The Office of the Comptroller of the Currency will no longer follow interagency guidance on climate-related risk management for large financial institutions. The full update can be found here on our US Regulatory Intelligence platform.

On 4 April 2025, the European Banking Authority (EBA) published its 2024 reports on the annual market and credit risk benchmarking exercises. The reports summarise the conclusions drawn from a hypothetical portfolio exercise conducted by the EBA during 2023/24. The exercise was performed on a sample of 43 European banks from 13 jurisdictions. For the first time, the EBA has released a specific report on the fundamental review of the trading book Alternative Standardised Approach.

On 4 April 2025, there was published in the Official Journal of the EU, Decision (EU) 2025/673 of the European Central Bank (ECB) of 24 March 2025 amending Decision (EU) 2023/1681 on the provision to the ECB of supervisory data reported to the national competent authorities (NCAs) by the supervised entities. Decision (EU) 2023/1681 lays down procedures concerning the submission to the ECB of information reported to the NCAs by supervised entities. Decision (EU) 2025/673 amends Decision 2023/1681 so that it includes the submission to the ECB of information on significant risk concentrations and significant intra-group transactions reported to the NCAs by significant supervised entities. Decision (EU) 2023/673 takes effect on the day of its notification to NCAs.

On 3 April 2025, the Prudential Regulation Authority (PRA) published a letter to directors setting out its approach to Credit Union Service Organisations (CUSOs) and intention to consult on rule changes. The letter from the PRA’s Director for UK Deposit Takers, Laura Wallis, clarifies the current regulatory position with respect to credit unions that hold an investment in, or are users of, CUSOs. She notes that a small number of CUSOs (i.e. entities owned by credit unions that provide shared services to them, to benefit from economies of scale) are already established in the UK and there is increasing interest in establishing them, but there is some uncertainty as to whether the regulatory framework permits credit unions to hold an investment in CUSOs. To clarify this, the letter includes information on: Typical characteristics of a CUSO. Benefits and risks of CUSOs. Compatibility with legislation and the regulatory framework. The PRA’s approach to CUSOs. Some key regulatory considerations that the PRA has seen in other jurisdictions. Next steps Ms Wallis confirms that the PRA intends to consult later this year on changes to the PRA rules to remove any uncertainty on the regulatory position. The consultation will be based on the regulatory considerations outlined in the letter. The PRA also plans to contact credit unions that are already investing in a CUSO to ensure that they are doing so in a way that is compatible with current regulation, and where appropriate it may use temporary rule modifications to ensure these credit unions’ use of CUSOs is in line with PRA rules.

On 2 April 2025, the Dutch Authority for the Financial Markets (Autoriteit Financiële Markten, the AFM) announced the launch of an exploratory investigation into financial services provided under the so-called ‘national regime’ exemption. This regime allows financial service providers and investment firms in the Netherlands to provide (i) investment advice and (ii) the reception and transmission of orders in units or shares in UCITS and alternative investment funds. Under this regime, firms are partially exempt from certain provisions of the Markets in Financial Instruments Directive (recast) (Directive 2014/65/EU, MiFID II), as transposed into the Act on the Financial Supervision (Wet op het financieel toezicht). The AFM has launched this investigation in response to a significant increase in the use of the national regime, a growing number of retail clients receiving services under this regime, and a rise in reports suggesting potential non-compliance by parties operating under this regime. The focus of the investigation will be on assessing compliance with key regulatory obligations, including the prohibition of commission, robust know-your-customer (KYC) procedures, and transparency around costs charged to investors. The outcome of this study could have meaningful implications for firms operating under the national regime. If the AFM identifies serious instances of non-compliance or regulatory risks, it may take further supervisory action or propose amendments to the current regulatory framework to better safeguard investor interests and ensure market integrity. Financial service providers and investment firms making use of the national regime are therefore advised to thoroughly evaluate their internal procedures and ensure they meet all applicable regulatory standards. The AFM has indicated that firms selected for the exploratory investigation will be notified individually. For further details, please refer to the AFM’s official news release on the investigation (available in Dutch only via the following link).

In the latest episode of our podcast series, Split the Difference, Hannah Meakin, Floortje Nagelkerke, Anna Carrier, Lucy Dodson and Anita Edwards discuss upcoming and potential reforms to the commodity derivatives regulatory framework in the UK and EU. Listen to the episode here.

On 3 April 2025, the Financial Conduct Authority (FCA) published a policy statement, PS25/2, on the derivatives trading obligation (DTO) and post-trade risk reduction (PTRR) services. Background In July 2024, the FCA consulted (in CP24/14) on proposed changes to the scope of the DTO and the framework for exemptions from the DTO for PTRR services. In particular, it proposed to: Bring swaps on the US risk-free rate SOFR (Secured Overnight Financing Rate) OIS (overnight index swap) into the scope of the DTO. Define the types of PTRR services that can be exempted from the DTO. Use its power of direction to modify the DTO. Response and final rules PS25/2 summarises the feedback received to CP24/14 and sets out the FCA’s response, as well as final rules on the classes of SOFR OIS subject to the DTO and the framework for PTRR services which allows investment firms to benefit from various exclusions. Use of power of direction to modify the DTO The FCA notes that it received unanimous support for its proposal to exercise its power of direction to modify the DTO to replace the direction made under the temporary transitional powers (TTP). As a result, it published its final direction in November 2024, which entered into force when the TTP direction expired on 31 December 2024. Bringing SOFR OIS swaps into scope of DTO The SOFR OIS classes of derivatives will be brought into the scope of the DTO as proposed in CP24/14, subject to some restrictions around the inclusion of the 12-year SOFR product. PTRR services exempt from DTO There are currently three types of PTRR services – portfolio compression, portfolio rebalancing and basis risk optimisation – but only transactions arising out of portfolio compression benefit from exemptions from the DTO at present. The FCA plans to proceed with its proposal to expand the exemptions to other PTRR services, subject to certain conditions. Next steps The changes will come into force on 30 June 2025.

On 3 April 2025, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) launched a consultation, FCA CP25/6 and PRA CP6/25, on proposed amendments to the PRA Rulebook and FCA Guidance concerning the de minimis threshold for the loan to income (LTI) flow limit in mortgage lending. Background The LTI flow limit ensures that mortgage lenders limit the number of new residential mortgage loans made with an LTI ratio of 4.5 or above, to no more than 15% of their total number of new mortgage loans per annum. Under the current de minimis threshold, lenders that extend residential mortgages of less than £100m in value or fewer than 300 in number per annum are exempt from the LTI flow limit. The Financial Policy Committee (FPC) has recommended that the LTI flow limit should only apply to lenders that extend residential mortgages above £150m per year, rather than the £100m threshold (which was set in 2014). FCA and PRA proposals CP25/6 sets out the PRA’s and FCA’s proposals to implement the FPC’s recommendation by amending their existing rules and general guidance (respectively). In particular: The PRA proposes to make amendments to the Housing Part of the PRA Rulebook. The FCA proposes to amend the general guidance it initially issued in October 2014 (in FG14/8) and revised in February 2017 (in FG17/2). Next steps As the proposals are narrow in scope and will result in fewer firms having to comply with the LTI limit, the consultation is open for 5 weeks, closing on 8 May 2025. The FCA is accepting responses on behalf of itself and the PRA, and both regulators will then consider the responses received and seek to resolve any issues raised. They aim to issue their finalised respective guidance and final rules so that they can be in place by H2 2025.

On 3 April 2025, the Financial Ombudsman Service (FOS) published its 2025/26 Plans and Budget. Key points from the publication include: The FOS aims to bring down the number of non-car commission cases waiting for a resolution, to improve the time it takes for customers to receive an answer on their case and their experience of the FOS. It also plans to continue to work motor finance commission (MFC) cases as far as it can and within the parameters of the ongoing legal and regulatory action outside its control. The FOS is continuing to progress its plans to transform and improve its service for customers, with a focus on reducing the time it takes to provide customers with answers on cases by further increasing its capacity to resolve cases productively; building flexibility into its workforce to respond to reasonable changes in demand; and sharing greater insight with industry. At the start of 2025/26, the FOS will implement changes to its funding model so that professional representatives are charged a case fee for using the service. A further focus for the year will be to engage with the Economic Secretary to the Treasury’s review of the FOS and the feedback received as part of the FOS’s joint Call for Input with the FCA on whether and how it should play a role in resolving mass redress events in future.

On 2 April 2025, the Financial Conduct Authority (FCA) published the feedback it received to discussion paper DP23/1 on finance for positive change, along with its response and next steps. Background DP23/1 was published in February 2023, with the aim of encouraging an industry-wide dialogue on firms’ sustainability-related governance, incentives and competences. The FCA noted at the time that it intended to use the feedback in considering what the industry would find most helpful in this developing area and in developing its future regulatory approach. Feedback The FCA notes that the responses it received were generally positive about the importance of sustainability matters and the role of the themes outlined in DP23/1. It summarises the feedback received in relation to: Objectives, purpose, business and strategy. The role of the board and senior management. Accountability. Incentives and remuneration. Investor stewardship. Training and competence. Common themes across the responses received included the need for new regulations (e.g. the Consumer Duty and the Sustainability Disclosure Requirements (SDR)) to “bed in” before determining whether any additional rules would be needed. The role of the International Sustainability Standards Board standards, and previously the Task Force on Climate-Related Financial Disclosures recommendations, in establishing a global baseline for sustainability disclosures was also mentioned. FCA response In its response, the FCA welcomes the level of engagement and flags the important role the engagement and dialogue has played in building its understanding of the state of play. It highlights the rules it has introduced since DP23/1 in relation to some of the themes, including the Consumer Duty, the SDR and labelling rules, and the Anti-Greenwashing Rule, and notes that many respondents to DP23/1 acknowledged the importance of these measures. The FCA recognises the importance of allowing time for new measures to be implemented before introducing further rules in these areas, and that current practices are still developing in the areas covered by the DP that are not captured by these measures. Next steps The FCA confirms that it is not currently considering introducing new rules on the themes discussed in DP23/1, although it notes that those themes remain important to firms’ success in embedding sustainability considerations, delivering value to consumers, and supporting market integrity. It plans to continue monitoring developments in the market to ensure it is functioning well, focusing on areas where potential harm to consumers, market integrity or competition is greatest and where it thinks regulatory action can make a positive difference. The FCA also explains that it will continue to promote the themes discussed in DP23/1 through other domestic and international initiatives, including carrying out supervisory engagement, bringing market participants together to develop market-led solutions, and influencing the global stage.

On 3 April 2025, the European Securities and Markets Authority (ESMA) published MiFIR Review Consultation Package 4; On transparency for derivatives, package orders and input/output data for the derivatives consolidated tape. Background The MiFIR review (Regulation (EU) 2024/7913) introduces two new articles, Article 8a for pre-trade transparency and Article 11a for post-trade deferrals, that effectively separate the non-equity regime into two – one for bonds, structured finance products (SFPs) and emission allowances (EUAs) under the amended Articles 8 and 11; and another one for derivatives, with the new Articles 8a and 11a. In order to ensure a consistent approach of the transparency regimes in each asset-class and reflecting the clear political steer for prioritising the review of the transparency regime for bonds, ESMA decided to tackle these mandates in separate publications. On 16 December 2024, ESMA published a final report which addresses the transparency mandate for bonds, SFPs and EUAs. In this latest consultation ESMA addresses the transparency mandate for derivatives under Articles 8a and 11a of MiFIR. Proposals This consultation includes ESMA’s proposals: On the new MiFIR transparency regime for exchange-traded derivatives (ETD) and over-the-counter (OTC) derivatives. It sets out the new scope of derivatives subject to transparency, it proposes to apply the new liquidity determination to pre-trade waivers and introduces amendments to post-trade transparency fields and flags. On the new deferral regime for ETD and OTC derivatives, including the different size thresholds and deferral durations to be applied for post-trade transparency. For amendments to provisions related to the conditions under which MiFIR trade transparency requirements are disapplied to transactions entered by a member of the European System of Central Banks. To review Commission Delegated Regulation (EU) 2017/21942 (‘Package order RTS’) in particular taking into consideration the new scope and liquidity determination. Deriving from ESMA’s new mandate to develop draft regulatory technical standards prescribing data quality requirements for prospective consolidate tape providers and data contributors, covering the OTC derivatives tape. Next steps The consultation closes on 3 July 2025. ESMA expects to publish a final report and submit draft technical standards to the European Commission in Q4 2025.

The SEC voted to end its defense of the rules requiring disclosure of climate-related risks and greenhouse gas emissions. The rules created a detailed and extensive special disclosure regime about climate risks for issuing and reporting companies. The full update can be found here on our US Regulatory Intelligence platform.

House Republicans urged the SEC to reform current rules on shareholder proposals, warning that “the politicization of the proxy process continues to place a substantial burden on public companies[.]” The full update can be found here on our US Regulatory Intelligence platform.

SEC Commissioner Hester M. Peirce outlined seven strategies for Congress to streamline crypto regulation. The full update can be found here on our US Regulatory Intelligence platform.

On 2 April 2025, the Competition and Markets Authority (CMA) launched a consultation on its review of those provisions of the SME Banking Undertakings 2002 which remain in force. Background The CMA reviewed the SME Banking Undertakings 2002 in 2014 and decided in 2016 to release all but 4 provision in the Undertakings. The 4 remaining provisions prohibit 8 designated banks from compelling an SME customer to open or maintain a business current account as a condition of accessing business loans or deposit accounts. Review The CMA is now carrying out a review to determine whether, as a result of any change of circumstances, those remaining provisions are no longer appropriate and need to be varied, superseded or released. In particular, it is consulting on: Potential changes of circumstances that may mean that the provisions are no longer appropriate. If such changes are identified, whether they mean that the provisions should be varied, suspended or released. In the case of identifying the need to vary the provisions, which changes could be made. Next steps The consultation closes on 7 May 2025.

On 2 April 2025, the Association for Financial Markets in Europe (AFME) published an updated version of its MiFID II / MiFIR implementation guide for firms operating in wholesale secondary markets. The guide provides a holistic yet detailed overview of the state of play and key implementation pain points for AFME members, which are sell-side firms operating in wholesale secondary markets. This second iteration of the guide covers regulatory developments up until 20 March 2025, and will be reviewed periodically until end of 2025.

On 2 April 2025, the European Securities and Markets Authority (ESMA) published its latest annual review of EU central counterparty (CCP) supervision. The peer review focuses on the effectiveness of Member State competent authorities’ (NCAs) supervisory practices in assessing CCP compliance with the European Market Infrastructure Regulation (EMIR) requirements on outsourcing and intragroup governance arrangements. The review provides an overview of the approaches adopted by NCAs and sets out ESMA’s assessment of the degree of convergence reached by NCAs. The peer review provides an assessment of NCAs against three supervisory expectations relating to: (i) the NCAs’ established process for the CCP to notify any new outsourcing arrangement, (ii) the NCA’s review of the ongoing compliance of CCP outsourcing arrangements with the relevant requirements under EMIR, and (iii) the NCAs’ reviews of the compliance of CCP governance arrangements with the relevant requirements under EMIR. Next steps ESMA will follow up on the implementation of the recommendations made to NCAs and work to identify, where relevant, the most appropriate tools to further enhance supervisory convergence on the identification of major activities linked to risk management.

On 2 April 2025, the Single Resolution Board (SRB) issued a public consultation on expectations on valuation capabilities. The consultation is part of the SRB’s engagement with industry in order to achieve its mandate and deliver on the Single Resolution Mechanism Vision 2028 strategy’s focus on improving crisis readiness. In the consultation the SRB proposes expectations on: Valuation Data Index (VDI): the VDI strives to make a sufficient comprehensive set of information available to the SRB and/or independent valuers for performing valuations so that the risk of lacking sufficient data to tune their valuation models is mitigated. The VDI consists of: (i) an enhanced Valuation Data Set (VDS), which includes data field requests on single asset and liability level, and data at portfolio level (for trading books and liabilities); and (ii) a set of documents, which includes audit reports, risk reports, business plans, information on internal models for valuation purposes, etc. Data Repositories for Resolution (DRR): the VDI information is expected be submitted to the DRR at a predefined frequency. The minimum functionalities expected for the DRR are outlined and banks are expected to ensure the capability to regularly provide and submit the information expected in the VDI to the DRR, as well as any other additional information upon request, if necessary. The data must be of high-quality and reconcilable with other financial information. Valuation playbooks: the SRB establishes expectations on the content and structure of the valuation playbooks, which will help the independent valuer gain an in-depth understanding of banks’ internal valuation models and their application in business processes.   Next steps The deadline for comments on the consultation is 2 July 2025.

On 2 April 2025, the European Securities and Markets Authority (ESMA) issued a short press release clarifying certain aspects of the Consolidated Tape Provider (CTP) for bonds. In the press release ESMA provides clarification on the: Timing of the entry into force and application of the delegated acts related to CTP and the transparency regime. ESMA has no indication that the European Commission intends to introduce substantial changes to the draft technical standards that ESMA published on 16 December 2024 and expects them to be adopted shortly. Possibility of ESMA granting a transition period to the selected and authorised CTP for bonds. ESMA acknowledges the possibility – foreseen within the Markets in Financial Instruments Regulation – to grant a transitional period to the selected CTP, if it is requested by the applicant. In that case, ESMA can grant a short transition period to the authorised CTP, to ensure its readiness and the readiness of its contributors for the start of the CTP activities. ESMA encourages market participants to prepare for the start of the CTP without counting on an extended transition period after the authorisation of the entity.

On 1 April 2025, the Information Commissioner’s Office (ICO) published detailed findings from its review into the use of children’s data by financial services. The review looked at the gathering of children’s data from services supplying them with current accounts, savings accounts, trust accounts, ISAs and prepaid cards, with a focus on the following areas: governance, transparency, use of information, individual rights, age verification, and further contact and marketing. The review report summarises: Evidence of good practice. Evidence of risks to data protection compliance. Instances where the ICO found that improvements may be necessary to data practices. Examples of areas identified in the report where financial services organisations need to make improvements include the need to revisit privacy information as children age and their understanding increases, having specific training for staff on children’s data protection, and making more of a distinction between parents and children when conducting marketing.