Regulatory News
FOS has published its response to FCA review on the long-term impact of AI on retail financial services. Amongst other matters, FOS notes that the incorrect or excessive use of generative AI can lead to a disproportionate amount of caseworker time being spent verifying the content.
FCA has updated its webpage to note that it has made directions which set out that relevant firms can complete a notification form to register for temporary permission from 15 May 2026 until 1 July 2026. The directions and a notification form may be downloaded from the link.
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Further to FCA’s CP25/32 on improving the UK transaction reporting regime, the authorities are seeking expressions of interest from market participants to join this new Taskforce and have also published the ToR which govern the work of the three working groups which collectively make up the Taskforce.
BoE and PRA have published the text of its response to a letter from Government departments which discusses their plans to enable safe AI innovation, including planned work for 2026. BoE notes that it will continue to consider potential reforms to enhance the resilience of liquidity provision in stress, continuing to work in collaboration with FCA, and will also explore changes in market structure that would support more prudent risk management practices and margining in the non-centrally cleared gilt repo market to enhance system-wide resilience.
This consultation follows FPC’s recommendation that the regulators amend implementation of its LTI flow limit to allow individual lenders to increase their share of high LTI lending while aiming to ensure the aggregate flow remains consistent with the 15% limit. Responses are required by 1 July 2026.
Further to its September 2025 discussion paper, BoE has now published a feedback statement which includes information on next steps. Amongst other matters, BoE will continue to consider potential reforms to enhance the resilience of liquidity provision in stress, continuing to work in collaboration with FCA, and ill also explore changes in market structure that would support more prudent risk management practices and margining in the non-centrally cleared gilt repo market to enhance system-wide resilience.
BoE has published the H1 2026 survey results. Amongst other matters, it is noted that geopolitical risk and cyberattack remain the two most frequently cited sources of risks among participants, and the number of participants citing risks surrounding AI has continued to rise. There has also been a noticeable increase in participants citing the risk as the most challenging to manage, as well as the most likely to materialise.
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The HoL Financial Services Regulation Committee has published a letter from Sarah Breeden which follows up on a hearing held on 11 March 2026. She discusses unhosted wallets and the Digital Securities Sandbox.
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BoE has published the Record of FPC’s meeting of 27 March 2026. Specific topics under discussion include: banking sector resilience and the use of AI in the financial system.
TSC has published the transcript of the hearing which took place on 24 March 2026. Topics include: market abuse and other financial crime; finfluencers; motor finance; FOS; cryptoassets; SME lending.
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