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ICYMI
Ahead of next year's report, we recap the major themes from our last edition
The 2025 edition of our annual flagship publication, Global FSR Outlook, took as its theme 'perpetual motion'. This seemed to aptly describe how the financial services community felt as we all looked out on the ever shifting geopolitical, technological and socio-economic landscape.
In nine carefully curated articles, authors from all corners of our global FSR practice collaborated to consider how the financial services sector could adapt to, and plan for, the complexities of this ever-changing environment. We covered AI, Quantum, an ageing population, the implications of the push for global competitiveness, non-bank financial intermediation, smart data and more. As 2025 draws to a close, our authors have regrouped to take stock of our predictions for 2025.
Global
ICMA publishes paper on stablecoins in capital markets
The International Capital Market Association (ICMA) has published a paper which considers whether stablecoins 'represent a credible development for capital markets infrastructure, or a diversion from more established solutions'. ICMA draws on the work it led under Project Guardian. [21 Jan 2026] #Crypto #DigitalAsset #Stablecoin
UK
FCA consults on further rules for cryptoasset firms
The FCA has published Consultation Paper 26/4 Application of FCA Handbook for Regulated Cryptoasset Firms II (CP26/4). The FCA is consulting on:
- the application of the Consumer Duty;
- the approach to complaints handling and redress;
- applying Conduct of Business Standards (COBS);
- credit for cryptoasset purchases;
- staff training and competence;
- categorisation under the Senior Managers and Certification Regime (SMCR);
- regulatory reporting;
- cryptoasset safeguarding;
- retail collateral treatment in cryptoasset borrowing; and
- location policy guidance.
With regard to the Consumer Duty, the FCA has published Guidance Consultation 26/2 – Application of the Consumer Duty to Cryptoasset Firms (GC26/2)
CP26/4 includes feedback from previous FCA CPs on the forthcoming new regime. It is the final step in the FCA's consultations on its crypto rules. The FCA expects the gateway for firms to apply for cryptoasset permissions in September 2026.
Responses are requested by 12 March 2026. #Crypto #DigitalAsset
BoE: 2025 CBEST thematic
The Bank of England (BoE) has published its annual CBEST thematic which sets out findings from the latest assessments. Key messages in this publication which the BoE highlights for consideration include:
- 'To reduce the likelihood of severe cyberattacks firms and financial market infrastructures (FMIs) should look to harden operating systems, including by patching vulnerabilities and securely configuring key applications.'
- 'Firms and FMIs can reduce the impact of unauthorised access to sensitive systems and information by strengthening credentials management, enforcing strong passwords, considering the use of multi-factor authentication (MFA), preventing or detecting insecure credential storage, and through appropriate segmentation of networks.'
- 'Early detection and effective monitoring, alerting and response processes are key to reducing the impact from cyberattacks.'
- 'Firms and FMIs should implement risk-based remediation plans with oversight from risk managers and internal auditors to ensure the successful remediation of technical findings, including vulnerabilities.' [21 Jan 2026] #Cybersecurity #OpRes
FCA/PSR: Prioritisation statement on open banking pricing models
The FCA and the Payment Systems Regulator (PSR) have published a prioritisation statement confirming that the regulators will not, at this time, prioritise a Competition Act 1998 investigation into the centralised 'access fee' pricing model being developed by the UK Payments Initiative (UKPI) for commercial Variable Recurring Payments (cVRPs). cVRPs are an emerging open banking technology that allow consumers to give trusted third parties secure, recurring access to manage payments on their behalf.
This is a temporary measure ahead of the Government's anticipated legislative framework, expected by the end of 2026. The statement applies until that framework is in place or until July 2027, whichever comes first. All three competition authorities – the FCA, the PSR and the CMA – may revise their prioritisation approach if new information emerges or if the expected legislative framework is not implemented by July 2027. [20 Jan 2026] #OpenBanking #Payments
TSC: AI in financial services
The Treasury Select Committee (TSC) has published a report on AI regulation in financial services, following its inquiry, launched in February 2025, to examine the opportunities and risks posed by AI for the UK financial services sector.
The TSC recognises that AI and wider technological developments have the potential to bring considerable benefits to consumers and therefore encourages firms and the FCA to work together to ensure that the UK capitalises on AI's opportunities. However, it concludes that the FCA, the Bank of England (BoE) and HM Treasury are not doing enough to manage the risks presented by AI, and that by 'taking a wait-and-see approach to AI in financial services, the three authorities are exposing consumers and the financial system to potentially serious harm'.
The report makes three recommendations:
- by the end of 2026, the FCA should publish comprehensive, practical guidance for firms on the application of existing consumer protection rules to their use of AI, and on accountability and the level of assurance expected from senior managers under the Senior Managers and Certification Regime (SMCR) for harm caused through the use of AI;
- the BoE and the FCA should conduct AI-specific stress-testing to boost businesses' readiness for any future AI-driven market shock; and
- by the end of 2026, HM Treasury should designate the major AI and cloud providers as critical third parties (CTPs) for the purposes of the Critical Third Parties Regime.
The Government's response to the Committee's report is due before 20 March 2026. [20 Jan 2025] #AI
FCA invites applications for second AI Live Testing cohort
The FCA has announced that applications are now open for the second cohort of its AI Live Testing service. The programme offers firms tailored support from the FCA regulatory team and Advai to develop, assess and deploy safe and responsible AI. AI Live Testing complements the Supercharged Sandbox, which assists firms during the discovery and experimentation phase with AI. Applications are requested by 2 March 2026. Successful firms will be notified by mid-March 2026, with testing starting from April 2026. [19 Jan 2026] #AI
Lawtech UK consults on liability for loss that results from the use of AI
Lawtech UK has published a consultation paper (CP) – Liability for AI Harms under the private law of England and Wales. The CP seeks to address in what circumstance, and on what legal bases, English common law will impose liability for loss that results from the use of AI.
Responses are requested by 13 February 2026.
(LawtechUK is a Ministry of Justice (MoJ) backed initiative dedicated to driving digital transformation in the legal sector.) [19 Jan 2026] #AI
Europe
EIOPA: Revised Single Programming Document 2026-2028
The European Insurance and Occupational Pensions Authority (EIOPA) has published the revised Single Programming Document (SPD) which includes the Annual Work Programme for 2026. The SPD sets out the activities EIOPA will undertake in the period 2026-2027. Activities which EIOPA will focus on in 2026 include the oversight of third parties under the Digital Operational Resilience Act (DORA). [19 Jan 2026] #DORA #OpRes
Hong Kong
HKMA publishes Project Cargox Recommendation Report to present 20 recommendations and roadmap for modernising trade finance landscape
The HKMA has published the Project Cargox Recommendation Report, setting out 20 recommendations and a development roadmap for modernising Hong Kong's trade finance landscape and reinforcing its position as a leading trade financing hub.
Project Cargoxwas launched in April 2025 with the objective of harnessing the power of cargo and trade data to enhance the digital ecosystem for trade finance (see our previous update). Its Expert Panel currently comprises 24 industry experts from banks, cargo data providers, credit reference agencies, export credit insurers, government agencies and international organisations. The panel finalised the 20 recommendations and roadmap in December 2025.
The 20 recommendations are structured under three strategic pillars:
Data
- Integrate strategic government cargo and trade data sources and infrastructures
- Source commercial trade and logistics data
- Facilitate diligence on trade counterparties
- Enable access to historical trade transaction data
- Utilise e-commerce data to support underwriting
- Combine trade flow and cash flow data for multi-dimensional credit assessment
- Enhance credit scoring model for SMEs
- Develop innovative new products
Infrastructure
- Study full digitisation of trade documents and promote paperless trade
- Align local legislation with the United Nations Commission on International Trade Law's Model Law on Electronic Transferable Records
- Evaluate the cost-benefit of a trade finance document registry
- Promote digital identity in trade transactions
- Explore innovative payment mechanisms
Connectivity
- Strengthen Chinese Mainland connectivity
- Explore ASEAN Single Window connectivity
- Connect with overseas trade corridors
- Adopt globally interoperable data and documentary standards
- Enhance Hong Kong's supply chain and related financial ecosystem
- Enhance receivables financing in trade financing
- Increase trade credit insurance availability
The report also outlines a roadmap for taking forward the recommendations between now and 2030. The HKMA will play a central role in the implementation through collaboration with relevant public and private sector organisations in a series of pilot trials. [19 Jan 2026] #Digitalisation #Payments
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