The Point
In this edition, we discuss latest developments in the UK and EU
banking and investment regulation. These include recent
announcement from the HM Treasury of Leeds Reforms which represent
the most comprehensive overhaul of the UK financial system in over
a decade, key papers from the Bank of England on fundamental rules
for Financial Market Infrastructures and the banking resolution
regime and from the Prudential Regulation Authority on
implementation of Basel 3.1. Our edition also features key EU
publications on recent technical standards published by the
European Banking Authority on crypto exposure values under CRR
III.
Leeds Reforms outline plans for financial services sector
On 15 July, HM Treasury announced Leeds Reforms which represent
the most comprehensive overhaul of the UK financial system in over
a decade, with the aim of making the UK the leading global
destination for financial services by 2035. Key initiatives include
unlocking retail investment through FCA-led “Targeted
Support” and allowing Long Term Asset Funds within ISAs.
Reforms will also free up capital for investment by raising the
MREL threshold and reviewing the ring-fencing regime, while Basel
3.1 rules will be tailored to support UK competitiveness.
Read here to know more on the upcoming initiatives
that have been announced.
Bank of England paper on maintaining a fit for purpose
resolution regime
On 15 July 2025, the Bank of England (BoE) published a paper on
maintaining a fit for purpose resolution regime. The paper outlines
the BoE’s approach to maintaining a fit-for-purpose resolution
regime that ensures financial stability while fostering
proportionality for firms of varying sizes and complexities. The
paper also summarises the various updates the BoE and the
Prudential Regulation Authority are making or are proposing to the
resolution regime.
Click here to read further on the proposed updates
in relation to the regime.
PRA consults on implementation of Basel 3.1 and adjustments to
market risk framework
On 15 July 2025, the Prudential Regulation Authority (PRA)
published a consultation paper (CP17/25) on ‘Basel 3.1:
adjustments to the market risk framework’. The purpose of this
consultation is to finalise the implementation of the Basel 3.1
standards in the UK, focusing on market risk requirements under the
Fundamental Review of the Trading Book (FRTB).
Read more on the PRA’s proposals here.
BoE policy statement on Fundamental Rules for FMIs
On 18 July 2025, the Bank of England published a policy
statement on Fundamental Rules for Financial Market Infrastructures
(FMIs). These rules, effective from 18 July 2026, outline the
high-level outcomes FMIs must achieve in areas such as financial
resources, operational resilience, and risk management. The policy
is relevant for recognised UK Central Counterparties, recognised UK
Central Securities Depositories, UK Recognised Payment System
Operators and UK Specified Service Providers.
Click here to read more on these fundamental
rules.
EBA final report on draft RTS on crypto exposure values under
CRR III
On 5 August 2025, the European Banking Authority (EBA) published
a final report on the ‘draft regulatory technical standards on
the calculation and aggregation of crypto exposure values under
Article 501d(5) of the CRR III’. Amongst other things, these
draft RTS aim to ensure that institutions have reliable valuation
processes of their cryptoasset exposures to ensure that they
correctly calculate the own funds’ requirements for exposures
to cryptoassets within the scope of Regulation (EU) 2023/1114 on
markets in crypto-assets (MiCA), which are not financial
instruments or commodities.
Click here to learn more on these
standards.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.