The GRC Navigator

• From 1 September 2025, large organisations face a strict-liability corporate offence if an “associated person” commits fraud for the organisation’s benefit and reasonable prevention procedures weren’t in place.
• Prosecutors (CPS/SFO) updated guidance in August to emphasise expectations ahead of commencement; the Home Office’s statutory guidance sets out the principles for “reasonable procedures.”
• This materially elevates board-level exposure and will likely drive enhanced internal controls, targeted fraud risk assessments and better MI on higher-risk channels (sales incentives, third-party agents, and digital journeys).
• Expect an uptick in self-reports and, over time, more DPAs.

What firms should do:

• Finalise and evidence your fraud risk assessment; ensure it is distinct from AML/ABC assessments. • Confirm effectiveness of controls across third-party/introducer networks. • Review escalation pathways; update Risk committees on readiness.

The FCA is making it easier for firms to find up-to-date supervisory communications on its website, as part of its ongoing efforts to streamline regulatory interactions. The FCA will label most pre-2022 thematic/multi-firm reviews as “historical” and pivot to periodic market reports instead of broad Dear CEO letters.

• The initiative aims to reduce the administrative burden on regulated firms by improving navigation and accessibility of guidance
• This development is part of the FCA’s broader agenda to enhance regulatory efficiency and effectiveness
• Firms should review their regulatory communication monitoring processes to ensure they’re accessing the most current information

The FCA is continuing to make data reporting more proportionate by reducing and removing regulatory returns for 95% of all authorised firms. They removed nil-return requirements for REP008 and set out further decommissioning/frequency changes (e.g., REP022, REP009) under Transforming Data Collection.

• This change will reduce compliance costs for smaller firms while maintaining appropriate oversight
• The initiative reflects a risk-based approach to supervision, focusing more intensive reporting requirements on larger or higher-risk entities
• Expect a September update on the wider decommissioning programme (CP25/8).
• Use the reprieve to re-focus on data quality where it matters (financial crime, conduct MI, and consumer outcomes) and document rationales for any retired internal reports.

Consumers are being warned of fraudsters impersonating the FCA, as the regulator revealed it had received almost 5,000 fake FCA scam reports in the first half of 2025.

• The high volume of reports indicates a growing threat of regulatory impersonation scams
• Financial institutions should ensure their customer communications clearly distinguish legitimate regulatory interactions from potential scams
• The FCA has emphasized the importance of checking the Financial Services Register and using the ScamSmart website to verify regulatory communications

The FCA is providing clarity around workplace savings schemes as part of efforts to improve financial resilience.

• The guidance aims to encourage greater participation in workplace savings alongside traditional pension provision
• Financial advisers and workplace benefit providers should review their advice frameworks in light of this clarification
• This initiative aligns with broader regulatory focus on improving financial outcomes for consumers

Implications: Product governance teams should reassess scheme communications, value-for-money metrics, and Consumer Duty outcomes—especially for lower-income cohorts and update financial promotions and target-market statements.

Will Self has been appointed Chair of the FCA’s Smaller Business Practitioner Panel, reinforcing the regulator’s commitment to understanding the perspectives of smaller financial services firms.

• The panel plays a key role in providing feedback to the FCA on regulatory proposals from the perspective of smaller businesses
• The appointment underscores the FCA’s continued focus on proportionate regulation for firms of different sizes
• Smaller regulated firms may benefit from increased representation of their specific challenges and concerns

On 29 August 2025, the Bank of England published a working paper titled “Measuring the stability of the banking system: capital and liquidity at risk with solvency-liquidity interactions.”

• The framework models how liquidity stress affects solvency through confidence mechanisms
• UK banks should evaluate how this methodology will influence future stress testing requirements and regulatory expectations
• The framework draws on the SVB/Credit Suisse collapses, moving beyond traditional risk model separation. Traditional solvency-liquidity separation models proved inadequate during recent banking system stresses, necessitating integrated behavioural modelling approaches.

Implications: • Counterparty Risk: Banks with inadequate liquidity-solvency modelling face disproportionate regulatory scrutiny, requiring enhanced due diligence frameworks and differentiated counterparty assessment methodologies • Valuation Model: Traditional DCF approaches become insufficient; behavioural stress factors require integration into bank investment analysis, necessitating sophisticated modelling capabilities • Systemic Risk: The framework enables hedging strategies based on modelled interdependencies that market participants could not previously access

The Bank of England’s Weekly Report published on 27 August 2025 provides insights into current economic conditions and potential risks to financial stability.

• The report contains the Bank’s latest assessment of economic indicators and market developments
• The analysis offers valuable context for scenario planning and risk management
• Firms should review the report for signals about potential monetary policy adjustments

On 22 August 2025, the Bank of England published a working paper titled “Trading blows: The exchange-rate response to tariffs and retaliations,” examining how currency markets react to trade policy changes.

• The research provides analytical tools for gauging how trade policy moves currency markets
• Financial institutions with significant cross-border exposures should consider implications for sophisticated currency risk management strategies
• The findings enable better anticipation of market reactions to geopolitically-driven trade policy changes

Implications: • Currency Warfare: Traditional FX hedging proves inadequate for managing politically-motivated volatility patterns, requiring sophisticated geopolitical risk modelling • Supply Chain: Exchange rate volatility from trade disputes creates previously unmodeled correlation risks across asset classes requiring comprehensive portfolio stress testing • Alpha Generation: Sophisticated quantitative models enable profit optimization from trade policy-driven market dislocations, creating systematic investment opportunities

On 21 August 2025, the Bank of England published its Real-Time Gross Settlement (RTGS) system and CHAPS Annual Report for 2024/25, highlighting developments in the UK’s critical financial market infrastructure.

• The report details operational performance, resilience measures, and future development plans for these critical payment systems
• Payment service providers should review the report for insights into upcoming changes to settlement infrastructure
• The document provides transparency on how the Bank is managing operational risks in systemically important payment systems

In August 2025, institutional capital concentrated increasingly in larger platforms offering operational infrastructure and access to diversified strategies. Specialist strategies still drew substantial allocations despite their concentrated risk.

Chicago-based Pritzker Private Capital has closed PPC IV with $3.4bn in capital commitments, surpassing its $3bn target, a sign of continued institutional appetite for middle-market private equity.

• The oversubscription reflects institutional appetite for middle-market value creation amid public-market volatility
• The fund size expansion signals Pritzker’s evolution from family office investment vehicle to institutional-scale private equity platform

Neuberger Berman is targeting a first close representing half of its $5bn fundraising objective for its flagship secondary private equity fund by year-end 2025, signaling institutional demand for sophisticated liquidity solutions.

• The vehicle expands secondary-market capacity, giving institutional private equity portfolios more routes to liquidity
• The fund size positions Neuberger among the largest secondary players, indicating institutional recognition of secondary markets as systematic portfolio management tools

Crescent Capital is seeking approximately $3bn for a credit continuation vehicle rolling assets from its 2017-vintage fund, representing evolution in credit fund lifecycle management through continuation fund.

• The transaction extends the assets to time realisations independently of the original fund’s lifecycle
• Credit continuation vehicles let managers extend hold periods for credit investments that need longer workout periods

Brevan Howard Asset Management has agreed to sell a minority stake to Abu Dhabi-based Lunate, alongside a $2bn capital commitment to a new investment platform based in the emirate’s Abu Dhabi Global Markets free-zone.

• The deal represents one of the largest recent investments in a hedge fund manager
• This strategic partnership highlights the growing influence of Middle Eastern sovereign wealth in global asset management

Blackstone has announced the acquisition of Shermco in a $1.6 billion deal focused on energy transition infrastructure.

• The transaction reflects private equity’s growing interest in energy transition investments
• The deal signals increasing private capital allocation to companies supporting critical infrastructure modernisation

BlackRock is preparing to launch its first dedicated venture secondaries fund targeting discounted venture capital stakes.

• The vehicle expands institutional access to venture secondaries, using BlackRock’s distribution reach to widen that access.

Millennium Management has provided a $1bn capital allocation to support a new hedge fund launched by a former Goldman Sachs commodities division head, representing significant institutional backing for specialized trading strategies.

• The allocation shows institutional conviction in specialist commodities trading amid market volatility

Sainsbury’s has overtaken all other listed companies to become the most shorted UK stock, with hedge funds betting heavily against the supermarket amid mounting concerns over an industry-wide price war.

• The positioning reflects growing investor concern about margin pressure in UK retail
• The short interest may signal broader investor caution about UK consumer spending outlook
• Firms with exposure to UK retail should evaluate potential portfolio implications

Goldman Sachs is giving wealthy investors the chance to buy into Izzy Englander’s Millennium Management, one of the world’s largest hedge fund managers, with financial commitments of between $1m and $20m.

• This offering highlights the growing trend of democratising access to alternative investments
• UK wealth managers may wish to consider competitive implications for their high-net-worth client offerings
• The initiative reflects increasing investor demand for access to established hedge fund strategies

The BlackRock Investment Institute has recommended its largest-ever boost to hedge fund allocations, advising institutional investors to add up to 5 percentage points more to the asset class compared with pre-2020 levels.

• This recommendation from the world’s largest asset manager could influence institutional allocation trends
• The recommendation suggests growing institutional confidence in hedge funds’ ability to deliver in the current market environment
• UK pension schemes and institutional investors should evaluate the implications for their strategic asset allocation