5 May 2025
The latest regulation broken down into easy to digest segments with relevant links. All you need to know to stay compliant. News, FCA updates, policies coming into force, the latest consultations, plus so much more...
GENERAL
FCA publishes speech on improving consumer outcomes - Pensions, mortgages and savings
On 28 March 2025, Nikhil Rathi, Chief Executive of the FCA, delivered a speech at the JP Morgan Pensions and Savings Symposium, focusing on improving consumer outcomes in the pensions, mortgages, and savings markets.
Key points included:
Holistic Financial Journeys: Rathi called for better integration across pensions, housing wealth, and savings to reflect how consumers actually manage their finances.
Investment Culture: He emphasised the need to enhance returns and financial resilience through a stronger national investment culture.
Targeted Support Model: The FCA plans to consult on a new approach bridging the gap between financial advice and generic guidance.
Using Pension Savings for Homeownership: Rathi suggested exploring limited, regulated access to pensions for home deposits, inspired by international models.
Later Life Lending: He highlighted the role of housing wealth in retirement planning and encouraged innovation in safe, flexible lending options for older consumers.
Financial Education: The speech underscored the importance of improving financial capability early in life.
Overall, the speech set out the FCA’s ambition to align financial services more closely with real-life consumer needs and outcomes.
FCA publishes written submissions - Motor finance appeal
The FCA has submitted its written arguments to the Supreme Court for the appeal heard from 1–3 April 2025 in the case of Johnson v FirstRand Bank Ltd (MotoNovo Finance), challenging a 2024 Court of Appeal decision that raised the prospect of widespread liability for undisclosed commissions in motor finance.
The FCA argues that the Court of Appeal’s approach was too broad, particularly in treating motor dealer brokers as fiduciaries in most cases. The FCA cautions that this sweeping generalisation may not align with legal or regulatory principles and could have far-reaching implications.
FCA: Written submissions to the Supreme Court in the motor finance appeals
FCA to launch a multi-firm review in 2025/26 - Cash-based money laundering
On 2 April 2025, the FCA announced plans to launch a multi-firm review in 2025/26 focused on cash-based money laundering. This follows concerns raised in the 2020 UK National Risk Assessment, particularly around abuse of cash deposit services, such as those at the Post Office.
The review will examine multiple cash entry points into the financial system, assessing how criminals exploit these channels. It builds on the FCA’s September 2024 regime aimed at protecting access to cash and reinforces the regulator’s continued focus on reducing financial crime under its 2025–2030 strategy.
FCA presence in US and APAC - established for the first time
On 15 April 2025, the FCA announced its first-ever international presence in the United States and Asia-Pacific (APAC) regions.
Tash Miah, based at the British Embassy in Washington, DC, will lead the FCA’s US operations. He will focus on UK-US regulatory cooperation and supporting US firms engaging with UK regulation.
From July 2025, Camille Blackburn will head a new regional office in Australia as Asia-Pacific Director, supporting UK firms expanding into APAC and APAC firms entering the UK market.
This move aims to strengthen global regulatory collaboration and enhance cross-border market access.
FCA publishes findings of multi-firm review on treatment - Bereavement and powers of attorney policies
On 12 April 2025, the FCA published findings from its multi-firm review of retail banks' treatment of customers in vulnerable situations involving bereavement and powers of attorney.
Good practices and areas for improvement were identified, particularly in:
Recognising and responding to customer needs
Outcomes testing and monitoring processes
The review contributes to the FCA’s broader work on vulnerable customer treatment, with related findings published in March 2025. The FCA has written to participating firms outlining its expectations and next steps. The FCA also referenced a recent review of life insurers’ bereavement processes, encouraging banks to adopt best practices such as electronic verification of death.
FCA multi-firm review: Retail banks’ treatment of customers in vulnerable circumstances
FCA charges individual - Unauthorised business and misleading investors
On 15 April 2025, the FCA charged an individual—sole director of Financial Trading Strategies Limited—for unauthorised investment activity and misleading investors.
Key allegations:
Operating without FCA authorisation between January 2020 and December 2023, offering subscription-based trade alerts and managing money for over 100 investors.
Misrepresenting the value and performance of client funds, violating the Companies Act 2006.
Allegedly raising over £1 million through the scheme.
The individual will appear before Westminster Magistrates’ Court on 23 May 2025. Notably, the FCA brought charges within 23 months, significantly faster than the 2023/24 average of 42 months.
FCA publishes summary and blog post - AI Sprint
On 23 April 2025, the FCA published a summary and blog post following its AI Sprint held in January 2025. Stakeholders from industry, academia, regulators, and consumer groups convened to explore the future of AI in financial services.
The following key themes were identified:
Regulatory Clarity – Clear guidance is critical for firms adopting AI.
Trust and Risk Awareness – Building trust among consumers and firms is essential for responsible AI use.
Domestic and International Coordination – Collaboration is key to consistent and effective oversight.
Safe Innovation through Sandboxing – Controlled testing environments can enable safe experimentation.
The FCA is taking immediate steps to support safe, growth-oriented innovation, including:
Expanding its AI Lab and Supercharged Sandbox
Collaborating with the Synthetic Data Expert Group to support safe testing of AI models
In a related blog post, Colin Payne, Head of Innovation, emphasised that firms seek clarity, not more regulation, and reiterated the FCA’s focus on building trust and enabling responsible AI adoption.
FCA to cease issuing portfolio letters - Simplifying supervisory communications
On 24 April 2025, the FCA announced that it will cease issuing and publishing portfolio letters from 30 April 2025 as part of efforts to simplify supervisory communications.
Key changes:
Portfolio letters will be replaced by a small number of market reports, offering targeted insights and regulatory updates across firm types.
The FCA will retire older portfolio and Dear CEO letters, marking them as ‘historical’, though they will remain publicly accessible.
Dear CEO letters will continue to be used for addressing urgent or significant supervisory matters with senior management.
Until the new market reports are released later in 2025, firms are advised to refer to existing communications for regulatory guidance.
House of Commons Treasury Committee launches inquiry - Finfluencers
On 22 April 2025, the House of Commons Treasury Committee launched a new inquiry into finfluencers (financial influencers).
The Committee will hear oral evidence on 30 April 2025 from:
Steve Smart, FCA Joint Executive Director for Enforcement and Market Oversight
Lucy Castledine, FCA Director of Consumer Investments
No further details on the scope of the inquiry have been released yet. The inquiry is expected to explore the impact of online financial promotion and the role of influencers in shaping consumer investment behaviour.
SFO publishes new corporate guidance - Self-reporting, cooperation and deferred prosecution agreements
On 24 April 2025, the Serious Fraud Office (SFO) published new corporate guidance detailing how it decides whether to prosecute a company or offer a deferred prosecution agreement (DPA).
Key points:
Prompt self-reporting and full cooperation are critical factors. Corporates that meet these expectations are more likely to be offered a DPA instead of facing prosecution, except in exceptional cases.
The guidance outlines:
How to self-report misconduct properly
Clear examples of cooperative vs. uncooperative behaviour
This guidance aims to provide greater transparency and predictability for companies navigating potential SFO investigations.
PAYMENTS & E MONEY
Derivative' action - APP fraud - Quincecare duty
On 23 April 2025, the High Court ruled in Hamblin and another v Moorwand Ltd and another [2025] EWHC 817 (Ch) in favour of two victims of authorised push payment (APP) fraud, in a derivative action brought against payment services provider Moorwand Ltd on behalf of its corporate customer, RND Global Ltd.
Key points:
A fraudster opened an account with Moorwand in RND’s name, despite application discrepancies.
Victims were misled into transferring £160,000, which was briefly held in RND’s e-wallet before being paid out.
The Court found Moorwand breached its Quincecare duty by failing to investigate suspicious circumstances before releasing the funds.
It criticised the lower court for misinterpreting regulatory vs. operational failings, and ordered Moorwand to restore the funds to RND’s account.
This case marks a significant application of the Quincecare duty in the context of APP fraud and e-money providers.
Hamblin and another v Moorwand Ltd and another [2025] EWHC 817 (Ch) (04 April 2025)
INSURANCE
SFO charges insurer - Failure to prevent international bribery
On 17 April 2025, the Serious Fraud Office (SFO) charged United Insurance Brokers Limited (UIBL) with failing to prevent bribery by its associates in connection with re-insurance contracts in Ecuador.
Key allegations:
Between October 2013 and March 2016, UIBL’s US-based intermediaries allegedly bribed Ecuadorian state officials to secure US$38 million in re-insurance contracts.
The contracts covered parts of the Ecuadorian public sector, including state water and electricity companies.
UIBL earned US$6.2 million in commission, with US$3 million allegedly paid to intermediaries involved in the bribery scheme.
Legal proceedings:
UIBL representatives are scheduled to appear before Westminster Magistrates’ Court on 7 May 2025.
If contested, this case would be the first ‘failure to prevent bribery’ prosecution by the SFO to be heard by a jury.
This marks a significant development in the enforcement of the UK Bribery Act 2010 under the ‘failure to prevent’ offence.
INVESTMENTS
HM Treasury publishes consultation and FCA issues call for input - Future regulation of AIFMs
On 7 April 2025, HM Treasury published a consultation on simplifying the regulatory framework for alternative investment fund managers (AIFMs), accompanied by an FCA call for input.
Key Proposals:
Remove the legislative threshold derived from the EU AIFMD, allowing the FCA to set proportionate rulesbased on firm size and activity.
Only large AIFMs (NAV > £5 billion) would be subject to the full regulatory regime, with smaller firms facing lighter requirements.
Additional reforms include:
Simplifying notification rules for AIFMs acquiring control of unlisted companies.
Considering a bespoke regime for venture and growth capital funds.
Reviewing remuneration, reporting, conduct, prudential rules, and business restrictions for AIFMs.
The deadline for comments on the consultation and call for input is 9 June 2025. The FCA plans to consult on detailed rules in H1 2026, subject to feedback and decisions made by HM Treasury on the future regime.
HM Treasury consultation paper: Regulations for AIFMs
FCA call for input: Future regulation of AIFMs
FCA publishes findings of multi-firm review - Trading apps and consumer behaviour
On 11 April 2025, the FCA published findings from a multi-firm review of trading apps (neo-brokers), assessing the business models, services, and consumer protection practices of 12 firms.
Key Findings:
Diverse Business Models: Some firms act as introducers, with affiliated firms receiving the customer introductions.
Appropriateness Testing Gaps: Several firms did not apply robust assessments for high-risk products, allowing unsuitable consumer access.
Positive Practices Identified: Alongside concerns, some good practices in consumer engagement and service delivery were noted.
The FCA urges firms to use these findings to improve app design and consumer protection. It also released an Occasional Paper exploring how digital engagement impacts investment outcomes.
FCA multi-firm review of trading apps: high-level observations
FCA consults on simplifying and consolidating rules - Definition of capital for FCA investment firms
On 24 April 2025, the FCA published a consultation paper (CP25/10) proposing to simplify and consolidate rules on the definition of regulatory capital for FCA investment firms.
Key proposals include:
Removing references to the UK Capital Requirements Regulation (UK CRR) from MIFIDPRU 3, focusing on a standalone UK framework.
No changes to capital amounts or firm capital arrangements—only to the qualifying criteria for what counts as regulatory capital.
The simplification would reduce the legal text by around 70%, improving clarity and lowering compliance costs.
Feedback on the proposals is requested by 12 June 2025. The FCA intends to publish a policy statement in H2 2025 containing its final rules and, subject to the outcome of the consultation, it expects the new framework to come into effect on 1 January 2026.
The goal is to maintain regulatory standards while making the framework easier to navigate and less burdensome for firms.
FCA consultation paper: Definition of capital for FCA investment firms (CP25/10)