Welcome to the August 2025 edition of the Freshfields FS Insights newsletter, which contains a selection of thought leadership related to the financial services industry published over the past month by Freshfields lawyers from around the world, as well as upcoming dates for your diary. If you would like more information regarding any of these developments, please get in touch with your usual Freshfields contact.

UK competitiveness and growth

The UK government’s new financial services strategy: a catalyst for growth?

On the evening of Tuesday 15 July 2025, the Chancellor of the Exchequer, Rachel Reeves, delivered her second Mansion House speech, in which she set out the government’s plans to “regulate for growth and not just for risk”. Earlier in the day, the government had published its Financial Services Growth and Competitiveness Strategy, along with a wide-ranging package of reforms to financial services regulation, dubbed the “Leeds Reforms”. For more information, see our blog post.

Freshfields hosted a live one-hour webinar on Wednesday, 23 July 2025, in which a panel of senior lawyers with expertise in financial services regulation, pensions, and competition law analysed the government’s growth strategy, its plans to overhaul the pensions industry, and what this means for financial institutions, consumers, employees and the economy. A recording of this webinar is available here.

Advice Guidance Boundary Review

Closing the advice gap: FCA consults on detailed proposals for targeted support

On 30 June 2025, the Financial Conduct Authority (FCA) published a consultation paper (CP25/17) setting out its detailed proposals for “targeted support” in pensions and retail investments. This new form of support will enable firms to offer ready-made suggestions tailored for groups of consumers with common characteristics and help them make informed financial decisions. The proposals were referred to by the FCA as “once-in-a-generation reforms” to help millions of people navigate their financial lives (see press release here). 

This consultation follows the 2023 HM Treasury (HMT) and FCA discussion under the Advice Guidance Boundary Review on how the FCA could better support consumers to make informed choices about their pensions and investments (see our previous blog post). The FCA consulted on proposals for targeted support in pensions (see here) in December 2024 and is now taking forward more detailed proposals for both pensions and retail investments. To help develop its policy, the FCA has also carried out consumer and behavioural research and a “policy sprint” with certain firms considering the provision of targeted support. For more information, see our blog post. For a more detailed consideration of the key proposals for targeted support and the areas firms should consider when assessing the potential impacts on their business and clients, see our briefing.

Senior Managers and Certification Regime

UK government and regulators announce reforms to the Senior Managers and Certification Regime
  
In 2023, the FCA and the Prudential Regulation Authority (the PRA) published a joint discussion paper on the review of the effectiveness, scope and proportionality of the Senior Managers and Certification Regime (SM&CR), which was introduced in the wake of the 2008 financial crisis to enhance the responsibility and accountability of certain individuals within financial services firms. In parallel, HMT launched a call for evidence to look at the legislative aspects of the regime (see more detail including a summary of the existing SM&CR framework in our previous blog post). On 15 July 2025, three new consultations were published by HMT, the FCA and the PRA, each proposing significant reforms to the SM&CR. These proposals aim to streamline the regime, reduce regulatory burdens, and enhance the UK’s competitiveness as a global financial centre (noting the FCA and PRA’s new secondary objective of international competitiveness and growth). For more information about the key proposals and their potential impact, see our blog post.

Non-financial misconduct

FCA policy statement and consultation on non-financial misconduct published

On 2 July 2025, the FCA published a policy statement containing final rules on non-financial misconduct (NFM) alongside a consultation on draft guidance to support firms to apply its NFM rules if needed (CP25/18). The policy statement extends the scope of the FCA’s NFM rules, while the consultation sets out amended guidance in relation to NFM for the purposes of the conduct rules and fitness and propriety (F&P) assessments. The FCA’s rule changes will clarify that serious bullying and harassment at any financial institution, including in some instances where it takes place in an individual’s private life, may affect whether they satisfy conduct rules and meet the fit and proper test. For more information, see our blog post.

Buy Now, Pay Later

The DPC Frontier: FCA Charges Ahead on Regulating Buy Now, Pay Later

In our previous blog post (here) on Buy Now, Pay Later (BNPL), we examined the UK Government’s proposals to bring interest-free BNPL products within the scope of regulation. Those proposals marked a clear shift towards formal oversight of a market that had, until then, been subject to only very light regulation. Since then, the regulatory direction has continued to take shape. On 18 July 2025, the FCA published a consultation paper (CP25/23), setting out its propose regime for regulating “Deferred Payment Credit” (or DPC), the new regulatory term for BNPL. This follows the government’s enactment of the Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) Order 2025 (the Amendment Order) just days earlier on 14 July 2025, bringing DPC within the FCA’s perimeter. CP25/23 marks a pivotal moment for DPC regulation. After years of debate and interim guidance, the FCA has laid out what it considers to be a proportionate, targeted framework reflecting consumer risks and behaviours. For more information, see our blog post.

Payments and e-money

Council adopts position on PSD3 and PSR – key take-aways

On 18 June 2025, the Council of the European Union formally approved its negotiating mandates on the legislative proposals relating to the third Payment Services Directive (PSD3) and the Payment Services Regulation (PSR). This represents a significant milestone in the legislative procedure, following the Commission’s initial proposal on 23 June 2023 (see our previous blog post) and the earlier adoption of its position by the European Parliament on 23 April 2024 (see our previous blog post). With this step, there is green light for the start of so-called “trilogue negotiations” (inter-institutional negotiations) between the co-legislators, with the objective of achieving a political agreement on the final texts of PSD3 and PSR, which will subsequently need to be adopted by both the Parliament and Council. 

PSD3 and PSR are intended to address issues identified under the second Payment Services Directive (PSD2) – particularly regulatory divergence, persistent payment fraud, and challenges for innovative non-bank market entrants. The new regime aims to achieve this by further harmonising rules, enhancing consumer protection and reducing fraud, and fostering competition and innovation. As trilogue negotiations approach, we take a look at some key amendments proposed by the Council in comparison to the Parliament’s position. For more information, see our blog post.

E-money and payment firms face FCA scrutiny over risk management and wind-down planning

On 20 June 2025, the Financial Conduct Authority (FCA) published its findings following a multi-firm review into risk management and wind-down planning at e-money and payment firms. The general message is that risk management frameworks and wind-down plans of the firms it reviewed remain underdeveloped and that none of the fourteen firms reviewed fully followed the FCA’s guidance in FG20/1 (Our framework: assessing adequate financial resources). The FCA’s review underscores the importance of effective risk management in this dynamic sector and signals a clear warning for e-money and payment firms to view wind-down planning as a live exercise, not just a compliance requirement. For more information, see our blog post, in which we explore the FCA’s key findings on risk management and wind-down planning, highlighting both examples of good and poor practice, and consider the practical steps firms should be taking now in response.

Cryptoassets

Trump Administration: Regulatory Framework for Digital Assets Begins to Emerge as House Sends Stablecoin Legislation to President and Passes Market Infrastructure Bill

After a rocky start to its highly-anticipated “Crypto Week,” the House of Representatives voted 308–122 to adopt the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the GENIUS Act) on Thursday July 17, 2025, sending landmark crypto legislation to the President’s desk for signature.  The House also adopted a broader market infrastructure bill, the Digital Asset Market Clarity Act of 2025 (the CLARITY Act), as well the Anti-CBDC Surveillance State Act (the Anti-CBDC Act), both of which now head to the Senate for action. With both the GENIUS and CLARITY Acts attracting wide bipartisan margins, the United States appears poised to adopt a comprehensive regulatory framework for digital assets, a prospect that seemed highly unlikely barely a year ago. For more information, see our blog post.

Open banking

UK data reforms unpacked: the new smart data schemes and what businesses need to know

On 19 June 2025 the UK enacted the Data (Use and Access) Act 2025 (the DUAA). The DUAA is a wide-ranging and significant reform package with implications for all businesses operating in the UK. In a previous blog post, we explained the background to the DUAA and its key provisions. In our latest blog post, we take a closer look at Part 1 of the DUAA, which establishes ‘smart data schemes’. Those provisions are intended to put the UK’s existing Open Banking regime on a statutory footing and expand personal data portability and sharing schemes to other sectors.

Capital markets

FCA confirms new 75% threshold for further issuances

On 15 July 2025, the FCA published final rules to implement the new public offers and admissions to trading regime (in PS 25/9, following its consultation in CP24/12). The FCA expects the new rules to come into effect on 19 January 2026. While the FCA plans broadly to retain the existing UK Prospectus Regulation requirements on IPO, the new regime will introduce significant reforms – in particular an increased 75% threshold for further issues. For a summary of the key changes, see our blog post.

Sustainability

A step closer to mandatory transition plans for UK-regulated financial institutions and FTSE 100 companies

On 25 June 2025, the UK government launched a consultation on mandatory disclosure of climate transition plans for UK-regulated financial institutions (including banks, asset managers, pension funds and insurers) and FTSE 100 companies. This forms part of a wider set of measures to develop the UK’s sustainable finance framework, with the government also launching consultations on the UK Sustainability Reporting Standards (UK SRS), aligned with the International Sustainability Standards Board’s general standards, and a new proposal for a voluntary sustainability assurance registration regime, which we covered in our recent blog post. The government is committed to securing the UK’s position as the green finance capital of the world and recognises the importance of taking international developments into account when designing the new framework. The consultation invites views on implementing transition planning requirements to realise the government’s commitment in its manifesto to mandate credible transition plans in the financial market, aligned with the 1.5oC goal of the Paris Agreement and the UK’s domestic commitment to achieving net zero by 2050. However, the government appreciates the complexities involved with striking the right balance between legal accountability and flexibility, noting that it would not want to create undue legal risks where entities are genuinely seeking to deliver on their plans. For more information, see our blog post.

Prudential regulation

Draft EBA guidelines for identifying ancillary services undertakings – how should institutions react?
  
On 7 July 2025, the European Banking Authority (EBA) published a consultation paper containing draft guidelines specifying the criteria for identifying ancillary services undertakings under Article 4(1)(18) of Regulation (EU) No 575/2013 (CRR). The consultation marks a significant step following recent changes to the definitions of ‘ancillary services undertaking’ and ‘financial institution’ enacted by Regulation (EU) 2024/1623 (CRR 3). For an overview of the draft guidelines and their implications for EU credit institutions and large investment firms, see our blog post.

Private credit

Private credit in the loan market: a new era of financing for corporates
  
In this blog post, we look at the offering by private credit lenders of new financing solutions to corporates. Growth in this market is changing how corporates approach their financing needs. Where they might previously have tapped the traditional equity, bond or bank loan markets, there is a relatively small but growing segment of companies turning to the broader private credit universe.

Historically, private credit has been associated with sub-investment grade distressed lending and direct loans to middle-market, often privately owned, companies. However, in the past few years we have seen a surge in private capital targeting listed corporates. In 2024, we saw record deal volumes in the private credit market and worked on transactions increasingly tailored to the needs of large, stable companies seeking alternatives to traditional bank and public bond financing

Dates for your diary

11th Conference on the Banking Union
  
In cooperation with the Institute for Law and Finance at Goethe University Frankfurt am Main and the Center for Financial Studies, Freshfields will be hosting the 11th Conference on the Banking Union in Frankfurt am Main. The topic of this year's conference is "Judicial Review in the Banking Union". 

The conference will take place on Tuesday, 2 September 2025, between 10:00 am and 3:45 pm CEST, in a hybrid format – both at Goethe University Frankfurt am Main and online. 

We will explore the system of legal protection as well as the role of European courts and administrative bodies within the system of “checks and balances” in the Banking Union. Key aspects to be discussed will include the development and functioning of judicial and administrative review, the impact of courts in promoting the Banking Union and shaping banking regulation, supervision, and resolution, as well as trends, challenges and opportunities in this respect. We will also consider implications for the current state and the future of the Banking Union. 

Confirmed speakers and panellists to date include:

• Adam Farkas – CEO of the Association for Financial Markets in Europe
• Elke Gurlit – Professor at the University of Mainz
• Pentti Hakkarainen – Chair of the Administrative Board of Review of the European Central Bank
• Dominique Laboureix – Chair of the Single Resolution Board
• René Smits – Professor emeritus at the University of Amsterdam
• Andreas von Bonin – Partner at Freshfields

This event is free of charge. For more information about the conference, please contact Azam Khan.