FCA Regulatory Priorities reports: throughout March 2026, the FCA continued to publish its newly introduced annual Regulatory Priorities reports which replace its portfolio letters. On 4 March 2026, the FCA published its Regulatory Priorities report on consumer investments which highlighted the following priorities:
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building a stronger investment culture;
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strengthening trust;
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securing good customer outcomes; and
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strengthening financial crime controls.
On 19 March 2026, the FCA published its Regulatory Priorities report for the wholesale buy side sector which highlighted the following priorities:
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evolving regulation to foster growth and innovation and serve changing consumer needs;
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delivering good outcomes to consumers;
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reinforcing consistent, high standards across private market investing; and
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preserving market integrity and resilience to disruption.
Although not stated in the report itself, the FCA is requiring firms to confirm, via a confirmation in its RegData system, that the report has been circulated to senior management.
Regulatory Priorities: Consumer investments report
Regulatory Priorities: Wholesale Buy Side
Operational resilience: on 27 March 2026, the FCA published examples of good practice and areas for firms to improve, based on some firms’ most recent operational resilience self‑assessments. The FCA’s guidance applies to firms within scope of the FCA’s operational resilience rules in SYSC 15A of the FCA Handbook which includes enhanced scope SMCR firms.
Operational resilience: insights and observations one year on | FCA
FCA annual work programme 2026/27: on 26 March 2026, the FCA published its annual work programme, which sets out how it will deliver its four strategic priorities for the year ahead. This will be the second year of the FCA’s 5-year strategy. As well as fighting financial crime, the FCA’s priorities are to:
- be a smarter regulator: the FCA reiterates its ambition to improve firms’ experience including with a reduction in unnecessary administrative burdens;
- support growth: the FCA flags the measures it will implement to unlock capital investment and liquidity including (amongst others) reforming capital requirements for solo-regulated investment firms to improve liquidity, setting clearer standards for firms to identify where the Consumer Duty and retail protections do not apply; and reform of the rules for alternative investment fund managers; and
- help consumers navigate their financial lives: amongst other developments the FCA flags its work in expanding consumer access to investments through the advice guidance boundary review.
FCA annual work programme 2026/27 | FCA
COLL concentration limits: on 26 March 2026, the FCA published Handbook Notice 139, which sets out changes to the FCA Handbook. In the notice the FCA confirmed the removal of the parts of the COLL concentration rule (set out in COLL 5.2.29R(3) and (6)) that restrict how much a UK UCITS can invest in units of other collective investment schemes, following consultation in CP25/37. The change, which took effect on 27 March 2026, will give authorised fund managers greater flexibility when structuring fund-of-funds arrangements.
Advice market reforms: on 25 March 2026, the FCA published consultation paper CP26/10 on simplifying its pensions and investment advice rules. The FCA’s proposals are intended to complement its existing advice and guidance and future targeted support services in order to provide consumers a continuum of support. The proposals include (amongst others):
- simplifying the existing advice rules;
- clarifying existing flexibility in the rules;
- introducing an “attitude to risk” concept to describe the consideration of the risk a client is willing to take;
- replacing the annual suitability review with periodic reviews based on clients’ needs; and
- guidance on interaction with the Consumer Duty including when dealing with clients who are not engaging with ongoing advice services.
The consultation closes on 22 May 2026, with a policy statement planned by the end of the year.
CP26/10: Simplifying the Pensions and Investment Advice Rules
Non-financial misconduct: on 23 March 2026, the FCA published a new webpage reminding firms of the changes they need to make in advance of the rule changes coming into effect on 1 September 2026 in respect of non-financial misconduct. In particular, the FCA reminds firms that they should ensure that staff and managers understand how the changes apply to them and that they should review whether they need to update their approach to:
Non-financial misconduct in financial services | FCA
Operational incident and third party reporting: on 18 March 2026, the FCA issued policy statement PS26/2 which will introduce new operational incident and third party reporting requirements with effect from 18 March 2027. Operational incident reporting will be relevant for all authorised firms. The new rules provide for (amongst others) a definition of what an operational incident is and thresholds for when firms must report an incident. Third party reporting requirements will be relevant for specified firm types including enhanced scope SMCR firms, banks and CASS large firms. The final rules define what a material third party arrangement is, require firms to notify the FCA of any new, or any significant changes to material third party arrangements, require firms to maintain a register for their material third party arrangements, and to submit it to the FCA annually.
PS26/2: Operational Incident and Third Party Reporting
FOS reform: on 17 March 2026, the Treasury published its response to its consultation on the review of the Financial Ombudsman Service (FOS), confirming it will proceed with the majority of its proposed reforms and the mass redress event framework. Key reforms include:
- adapting the FOS “fair and reasonable” test so that firms which have met their obligations under relevant FCA rules will be found to have acted fairly and reasonably;
- introducing a referral mechanism for the FOS to seek FCA guidance on ambiguous rules;
- imposing a 10-year time limit for complaints; and
- giving the chief ombudsman overall responsibility for FOS determinations.
On the same date, the FCA and FOS published CP26/9, setting out final policy on modernising the redress system and consulting on further changes to DISP, including revisions to the fair and reasonable test. Responses are due by 11 May 2026.
Consultation_Response_FOS_Reform_March_2026.pdf
CP26/9: Modernising the Redress System
Consumer understanding: on 13 March 2026 the FCA published the findings of its review into firms’ approaches to delivering the consumer understanding outcome under the Consumer Duty. The review covered firms of various sizes across different sectors including: insurance, retail banking, payments, consumer finance and contracts for difference. The review highlights good and poor practice across five areas:
- management information and testing;
- innovation and communications design;
- vulnerability and accessibility;
- financial promotions; and
- governance and oversight.
Consumer understanding: good practice and areas for improvement | FCA
MIFIDPRU — prohibition on non-cash distributions: on 6 March 2026, the FCA published its quarterly consultation on proposed miscellaneous amendments to the FCA Handbook (CP26/8). The FCA proposes to amend the simplified prohibition on non-cash distributions on own funds instruments which were introduced by PS25/14 on 1 April 2026. The FCA has identified that, without amendment, the simplified prohibition would inadvertently render ineligible certain capital instruments that comply with the current prohibition in Article 73 of the UK CRR. To address this, the FCA proposes to align the simplified prohibition with the current prohibition. In the interim period prior to the amendments taking effect, the FCA has confirmed that firms need not amend the terms of affected capital instruments.
CP26/8: Quarterly Consultation Paper No. 51
Consumer investment priorities: on 4 March 2026, Lucy Castledine, FCA director of consumer investments, gave a speech at the TISA Inclusive Investing Conference 2026. The speech highlighted the FCA’s focus on retail investment and its commitment to creating a stronger investment culture.
Consumer investments priorities: strengthening trust, supporting investors | FCA