The GRC Navigator

The FCA's PS26/15: Improving the UK transaction reporting regime, published on 3 August 2026, sets final rules that move transaction reporting out of UK MiFIR and into the Handbook at MAR 13, 14 and 15 once HM Treasury repeals Articles 25 to 27 of UK MiFIR and the related technical standards. The instrument (FCA 2026/52), made on 30 July 2026, comes into force on 3 April 2028. It follows CP25/32 of November 2025. The FCA puts the current cost of MiFIR transaction reporting at £493m a year and, in its press release, expects that to fall to about £385m.

The package cuts fields from 65 to 52, takes about 7 million instruments tradeable only on EU venues out of scope, and removes FX derivatives and most corporate actions. FCA FIRDS becomes the "golden source": if an instrument or its underlying is not in FIRDS within seven working days of the trade, the firm may conclude it is not reportable (MAR 14.5.3G). Back reporting defaults to three years (MAR 14.15.4G). The FCA keeps the power to direct up to five, and record-keeping under COBS 11 and SYSC 9 is unchanged.

Whether an asset manager is caught depends on a defined term. A "transaction reporting firm" is a MiFID investment firm, excluding a collective portfolio management investment firm, or a third-country firm acting from a UK establishment. Full-scope AIFMs and UCITS management companies with MiFID top-up permissions therefore stay outside, as CP25/32 proposed; the FCA says it is considering reporting for CPMI firms within its FRAME consultation (CP26/26). MiFID portfolio managers remain within the definition.

Changes from consultation are modest. A trust must be identified by its LEI where one exists (MAR 14.13.10G(2)). The proposal to report a venue's segment MIC for unknown counterparties was dropped in favour of the existing CCP LEI practice, and the seven-day FIRDS test now applies wherever the trade was executed. New guidance at MAR 14.15.5G expects an incident management framework covering triage, root-cause analysis, remediation, escalation and notification, with no materiality threshold for breach reports. Conditional single-sided reporting goes ahead although most respondents called it unworkable: MAR 14.10.1R requires a written agreement between sending and receiving firm, and the FCA declined to make either party fully responsible for the data.

Part of the relief starts now. Under a flexible supervisory approach running from 3 August 2026 until the rules take effect, the FCA will not act against firms that stop reporting EU-only instruments or that limit back reporting to three years unless instructed otherwise. Firms may also drop FX derivatives if they report them under UK EMIR; UK branches of third-country firms, which do not, must carry on. Validation rules will be relaxed, and a draft schema and Transaction Reporting User Pack published, in October 2026.

In a statement on 7 August 2026 the FCA said it is applying increased scrutiny to Annex 1 firms, the unregulated lenders, safe custody providers, money brokers and financial leasing companies that must register with it for anti-money laundering purposes. It has sent an information request to around 900 Annex 1 firms which, with the 300 it contacted in late 2025, covers every registered Annex 1 firm, and it warns that registration applications will take longer.

The statement adds no new obligation. Annex 1 firms are registered for anti-money laundering purposes only: the FCA's March 2026 statement explained that its powers over the roughly 1,200 such firms are limited to anti-money laundering, that its wider rulebook does not apply, and that their customers cannot use the Financial Ombudsman Service. The August statement criticises firms that rely too heavily on a parent's financial crime controls: each firm in a group must assess whether those controls suit its own risks, governance and operations, and cannot rely on off-the-shelf procedures written for another company. It is also concerned about unregulated lending "often conducted through complex structures, including special purpose vehicles".

That concern is relevant to private credit managers. The FCA's registration guidance lists lending, including financing commercial transactions, as an Annex 1 activity and says an authorised firm need not register. A special purpose vehicle involved in lending needs to register only if it is the original lender, not where it merely acquires the legal or beneficial interest in loans. Whether lending is carried on "as a business" turns, on the FCA's published approach, on the commercial element, the commercial benefit, the activity's weight against the firm's other business, and its regularity. A fund's lending vehicle that originates loans as a business in the UK can therefore be an Annex 1 firm even though its manager is authorised, and the criticism of borrowed group controls then applies to it directly.

Regulated firms dealing with Annex 1 firms were told in March to seek direct confirmation of registration status and to understand the counterparty's business. The August statement repeats that.

The FCA's Early and High Growth Oversight pilot, whose good and poor practice findings were published on 10 August 2026, ran from July 2025 to March 2026 and engaged 15 firms across asset management, wealth management and payments. The FCA picked firms from data, looking at growth in revenue, expenditure and staff and at changes in permissions or control, and has given each firm individual feedback. The findings come from a sample of 15 and are neither rules nor guidance, though they show what supervisors examined in growing firms.

At some firms the FCA found:

• board and committee structures that had not kept pace, thin independent challenge, and responsibilities held by a few people;
• incomplete minutes, missing attendance, quorum, conflicts, decisions or follow-up actions;
• dependence on key individuals without succession planning or cross-training;
• suitability frameworks not reviewed when the target market changed, and management information that still referred to superseded documents or meetings;
• conflicts from group relationships, co-manufacturing, shared resources and combined senior roles not identified;
• wind-down plans that were not current, practical or proportionate, with the FCA reminding firms of their duties under SUP 15, including SUP 15.3.1R's requirement to notify immediately a matter that could mean failing the threshold conditions;
• too little weight on customer outcomes, including fair value.

The stronger firms added independent non-executives as they grew, used risk committees with defined appetites, stress tested their cost base, and in some cases delayed moving into new regulated activities until controls for existing business were stronger. The FCA says it will use the pilot to shape how it engages with high-growth firms and will look at how data can identify emerging risks earlier. The same week it added five solo-regulated firms to its Scale-up Unit, none of them asset managers.

PS26/16: Changes to information flows for UK equity IPOs, published by the FCA on 5 August 2026, took effect the same day through the Changes to Information Flows for UK Equity IPOs Instrument 2026 (FCA 2026/53). It implements CP26/14 of April 2026 as proposed; almost all of the 12 respondents agreed.

Until 5 August, COBS 11A.1.4FR stopped a syndicate bank disseminating connected research on an IPO until one day after publication of the approved registration document or prospectus if unconnected analysts had joined its analysts' communications with the issuer, and seven days after otherwise. COBS 11A.1.4BR to 11A.1.4ER required the bank to give a range of unconnected analysts the same access and information as its own, with five-year records. Those provisions are deleted. COBS 11A.1.4FR now only bars dissemination until the approved prospectus or registration document is published. The scope test in COBS 11A.1.4AR is unchanged: it catches underwriting or placing of shares to be admitted to trading on a UK regulated market for the first time where an approved prospectus is required, so admissions to an MTF such as AIM were never within it. The FCA's reason for the change is that the 2018 rules produced little unconnected research while adding execution risk and cost for issuers; respondents added that the seven-day wait had become the default on deals and left the UK out of line with other listing venues.

The instrument also corrects COBS 12.2.21R(1)(f) to its original MiFID Org Reg wording: where a draft contains a recommendation or target price, issuers, relevant persons other than the analysts, and anyone else may not review it, whether to check facts or for any purpose other than verifying the firm's legal compliance. Two respondents opposed the main change, arguing that unconnected analysts need access to the issuer to give the market an independent view.

For fund managers buying IPO stock, I think the practical effect is that the first published view will usually be the syndicate's, and independent research, if it comes at all, will depend on terms negotiated commercially. An investment committee that counted unconnected research as part of its IPO process now needs another source for an independent view. The rest of the 2018 package, including the rule that approved documents come before connected research and the COBS 12 guidance on pre-mandate analyst contact, drew critical feedback, but the FCA is not consulting on either for now.

Minutes of the Artificial Intelligence Consortium's meeting on 3 June 2026, published by the Bank of England on 5 August, record its fourth quarterly meeting, co-chaired by Sarah Breeden of the Bank and David Geale of the FCA. The minutes record members' views under the Chatham House Rule and state that they are not the views of the Bank or the FCA and "should not be taken as an indication of future policy".

Four workshops reported. The explainability group said generative AI systems are often classified as high risk under SS1/23, the PRA's model risk management principles for banks, which may limit proportionate application of controls. It suggested managing model risk at the level of the whole "AI model system", because most uses combine several models and components that can be updated independently, and it flagged limited transparency from third-party providers. The concentration group located the dependency at the model and compute levels, where alternatives are few, and noted that software-as-a-service provision reduces substitutability, a concern where AI supports important business services. A third workshop, on contagion, separated fast failures such as a provider outage from slow, correlated errors that only show up when firms are compared. The fourth, on edge cases, proposed a four-step response: identify the type of failure, detect it through observable signals, set the minimum evidence needed to diagnose it, and apply pre-defined containment controls.

SS1/23 is written for banks, so it does not bind a solo-regulated asset manager. The system-level point applies regardless: an AI inventory that lists models but not the prompts, retrieval layers and third-party services around them cannot answer the questions these workshops are asking. The general discussion added that human review of outputs is widely relied upon but not practical everywhere, and some members suggested standardised AI incident reporting. The workshop outputs will be consolidated into a final publication later in the year, before a second phase of the Consortium.

Tritax Big Box REIT plc, a London-listed real estate investment trust, announced on 5 August 2026 an equity issue to fund its data centre development pipeline and confirmed on 6 August that it had raised gross proceeds of about £350 million. The 213,414,634 new shares, about 7.9% of its existing share capital, were priced at 164p through an accelerated bookbuild, a retail offer via RetailBook and a subscription by the directors and some PDMRs. NTA per share at 30 June 2026 was 185.9p.

The deal is conditional because the price is below net asset value. UKLR 11.4.18(1)R bars a closed-ended investment fund from issuing shares of an existing class for cash below NAV per share unless its shareholders authorise it or the shares are first offered pro rata to existing holders, so the company has called a general meeting, expected on or around 24 August, with admission to follow on or around 26 August. No prospectus was needed: the placing relied on exemptions under the Public Offers and Admissions to Trading Regulations 2024 and the FCA's PRM sourcebook, and the retail offer announcement was a financial promotion approved by Retail Book Limited under section 21 of FSMA. The company's external manager is authorised and supervised by the FCA.

In my view the evidence a board needs for a sub-NAV issue is on allocation. The company reports that placing shares allocated outside soft pre-emption went preferentially to existing holders and wall-crossed investors, and that retail allocations also favoured existing shareholders.

Seraphim Space Investment Trust plc, listed on the Main Market and managed by UK-based Seraphim Space Manager LLP, announced on 4 August 2026 the first deployment of the £137 million it raised through a C share issue in May: follow-on investments of $25 million (£18.6 million) in Pixxel and $3.6 million (£2.7 million) in Zeno Power. Both companies are already held in the ordinary share portfolio. The manager says it remains on track to begin a partial conversion of the C shares into ordinary shares after the end of the current quarter.

A C share class normally holds new money in a separate pool until it is invested and converted, so existing shareholders avoid the cash drag. The difficulty comes when that pool buys into companies the ordinary pool already owns, because the price of the follow-on round bears on the value of the ordinary shareholders' existing stakes as well as on what the C shareholders pay, and the conversion is normally set by reference to the two pools' values. With one manager acting for both classes, I'd want to know who tested those round prices, and against what.

Puma AIM VCT plc announced on 3 August 2026 that it intends to launch an offer for subscription in September to raise up to £10 million, with an over-allotment facility of up to a further £10 million; the terms will be in a prospectus published at launch. On 14 August Calculus VCT plc published an FCA-approved supplementary prospectus to its offer prospectus of 3 October 2025. It says the supplement was issued under the Prospectus Regulation Rules following publication of its audited accounts for the year to 31 March 2026, which show net assets of £52.21 million, NAV per share of 56.43p and dividends of 2.82p per share for the year.

Both offers rest on a prospectus, and Calculus's supplement shows the disclosure cycle running while an offer is open. For platforms and advisers distributing VCT offers this autumn, the practical check is whether their suitability and target-market material reflects the supplemented document rather than the original.

The Upper Tribunal has upheld prohibition orders on Richard Fenech and Heather Dunne but directed the FCA to cut their penalties from £270,646 and £399,817 to £16,046 and £41,230, an outcome the FCA announced on 4 August 2026. The penalty decision, [2026] UKUT 00281 (TCC), was given on 27 July 2026 by Judge Anne Redston sitting with two members. Ms Dunne was a pension transfer specialist and appointed representative of Financial Solutions Midhurst Ltd, the firm Mr Fenech owned and ran.

The liability decision of 27 April 2026, [2026] UKUT 00162 (TCC), found that both had dishonestly given the FCA a backdated AR agreement, in breach of Statement of Principle 1. Ms Dunne also breached Statement of Principle 2. Mr Fenech breached Statement of Principle 7 by failing to supervise her, but the Tribunal found he was not reckless. The FCA's case was that all Ms Dunne's advice was non-compliant. Its reviewer had found 8 of 17 sampled files suitable; the FCA "recalibrated" them rather than enlarge the sample. The Tribunal found 10 of 16 suitable and, with a 95% confidence interval of 18% to 62%, would find only that at least 18% of her clients had been advised unsuitably.

The 18% finding set the disgorgement figures. Step 1 was limited to the benefit from the wrongdoing, 18% of the pension transfer income, not all of it. For Mr Fenech's Step 2, the FCA used all his income from the firm, first put at £455,446 and later agreed at £240,033. The Tribunal used only the £36,269 derived from the AR arrangement: the DEPP 6.5B rationale of pay "commensurate with" responsibilities fits employees, it held, better than an owner whose other income came from separate work. At level 4 (30%) that gave £10,881, plus £5,165 disgorgement. No interest was added, because the FCA left gaps totalling about three years unexplained and issued its warning notices two days before the six-year limit in section 66(5ZA)(b) of FSMA expired. Ms Dunne's penalty is disgorgement only because the FCA accepted serious financial hardship.

The bans stand because, as the Tribunal accepted, the FCA must be able to rely on those it regulates "at all times", including under pressure. Mr Fenech's dishonesty was found to be "a one-off action which was out of character", and a remittal would still have produced a prohibition.

On 5 August 2026 the Upper Tribunal published Finch v FCA [2026] UKUT 00217 (TCC), a decision of Judge Mark Baldwin released on 12 June 2026. It dismissed applications by Alec and Robert Finch for directions under rule 14 of the Tribunal Procedure (Upper Tribunal) Rules 2008 that the FCA not publish the decision notices it gave them on 4 July 2025, and under paragraph 3(3) of Schedule 3 that their references be kept off the Tribunal register. We covered the notices in Issue 25; this decision explains why they were public while the references are pending.

The notices rest on a High Court judgment of 27 September 2023 finding that the Finches committed a major fraud and misused client money at AFL Insurance Brokers. On that basis the FCA decided to publish statements of misconduct under section 66 of FSMA and make prohibition orders under section 56, and waived penalties for serious financial hardship. The Finches, who are trying to set the judgment aside as obtained by fraud (a claim struck out at first instance and now under appeal), argued that publication would prejudge that claim and cause severe and irreparable harm to their livelihoods.

Applying the principles summarised in Kingsbridge Capital Advisers v FCA [2023] UKUT 000103 (TCC), the Tribunal started from the presumption in favour of publication in section 391 of FSMA and open justice, and required cogent evidence of unfairness, such as a significant likelihood of severe damage to livelihood. The merits of the reference were irrelevant. It found no such evidence. The judgment was already public and had been reported; the notices showed that the FCA relied on the judgment rather than endorsed it, and they carry a marking that they are referred and provisional. Nor was there a "qualitative leap" from being found by a High Court judge to have been the architects of a fraud.

The decision applies settled principles, and where the underlying findings are already public it leaves an applicant little room to show that a decision notice adds harm. The question it left for the substantive hearing, listed for 7 and 8 September 2026, is whether the FCA was entitled to rely on the judgment without investigating the facts itself. That is a live question for any firm whose staff face civil findings the FCA could adopt.

An FCA blog published on 13 August 2026, by Jamie Bell of its infrastructure and exchanges team, assesses readiness for the UK's move to T+1 securities settlement on 11 October 2027. The blog, a supervisory update with no new requirements, reports what the FCA found in its engagement with firms and restates the expectations in its Dear CCO letter to asset management and alternatives firms, which set end-2026 for implementing changes and 2027 for testing.

Most participants met the FCA's expectations, but some were "considerably behind" and, without urgent remediation, unlikely to be ready; a very small number had not read the Accelerated Settlement Taskforce's implementation plan. The FCA singles out the buy-side, citing a Value Exchange survey from the first quarter of 2026 that found most buy-side firms had not begun implementation, and that two-thirds of firms did not think their service providers were ready. It will "pay particular attention to buy-side firms' progress" and, as October 2027 approaches, "take an increasingly intrusive approach".

The dated milestone is the end of December 2026, when the Taskforce expects trades to be allocated and confirmed on trade date and standard settlement instructions shared to the FMSB standard. Roughly half the firms the FCA spoke to already allocate and confirm on trade date. The FCA expects settlement data from Euroclear UK & International soon and will ask firms with poor settlement performance to explain it. On funds, it notes the IA, PIMFA and AIMA recommendation to move fund settlement to T+2 on or before 11 October 2027: most managers intended to, and only a minority had concrete plans.