Navigating FCA Regulatory Changes: What Financial Services Firms Need to Know

The FCA’s recent 2025–2030 strategy narrows its regulatory priorities to four core themes: smarter regulation, supporting growth, empowering consumers, and tackling financial crime. This strategic clarity signals a more targeted approach, with deeper scrutiny in fewer areas rather than broad regulatory expansion.

According to FCA communications, firms can expect a continued push towards enabling economic growth, but with the acceptance of “tolerable failures” as new risks emerge in a less prescriptive environment. This marks a notable shift in regulatory philosophy, balancing innovation with consumer safeguards.

One of the FCA’s headline changes is the introduction of a streamlined prospectus regime. This new framework allows firms to raise up to 75% of their existing share capital without needing a full prospectus, reducing the regulatory burden on fundraising and public listing.

The Public Offers and Admissions to Trading Regime (POATR), launching January 2026, will further simplify access to public markets, making it easier for firms to secure investment as they scale. For asset managers and capital market participants, these changes could unlock faster growth pathways.

Anti-fraud efforts remain high on the FCA’s agenda. As fraud complaints surge, banking and payments firms will face stricter oversight, with new rules taking effect in 2026 to protect client funds, especially for e-money institutions. These firms will be required to submit monthly fund protection reports and conduct daily reconciliation checks, underlining the FCA’s intent to safeguard consumers amid rapid fintech innovation.

The FCA’s enhanced authority under the Financial Services and Markets Act 2023 empowers it to protect public access to cash, a growing concern as the UK transitions towards digital payments.

Additionally, the recent appointment of David Geale as Executive Director for Payments and Digital Finance underscores the regulator’s commitment to integrating payments system oversight, open banking, and crypto-assets regulation. Crypto-related rules, including new marketing standards for exchange-traded notes (ETNs), are due from October 2025.

A major data modernisation initiative is underway to improve regulatory reporting efficiency, which will affect firms’ data submissions through at least 2026.

Meanwhile, private markets, which have seen explosive growth, now exceeding $13 trillion in assets, are coming under FCA scrutiny, particularly around valuation practices and governance. Recent FCA in-person visits to private capital firms signal a readiness to intervene in areas traditionally lightly regulated.

An FCA survey revealed nearly 180 breaches of internal WhatsApp policies among UK wholesale banks, mostly involving senior staff. This highlights increasing regulatory attention to conduct risk in electronic communications and the importance of record-keeping controls.