The GRC Navigator

Published on 30 January 2026 (immediately before this period), FCA CP26/5 proposes the UK Sustainability Reporting Standards, a significant expansion of disclosure obligations for listed companies. The consultation closes on 20 March 2026, with a policy statement expected in autumn 2026 and mandatory application from 1 January 2027. For listed companies and their advisers, it is the main rulemaking exercise of the first half of 2026.

• Scope: The rules would require listed issuers to disclose climate-related, biodiversity-related, and other sustainability matters using a principles-based framework aligned with international standards including TCFD, ISSB, and CSRD precedent.
• Timeline: Responses to CP26/5 close on 20 March 2026. A policy statement is expected in autumn 2026, with mandatory application from 1 January 2027 (initial reporting in March 2028). A transitional relief period of one year is proposed for smaller issuers.
• Governance implication: Listed company boards will need to establish governance frameworks for sustainability reporting, assign accountability for data collection and verification, and integrate sustainability metrics into existing financial reporting infrastructure before year-end 2026.

On 17 February 2026, the FCA published CP26/6 and the PRA published CP2/26, the joint consultation on major reforms to the UK securitisation framework. For UK asset managers this is a significant competitiveness reform. The consultation closes on 18 May 2026, with implementation expected in Q2 2027.

• Principle-based due diligence: The PRA proposes replacing prescriptive due diligence requirements with a principle-based approach requiring investors to assess securitisation risks proportionate to transaction complexity and risk profile. This removes formulaic compliance checklist requirements.
• Non-UK originator risk retention verification: The PRA proposes removal of the requirement that PRA-regulated investors verify non-UK originator risk retention compliance. This is the change that matters most: it opens access to US CLO structures for the first time. The removal recognises that investor due diligence on US CLOs has matured sufficiently that third-party verification of US originator compliance is redundant. For credit fund managers, this could materially change US allocation decisions.
• Framework alignment: The proposals align PRA and FCA requirements, reducing duplication and harmonising definitions. Single regulatory framework for securitisation across prudential and conduct dimensions.
• Market disclosure and exemptions: Simplified market disclosure requirements and exemptions for certain securitisation structures, particularly single-loan securitisations and resecuritisation structures. The goal is to reduce compliance burden for market-standard structures while maintaining investor protection for complex risks.

On 4 February 2026, the Bank of England's Monetary Policy Committee voted 5-4 to hold the base rate at 3.75%. Five members preferred to hold, citing the need for further disinflation evidence. Four members preferred a 0.25% cut, indicating that near-term rate reductions remain a genuine policy option.

• Forward guidance: The split vote points to uncertainty about the timing of rate cuts. Market expectations for Q2 cuts have been tempered, though not eliminated.
• Implications for fund strategies: For funds with rate-sensitive positioning, the hold reinforces the case for dynamic interest rate hedging rather than static directional positioning. The 5-4 split is closer than some expected, creating elevated volatility risk in fixed income markets.

On 24 February 2026 (just outside the formal period but signalling the new supervisory framework), the FCA launched its Regulatory Priorities webpage, replacing the Dear CEO and portfolio letter model that characterised FCA communications since 2020. The new model publishes sector-specific Regulatory Priorities reports at the start of the supervisory year, telling firms exactly which workstreams will receive attention.

• Scope: The FCA plans nine sector-specific reports covering consumer investments, pensions, retail banking, mortgages, consumer finance, wholesale markets, insurance, payments, and digital assets.
• Shift in accountability: Under the old model, the FCA told firms what it had found (portfolio letters). Under the new model, it tells firms what it will find. This shifts accountability: firms can no longer claim they did not know what the regulator was examining.

Published on 17 February 2026 alongside FCA CP26/6, the PRA's CP2/26 consultation sets out detailed proposals for major reforms to the UK securitisation framework. It is a banking and credit regulation reform with material implications for cross-border capital flows.

• Single risk approach: The PRA proposes consolidating two separate risk assessment modalities (CRR modelled approach and standardised approach) into a single risk approach for securitisations. This simplification reduces compliance burden for firms managing securitisation portfolios.
• Simpler market disclosure: Proposals for simpler disclosure requirements, reducing repetitive market disclosure while maintaining investor protection.
• Descoping single loan securitisations: The PRA proposes exempting single loan securitisations from certain detailed disclosure requirements, reflecting their lower complexity and more transparent underlying assets.
• Resecuritisation exemptions: Two resecuritisation structures would be exempted from the ban on resecuritisations under certain conditions, allowing greater flexibility for structured credit markets.
• Mortgage Guarantee Scheme capital treatment: New capital treatment for loans underlying the Government's Mortgage Guarantee Scheme, reflecting their lower risk profile post-government guarantee.
• Consultation closes: 18 May 2026. Implementation expected Q2 2027.

Published on 19 February 2026 (just outside period), the PRA's CP3/26 consultation sets out rule changes to accommodate HM Treasury's new regulatory regime for overseas firms. This is technical rule-harmonisation work reflecting the new permissions framework for cross-border banking activity.

On 16 February 2026 (just outside period), Tycho Capital, an emerging alternative asset manager, launched a European equity long-short UCITS fund, adding to the growing range of hedge fund strategies available through regulated UCITS wrappers. The fund targets European equity markets with gross exposure flexibility up to 200%.

February 2026 fund flow data shows continued strong inflows into fixed income and money market strategies, with Vanguard FTSE UK Equity Income Index entering the top 10 most-bought funds alongside Artemis Global Income. The flow data reflects institutional and retail allocation shifts away from equities toward bond and money market exposures, responding to interest rate uncertainty and elevated geopolitical risk.

Sidley Austin's investment management team published an update on UK-EU regulatory developments in February 2026, covering FCA fund tokenisation consultations, short selling regime updates, and IFPR capital requirements. The update highlights continued regulatory divergence between UK and EU frameworks post-Brexit, requiring UK asset managers to maintain dual-jurisdiction compliance strategies.

Clifford Chance published analysis of the FCA's 2026 insurance regulatory priorities, including Consumer Duty implementation, ESG obligations, and operational resilience. For insurance boards, the analysis provides a practical roadmap for anticipated supervisory engagement across conduct and prudential dimensions.

In February 2026, Apollo and Schroders announced a partnership to launch a US-focused Collective Investment Trust targeting UK institutional investors, with launch expected in Q2 2026. The partnership points to growing appetite for UK-US cross-border asset management collaboration, particularly in credit strategies.