Your guide to this week in regulation

This week, we see further examples of regulatory catalysts to spur UK economic growth. Most recently, the Financial Conduct Authority (FCA) is consulting on IPO research rules to reduce friction in UK listings, and there’s a key speech from the FCA on its plans to support growth in the mutual sector.

In somewhat contrary manner, our third item signals higher prudential expectations as the Prudential Regulation Authority (PRA) consults on funded reinsurance.

Elsewhere this week, we shine a spotlight on practical ambitions for open finance, as well as latest developments in ESG reporting for rating providers.

FCA consults on IPO research

The FCA has launched a consultation, CP26/14, on changing IPO research rules, aiming to reduce friction in the UK listings process. The proposals would remove the current seven‑day delay before connected research can be published and scrap the requirement for firms to give independent analysts the same information as their own analysts.

The FCA introduced these measures in 2018 to encourage unconnected research. The regulator now says they have not met that aim and have instead added complexity, risk and cost to IPOs, putting the UK at a disadvantage versus other listing venues. Removing them would, in the FCA’s view, simplify IPOs and support growth and competitiveness in UK capital markets.

Key points for firms to note:

• The FCA proposes no other rule changes at this stage.
• The consultation includes discussion questions on whether further reform of the 2018 IPO information flow rules may be needed.
• The proposals link to commitments set out in the FCA’s December 2025 letter to the Prime Minister.

The consultation closes on 29 May 2026.

Read more on FCA consulting on changes to IPO research rules

Read the consultation CP26/14: Changes to information flows for UK equity IPOs

FCA backs mutual growth

In a speech at the BSA Annual Conference, the FCA set out how it plans to support growth in the mutual sector while keeping consumer outcomes at the centre of regulation. The regulator is using the current reform programme to move towards a less prescriptive, outcomes‑focused and Consumer Duty‑centred approach, aimed at giving firms more freedom to innovate while maintaining trust.

Key points for firms included:

• A clear expectation that firms continue to support consumers in, or at risk of, financial difficulty as cost of living pressures persist.
• Closer monitoring of complaints and vulnerability data to spot harm early, particularly for mortgage customers as fixed‑rate deals end.
• Additional FCA support for mutuals, including the new Mutuals Society Development Unit and encouragement to use innovation services early.

The FCA also flagged forthcoming consultations, including changes to responsible lending standards and reforms to advice and targeted support for retail investors. Firms may wish to review how their products, consumer support and innovation pipelines align with the FCA’s direction, and engage early where rules or processes hinder good outcomes.

Read more on the speech about trust, tradition and the future of mutual growth

PRA consults on funded reinsurance

The PRA has published CP8/26, setting out proposals to tighten the regulatory treatment of funded reinsurance under Solvency UK, citing growing use of these arrangements and concerns that risks are currently understated. The proposals aim to align the treatment of funded reinsurance more closely with that of economically similar assets and to reduce incentives for excessive reliance on offshore reinsurance structures.

Key points of interest for life insurers include:

• Changes to how the counterparty default adjustment would be calculated, using the Solvency UK fundamental spread.
• A new definition of funded reinsurance in the PRA Rulebook, with limited exceptions
  higher expected capital held against new funded reinsurance transactions, better reflecting underlying risk, and
• A savings provision for arrangements where risks are fully transferred by 30 September 2026.
  The PRA proposes an implementation date of 1 July 2027. The consultation closes on 31 July 2026.

Read the news release on the consultation

Read more on CP8/26 – Funded reinsurance

Open finance moves into practice

The FCA has set out how its Smart Data Accelerator is shaping the next phase of open finance policy, drawing on two TechSprints run between November 2025 and February 2026 with 17 firms focused on mortgages and SME finance.

The work shows open finance moving beyond isolated pilots towards integrated, end‑to‑end customer journeys built on shared datasets. The FCA highlights practical benefits already emerging, including better mortgage readiness, more informed overpayment decisions, improved SME cashflow management and stronger tools to assess lending readiness.

A clear message for firms is that value does not come from accessing more data alone. It comes from combining, structuring and applying trusted data at scale, supported by strong standards, digital verification and shared infrastructure. These foundations also matter for the responsible use of AI, which the FCA sees as dependent on interoperable and reusable data.

The insights will inform the FCA’s open finance regulatory roadmap, with a further policy sprint on mortgages planned for June 2026.

Read more on shaping open finance policy

FCA pilots ESG ratings reporting

The FCA has invited ESG rating providers to join a voluntary reporting pilot to shape a future regulatory reporting regime for ESG ratings. The pilot follows the FCA’s consultation on bringing ESG rating providers into scope of UK regulation and aims to test whether proposed reporting metrics are clear, workable and proportionate across different business models.

The FCA intends to use feedback from participants to refine the design of the reporting framework and future reporting requirements. The regulator has been clear that data provided through the pilot will not be used to assess firms seeking authorisation, and that participation is voluntary. Key points for firms include:

• The pilot covers ESG rating providers expecting to fall within future UK regulation,
• participants can directly influence the final reporting regime,
• the FCA may revise metrics based on practical feedback from the pilot.

Firms must register their interest with the FCA by 13 May 2026 by emailing the ESG ratings policy team.

Read more on the FCA invite to ESG rating providers