Freshfields FS Insights
Welcome to the June 2026 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.
This month’s edition includes the following topics. Please click on any of the topics in this list for more information.
Payments
Cryptoassets
SM&CR
Investment advice
Bank ring-fencing
Insurance
Capital markets
Short selling regulations
Consumer credit
Claims management
Consumer credit
Insider trading
Dates for your diary
Payments
PSD3/PSR: What the EU's new payments rules mean for your business
The EU payments package, comprised of the Third Payment Services Directive (PSD3) and the Payment Services Regulation (PSR), was proposed by the European Commission on 28 June 2023. After years of negotiations, the Parliament and the Council of the EU have now agreed on the final rules, with the agreed texts published on 23 April 2026. Our blog post provides a high-level summary of selected key changes that will be introduced under PSD3 and PSR.
Payments meet the future: HM Treasury's new package to modernise UK payment services regulation
On 21 April 2026, HM Treasury released a package of measures to modernise UK payments regulation, including a draft statutory instrument (SI) and the government’s response to its 8 September 2025 consultation paper on a streamlined approach to payment systems regulation. Alongside these publications, the government also announced a significant policy shift: it now intends to regulate stablecoin payments as payment services where stablecoins used for such payments have been issued by a firm that is authorised to carry on the new regulated activity of qualifying stablecoin issuance. In this blog post, we summarise the impact of the policy shift to regulate certain stablecoin payments as payment services, and identify key takeaways from the draft SI for stablecoin payments firms.
Agentic AI in the payments chain: regulatory challenges for financial institutions
AI “agents”, which combine the reasoning of generative AI with memory and execution capabilities, are the next frontier of AI risk and opportunity. One rapidly emerging application is agentic commerce, where agents autonomously execute tasks and make payments — whether operating alone or in multi-agent systems. For financial institutions, the question is not whether agentic commerce will arrive, but whether their existing compliance frameworks can absorb it. In this article, which was first published in the May 2026 issue of the Butterworths Journal of International Banking and Financial Law, we consider how firms can satisfy regulatory obligations, mitigate risks and allocate liability in this new landscape.
Cryptoassets
Drawing the Line: Navigating the FCA's New Cryptoasset Perimeter Guidance
On 15 April 2026, the Financial Conduct Authority (FCA) published a consultation paper (CP26/13), consulting on its proposed perimeter guidance for the new regulated cryptoasset activities introduced by the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026. CP26/13 proposes a new Chapter 19 of the Perimeter Guidance Manual (PERG) to help firms assess whether the business they carry on falls within the UK regulatory perimeter. In this post, we set out the headline points for market participants, followed by key activity-specific guidance.
SM&CR
UK regulators and HM Treasury announce reforms to the Senior Managers and Certification Regime
On 22 April 2026, the FCA published a policy statement (PS26/6) setting out changes to the Senior Managers and Certification Regime (SM&CR). These reforms have been developed jointly with the Prudential Regulation Authority (PRA), which has also published a policy statement (PS12/26) setting out changes that will affect dual-regulated firms. The purpose of the changes, which largely reflect the position set out in the earlier consultation papers, is to increase the efficiency and effectiveness of the SM&CR rules and reduce unnecessary regulatory and compliance burden. In our blog post, we summarise the changes and discuss implications for firms.
Investment advice
Reforming the advice landscape: FCA proposals simplify and support wider access to advice
The FCA’s long-awaited consultation paper on simplifying the pensions and investment advice rules (CP26/10), which was published on 25 March 2026, marks an important step in the FCA’s wider review of the UK retail advice regime. The proposals are designed to make investment advice easier to deliver, easier to access and more commercially viable, while supporting the UK government’s broader objective of encouraging greater retail participation in long-term investing and narrowing the “advice gap”. In our briefing, we examine the FCA’s proposals in further detail, including the move from “necessary” to “sufficient” information when assessing suitability, the consolidation of the fragmented suitability framework into a new COBS chapter, reforms to suitability reports and changes to ongoing advice services.
Bank ring-fencing
Less fenced in: review of the UK ring-fencing regime
On 18 May 2026, HM Treasury published the conclusions of its Ring-Fencing Review, which sets out a comprehensive package of proposed reforms to the UK’s ring-fencing regime. The PRA simultaneously announced plans to consult on reforming rules around shared operational services for ring-fenced banks. As we explore in our blog post, these proposals aim to create a more proportionate and flexible ring-fencing regime, with a view to supporting growth in the UK.
Insurance
Funded reinsurance: The PRA closes the capital gap
The use of funded reinsurance has expanded rapidly in recent years as UK life insurers have sought capital-efficient ways to support growing bulk purchase annuity volumes in a higher interest rate environment. This growth has been underpinned by increasing use of collateralised structures backed by private credit and other illiquid assets, alongside a competitive global reinsurance market with significant capacity. Consultation paper CP8/26, which was published on 29 April 2026, reflects the PRA’s concern that the existing Counterparty Default Adjustment methodology may be underestimating the risk inherent in funded reinsurance structures, particularly where collateral portfolios are concentrated in similar asset classes and downgrade risk is not explicitly captured. The consultation signals the PRA’s intent to reduce regulatory arbitrage between funded reinsurance and directly held assets, and to ensure that capital requirements more closely reflect the underlying economic exposures on insurers’ balance sheets. For analysis of the PRA’s concerns and what it is proposing, see our blog post.
Capital markets
The Finance Ministers of France, Germany, Italy, the Netherlands, Poland and Spain — informally known as the "E6" — have issued a joint position paper addressed to the Cypriot Presidency of the Council of the EU and Commissioner Maria Luís Albuquerque, calling for a pragmatic and ambitious path forward on the EU's Market Integration and Supervision Package (MISP). With the Cypriot Presidency at the helm, Council negotiations are now entering a more decisive phase — and the E6 letter arrives at exactly this moment, aiming to inject political momentum and outline areas for compromise for the rest of the Member States. For a summary of the E6’s proposals and why this matters, see our blog post.
Short selling regulations
The new UK short selling regime: FCA publishes final rules and operational guidance
On 16 April 2026, the FCA published a policy statement (PS26/5), setting out its final rules for the new UK short selling regime, together with a final Statement of Policy on the use of its emergency powers and an operational guide explaining how and when the new rules will come into force. While the rules largely replicate existing provisions, there are some notable changes. In response to the feedback it received, the FCA has also made some changes to the proposals in its consultation paper (CP25/29). For more information on the final rules, including an implementation timeline, see our blog post.
Consumer credit
A continued tale of outcomes-based regulation: FCA consults on simplifying financial promotions rules for consumer credit
On 29 April 2026, the FCA published a consultation paper (CP26/15), in which it sets out proposals to streamline its financial promotions rules in Chapter 3 of the Consumer Credit sourcebook (CONC 3) by removing duplicative, outdated or overly prescriptive requirements in light of the Consumer Duty. The FCA is also exploring potential amendments to disclosure requirements in relation to the cost of credit, aimed at improving consumer understanding. The FCA’s proposals mark the latest example in the regulator’s drive to move from a prescriptive to a more outcomes-based approach to regulation. In our blog post, we explain the proposed changes and what they would mean for firms.
Claims management
The FCA launches market study into claims management services
On 19 May 2026, the FCA launched a market study into claims management services in Great Britain. The study will examine the extent to which the conduct of claims management services – including both professional representatives (claims management companies and legal professionals) and lead generation firms – is having an adverse effect on consumers and competition. The FCA’s study, on which it will work closely with the Solicitors Regulation Authority, has been prompted by its “significant concerns” about the impact of certain behaviours on consumer outcomes. The study represents a further step in the FCA’s increasingly interventionist approach to the claims ecosystem – signalling a willingness to examine not just individual firm conduct, but structural drivers of poor consumer outcomes. Our blog post examines the key concerns identified by the FCA and next steps.
Insider trading
From patterns to proof: the SEC’s new playbook for insider trading enforcement
The recent action by the US Securities and Exchange Commission (SEC) charging 21 individuals in a wide ranging insider trading scheme marks an important inflection point in market abuse enforcement—both in scale and in method. While grounded in a familiar misappropriation theory, the case reflects a more fundamental shift: the SEC is now building scienter based antifraud cases through data analytics, pattern recognition, and network level investigation, rather than relying on isolated transactions or discrete tips. In this blog post, we examine the new approach to enforcement and implications for compliance.
Dates for your diary
Unlocking Growth Through a Stronger UK-EU Financial Services Partnership - UK Finance and Freshfields launch event
Freshfields is collaborating with UK Finance, the trade association for the UK banking and financial services sector, on a landmark new report entitled Unlocking Growth Through a Stronger UK-EU Financial Services Partnership. The report will explore how the financial services sectors on both sides of the Channel have adapted post-Brexit, and explore opportunities for deeper, technical level cooperation between the UK and EU. It will also set out an ambitious, forward-looking vision for a stronger UK-EU financial services partnership to help drive growth and support both the UK and EU economies. A report launch event will be held on the afternoon of 8 June 2026 at Freshfields in London, where UK Finance and Freshfields will showcase the report’s key findings with senior UK and EU industry representatives. For more information, please click here.
7th Digital Financial Services Forum: Navigating PSD3 & PSR – The Future of Payments
Freshfields is hosting our 7th Digital Financial Services Forum, in co-operation with the Institute for Law and Finance at the Goethe University Frankfurt am Main. This years’ edition will focus on the rapidly evolving payments landscape, driven by technological advances and the continued development of regulatory frameworks. Against the backdrop of PSD3 and PSR, the forum will bring together EU policymakers and global industry players to discuss the regulatory vision, its practical implications and key market trends, as well as how innovative technologies such as agentic AI and stablecoins are shaping the payments ecosystem. The conference will take place on Tuesday, 9 June 2026 between 2pm and 5pm CEST in a virtual format. Attendance is free of charge. To register, please click here.