The GRC Navigator

On 2 October 2026, the FCA published CP26/34, Preparing for the new transaction reporting regime, together with a draft reporting schema and validation rules for the Market Data Processor. The consultation is concerned with implementation: it proposes guidance, transitional provisions and consequential amendments for the rules made in PS26/15 (FCA 2026/52), which move transaction reporting from UK MiFIR into MAR 13, 14 and 15 on 3 April 2028, and it does not revisit the policy, which we analysed in Issue 26.

The guidance covers seven areas in which the FCA considers early clarification most useful, with the examples in Appendix 2:

• Client indicator. Guidance on MAR 14 fields 8 and 17, which replace the country-of-branch fields in RTS 22.
• Conditional single-sided reporting. Under the optional model, the buyer or seller reported by the receiving firm depends on the sending firm's trading capacity.
• Meaning of a transaction. Derivative events are treated as changes in economic exposure, in support of MAR 14.3.1G(7).
• Branch execution. The FCA restates the Market Watch 70 position that a UK branch is identified by supervisory, governance and operational arrangements and not by the trader's location.
• Equity swaps. Field 31 is populated with the reference price of the underlying instrument, following the removal of the SwpIn and SwpOut tags.
• Strike price. A new value, “NOAP”, is reported in field 48 where the strike cannot be determined at execution.
• Package transactions. These replace complex trades and require neither a single price nor simultaneous execution.

The examples are proposed as the first content of a new Transaction Reporting User Pack, on which the FCA will consult in full in the first quarter of 2027, which it will publish by 3 April 2027, and which will replace the ESMA guidelines, Q&A and TOTV opinion from 3 April 2028. The transitional provisions, in a proposed MAR TP 5, address the switch-over weekend. A transaction executed between 00:00 UTC on 31 March 2028 and 23:59 UTC on 2 April 2028 may be reported in the UK MiFIR format before 3 April or in the MAR 14 format afterwards, and either will be treated as compliant. Records of orders and transactions from before 3 April 2028 need not be reformatted to MAR 13. Corrections submitted after that date must follow the new rules, although the FCA does not expect them to contain information that UK MiFIR did not require when the transaction was executed. The FCA is also considering removing instruments tradeable only on EU venues from FCA FIRDS before April 2028, which depends on HM Treasury amending the legislation that sets the scope of the regime. Comments are due by 6 November 2026, and firms are invited to identify reporting scenarios that the existing Level 3 materials do not cover, for inclusion in the 2027 consultation.

On 14 October 2026, the FCA published Market Watch 86, reporting on supervisory visits to seven UK retail brokerage firms to assess their arrangements for detecting and reporting market abuse. Market Watch is a newsletter: it records the FCA's observations and makes no new rules, and the obligation it describes is the requirement under UK MAR to maintain effective arrangements to detect and report suspicious orders and transactions. The FCA records that it found material weaknesses in the design, implementation and operation of surveillance at the firms visited, that it required every firm to take remedial action, and that in some cases it used skilled person reviews to obtain assurance over remediation.

The findings concern the reporting threshold, calibration and governance. On the threshold for a suspicious transaction and order report (STOR), several firms applied a standard of reasonable suspicion that the FCA considers too high: some procedures told analysts not to escalate unless they could show a link between the client and the issuer, even where other aggravating factors were present, and others steered analysts towards reasons to close an alert. On calibration, some firms used a single price-move threshold across all stocks without regard to volatility, or a minimum notional that excluded a significant proportion of client trading from monitoring; several relied on vendor default settings and could not explain their alert logic, and calibration testing was often limited to comparing alert volumes with trading volumes, whereas the FCA identifies as good practice testing above and below the line and using synthetic trade data to confirm that alerts fire in defined abuse scenarios. On governance, some senior managers responsible for surveillance had limited understanding of triage, investigation, escalation and calibration, responsibilities were split across functions without one individual responsible for the whole process, and quality assurance ranged from full review to none.

The FCA also records a conceptual error in some firms' market abuse risk assessments, the assumption that an alert in place is evidence of an effective control. Market abuse risk at retail brokers remains a supervisory priority, the FCA states, and the findings may be relevant to other types of firm.

On 12 October 2026, the FCA published the findings of a multi-firm review of governance in the benchmarks sector, the final part of the supervisory work that followed its 2024 benchmarks portfolio letter. The document is a review and not guidance: the FCA describes its observations as “not a checklist or template”, does not expect administrators to adopt a single governance model, and does not state how many firms were in the sample. The review assessed board composition, challenge and decisions, delegation and escalation, board packs, and governance assurance.

The observations with the clearest application are those on records and on groups. The FCA found that in some cases governance records did not capture board decisions, the challenge made, the rationale or the resulting actions; it considers concise records of the principal considerations, challenge, rationale, actions and ownership sufficient, and notes that decisions taken outside scheduled meetings should be brought into the formal record where later oversight depends on them. On group structures, within which many administrators sit, arrangements worked best where the UK regulated entity retained visibility of its own risks and obligations and where information and escalation flowed in both directions between local and group forums; in some cases those flows were “less developed”. Conflicts arrangements were most meaningful, the FCA observes, where they reflected the firm's actual structure and not a generic register.

On management information, the review suggests testing reports by whether they helped the board identify a change, challenge an assumption, make a decision or track an outcome, and on assurance it suggests examining whether challenge affected decisions and whether escalation worked. The FCA will use the observations in its supervisory engagement and encourages administrators to engage with the Government's review of the UK Benchmarks Regulation, for which no timetable is given.

On 15 October 2026, the FCA published good and poor practice for contracts for difference (CFD) firms on the Consumer Duty price and value outcome, drawn from a May 2026 survey of 81 firms on what they had changed since its November 2025 multi-firm review. The document is supervisory feedback and not a rule, and it applies to every FCA-authorised firm that manufactures, promotes or distributes CFDs, spread bets or rolling spot forex to retail clients. It concerns firms with a live UK retail business, a different population from the 25 September closures covered in Issue 29.

Most firms had made or planned changes, but the FCA found many of them “relatively minor” and without effect on the provision of price and value. The changes it records as good practice are the widening of fair value assessments to every cost and charge on a client account, a move from offshore peer groups to UK-regulated peers, income thresholds at the appropriateness stage, and web pages that explain each fee. Only 12% of firms said they had changed any charge; those that did introduced interest on cash balances, reduced overnight financing on matched positions or outlier products, or changed calculation methods to reflect that financing is charged on total notional while no interest is paid on initial margin. Only a minority added an annual percentage rate to the implied daily cost of overnight financing, and the FCA states that the mark-ups in those charges remain “largely opaque”.

On matched or hedged positions, most respondents apply the full overnight funding spread to a client holding offsetting long and short CFDs on the same asset, many describing it as an administration charge, and the FCA is concerned that firms which offer reduced or waived margin on such positions may be encouraging clients to keep both legs open and pay spread and funding on each; it asks those firms to review every communication a client receives from onboarding onwards and to give a balanced account of the alternative of closing the positions. The FCA says it is disappointed that firms have not acted faster nearly three years after the Duty took effect and six months after its feedback, that fair value assessments should not be designed to conclude that value is fair, and that it expects firms to be able to show that they have reviewed their charges; it will follow up individually where it has concerns.

On 7 October 2026, the PRA published CP13/26, The Prudential Regulation Authority's automatic thresholds indexation framework, proposing that 128 fixed nominal thresholds in the PRA Rulebook, supervisory statements and statements of policy be uprated automatically in line with UK nominal GDP. The paper is a consultation with a draft rule instrument and a draft statement of policy, and it closes on 7 February 2027. The PRA's stated purpose is to prevent “prudential drag”, the unintended tightening that occurs when a threshold set in money terms is left unchanged while prices and the economy grow.

The mechanics are uniform: the base year is 2026, with no backdating for thresholds set earlier; thresholds taking effect in 2027 or 2028, including those in the Basel 3.1 and Small Domestic Deposit Taker instruments, take their effective-date values as base amounts. The first update would take effect on 1 July 2031, reflecting nominal GDP growth over 2027 to 2029, with further updates every five years, each communicated by 31 December of the preceding year to give a six-month implementation window, and the formula would never reduce a threshold if nominal GDP fell. Of the 128 thresholds, 52 govern reporting and 31 set the perimeter of a regime or definition; the largest is the £320bn total assets threshold for detailed capital reporting and the smallest £7,500 for credit union lending to an individual, and fewer than 10% operate in the opposite direction, so that indexation would raise a requirement. The FPC's O-SII buffer thresholds and the £75bn retail deposits threshold for the leverage ratio are excluded.

For readers outside the banking sector, the relevant part is the discussion paper in section 4 on thresholds that operate across the PRA and FCA frameworks: the remuneration proportionality thresholds, the whistleblowing scope thresholds and the SMCR size thresholds for dual-regulated firms. The PRA does not propose to index these and instead asks what would follow if the two regulators adopted different metrics, base years or timetables, noting that the FCA raised its Enhanced-firm thresholds in 2026 in line with inflation while the dual-regulated thresholds were unchanged, and that groups containing both solo-regulated and dual-regulated entities could find similar firms treated differently; responses on that section will be shared with the FCA unless a respondent objects.

On 14 October 2026, the PRA and the FCA published PS19/26 (FCA PS26/20), High loan to income lending, with a new supervisory statement, SS2/26, and replacement FCA general guidance, FG26/11. The policy is final: the amendment to the Housing Part of the PRA Rulebook and both statements commence on 28 October 2026, when the interim modification by consent and individual guidance that lenders have used since July 2025 fall away automatically. It implements the FPC's July 2025 recommendation that the regulators allow individual lenders to exceed 15% of new mortgages at loan to income multiples of 4.5 or more, provided the aggregate flow remains consistent with the 15% limit.

With the firm-level cap removed, a lender above the de minimis threshold, set at less than £150m or fewer than 300 regulated mortgage contracts in each of two consecutive four-quarter periods, may set its own high LTI appetite, must notify its regulator before changing strategy to exceed 15%, and must monitor both its own flow and the aggregate figure that the PRA will publish each quarter. If the regulators judge the aggregate inconsistent with the FPC's limit, they will announce a fractional reduction that each lender above 15% applies to its excess in each successive quarter until its flow returns to 15% or the expectation is withdrawn.

One point changed between CP6/26 of April 2026 and the final policy: most of the 15 respondents objected that a lender cannot manage its high LTI share within a single calendar quarter, because completions lag approvals and vary with the season, and the regulators have therefore adopted a rolling four-quarter measure for each firm's flow and for the adjustment expectations, while keeping a single-quarter measure to monitor the aggregate and to trigger an adjustment. They declined to vary the adjustment by lender size or risk profile, considering that the de minimis exemption already protects the smallest lenders. The FCA's guidance records that it may use its powers under section 55L of FSMA to require a firm that does not act on its expectations to cease high LTI lending.

On 15 October 2026, the Bank of England published a consultation paper proposing to amend the Collateral Part of its draft UK CCP Rulebook so that central counterparties may accept uncollateralised letters of credit (LOCs) as initial margin collateral. The proposals amend the draft rulebook on which the Bank consulted in June 2025 and on which it expects to publish final rules in the fourth quarter of 2026; they would take effect no earlier than that rulebook and without an implementation period, since a CCP that chose to accept LOCs would need the Bank's permission under the existing process for new collateral types. Responses are due by 15 January 2027, with final rules planned for the first half of 2027.

The present rules, carried over from UK EMIR, allow commercial bank guarantees only from non-financial clearing members and only if fully collateralised, and the Bank notes that no UK CCP accepts them. The proposals would rename the instrument, extend eligibility to non-financial clients clearing through a member, remove the collateralisation requirement, confine issuers to authorised UK or overseas credit institutions, require CCPs to monitor issuer creditworthiness, and tighten the concentration limit from 10% to 5% of a CCP's total collateral per issuing bank, with the option to raise the limit to 25% removed. CCPs would have to validate each LOC with the issuer before accepting it, and a clearing member named as joint beneficiary could draw only with the CCP's consent; the PRA considers that such LOCs are credit substitutes attracting a 100% credit conversion factor under Basel 3.1. The Bank's case rests on the 2022 energy crisis, when ICE Clear Europe's initial margin requirements rose by £30bn between February and April and some non-financial firms reduced their hedging to avoid meeting margin calls in cash; it states that liquidity planning remains the clearing participant's responsibility.

On 15 October 2026, Octopus Apollo VCT plc announced an FCA-approved prospectus for an offer for subscription of up to £50m, with an over-allotment facility of a further £25m, open until 5 April 2027 for the 2026/27 tax year and 14 October 2027 for 2027/28 unless closed earlier.

The manager's charges are in three parts. Under an agreement dated 15 October 2026, Octopus Investments Limited, the portfolio manager, receives an initial charge of 3% of gross funds raised; a further charge of up to 2.5% of funds raised from investors who apply without a financial intermediary; and an additional 0.5% a year of the net asset value attributable to those direct investors' shares for up to nine years while they hold them. The company treats the agreement as a related party transaction within UKLR 8.2.1R and states that its sponsor, Howard Kennedy Corporate Services LLP, has advised that the terms are fair and reasonable. The effect is that shares bought direct carry an ongoing charge for up to nine years that shares bought through an intermediary do not.

On 12 October 2026, PXN Growth VCT plc, formerly Praetura Growth VCT, published a prospectus for an offer of up to £10m of ordinary shares with a £10m over-allotment facility, open from that day until 1 April 2027 for the 2026/27 tax year and 24 September 2027 for 2027/28. Its investment manager, PXN Asset Management Limited, will charge up to 5% of accepted applications for promoting the offer, less early-bird and existing-shareholder discounts. Because the manager is a related party, the company treats the fee as a relevant related party transaction under UKLR 11.5.5R and has made the offer conditional on shareholders approving the payment at a general meeting at 10am on 11 November 2026, the procedure we described for Albion's offers in Issue 27.

On 14 October 2026, Baronsmead Venture Trust plc and Baronsmead Second Venture Trust plc published a joint prospectus for offers of up to £20m in aggregate, with over-allotment facilities of a further £15m, opening at 9am on 15 October and closing for the 2026/27 tax year at 9am on 29 March 2027 on a first-come, first-served basis. Gresham House Asset Management Limited is paid 4.5% of accepted applications for administering each offer, reduced by 1.5% for advised applications through intermediaries, for direct applications and where intermediaries waive initial commission, and it funds a discount to offer costs of 0.75% for existing shareholders and 0.5% for new investors on the first £7.5m per company; the announcement likewise describes the offer agreement as a relevant related party transaction. Taken with Octopus Apollo and Molten Ventures, the fortnight's VCT offers seek up to £160m including over-allotment facilities.

On 7 October 2026, Molten Ventures VCT plc published an offer document for an offer for subscription seeking £10m, with an over-allotment facility of up to a further £20m and a ceiling of 80 million new ordinary shares, open from noon that day until 5pm on 30 June 2027 unless closed earlier. We noted the intended offer of up to £30m in Issue 28.

The document is not a prospectus: the company relies on the exemption for a closed-ended investment fund that issues, over twelve months, fewer shares than the number already in issue, so no prospectus has been approved by the FCA and the protections that attach to one, including section 90 of FSMA, are not available; the document is instead a financial promotion approved under section 21 of FSMA by Paxiot Limited, an FCA-authorised firm. The same route was used by Foresight Technology VCT and the Northern VCTs in September, as we described in Issue 29. An investor comparing the four offers opened this fortnight is therefore comparing three FCA-approved prospectuses, one of which carries a shareholder vote on the manager's fee, with one document whose accuracy is the responsibility of its approver under the financial promotion rules.

On 5 October 2026, Jon Relleen, the FCA's director of infrastructure and exchanges, gave a speech at the Reform of the UK Public and Private Capital Markets Summit. A speech is not policy, and the FCA's page notes that the drafted text may differ from what was delivered; most of it restates completed reforms, and two forward statements are new. The FCA and the Bank of England will publish “in coming weeks” a joint roadmap setting out how UK wholesale markets will adapt to tokenisation, following the joint vision published in May 2026 and the feedback statement FS26/1 that we covered in Issue 28, and the FCA will appoint an equity consolidated tape provider next year.

He cited figures for the programme to date: about 25 companies have joined the Main Market since the 2024 listing reforms, including seven IPOs in the first half of 2026; the bond consolidated tape launched in June 2026 has 1.6 million licences and has increased the share of corporate bond trades observed in real time by 70% and of government bond trades by 30%; four PISCES operators have been authorised and seven transactions have taken place; and the transaction reporting proposals in PS26/15 were estimated to save £100m a year. The speech gives no indication of a change in supervisory approach for asset managers; its relevance to them is the timetable, since the roadmap will frame the FCA's later work on tokenised funds and on the custody and prudential questions it has said it will address.

On 1 October 2026, Nathanaël Benjamin, the Bank of England's Executive Director for Financial Stability Strategy and Risk, gave a speech at the ISDA Derivatives Trading and Treasury Forum. It is a speech and announces no policy, but it states that the Bank intends to publish “a comprehensive update on this, including potential policy proposals, in early 2027” on the resilience of the gilt repo market, following its 2025 discussion paper, and that “doing nothing is not an option”. Andrew Bailey's speech in Istanbul on 8 October named the same candidates, central clearing, minimum haircuts and risk management, as measures that “merit consideration”.

The evidence Mr Benjamin set out comes from the Bank's combined use of transaction reporting, fund reporting and supervisory data. Over the past four years, hedge funds have moved from net lenders to net borrowers of cash in repo across several currencies, with banks the main providers of leverage, and growth in their gilt repo borrowing has coincided with rising futures open interest, consistent with an expansion of the cash-futures basis trade that the Bank has tracked over the last 18 months. In the first system-wide exploratory scenario, hedge funds assumed that additional repo financing would be available while dealer banks indicated that it would not, and many funds said they would unwind repo-financed positions in response. Bank research estimates that broader central clearing could have reduced dealer gilt repo exposures by 40% to 60% during the 2020 “dash for cash”, and the Bank found that competition for clients, as well as netting and portfolio margining, explains the prevalence of near-zero haircuts, which it considers can allow leverage to build at little cost.

Mr Benjamin also drew attention to the aggregate repo data the Bank now publishes in the Financial Stability Report. For a UK AIFM running leveraged gilt strategies, the 2027 proposals are likely to address the three areas he named, and the Bank's data already identify where the leverage sits.

On 1 October 2026, Sasha Mills, the Bank's Executive Director for Financial Market Infrastructure, gave a speech at the Hogan Lovells and Global Digital Finance Digital Assets Summit. It is a speech and not policy, and much of it restates the “same risk, same regulatory outcome” principle, but it fixes three points of timetable and scope. The Bank intends to deliver a live synchronisation capability in 2028, allowing platforms to settle in central bank money, and is testing it through its Synchronisation Lab; it will publish, with the FCA, a full tokenisation roadmap later this year; and it places the future of CSD regulation and settlement finality “firmly in the innovation agenda”, meaning whether the definition of a CSD fits new business models, whether the scope of securities required to settle on a CSD is set appropriately, and how finality and financial collateral arrangements should apply to new asset types.

On the Digital Securities Sandbox, Ms Mills gave the activity limits as £8bn to £13.1bn for gilts and £17bn to £28bn for sterling corporate bonds. The Economic Secretary to the Treasury's speech of 6 October added that HSBC and ClearToken have been approved to operate live digital securities depositories in the sandbox and that the pilot issue of the digital gilt, DIGIT, is expected by the first quarter of 2027; HM Treasury the same day appointed Barclays, HSBC, Lloyds, Morgan Stanley, NatWest and RBC Capital Markets as joint lead managers.

Ms Mills said that the Bank will not pick technologies or business models and asked firms to bring real users and transactions into testing. For fund managers, the legal questions she listed, namely who owns the asset, which record is authoritative, when settlement is final and what happens on insolvency, are the questions that chapter 9 of CP26/35 leaves open for tokenised units in illiquid funds.