indices: The list of main indices from Commission Implementing Regulation 2016/1646 will be restated directly in the PRA Glossary.
- Housekeeping: SS20/13 on third-country equivalence for credit risk is deleted. Consequential amendments to the Counterparty Credit Risk and Credit Risk Mitigation CRR Parts.
Implementation date: 1 July 2026.
PRA Regulatory Digest: February 2026 and Securitisation Reform Consultationdummyanimatedrotating
Published on 2 March 2026, the PRA’s monthly digest consolidates all PRA activity from February 2026, including: CP2/26 on securitisation reforms (published jointly with FCA CP26/6 on 17 February, closing 18 May 2026), CP4/26 on UK Solvency II own funds updates (closing 24 April 2026), PS5/26 on credit union service organisations, and the life insurance stress test announcement scheduled for 2028.
- CP2/26 securitisation reforms: Proposes principle-based due diligence replacing prescriptive requirements, removal of the requirement to verify non-UK originator risk retention (unlocking US CLO investment), and alignment of PRA/FCA frameworks. Closing date: 18 May 2026.
- CP4/26 Solvency II own funds: Updates and fixes to own funds rules and expectations. Closing date: 24 April 2026.
The securitisation reforms in CP2/26 deserve particular attention from fund managers running credit strategies. The removal of the investor due diligence requirement for non-UK risk retention compliance would, for the first time, allow PRA-regulated firms to invest in US CLO structures without the current cross-border barriers. This is a significant competitiveness measure that could reshape cross-border credit allocation.
Operational Resilience: Joint FCA-PRA Framework Nears Completiondummyanimatedrotating
As this issue went to press, the FCA published PS26/2 and the PRA published PS7/26 and SS1/26 on 18 March 2026, jointly finalising the operational resilience framework for incident reporting and material third-party arrangements. FG26/3 and FG26/4 provide detailed guidance on compliance expectations. FG26/2, published on 16 March, provides finalised guidance on good and poor practice in identifying and rectifying harm.
- Incident reporting: Firms must report operational incidents meeting defined thresholds based on safety, soundness, financial stability, and policyholder protection criteria. A phased reporting approach requires initial, interim, and final reports (final within 30 working days of resolution).
- Third-party arrangements: Firms must notify regulators of all material third-party (MTP) arrangements and submit annual registers. SS2/21 on outsourcing and third-party risk management is updated with further guidance on identifying MTPs.
- Implementation: Rules take effect from 18 March 2027, providing firms 12 months to prepare.
Twelve months is not generous for the scope of change required. Fund managers need to map their entire third-party landscape, classify material arrangements, build or acquire incident reporting capability, and integrate both into existing governance frameworks. COOs should be commissioning gap analyses now, not in Q3. The firms that treat this as a 2027 problem will be the firms scrambling in Q1 2027.
Fund Launches
Apollo Launches First UK Long-Term Asset Fund Targeting DC Pensionsdummyanimatedrotating
On 10 March 2026, Apollo announced the launch of the CG Apollo Global Diversified Credit LTAF, the first sub-fund under its Private Markets LTAF umbrella, following FCA authorisation. The fund is designed specifically for UK Defined Contribution pension schemes, offering semi-liquid access to a diversified global credit portfolio spanning private investment grade, large-cap corporate lending, and asset-backed finance. Carne Global Fund Managers (UK) Limited serves as Authorised Corporate Director and AIFM.
- Significance: Apollo is the first major US alternative asset manager to launch an LTAF specifically designed for the UK DC market, validating the LTAF wrapper as a viable vehicle for institutional-grade private credit.
- Structure: Semi-liquid with periodic dealing, addressing the liquidity management challenges that have historically prevented DC schemes from accessing private credit at scale.
The Apollo LTAF is a watershed for the UK DC pension market. It demonstrates that the regulatory infrastructure – the LTAF wrapper, the FCA authorisation pathway, the DC scheme governance framework – is now mature enough to attract tier-one global allocators. Fund boards considering LTAF strategies should study the Carne/Apollo structure as the emerging benchmark for how private credit can be packaged for DC capital.
Quilter Partners with JPMorgan for Long-Short Equity Fund Launchdummyanimatedrotating
Quilter partnered with JPMorgan Asset Management to launch a long-short equity fund, expanding the alternatives allocation available to UK wealth management clients. The partnership signals growing demand from the UK wealth sector for hedge fund-style strategies delivered through regulated, transparent fund wrappers.
- Distribution shift: UK wealth platforms are expanding their alternatives menus to meet client demand for uncorrelated returns, particularly in the context of elevated geopolitical risk and market volatility from the Iran conflict.
- Governance question: Platform operators need to assess whether their due diligence and ongoing monitoring frameworks are calibrated for the complexity of long-short strategies.
HANetf Lists Ukraine Reconstruction UCITS ETF on London Stock Exchangedummyanimatedrotating
HANetf launched the Ukraine Reconstruction UCITS ETF (UKRN) on the London Stock Exchange, marking the first ETF globally focused on Ukraine’s reconstruction. The fund provides exposure to companies expected to benefit from the rebuilding of Ukrainian infrastructure, representing an emerging intersection of thematic investing and geopolitical development finance.
- First mover: The world’s first reconstruction-focused ETF, listed in London, underscoring the LSE’s role as a hub for innovative thematic products.
Sands Capital Closes $1.1bn Global Innovation Fund IIIdummyanimatedrotating
Sands Capital closed its Global Innovation Fund III at $1.1 billion, targeting growth-stage technology and innovation investments across North America, Europe, and Asia. The fund reflects continued institutional appetite for growth equity strategies focused on technology-driven disruption, despite broader market uncertainty.
Saba Capital Expands UK Investment Trust ETF Rangedummyanimatedrotating
Saba Capital listed its UK Investment Trust ETF (UKIT) in the week of 5 to 12 March 2026, alongside the Saba Capital Investment Trusts UCITS ETF on Deutsche Börse on 5 March. These products invest in global exchange-listed closed-ended funds, reflecting continued institutional interest in the investment trust discount arbitrage strategy that Saba has pursued aggressively in the UK market.
Enforcement
Wood Group: £12.99m Fine and the Nine-Month Enforcement Precedentdummyanimatedrotating
On 4 March 2026, the FCA fined John Wood Group PLC £12,993,700 for publishing misleading financial statements in breach of Listing Rule 1.3.3R and Listing Principle 1. The enforcement action centred on Wood Group’s full-year 2022 and 2023 results and half-year 2024 results, where accounting judgements were inappropriately influenced by management’s desire to maintain previously stated financial performance.
- Financial impact: Wood Group’s share price fell 78% by April 2025; shares were suspended in May 2025. The company published restated results for 2022 and 2023 on 30 October 2025 with material adjustments.
- Penalty calculation: The original penalty of £18,562,500 was reduced by 30% to £12,993,700 following Wood Group’s early acceptance of findings and cooperation.
- Enforcement pace: The FCA opened its investigation in June 2025 and concluded it within 9 months. The regulator explicitly highlighted this as evidence of its commitment to improving enforcement speed.
The nine-month investigation timeline is the real headline. The FCA has historically been criticised for enforcement investigations that take three to five years to conclude, by which time the deterrent effect is negligible and the individuals responsible have often moved on. A nine-month turnaround on a complex financial reporting case involving three sets of restated accounts signals a fundamentally different enforcement capability. The message to listed company boards is stark: the time between misconduct and consequence is compressing.
When the FCA builds an enforcement case on the culture of financial reporting rather than isolated technical breaches, it reveals systemic governance failure. Three years of overstated profits means three years of board packs, audit committee sign-offs, and regulatory returns built on flawed data. NEDs should be asking: could our board receive materially misleading financial information for three consecutive reporting periods without anyone flagging it? If the answer requires faith rather than evidence of specific controls, the governance gap is real.
Concept Capital Group Placed into Administration: £23m Investor Schemedummyanimatedrotating
On 9 March 2026, the High Court placed Concept Capital Group (CCG) into administration, with BTG appointed as administrators. The FCA had commenced High Court proceedings against CCG in July 2025 over an alleged unauthorised investment scheme involving static homes promoted as social housing investments. CCG collected approximately £23 million from investors who were promised fixed returns and told the scheme was backed by the UK Government, claims the FCA considers false or misleading. CCG’s assets had been frozen since July 2025. The company stopped responding to the FCA in December 2025.
- Scale of harm: Approximately £23 million collected from investors before intervention. The administration puts the FCA’s civil proceedings on hold, but actions against individual defendants continue.
- Individual defendants: The FCA’s claim against Ian Anthony Elliott, Adrian Felix, Ayub Swaibu, Edmund Brew, Ernest Kargbo, Raymondip Bedi, and Gateridge Consulting Limited continues.
The Concept Capital case illustrates a recurring pattern: unauthorised schemes that promise government-backed returns and target retail investors who lack the sophistication to assess the claims. The £23 million collected before intervention is a reminder that the FCA’s perimeter remains a significant challenge. For firms operating authorised schemes, the reputational risk from proximity to such cases reinforces the importance of clear marketing that distinguishes authorised from unauthorised offerings.
FCA Bans Kasim Garipoglu from UK Financial Servicesdummyanimatedrotating
On 13 March 2026, the FCA published its decision to ban Kasim Garipoglu from working in UK financial services. Prohibition orders remain one of the FCA’s most direct enforcement tools, removing individuals from the regulated sector entirely.
- Signal: Individual prohibition orders continue to feature regularly in FCA enforcement output, reinforcing the message that personal accountability is a cornerstone of the regulatory framework.
Market Developments
EU-UK Financial Regulatory Forum Signals Deepening Post-Brexit Cooperationdummyanimatedrotating
The fifth meeting of the EU-UK Financial Regulatory Forum took place on 11 March 2026, producing a joint statement that signals a notable thickening of the post-Brexit regulatory dialogue. The UK updated on its Financial Services Growth and Competitiveness Strategy, while the EU presented its Savings and Investments Union strategy and Market Integration and Supervision Package.
- Banking: Discussions covered simplification, competitiveness, Basel implementation, securitisation reforms, and cross-border resolution frameworks.
- Asset management: The UK updated on its review of AIFMD and Overseas Funds Regime progress. Both sides discussed fund resilience, including money market fund vulnerabilities and NBFI oversight.
- Digital finance: Joint engagement on digital assets and stablecoins, with multilateral coordination through the FSB.
- Sustainable finance: The UK provided updates on UK SRS, FCA consultations, ESG ratings, and transition finance. The EU discussed its Omnibus Simplification Package and SFDR review.
For UK fund managers with European distribution ambitions, this forum matters. The discussion of AIFMD review and Overseas Funds Regime in the same session suggests regulatory convergence on market access is a live conversation, not a theoretical aspiration. Firms operating cross-border should track these bilateral discussions as closely as they track domestic rulemaking.
Iran Conflict Drives Oil Prices and Reshapes Hedge Fund Positioningdummyanimatedrotating
The escalating Iran conflict has driven crude oil prices towards $110–$113 per barrel during March, triggering significant repositioning across hedge fund portfolios. Hedge funds have been selling financial stocks aggressively, making financials the most heavily sold sector of the year. Commodity hedge funds are deploying complex derivatives strategies, including exotic cross-asset options, to navigate the supply shock through the Strait of Hormuz.
- Monetary policy impact: The Bank of England’s MPC held interest rates at 3.75% on 19–20 March in a unanimous 9-0 vote, reversing pre-conflict expectations of a rate cut. Projected inflation is expected to rise to 3.5% in Q3 2026 from energy costs.
- Fund positioning: Global hedge funds are increasing commodity exposure and rotating out of financials. The conflict has split hedge fund performance, with macro and commodity strategies outperforming while equity-focused funds face drawdowns.
For fund boards, the geopolitical overlay on portfolio construction has become unavoidable. Risk committees should be reviewing the stress-testing assumptions underlying their funds’ liquidity frameworks, particularly where commodity price shocks intersect with rising interest rate expectations. The MPC’s hold at 3.75% removes the anticipated monetary easing that many portfolio strategies were positioned for. Funds with leveraged rate-sensitive positions need to reassess their base cases.
FCA Announces Senior Leadership Appointmentsdummyanimatedrotating
On 5 March 2026, the FCA announced two senior appointments. Chris Knight will join in July 2026 as Director of Insurance within the Supervision, Policy and Competition division, arriving from Legal & General where he served as Group Chief Risk Officer. David Lymburn joined the Payment Systems Regulator on 23 February 2026 as Interim Deputy Managing Director, bringing experience from Nordea Bank and Lloyds Banking Group.
- Knight appointment: A Group CRO moving into the FCA’s insurance directorship signals the regulator’s intent to bring practitioner risk management expertise into its supervisory leadership.
David Geale Speech at MoneyLIVE: A Joined-Up Approach to Growthdummyanimatedrotating
On 10 March 2026, David Geale, the FCA’s Executive Director for Payments and Digital Finance and PSR Managing Director, delivered a speech at the MoneyLIVE Summit 2026 in London. The speech, titled “Stepping back, staying safe: a joined-up approach to growth,” positioned the FCA’s regulatory approach as supportive of innovation while maintaining consumer protection standards.
Calendar
March 2026 (Remaining)
- 18 Mar FCA PS26/2 and PRA PS7/26/SS1/26 published: Operational Incident and Third-Party Reporting (effective 18 March 2027)
- 18 Mar FCA FG26/3 (Incident Reporting) and FG26/4 (Third Party Reporting) finalised guidance published
- 23 Mar CP26/8 Chapter 10 consultation closes
- 30 Mar FCA SI regime changes take effect for bonds and derivatives (PS25/17): matched principal trading and RPW reforms
- Late Mar FCA expected to publish final rules on motor finance compensation scheme
April 2026
- 1 Apr FCA targeted support regime: authorisation gateway opened 2 March
- 13 Apr CP26/8 Chapters 2–4 and 6–9 consultation closes
- 20 Apr CP26/8 Chapter 5 (MAR transparency) consultation closes
- 24 Apr PRA CP4/26 (UK Solvency II Own Funds) consultation closes
May – June 2026
- 11 May FCA/FOS CP26/9 (Modernising the Redress System) consultation closes
- 18 May FCA CP26/6 and PRA CP2/26 (Securitisation Framework Reforms) consultations close
- 1 Jun FCA SUP 15 updates on serious redress risk reporting take effect
- 17 Jun PRA CP5/26 (Modernising the Liquidity Policy Framework) consultation closes
- 30 Jun FCA transitional relief period ends for SI regime trading venue rulebook updates
Key Dates Later in 2026
- 1 Jul PRA PS6/26 Recognised Exchanges policy takes effect
- Mid-2026 FCA Consumer Duty supervisory consultation expected
- H1 2026 FCA/PRA/HMT SM&CR review consultation expected
- Sep 2026 FCA non-financial misconduct rules expected to take effect
- 18 Mar 2027 FCA PS26/2 and PRA PS7/26 operational resilience rules take effect
The FCA has published Regulatory Priorities reports telling firms exactly where it will focus its supervisory attention in 2026. If your compliance monitoring programme was designed before these reports were published, does it still reflect the regulator’s actual priorities, or is it monitoring the risks you chose to measure rather than the risks the FCA has told you it will examine?
We’d welcome your perspective. The best responses may feature in a future edition.
The FCA’s shift from portfolio letters to Regulatory Priorities reports marks a structural change in supervisory communication. Under the old model, the FCA told firms what it had found. Under the new model, it tells firms what it will look for. That distinction matters profoundly for how governance frameworks should be constructed. Portfolio letters were reactive compliance checklists, published after supervisory cycles concluded. Regulatory Priorities reports are forward-looking supervisory playbooks, published at the start of the year, telling firms exactly which workstreams will receive attention. The accountability has shifted: firms can no longer claim they did not know what the regulator was examining.
For fund managers and ACDs, the consumer investments report published on 4 March contains an actionable supervisory roadmap: MPS firm reviews, Consumer Duty assessments, AI sandbox testing through the AI Live evaluation programme, LTAF implementation support, and financial crime control evaluations. Each is a discrete workstream that could generate a data request, a thematic review, or a supervisory intervention within the next twelve months. Compliance monitoring programmes designed before these reports were published are, by definition, not aligned to the regulator’s stated priorities. That misalignment is no longer an oversight. It is a governance choice.
The practical response is straightforward. Map each Regulatory Priorities report against your business activities within 30 days. Identify the supervisory workstreams that apply to your firm. Test whether your current monitoring programme covers them. Report the gap analysis to the board before the next scheduled governance meeting. The FCA has told you what it will examine this year. The question for your board is whether you listened.
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