This month's updates span fund tokenisation, crypto asset authorisation readiness, financial crime frameworks, Consumer Duty expectations, payments regulation, AI governance, cyber risk, pension reform and enforcement activity.
We have provided a comprehensive overview of all the notable regulatory developments this month in our full report, which you can download via the link below.
Tokenisation is moving rapidly from concept to practical implementation, with the FCA providing clearer pathways for firms to use distributed ledger technology within existing frameworks.
The regulatory focus is shifting towards scalability, governance and investor protection, signalling that tokenisation is no longer a niche innovation topic, but a core strategic operating model consideration for funds and market infrastructure.
Firms are now expected to assess how digital models will function in practice, including custody, settlement and risk management, as regulatory scrutiny increases around operational resilience and market integrity.
Crypto Asset Firms Can Request Pre-Application Meetings from 11 May 2026
The FCA has introduced pre-application support for crypto asset firms, marking a transition to a more structured, supervisory-led regime under FSMA.
Firms will need to demonstrate strong application readiness, including clearly defined business models, governance arrangements and gap analysis against regulatory expectations.
Early engagement is critical, particularly for firms currently operating under the Money Laundering Regulations, as the new regime represents a significant step-up in regulatory scrutiny.
Complaints, Whistleblowing and Accountability
The FCA's recent messaging highlights a clear shift towards a more growth-focused, agile and accessible supervisory model, supported by initiatives such as the Scale-up Unit and faster authorisation metrics. This points to a regulator that is placing greater emphasis on speed, transparency and accountability, while maintaining core standards. For firms, this creates a valuable opportunity to improve time to market, support innovation and scale more confidently, but also increases expectations around more strategic regulatory engagement, decision-ready submissions and robust governance, controls and resilience.
At the same time, the FCA is reinforcing a more operational and data-driven approach to supervision, particularly across financial crime and conduct risk. Market Watch 85 signals that information-sharing powers under ECCTA should now be treated as an active control tool, with firms expected to embed these mechanisms into risk assessments and financial crime frameworks, especially in relation to market abuse, while continuing to meet existing obligations such as SARs and STORs.
Alongside this, complaints data is becoming an increasingly important supervisory and public indicator of customer outcomes under Consumer Duty. Firms are expected to move beyond reporting and actively monitor trends, strengthen data quality and address underlying issues, as complaint volumes, uphold rates and redress levels can quickly highlight emerging conduct risks. Weaknesses in categorisation, root-cause analysis or governance may lead to regulatory scrutiny and reputational impact, particularly where there is published data disclosed.
Whistleblowing data further reinforces the FCA's focus on culture, governance and early risk identification. Rising volumes of disclosures and the breadth of allegations indicate that internal issues across conduct, systems and controls are continuing to surface externally, informing supervisory priorities and enforcement activity. For firms, this highlights the importance of maintaining effective internal escalation frameworks, strong speak-up cultures and governance that enables early intervention and escalation.
The FCA's updated approach to payment services and electronic money brings together expectations across authorisation, safeguarding, reporting and supervision into a more holistic supervisory framework.
Similarly, consultation CP26/16 signals potential changes to authorised fund asset registration, with implications for custody, delegation and oversight models within private markets.
The FCA's Regulatory Initiatives Grid (10th Edition) is produced by the Financial Services Regulatory Initiatives Forum and sets out the planned regulatory initiatives for the next 24 months. It is designed to help firms understand the timing and operational impact of future developments, supporting regulatory change management, programme prioritisation and resource planning.
In practice, firms should use the Grid to identify relevant initiatives early, prioritise areas of greatest operational impact, and remain flexible as the regulatory landscape evolves.
AI is moving from experimentation to implementation, with regulators emphasising responsible adoption, governance and alignment with customer outcomes. Input to the FCA's Mills Review and the Financial Inclusion Commission highlights growing expectations that AI-enabled products are designed with vulnerable customers and financial inclusion in mind.
Firms are expected to address risks around bias, transparency, data quality and workforce readiness, ensuring AI is deployed in a controlled way.
At the same time, the National Cyber Security Centre highlights the risks of agentic AI, reinforcing the need for strong cyber hygiene, human oversight and incremental deployment strategies.
The Pension Schemes Act 2026 is a framework for phased reform rather than a one-off rule change. This publication sets out a direction of travel that could reshape governance, pooling arrangements, and investment oversight over time.
Recent enforcement actions and court cases highlight the FCA's continued focus on financial promotions and anti-money laundering controls. Investigations into unlawful promotions and additional sentencing in money laundering cases reinforce that weak controls can quickly escalate into enforcement and reputational risk.
For a detailed analysis of these developments and their implications, download the full report via the form below.