The eighth edition of the FCA Regulatory Initiatives Grid is now live, setting out the planned activities for the next 24 months across the financial services regulatory sphere. Amid a heavy pipeline of regulatory change, the grid continues to serve as a comprehensive and practical source of information. It ensures that firms can plan ahead and prepare for the key initiatives that will shape the future regulatory landscape.
This release, postponed from May 2024 due to the UK General Election, reflects the new Government's realignment of priorities. As such, it includes significant focus on reducing the regulatory burden (and ultimately, the cost) and supporting medium to long-term growth through innovation and competition.
The grid continues to show increased coordination between regulators. Many of the major cross-sector initiatives feature as expected, including Consumer Duty, premium finance, the redress framework, money laundering regulations, the Advice Guidance Boundary Review, Senior Managers & Certification Regime, and crypto assets. Data remains a key area of focus, with the removal of superfluous templates and the establishment of more accessible interfaces for ease of collection.
Notable areas expected to have a significant impact on firms’ planning include the delay in Basel 3.1 and the ‘Strong and Simple’ prudential framework for non-systemic banks and building societies. Additionally, it covers the rolling back of certain initiatives, including diversity and inclusion.
There are 144 items listed in the Regulatory Initiatives Grid, and just under half are new additions. Of those new listings, eight are likely to have a high impact on firms, and the impact is, as yet, unknown for a further 12.
The 25 high-impact initiatives listed reflect both new entries to the grid and ongoing work.
Advice Guidance Boundary review will continue with new consultations expected in the first half of the year
Environmental, Social and Governance (ESG) ratings will come into the regulation boundary following the Government’s intention to introduce secondary legislation to do so
Review of Politically Exposed Persons is likely to feature, but there are no specifics on timings
Sustainability Disclosure Requirements (SDR) and investment labels is a classification system for investment products which will continue to be implemented this year. It will also potentially extend to portfolio management
Banking
The regulation of the Buy Now Pay Later (BNPL) sector will move closer in 2025. This will have significant implications for BNPL lenders, who will need to prepare for compliance with new regulatory requirements
The PRA has delayed the implementation of Basel 3.1 by one year to January 2027, allowing firms more time to align with the required standards which are already available
Insurance
The Pure Protection Market Study was launched in March and firms should expect continuous engagement with the regulator during the rest of the year
Solvency II liquidity reporting requirements will be published in Q2, with an implementation timeline of the end of the year
The regular Life Insurance Stress Test 2025 will take place in Q4
Payments and crypto assets:
Regulation of crypto assets is a key theme of several activities, with draft legislation expected shortly and implemented soon after
Safeguarding payments and preventing scams will remain a focus in the coming year
Protecting access to cash with codes of practice expected in the first half of this year
Investment management:
Retail investments:
A new consultation is expected in relation to Packaged Retail and Insurance-based Investment Products (PRIIPs) regulations
Wholesale financial markets:
A number of activities relating to the settlement cycle for securities trades, prospectus regime reform and wholesale markets review
The latest publication of the Regulatory Initiatives Grid follows a significant reprioritisation of efforts in line with the new Government's agenda. Many of the previous priorities and regulatory initiatives are listed in the annex, either marked as complete or discontinued. There are a total of 89 items, with 29 removed from the multi-sector section of the grid.
Former priorities have been re-assessed to ensure alignment with the current focus on growth and innovation. For example, the requirement for a Consumer Duty Board champion was removed at the end of February 2025, without prior consultation. This shift underscores the regulators' commitment to reducing unnecessary regulatory burdens and focusing on initiatives that directly support the Government's growth objectives.
By reducing the quantity of new regulations and streamlining existing ones, the FCA Regulatory Initiatives Grid aims to lower the cost of compliance for firms, thereby fostering a more conducive environment for growth and innovation. The grid also highlights targeted reductions in regulatory reporting requirements, which are expected to alleviate administrative burdens on firms. By reducing the cost of compliance, the regulators aim to support medium to long-term growth, drive innovation by reducing the associated regulatory risk, and enhance competition both within the UK and internationally.
The Regulatory Initiatives Grid also considers the evolving landscape of EU regulation, ensuring that UK efforts are harmonised with broader international standards. For instance, the PRA's decision to delay Basel 3.1 to January 2027 was made in consultation with the Treasury, and reflects the need for clarity over US implementation plans. This delay allows UK firms to better align their compliance efforts with global regulatory timelines, thereby maintaining competitiveness and ensuring a level playing field.
There are several items in the Regulatory Initiatives Grid which could have a larger impact than the regulators anticipate. For example, the motor finance commission review could result in a mass redress exercise for the industry, depending on the Supreme Court’s decision. Others include the FCA’s concerns over premium finance and whether it provides fair value for consumers, particularly those who are financially vulnerable. There are several initiatives related to the National Payments Vision and at this stage it’s tricky to quantify their impact. Finally, defined contribution pension schemes will need to undertake a thorough value-for-money assessment which may have significant consequences.
Firms should closely monitor the items outlined in the Regulatory Initiatives Grid and assess the potential impact on their operations. Proactive planning and continuous horizon scanning will be essential for firms to navigate the regulatory environment effectively and maintain compliance. As an immediate step, firms can review and update their risk and compliance frameworks to align with the new regulatory priorities, particularly those related to data collection and reporting. Given the focus on simplification and efficiency, it’s also essential to stay up to date and participate in consultations to help shape the future regulatory landscape.
For more insight and guidance on the Regulatory Initiatives Grid, contact Paul Staples.