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The FCA made the Collective Investment Schemes Sourcebook (Cryptoasset Exchange Traded Note) Instrument 2026 (FCA 2026/57) on 24 September, with its feedback in chapter 3 of Handbook Notice 144, published on 25 September. The rules took effect on 28 September 2026. They end an effective prohibition, applied through the authorisation process rather than by rule, on authorised funds holding exchange traded notes that track cryptoassets (cETNs).

The limits are rules. Not more than 10% in value of the scheme property may consist of cETNs in a UCITS scheme (COLL 5.2.11R(9A)), a non-UCITS retail scheme (COLL 5.6.7R(2B)) or a NURS operating as a fund of alternative investment funds (COLL 5.7.5R(2A)). A long-term asset fund may hold none (COLL 15.6.8AR). Qualified investor schemes have no specific limit. The one change from CP26/17 concerns FAIFs. The FCA had proposed to exclude them. Respondents pointed out that FAIFs already hold assets other than second schemes under an enhanced framework, and the final rule gives them the same 10% as other NURS. The LTAF ban stays because the FCA does not consider cryptocurrencies consistent with those funds' objectives.

The 10% limit is a separate test from the existing limit on unapproved transferable securities and is not cumulative with it by default. A cETN must still pass the general tests for transferable securities and trade on an eligible market. And because the Glossary definition of a cETN includes leveraged and inverse products, the embedded derivative rules do the filtering: COLL 5.2.19R(3) requires a fund to take an embedded derivative into account, the permitted underlyings in COLL 5.2.20R(2) do not include cryptoassets, and the FCA says its rules allow no derivatives on unbacked cryptoassets in either UCITS schemes or NURS. Its conclusion is that neither can hold leveraged or inverse cETNs. Direct cryptoasset holdings stay off the table until the FCA has considered the October 2027 regime.

There is no prescribed risk warning. Instead, the feedback says exposure "beyond a genuine de minimis" is a relevant feature of a fund's strategy and belongs in the prospectus and marketing material, and the consultation reminded UCITS managers of COBS 4.13.2R(4), which requires a prominent statement in marketing where a scheme's net asset value is likely to be highly volatile. The consultation also said the prudent spread assessment should cover indirect exposure through other funds and correlated holdings such as "cryptoasset treasury issuers".

Before a first purchase, a manager needs the fund's objective and policy to cover cETNs, the 10% limit coded in pre-trade compliance separately from the unapproved securities limit, leveraged and inverse products screened out, and the depositary's agreement on how it will oversee the limit. Someone also has to decide, with a written reason, whether any intended exposure is de minimis.

On 16 September 2026 the FCA published PS26/18, finalising the Perimeter Guidance (Regulated Cryptoasset Activities) Instrument 2026 (FCA 2026/55), made on 11 September. It adds a new PERG 18 (numbered PERG 19 in CP26/13) and amends PERG 1, 2 and 8, in two stages: 16 September, and 25 October 2027, when the new regulated cryptoasset activities begin. This is guidance given under section 139A of FSMA. The FCA acknowledges that it cannot widen or narrow the perimeter Parliament set, and that only the courts can give an authoritative reading. The core Handbook rules were finalised on 30 June, as covered in Issue 23.

The application window is now open. Under the FCA's direction of 20 February 2026 the application period runs from 9am on 30 September 2026 to 11:59pm on 28 February 2027. A firm that applies in the window and is still undetermined on 25 October 2027 can keep operating under the saving provision. A firm that applies later and is not authorised by commencement falls into the transitional provision, which allows only the performance of existing contracts (FCA gateway page). MLR registrations and existing FSMA permissions do not convert.

Four points in the final text bear directly on fund and wealth managers:

• Mixed mandates. The consultation draft said managing investments "does not include qualifying cryptoassets". PERG 18.8.9 now says the article 37 activity applies wherever the managed property includes, or could include, securities or contractually based investments. Only a mandate confined to qualifying cryptoassets, with no possibility of it ever including securities, structured deposits or contractually based investments, falls outside it. A discretionary manager trading qualifying cryptoassets for clients may also need dealing, arranging or safeguarding permissions through a variation.
• Fund managers. PERG 2.9.22G(8) confirms that the article 72AA exclusion for managers of AIFs and UK UCITS extends to regulated cryptoasset activities carried on in connection with managing the fund. The same activity carried on for a segregated mandate falls outside that exclusion.
• Depositaries. PERG 18.6.12 says the article 42A exclusion for depositaries of UK UCITS and AIFs covers the new safeguarding activities. A custodian holding relevant specified investment cryptoassets outside that role will need a variation, because from 25 October 2027 the article 40 activity no longer covers them (PERG 2.7.10AG).
• Overseas firms. There is no overseas persons exclusion for the new activities (PERG 2.9.17BG(9)), so an overseas manager or broker serving UK clients has to work through the "in the UK" test.

Some of the perimeter is still moving. The guidance reflects the Cryptoassets Regulations as passed on 4 February 2026, not the amending statutory instrument since laid, which changes the scope of arranging and dealing and adds exclusions for some technology providers and UK qualifying stablecoin activity. A consultation on the resulting PERG changes is due in October, with final guidance aimed for early 2027, by which time the window will have been open for several months. The FCA refused requests for a technical services exclusion from safeguarding and may revisit its safeguarding guidance for tokenised securities and funds.

The FCA published a multi-firm review of money mule activity on 23 September 2026. It combines a survey of 35 retail banks, building societies, challenger banks, payment institutions (PIs) and e-money institutions (EMIs) with a public/private cell of 22 firms that traced the highest-value payments in 140 cases across seven fraud types. It is not rules or guidance, but it sets out what the FCA expects and says supervisors will monitor firms' approaches.

Firms offboarded 238,396 suspected mules in 2025, against 184,935 in 2023 and 233,269 in 2024, or 656,600 across the three years. EMIs' offboarding rose 164.6% on 2024. The share of offboarded customers filed to the National Fraud Database fell from 17.4% in 2024 to 15.3% in 2025. The review itself flags the limits of that comparison: Cifas introduced a dedicated mule category in January 2025, and the evidential threshold for a filing is higher than the threshold for closing an account. Tenure differs by model. Of the accounts EMIs and PIs closed, 74.1% and 56.9% went within six months of opening, whereas 45.4% of retail bank and building society closures involved accounts more than two years old.

The cell traced where the money left the system. Criminals usually cashed out between the second and fifth mule account, most often the second, after breaking funds into smaller payments. Card spending was the most common cash-out route; crypto cash-outs were fewer but larger; and some accounts had been used repeatedly across different fraud types before closure, which the FCA reads as organised infrastructure rather than opportunistic misuse.

The expectations are general: understand how funds move between accounts inside the firm and across the system, look at indicators beyond the first receiving account, and use the voluntary information-sharing provisions of the Economic Crime and Corporate Transparency Act 2023. For banks and building societies the Handbook hook is SYSC 6.3.1R, which requires systems and controls that identify, assess, monitor and manage money laundering risk. Payment and e-money firms answer under the Money Laundering Regulations. The FCA and the National Economic Crime Centre are sending relevant firms an alert with more detail. One practical test for an MLRO is to take a sample of recent confirmed mule cases and check whether transaction monitoring flagged the second and third accounts in the chain, or only the first.

On 25 September 2026 the FCA said in a press release that 21 contracts for difference (CFD) firms have closed since 2025 and three more are cancelling their permissions. Its concern was UK-authorised firms that do little UK business but use their authorisation as a badge to make linked overseas companies look more trustworthy. Consumers then believe they are dealing with a UK-regulated firm and have UK protections when they do not. The actions included restrictions on trading, independent reviews of the business and, in the two most serious cases, enforcement investigations. No enforcement outcome has been published, so none of this is a finding against a named firm.

The FCA signalled this in its 2024 CFD portfolio letter, which said around 20% of firms in the portfolio appeared to conduct little or no regulated activity, some "purely to provide an FCA 'halo'" to wider groups. The letter said the FCA would invite them to cancel or to show, with a credible business plan and realistic revenue projections, that they were ready, willing and organised to trade. It said a change in control of a largely dormant firm would be treated as little different from a new authorisation, and it defined "group" to include looser connections through a common ultimate beneficial owner. In 2025 the FCA separately warned that some CFD firms were redirecting retail clients to associated providers in third countries without equivalent protections, or pressing them to opt up to professional status.

The legal footing is the threshold conditions. The suitability condition in COND 2.5.1A looks at a firm's connections with other persons and whether its affairs are conducted appropriately, having regard to consumers and the integrity of the UK financial system. Where a firm carries on no regulated activity at all, the FCA can cancel its permission under Schedule 6A to FSMA (SUP 6B.5.3G), the procedure used in two unrelated consumer credit notices of decision published in the same fortnight.

The read-across goes beyond CFD brokers. Any group that runs a UK-authorised entity alongside overseas affiliates under a shared brand can apply the test the FCA described: could a client tell, from the website, the onboarding process and the client agreement, which entity they are contracting with and which protections apply? A UK entity whose revenue does not support its permissions, or whose name appears on marketing for business it does not carry on, matches the profile the FCA has been challenging since its 2024 letter.

On 17 September 2026 the Bank of England replaced annual quantitative tightening (QT) decisions with a multi-year plan and changed how it will carry it out. The MPC minutes record a unanimous vote to run the stock of gilts held for monetary policy purposes down to zero by the end of 2034, through sales of £20bn a year alongside maturities, an average reduction of £46bn a year. The Governor's letter to the Chancellor puts the past four years' average at £87.5bn, including £32bn of sales a year.

The market notice divides the £488bn left in the Asset Purchase Facility three ways. Gilts maturing before 2035, £222bn, will be held to maturity. The longest-dated £120bn, maturing between 2049 and 2071, will be kept to back banknote issuance indirectly, which the Chancellor's reply authorises as a segregated portfolio held for non-monetary policy purposes, with the Treasury indemnity unchanged. The remaining £146bn, maturing between 2035 and 2049, will be sold at the £20bn pace.

The buyer changes too. The Bank Executive intends to sell those gilts to the Government instead of the market: the Treasury would instruct the Debt Management Office to buy them at market prices on a pre-announced, non-discretionary schedule, and the DMO would pass them to the National Loans Fund for cancellation, with the Treasury issuing a matching amount of debt through the DMO's financing remit. A final decision follows a review before April 2027; either way, the Bank will announce its operational details by then, and its APF auctions are paused meanwhile. Dave Ramsden said in a speech on 28 September that DMO sales would run longest maturities first, and that 30-year yields fell about 10 basis points on the announcement.

The plan can be amended only if the MPC judges that Bank Rate alone is insufficient to meet the inflation target, or if the Bank judges markets to be very distressed, with the Financial Policy Committee involved in that second case. Bank staff put QT's contribution to 10-year gilt yields at 20 to 30 basis points, against a rise in term premia of about 200 basis points since February 2022.

Managers of gilt and liability-driven portfolios face a change in how supply arrives, not in how much. The Chancellor's letter says overall public sector supply to the market is unchanged. If the model goes ahead, long gilts reach the market through DMO issuance, not Bank auctions, and until April 2027 there are no Bank sales at all. Stress assumptions built around the APF auction calendar are out of date, and the DMO's next annual remit is where the supply will show up.

The Transaction and Post-trade Reporting Harmonisation Taskforce, which the Bank of England runs with the FCA to inform a long-term approach to harmonising UK MiFIR, UK EMIR and UK SFTR reporting, held the first meetings of its three working groups on 3 July 2026. The Bank published the minutes on 18 September. They record discussion only: nothing in them is a proposal, and each group was due to meet again in September.

The accompanying slides break down what the three regimes generate. Valuation updates account for 48% of UK EMIR activity files reported at transaction level since July 2025, and 45% of UK SFTR activity files. Securities lending makes up 88% of SFTR activity files, and equities and equity-like instruments 67% of daily MiFIR transaction reports.

The minutes show where the burden might move. Members called dual-sided reporting a significant cost driver and discussed whether valuations could be calculated centrally, by the authorities or market infrastructure, instead of being reported by firms. The Strategy Working Group recorded that harmonisation "could redistribute costs rather than reduce them, particularly where responsibilities shift between counterparties or between buy-side and sell-side firms", and the Policy Working Group noted the cost of delegated reporting. Buy-side participants include Man Group, Capula Investment Management, BlackRock and AIMA. The Architecture Working Group asked members to come to the next meeting with a design for EMIR, SFTR and MiFIR reporting built from first principles, without immediate implementation constraints.

This work runs alongside the FCA's MiFIR transaction reporting reform in PS26/15, published on 3 August 2026, whose rules apply from 3 April 2028. The minutes leave open who would carry the obligation if dual-sided reporting went. For a fund manager that reports its own EMIR and SFTR trades, or pays a dealer to report them, that allocation will decide whether harmonisation cuts its costs or adds to them.

M&G Credit Income Investment Trust plc announced a placing and retail offer of new ordinary shares on 18 September 2026; retail investors take part through the Winterflood Retail Access Platform (WRAP). Shares will be issued at a 1.5% premium to the last published cum-income net asset value per share before the offer closes. The issue price is expected on 16 October, commitments close at 2pm on 20 October and admission to the Main Market is expected on 23 October. Under the board's zero discount policy the trust has issued or sold from treasury 18,425,000 shares in the past 12 months.

The retail offer relies on an exception in Part 1 of Schedule 1 to the Public Offers and Admissions to Trading Regulations 2024, in force since 19 January 2026, and on an exemption in the FCA's PRM sourcebook, where PRM 1.4.3R(1) frees a closed-ended investment fund's further issues of admitted shares from the prospectus requirement while they stay below 100% of the shares already admitted over 12 months. Retail investors, with a £100 minimum, subscribe on the basis of the announcement and the trust's existing disclosures, and cannot withdraw once an application is accepted. The announcement also says each distributor is responsible for its own target market assessment and choice of distribution channel.

Foresight Technology VCT plc published an offer document on 28 September 2026 for an offer of up to £15 million, with an over-allotment facility of up to a further £10 million, across the 2026/27 and 2027/28 tax years. The document states that it is not a prospectus and that the protections attached to one, including under section 90 of FSMA, are not available. It relies on the PRM further-issue exemption for closed-ended funds and on paragraph 6 of Schedule 1 to the Public Offers and Admissions to Trading Regulations 2024, so the offer is conditional on admission. On its own figures, the maximum issue under the offer plus shares issued in the previous 12 months comes to about 65.6% of the shares in issue. Paxiot Limited approved the document as a financial promotion under section 21 of FSMA.

Foresight Group LLP, the investment manager, is also the promoter and will receive a fee of up to 4.5% of amounts subscribed, according to the company's announcement. As with the VCT offers in Issues 27 and 28, that makes the appointment a related party transaction under UKLR 11.5.4R; the board says its sponsor, SPARK Advisory Partners Limited, has advised that the terms are fair and reasonable.

Northern Venture Trust, Northern 2 VCT and Northern 3 VCT published an offer document on 16 September 2026 to raise up to £30 million in the 2026/27 tax year, £10 million for each trust. The offers opened at 8am on 30 September on a first-come, first-served basis and run until 12 noon on 31 March 2027 unless filled earlier; funded applications received by 5pm on 23 November 2026 go into the first allotment at the end of November. Mercia Fund Management Limited is investment manager to the two numbered trusts and investment adviser to Northern Venture Trust, which the document says is itself registered with the FCA as a small registered UK AIFM.

This document is not a prospectus either. It relies on the same exemptions for closed-ended funds and was approved as a financial promotion under section 21 of FSMA on 16 September by Howard Kennedy Corporate Services LLP. That shifts the gatekeeping. Instead of an FCA-approved prospectus, investors rely on an authorised firm's approval, and COBS 4.10.2R(1A) requires that firm to take reasonable steps to monitor the promotion's continuing compliance for as long as it is communicated, which here runs at least until the offers close in March 2027.

The Monetary Policy Committee voted by six to three at its meeting ending on 16 September 2026 to hold Bank Rate at 3.75%, according to the summary and minutes published on 17 September. Megan Greene, Catherine L Mann and Huw Pill voted to raise it to 4%. CPI inflation was 3.1% in August, which triggered the Governor's open letter to the Chancellor. Of the 1.1 percentage point overshoot, 0.7 points came directly from energy, mostly motor fuels. Bank staff now expect inflation of around 3¾% in the fourth quarter and slightly above 4% in early 2027.

The minutes suggest a majority close to moving. Andrew Bailey's paragraph says that if the Middle East conflict persists for an extended period, "it is likely that policy may have to tighten". The Bank's summary of Clare Lombardelli's speech on 24 September says policy "will be tightened further if needed", and she noted that the majority regarded waiting for evidence as having limits. Alan Taylor, also in the majority, puts neutral at 3%, and in a speech on 29 September argued that the burden of proof for further tightening should rest on evidence that second-round effects are gaining traction. The three dissenters pointed to inflation peaking in early 2027 just as wage settlements are agreed. Markets are ahead of the majority: the minutes record a UK short-rate curve peaking at around 4.9% by the end of 2027, and quoted two-year fixed mortgage rates about 95 basis points above their pre-conflict level.

The transmission to fund managers runs through financing costs. Private credit funds with floating-rate borrowers, funds using subscription or NAV facilities, and property vehicles refinancing in 2027 price off the curve, not the 3.75% headline. The next decision is on 5 November 2026. A valuation or liquidity model whose base case still assumes rate cuts in 2027 is now at odds with both the curve and the MPC's own language.

Much of Nikhil Rathi's speech to TheCityUK on 22 September 2026, published the next day, restates the FCA's record. He cited the fund tokenisation policy statement PS26/7 in April, the first fully native tokenised UK fund authorised in June, which we covered in Issue 23, and the stablecoin rules finalised before the summer. Three statements go further than published policy. The FCA intends to consult on safeguarding rules for "relevant tokenised investment assets". A joint tokenisation roadmap with the Bank of England is coming, setting out a route from testing environments to established market infrastructure. And the FCA is exploring agentic AI as a "first responder" in wholesale market surveillance across more than 9,000 firms and a billion rows of data a day.

He also reported more than 120 responses to the joint call for input with the Bank on tokenisation in wholesale markets, a common complaint of "pilot fatigue", and split views on where accountability should rest when decentralised finance protocols are used.

The safeguarding consultation connects directly to PS26/18. From 25 October 2027, safeguarding relevant specified investment cryptoassets, the tokenised securities and contractually based investments, moves from the article 40 activity to the new article 9N activity, and PERG 2.7.10AG says existing article 40 permission holders will need a variation if they intend to carry on the new activity. PS26/18 had already said the FCA may revisit its safeguarding guidance after the tokenisation call for input. A speech commits the FCA to nothing, but a manager with a tokenised share class or a plan for a native tokenised fund has two questions that stay open until the consultation appears: whether the token is "solely a record" of rights or value, which keeps it outside the qualifying cryptoasset definition, and which entity in the chain will need the new permission.

In a speech on 23 September 2026, Ruth Smith, the Bank of England's Executive Director for Resolution, said the Bank is reviewing the indicative threshold of 40,000 to 80,000 transactional accounts at which a bank with less than £25bn of assets may be given a transfer strategy instead of the Bank Insolvency Procedure (BIP). She expects the Bank to publish its updated approach in early 2027.

In the Bank's framework, banks with £40bn or more of assets are planned for bail-in, and those between £25bn and £40bn may be given transfer or bail-in. Below £25bn, a bank that cannot recover or wind down solvently is normally expected to enter BIP, a modified insolvency with rapid FSCS payout or transfer of the covered deposit book, unless the Bank judges that its failure would pose an unacceptable risk. Since the Bank's 2025 MREL update, transfer firms need not hold MREL above their minimum capital requirements, partly because the Bank Resolution (Recapitalisation) Act 2025 lets the Bank fund recapitalisation costs in a transfer up front and recover them from industry through the FSCS levy.

She gave three reasons for the review. Silicon Valley Bank UK, a bank of around £12bn with a BIP strategy, was instead sold to HSBC over a weekend in March 2023 because many customers relied on it for banking and payment services. The recapitalisation mechanism gives the Bank more options for firms that hold no MREL. And customers' banking behaviour has changed since the threshold was set. The Bank is also reviewing, with the PRA, what BIP firms should report.

A smaller bank with a large business current account book that moves onto a transfer strategy would not need extra MREL, but it would come within the resolvability assessment framework and need the information and capabilities for an accelerated sale that the Bank's operational guide to transfer, published in April, describes. Its board has until the early 2027 update to work out which side of the revised line it is likely to fall.