FCA sets out 2026 regulatory priorities for the Wholesale Banking and Buy- Side markets sector

Priority

FCA expectations of firms

Upcoming FCA work includes:

Improve the resilience of firms and markets

Strengthen operational resilience by embedding resilience into new product design and change management.

Improve third-party and technology risk oversight by robust due diligence.

Ensure trading controls and liquidity frameworks are robust.

Undertaking a threat-led penetration testing (CBEST) of wholesale banks and trading venues.

Review and test a sample of wholesale brokers’ contingency funding, recovery and wind-down plans.

Enhance efficient, competitive and innovative markets

Support and engage proactively with FCA reforms, including providing timely and accurate data.

Prepare for T+1 settlement, dematerialisation of shares and digitalisation of market processes, including how technology can streamline operations and reduce settlement risks.

Work with the government to reform the benchmarks regime.

A review of wholesale conduct rules for potential improvements to support UK growth.

Begin a post-implementation review of the Investment Firms Prudential Regime (IFPR) to check it remains fit for purpose and be better aligned with the new COREPRU framework.

Enable the safe and responsible adoption of new technology

Engage with regulatory sandboxes to trial new technologies

Implement robust governance for emerging technologies by establishing clear accountability, risk management and oversight for the use of AI, DLT and other new technologies.

Manage third-party and data risks.

Operate the Digital Securities Sandbox to enable firms to experiment with DLT and tokenisation.

Finalise the cryptoasset regulatory regime

Continue to collect information from wholesale brokers on whether they currently provide, or have plans to provide, client access to crypto and digital markets, using a survey in Q2 2026.

Prevent financial crime and market abuse

Strengthen financial crime controls, including by having effective oversight of appointed representatives and implementing policies to manage financial crime risks from their activities.

Be vigilant for new sources of financial crime risk by working collaboratively with regulators and law enforcement.

Enhance surveillance and conduct oversight.

Collect and analyse information from a sample of banks and trading venues to understand the maturity of firms’ insider risk management.

Ensure firms effectively manage conflicts of interest and conduct oversight

Identify and manage conflicts of interest. The FCA states that firms should pay particular attention where they adapt to additional responsibilities, new regimes or new technologies.

Strengthen conduct oversight and accountability.

Initiate a broad supervisory strategy to address and mitigate conflicts and inadequate conduct in trading and originating activities of wholesale banks in securities markets.

Review its position on payment for order flow

A review of FCA rules following IOSCO’s recommendations on pre-hedging.

Continue work on addressing concerns about the application of the Consumer Duty.

Review and test controls in place at wholesale brokers to prevent and investigate non-financial misconduct.

Priority

FCA expectations of firms

Upcoming FCA work includes:

Evolve regulation to foster growth and innovation and serve changing consumer needs

Implement robust governance for emerging technologies, including establishing clear accountability, risk management and oversight for the use of AI, DLT and other new technologies.

Consult on plans for an effective, predictable and proportionate regulatory regime for alternative investment fund managers.

Remove unnecessary reporting and incorporate global data standards.

Consult on streamlining product-level Task Force on Climate-related Disclosures (TCFD) reporting requirements.

Deliver good outcomes to consumers

Embed the Consumer Duty.

Apply a consumer lens to products and services, such as model portfolio services and retirement solutions.

Provide clear communications to investors to enable informed investment decisions.

Maintain strong oversight of ARs and make sure Duty expectations are met.

Progress multi-firm review of model portfolio services.

Focus on outlier firms that design products and services that do not consider consumers’ best interests.

Support further implementation of the SDR and labelling regime.

Reinforce consistent, high standards across private market investing

Review and update governance and processes for valuations.

Ensure robust processes are in place for identification, management and mitigation of conflicts of interest.

Align product development frameworks for retail products and retirement solutions.

Communicate on good practice to the market following ongoing review of conflicts of interest in private markets firms.

Support the Bank of England as it conducts a new private markets system-wide exploratory scenario (SWES).

Undertake focused supervisory work on firms’ approaches to risk management in private markets.

Preserve market integrity and resilience to disruption

Strengthen operational resilience and embed it into processes such as new product design and change management. 

Maintain robust incident response and recovery plans.

Assess and manage dependencies on material third party providers, ensuring robust due diligence and ongoing monitoring of resilience capabilities. 

Strengthen governance frameworks to manage the firm’s impact on markets, with a particular focus on effective risk management of investment models and strategies employing leverage, concentrations and use of newer technologies like AI. 

Act as good market participants by ensuring strong systems and controls are in place to detect and prevent market abuse.

Collect information from a cross section of firms to understand the maturity of firms’ insider risk management.

Finalise rules on improving the UK transaction reporting regime (CP25/32), with a policy statement expected in Q3 2026.