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). It is a competitiveness reform that changes 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 reforms to the UK MiFIR transaction reporting regime, including changes to reporting timelines, order reporting requirements, and trading venue obligations. The consultation aims 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, PS25/18 amends complaints handling rules following the Supreme Court's June 2025 judgment on undisclosed commission in motor finance. The FCA is expanding the definition of complaint to include claims arising from undisclosed commission, extending the scope of financial remedy that firms must consider when handling motor finance disputes.

• What changed: Motor finance firms must now treat undisclosed commission disputes as complaints under DISP 2, not as separate compensation claims. This requires integration of motor finance complaint handling into the standard complaints procedure, including the requirement to provide a Final Response Letter and comply with standard DISP timelines.
• Compliance requirement: Firms must update complaints handling procedures, staff training, and complaint triage systems to capture undisclosed commission disputes within the standard complaints framework.
• Implementation: Final rules are expected in Q1 2026, with a 3-month implementation period.

Published on 15 December 2025, FS25/6 summarises the FCA's feedback from the 2025 mortgage rule review consultation and sets out a roadmap for modernising the mortgage rules. The FCA received over 500 responses to the consultation and is using this feedback to structure a series of consultations planned for H1 2026 and beyond.

• Roadmap: The FCA plans to publish consultation papers on: mortgage affordability assessment modernisation (covering property valuation and income verification), criteria for affordability assessment exemptions, and integration with the Consumer Duty framework. Consultations are expected in Q1 and Q2 2026.
• Themes: Key feedback includes concerns about process burden on lenders, the need to modernise affordability assessment methodologies given rising house prices, and questions about how Consumer Duty applies to mortgage distribution.

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.

Published on 17 November 2025, the PRA disclosed the results of the 2025 life insurance stress test conducted across the sector. The results show the sector remains well-capitalised post-stress, with Solvency Capital Requirement (SCR) coverage ratios declining from 185% to 154% under the stress scenario, significantly above the 100% minimum requirement.

• Resilience message: The test shows the life insurance sector remains resilient to significant stress scenarios, including equity market shocks, interest rate moves, and mortality impacts. The regulator is satisfied that capital buffers remain adequate.
• 2028 stress test: The PRA has announced the next life insurance sector stress test will be conducted in 2028, providing three-year intervals between major stress testing cycles.

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 reflects the government's continued focus on life sciences as a growth sector.

• 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 reflects continued appetite for UK-based life sciences investment within the government's innovation strategy.

According to Hedge Fund Intelligence data published in Q4 2025, hedge fund launches accelerated 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 fits these flow trends.

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 points to continued monetary easing, with the MPC judging 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 reflects 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 points to the MPC's confidence that the disinflationary trend is established, allowing 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 now feeds directly into its 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.

Following the government's Autumn Budget 2025, questions emerged about financial services regulatory simplification and the FCA's involvement in budget-preparation communications. The Treasury Select Committee questioned the FCA about pre-budget information sharing and the potential for regulatory policy to be driven by budget priorities rather than supervisory evidence.

• Regulatory coordination: The FCA and HM Treasury are coordinating on regulatory policy more closely, particularly where FCA rulemaking intersects with government growth strategy objectives.
• Governance transparency: The select committee scrutiny points to the need for clear governance boundaries between government growth priorities and FCA regulatory decision-making.