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The ninth edition of the UK’s Regulatory Initiatives Grid, published in December 2025, sets out the country’s financial services regulatory agenda for the next two years.
The grid is intended to help the UK financial sector and stakeholders plan for regulatory changes that could have an operational impact. For example, it highlights regulators’ priorities, which include regulatory streamlining and consumer protection.
Financial institutions operating in the UK can find insights in the grid into what the regulators will be prioritising over the coming months, what consultations they should consider responding to and how the regulatory environment could change.
In this piece, Vixio examines what the regulators have outlined in the banking, credit and lending section of the latest regulatory grid, explains the likely impact of developments on financial institutions and suggests what the regulators’ stated priorities tell us about the direction of travel in the UK.
Timeline for 2026 (download here)
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Regulator and Initiative |
Why should you care? |
Rating, Deadlines & Resources |
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Competition, innovation and other |
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FCA Credit Information Market Study Remedies Development of remedies arising from the 2023 market study of how the UK’s credit information market functions, including the role of credit rating agencies (CRAs) and the effectiveness of competition. |
The proposed remedies aim to make consumer credit information in the UK more consistent and comprehensive and to improve the accuracy of information shared. Organisations should be prepared for stricter data quality controls and faster dispute resolution timelines. They may also need to build an effective working relationship with a new governing body. Although firms may gain access to richer data sets, this will come with increased responsibility for ensuring that its use remains fair under the Consumer Duty. |
A consultation paper on FCA requirements was published in February 2026. Relevant Resources |
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PRA Review of the Financial Services Compensation Scheme (FSCS) deposit protection limit The PRA review of the FSCS deposit protection limit was due by December 2025. The regulator published a consultation paper in connection with this review in Q1 2025 and a policy statement in Q4 2025. |
The PRA increased the FSCS deposit protection limit from £85,000 to £120,000 per person, per authorised firm, effective December 1, 2025. Affected firms will need to conduct a comprehensive review of all customer-facing materials, including physical posters in branches, statements and automated telephone scripts. Compliance should treat this as a high-priority task for H1 2026. |
Disclosure materials are due to be updated by May 31, 2026. Relevant Resources |
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Conduct |
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FCA Evaluation of the persistent debt intervention In 2018, the FCA introduced rules requiring firms to intervene where customers remain in persistent credit card debt, requiring them to:
The FCA plans to review the effectiveness of these rules in 2026. |
Firms should pay attention because the review could lead to adjustments in how persistent debt obligations are implemented and supervised. The FCA’s review of the effectiveness of these rules may highlight operational challenges, customer outcomes and cost implications within the current framework. This could influence future rule changes and firms should keep a lookout to prepare for any shift in supervisory expectations. |
Relevant Resources |
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FCA High-cost short-term credit (HCSTC) price cap review The FCA previously committed to reviewing the HCSTC price cap to assess whether the market remains viable, accessible and appropriate for its target customers, or if there is evidence of reduced access, market exit, product substitution or consumer harm. |
The FCA’s review of the HCSTC price cap will be significant for firms operating in the payday and short-term lending market, and is likely to prompt closer scrutiny of profitability, risk appetite and customer outcomes. Lenders may need to provide evidence that their products remain appropriate for their intended customer base and that business models can operate sustainably within the cap. Depending on the FCA’s conclusions, firms may need to reassess the viability of their products, pricing models and target markets to maintain consumer access while limiting harm. |
The FCA expects to publish findings from this review in Q3 2026, subject to the quality of information coming through from firms. Relevant Resources |
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FCA CONC 3 review In March 2025, the FCA committed to reviewing its rules for advertising consumer credit. The regulator will focus on CONC 3.5, to identify opportunities to reduce the level of prescription currently required and to be more outcomes-focused in line with the Consumer Understanding Outcome of the Consumer Duty. |
The FCA’s CONC 3.5 sets out detailed rules and guidance governing financial promotions for consumer credit agreements that are not secured on land. The planned review of the CONC 3.5 rules is therefore significant for firms, signalling a move away from highly prescriptive disclosure requirements. If implemented, this could reduce the operational and compliance burden associated with rigid promotional requirements. At the same time, such a shift would reinforce firms’ obligations under the Consumer Duty by focusing on whether communications deliver good consumer outcomes, rather than simply whether they follow detailed rules. |
The FCA expects to formally seek views from stakeholders in Q2 2026. Relevant Resources |
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FCA Motor Finance Commission review The review found that many firms did not comply with the law when selling these motor finance loans. The FCA is now consulting on an industry-wide redress scheme to ensure affected consumers receive compensation in an orderly, consistent, and efficient way. |
Consumer lending firms that undertook motor finance arrangements between April 6, 2007 and November 2024 should closely monitor the forthcoming final policy statement from the FCA. Firms in scope may need to conduct retrospective reviews of historic motor finance portfolios to estimate potential exposure. If a redress scheme is implemented, firms may need to recognise provisions and assess the potential balance-sheet impact of customer remediation. This could also create operational demands, including data analysis, customer engagement and enhanced internal oversight to ensure an appropriate regulatory response. |
If the decision is made to have a redress scheme, a Policy Statement and final rules are expected in early 2026. Relevant Resources |
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FCA Mortgage Rule review Review of the mortgage market to identify changes needed to rebalance risk, support sustainable home ownership and economic growth, and increase flexibility for firms to tailor products to consumers’ changing needs.
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Based on the roadmap set out in its feedback statement, the FCA is expected to continue its review with plans to consult on the following in 2026:
Potential changes could materially influence both lending criteria and target customer segments. Adjustments to LTI expectations or affordability frameworks may alter how firms structure mortgage assessments, potentially expanding or constraining access for certain borrower groups such as first-time buyers or older borrowers seeking RIO products. Firms may therefore need to reassess underwriting models, risk appetite and product design to ensure their lending strategies remain aligned with the evolving regulatory approach. |
PRA-FCA consultation on LTI ratio is due in Q1 2026. The consultations on the responsible lending rules and RIO mortgages are due in H1 2026. Relevant Resources |
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FCA/HMT Regulation of buy now, pay later (BNPL) On February 11, 2026, the FCA issued its policy statement (PS26/1) setting out its approach to the regulation of deferred payment credit (DPC), otherwise known as unregulated BNPL. It intends to bring interest-free BNPL products provided by third-party lenders into FCA regulation. |
Firms will need to be authorised for the relevant consumer credit activities or enter the temporary permissions regime (TPR), which opens on May 15, 2026, and then apply for full authorisation within six months of regulation day. This means firms currently operating outside the regulatory perimeter will need to prepare for FCA supervision and ensure their governance, reporting and compliance frameworks align with the wider FCA Handbook. The changes will also require operational adjustments. DPC lending will be subject to complaint-handling rules and Financial Ombudsman Service jurisdiction for regulated agreements, meaning firms must ensure disputes are recorded, investigated and resolved in line with prevailing standards. In addition, the application of the Consumer Duty and key conduct rules will require firms to review customer journeys, disclosures, creditworthiness assessments and support for customers. |
The DPC temporary permissions regime gateway opens on May 15, 2026. Firms must either hold the relevant authorisations or be under the TPR to continue providing DPC services as of July 15, 2026. Relevant Resources
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Cross-cutting/omnibus |
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FCA Retail banking disclosure rule review Review of disclosure requirements in the Banking Conduct of Business Sourcebook to simplify rules and increase flexibility. The FCA plans to assess whether simplifying detailed disclosure requirements could improve consumer understanding.
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The review signals a shift away from rigid, prescriptive disclosure rules that often create heavy compliance processes. A more flexible framework could allow clearer communication with customers while reducing the administrative effort required to meet detailed regulatory requirements. In practice, this may streamline compliance reviews, cut legal drafting work and reduce the resources devoted to technical disclosure updates. |
The FCA consultation is due in 2026.
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PRA A strong and simple prudential framework for non-systemic banks and building societies – capital requirements for small domestic deposit takers (SDDTs) The PRA is developing policy to simplify prudential regulation for non-systemic and domestic banks and building societies in the UK, while maintaining resilience. This includes working with the FCA on corresponding changes to its Handbook. |
Changes to the strong and simple prudential framework primarily focus on reductions to the frequency of reporting, stress testing and related documentation. Firms should take note because the revisions are intended to ease ongoing regulatory demands on small domestic deposit takers. In practice, this is expected to lower compliance costs and free up operational resources. |
The rules and expectations relating to the frequency of Internal Capital Adequacy Assessment Process (ICAAP) updates (including reverse stress-testing) and Internal Liquidity Adequacy Assessment Process (ILAAP) updates took effect on January 20, 2026. The SDDT capital regime will take effect on January 1, 2027. Relevant Resources |
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PRA Leverage Ratio: changes to the retail deposits threshold for application of the requirement In 2025, the PRA published its policy statement on the thresholds for application of the leverage ratio requirement. The final policy also introduced an averaging mechanism, whereby the relevant metric for firms’ retail deposits is calculated as a three-year moving average, to better allow firms to grow and plan their capital. No changes were made to the other threshold for application of the leverage ratio requirement, set at £10bn non-UK assets. |
The final policy raises the retail deposit threshold for the leverage ratio requirement to £75bn and introduces a three-year moving average to determine whether firms fall within scope. Firms should review their position under the new threshold, as the change may affect whether the requirement applies and how balance sheet growth is managed. Although the £10bn non-UK assets threshold remains unchanged, the revised approach offers greater planning certainty and may delay or avoid additional capital obligations for some institutions. |
The policy took effect on January 1, 2026. Relevant Resources
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BoE/PRA Full template deletions Streamlining banks’ regulatory reporting will remain a key focus for the PRA. In December 2025, the regulator published a policy statement confirming the removal of certain whole template data collections that are underused or already available through other reporting channels. This marks the first deliverable of the PRA’s Future Banking Data Project. |
Firms will see a meaningful reduction in regulatory reporting requirements, with 34 full FINREP templates and two COREP templates removed. This should materially reduce the volume of data collection, validation and submission required under prudential reporting. In practice, the change is likely to reduce operational workload, compliance costs and ongoing regulatory reporting complexity. |
The policy took effect on December 31, 2025. Relevant Resources |
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BoE/PRA Amendments to resolution reporting In 2025, the Bank committed to reviewing and making changes to streamline the content of resolution packs. In February 2026, it confirmed the partial revocation of the UK Technical Standards on resolution reporting (COREP13), confirming the deletion of six reporting templates that collect information for resolution purposes. |
The six withdrawn reporting templates previously required firms to submit detailed information on liabilities, capital requirements, group exposures and deposit protection. Their removal will reduce resolution reporting obligations once the changes take effect on April 1, 2026. In the interim, the templates may still appear in the RegData system, and firms are expected to submit negative filing indicators until they are fully withdrawn. |
The policy takes effect on April 1, 2026. Relevant Resources |
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BoE/PRA Resolution assessment, reporting and public disclosure by firms The Resolution Assessment Part of the PRA Rulebook requires firms to carry out an assessment of their preparations for resolution. On July 15, 2025, the PRA published Consultation Paper 14/25, proposing to increase the threshold at which firms come into scope of these rules from £50bn retail deposits to £100bn retail deposits. A policy statement is expected in H1 2026. |
Firms with between £50bn and £100bn in retail deposits should monitor the final policy statement closely. The proposed increase in the threshold to £100bn could remove some institutions from scope, potentially easing prudential and compliance obligations. For affected firms, this may translate into reduced regulatory burden and greater flexibility in balance sheet management. |
A policy statement is expected in H1 2026. Relevant Resources |
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Financial resilience |
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PRA Amendments to the Large Exposures Framework Following the publication of CP14/24 on the Large Exposures Framework and PS14/25 on amendments to the large exposures framework Part 1, the PRA will be finalising the remainder of its rules in a second policy statement. |
CP14/24 set out several proposals to amend the large exposures framework. Part of these proposals were implemented in PS14/25, including:
For the upcoming policy statement, the PRA intends to finalise the remaining proposals, including:
In doing so, the regulator will be implementing the remaining Basel large exposure standards (LEX standards). Given that the rules contained in PS14/2025 entered into force on January 1, 2026, it is unlikely that firms will have an extended transition period. In turn, firms should prioritise reviewing and implementing the changes effected by the upcoming policy statement. |
The PRA expects to finalise its policy statement in H1 2026. This will include the proposed mandatory substitution approach, the removal of the use of initial margin (IM) methods for calculating exposure values for securities financing transactions (SFTs) and proposed rules on intragroup permissions. Relevant Resources |
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PRA Pillar 2A methodologies review The PRA plans to publish a policy statement following CP12/25 to implement the Pillar 2A changes necessary for Basel 3.1. |
In CP12/25, the PRA published a proposal to clarify and update its Pillar 2A methodologies for banks. The proposals are the first phase of a two-stage review. Specifically, the consultation paper outlined the PRA’s proposals to address the consequential impacts of the near-final PRA rules that would implement the Basel 3.1 standards, as well as to improve information, guidance and transparency for firms, including about the methodologies used by the PRA to uniform the setting of Pillar 2A capital. With the upcoming policy statement, the PRA aims to implement the proposals contained in that consultation paper, which include:
The improved information, guidance and transparency aspects should be of particular use for firms regarding their own implementation of the Basel 3.1 standards. |
The PRA plans to publish the phase one policy statement in Q2 2026. Relevant Resources |
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PRA Streamlining the Pillar 2A capital framework and the capital communications process – Policy Statement 2 Following the publication of a near-final PS18/25, the PRA is planning to publish a final policy statement for implementation on January 1, 2027. |
PS18/25 set out the PRA’s near final policies regarding the retirement of the methodology to Pillar 2A. The PRA implemented the refined methodology in 2018 to address concerns at the time about the potentially conservative nature of the current credit risk standardised approach (SA) compared with the internal ratings-based (IRB) approach, especially for asset classes that are considered lower risk, such as residential real estate exposures with a low loan-to-value (LTV) ratio. However, as the Basel 3.1 standards are set to take effect on January 1, 2027, the PRA considers that the Basel 3.1 standards – in particular the updated SA and IRB approach to credit risk, and the introduction of the output floor – together with changes to IRB modelling of real estate exposures (stemming from hybrid modelling and the IRB roadmap), would address the safety and soundness, and competition concerns that the refined methodology sought to mitigate in a more straightforward and transparent way. This change forms another part of the Basel 3.1 implementation. Firms should review this retirement, as well as other initiatives associated with Basel 3.1, ahead of its January 1, 2027 implementation date. |
The PRA published its final policy statement (PS2/26) on January 20, 2026. Relevant Resources |
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BoE/PRA Resolution planning: Amendments to Minimum Requirement for Own Funds and Eligible Liabilities (MREL) reporting. The BoE and PRA are planning on publishing a final policy statement on amendments to MREL reporting. |
The PRA published CP15/25 on July 15, 2025, setting out its proposals to make targeted changes to the reporting expected from relevant firms on their MREL, as part of a broader package of announcements on resolution-related policy by the Bank and the PRA. The proposals involve amendments to the templates, reporting instructions and Supervisory Statement (SS) 19/13. Specifically, the proposals aimed to ensure that firms only report data that are aligned with the revised MREL statement of policy and essential to the work of the PRA and the Bank. The proposals also aimed to ensure that the regulators can effectively monitor whether firms are on track to build and maintain sufficient loss-absorbing capacity to support an effective resolution by establishing a clear, consistent and consolidated MREL reporting framework. Given the upcoming final policy statement, firms should review the proposals contained within CP/25, particularly regarding the possible retirement of four COREP13 templates, against their existing reporting frameworks. |
The BoE and PRA expect key milestones to arrive in Q1 and Q2 2026. In addition, the PRA proposes that firms will have at least six months following the publication of the final MREL reporting policy to implement the policies. Relevant Resources |
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BoE/HMT/PRA Implementation of the remaining Basel 3 Banking Standards The regulators are planning on publishing a final Basel 3.1 policy statement and rules. |
The final policy statement should help with the implementation of the remaining elements of the Basel 3.1 banking standards. Separately, the PRA is consulting on a one-year delay to the implementation of the internal model approach for market risk to January 1, 2028. |
The regulators plan to publish the final Basel 3.1 policy statement and rules in Q1 2026. Key milestones are expected to arrive in Q1 2027 and post-July 2027. |
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FCA/PRA Implementing the Financial Policy Committee’s (FPC) recommendation to amend the loan-to-income (LIT) flow limit. The FCA and PRA have put in place interim measures to implement the FPC’s recommendations, and will be launching a consultation on new policies in the area. |
In Q2 2025, the FPC issued a recommendation that the PRA and FCA amend the implementation of its LTI. Under the current rule, mortgage lenders must limit the number of new residential mortgage loans made with an LTI ratio at, or greater than, 4.5 to no more than 15 percent of their total number of new mortgage loans per annum. Due to this, the regulators announced a review of its implementations, and have each adopted interim measures. Specifically:
Going forward, the regulators will be launching a consultation to review the LTI ratio requirements. Should firms wish to increase their LTI ratios after the conclusion of the interim measures, they should consider engaging with the consultation. |
The FCA and PRA expect to publish a consultation paper in Q1 2026. Subject to responses, the regulators plan to implement the FPC’s recommendation in H2 2026. Relevant Resources |
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BoE/PRA Disclosure: resolvability resources, capital distribution constraints and the basis for firm Pillar 3 disclosure. The BoE and PRA are planning on publishing a policy statement on enhancements to Pillar 3 disclosures. |
On July 15, 2025, the PRA published CP16/25 on proposals to enhance Pillar 3 disclosures by firms in three areas:
This consultation is part of a broader package of announcements on resolution-related policy by the Bank and the PRA. A policy statement is expected following this consultation. The proposed implementation for all the proposals contained in the CP is January 1, 2027. Firms should, in turn, review the proposals contained in the consultation paper against their existing disclosures. |
The BoE and PRA expect key milestones to arrive in Q1 and Q2 2026. Relevant Resources |
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Other single-sector initiatives |
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FCA Evaluation of the Access to Cash regime The FCA is to complete and publish a formal review of the effectiveness of the Access to Cash regime. The work will include both qualitative and quantitative assessment and the final review will be published in 2027. |
The review is not expected to begin until late into the year, giving financial institutions time to review and evaluate their own cash access systems and policies before the formal review begins. The FCA is expected to reach out to stakeholders, including consumers and businesses, to gain their insight and experience of the regime, which will be entities’ opportunity to engage and influence any potential outcome from the review. |
The review is expected to begin in Q4 2026, with the output published at the end of 2027. Relevant Resources |
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HMT Reform of the Consumer Credit Act (CCA) 1974 This reform seeks to modernise regulation governing the UK’s £200bn non-mortgage consumer lending market by moving much of the CCA so that it sits under the more agile regulatory framework of the FCA. |
This is very much a live issue, with the FCA having released its approach to regulating deferred payment credit, otherwise known as buy now, pay later (BNPL), in February 2026. The regime is expected to come into effect from July 2026, which means that those who currently offer such services in the unregulated space need to apply for authorisation. They will also need to ensure they are compliant with the relevant provisions of the FCA’s Consumer Credit Sourcebook and other parts of the FCA Handbook. A temporary permissions regime will commence in May, and if a firm has not applied to this regime or does not already have the necessary permissions by the regulation day in July, then offering such activities will need to stop. There is quite a short turnaround so this should be dealt with as a priority. More developments in relation to consumer credit reforms are expected from HMT. |
The FCA’s regulatory regime for deferred payment credit is expected to come into effect on July 15, 2026. HMT is still expected to provide further detail on next steps. Relevant Resources |
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PRA Residential mortgages: Loss Given Default (LGD) and Probability of Default (PD) estimation The PRA published Discussion Paper DP1/25 in July 2025. This paper presents the PRA’s considerations and requests feedback and evidence regarding potential policy changes to the treatment of residential mortgage exposures under the Internal Ratings Based (IRB) approach. The publication was prompted by the PRA’s observation that medium-sized firms encounter challenges in developing IRB models for Loss Given Default (LGD) and Probability of Default (PD) estimation. The PRA plans to publish a subsequent consultation paper once the feedback and evidence from DP1/25 has been reviewed and considered. |
This development is currently in a holding pattern, with a consultation paper not expected until towards the end of the year. It could mean a significant shift in approach, in an attempt to increase competition in the market; however, it is too early to know what changes will come about and financial institutions should watch for any further releases to indicate the direction the PRA plans to take. |
A consultation paper is expected in Q4 2026. Relevant Resources |
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Repeal and replacement of assimilated law under FSMA 2023 |
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HMT Overseas Prudential Requirements Regimes (OPRR) HMT intends to create an overseas regime framework for banks to replace the existing equivalence regimes in the UK Capital Requirements Regulation (CRR). |
This development aims to reshape the UK’s post-Brexit prudential landscape by replacing the inherited EU equivalence framework with a bespoke OPRR that gives HMT the power to decide which jurisdictions are safe for UK banks to interact with on a preferential basis. PRA-authorised banks, building societies and investment firms should focus on auditing their cross-border exposures, ensuring that their internal equivalent jurisdiction lists are ready to be migrated to the new OPRR framework. |
HMT is to publish the statutory instrument in draft before the end of 2026. Relevant Resources |
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PRA CRR definitions: restatement in PRA Rulebook (Articles 4, 4A, 4B and 5) The PRA plans to expressly define certain terms in the PRA Rulebook Glossary that are currently implicitly defined in other provisions of the CRR, as well as to make amendments across the PRA Rulebook that are related to the transfer of CRR definitions into the PRA Rulebook Glossary. |
This step moves the UK towards a regulator-led handbook rather than a statute-led one. By decoupling from the fixed text of the CRR, the PRA is gaining the agility to adjust core definitions, such as what constitutes an “institution” or “financial instrument”, without waiting for an act of parliament. Although the authority says it is aiming for a faithful restatement, by redefining key terms that were previously only implicitly defined it is creating the risk of subtle interpretation shifts. Affected financial organisations should review the restated definitions to identify any divergence from the original CRR text that could impact their operations. |
A final policy statement is expected in Q2 2026, subject to HMT’s revocation of the relevant CRR provisions. Relevant Resources |
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HMT/PRA Repeal and replace in the PRA Rulebook parts of the remainder of the CRR – definition of capital and the mapping of external credit rating agency ratings to credit quality steps Transferring parts of firm-facing CRR requirements into the PRA Rulebook and other policy materials as part of the programme to replace assimilated law. |
By moving these rules from high-level assimilated law into the PRA Rulebook, the regulator is fine-tuning the definition of what counts as “own funds” and how much capital firms must hold against rated exposures. Given that the rules were finalised in July 2025 and go live in H1 2026, firms have a tight window to ensure their regulatory reporting systems are mapping ratings correctly under the new PRA-specific tables rather than the old EU ones. Firms should prioritise reconciling their current mapping with the new PRA appendices to avoid any surprises on implementation. |
The PRA published the final rules in July 2025, with a commencement date of H1 2026. Relevant Resources |
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HMT/PRA Repeal and replace in the PRA Rulebook the remainder of the CRR – remainder Transferring all remaining firm-facing CRR requirements into the PRA Rulebook and other policy materials as part of the programme to replace assimilated law. |
This is, in effect, a sweeping-up exercise, shifting the remaining elements of the CRR text into the PRA Rulebook. The completion of the shift from a legislative statute to a more flexible regulatory rulebook is a significant change in how the UK supervises the financial services industry. Regulated firms will need to conduct a great deal of updating to ensure that internal policies, audit trails and legal agreements that currently cite the CRR all point to the new PRA Rulebook chapters. Misalignment could lead to technical breaches in regulatory reporting. |
Following the publication of a near-final policy statement (PS19/25) in October 2025, the PRA plans to publish a final policy statement in Q1 2026 for implementation on January 1, 2027. Relevant Resources |
