Regulatory Update: Ten Things to Watch in 2026

1. Farewell TMPR (for UCITS, at least).

The post-Brexit UK Temporary Marketing Permissions Regime (TMPR) will end for EU-UCITS on 31 Dec 2026.

The Financial Conduct Authority (FCA) will approve residual applications for ‘equivalence recognition’ within their permanent Overseas Fund Regime (OFR), per allocated ‘landing slots’.

Under the OFR, EU firms are “subject to certain rules when marketing a recognised scheme”, including “new disclosure rules that will come into effect”.  Dual diverging product requirements clearly lie ahead.

For the time being, only local firms are covered by Consumer Duty and annual Assessment of Value reporting rules.

NB: EU-Money Market Funds (MMFs) cannot (yet) apply for OFR recognition; to avoid potential “cliff edge risks”, the UK Government may have to further extend the TMPR for (EU-MMFs only) later this year.

2. Countdown to the new UK-CCI framework

Right now, most European asset managers are working out their approach to the FCA’s ‘Final rules for Consumer Composite Investments’, published shortly before the festive season.

Both EU and local authorised fund firms fall into scope of the new UK-CCI disclosure regime.

Starting from 6 April 2026, fund manufacturers can opt to produce a new UK-CCI Product Summary document, instead of a UCITS KIID or local PRIIPS KID (i.e. for the duration of the 14-month transition period).

The FCA state “the only part of the CCI regime that will turn on before 8 June 2027 is the ability to produce and make available a Product Summary”. This ‘short and concise document’ must set out “the essential characteristics” of each retail-facing product, including simplified costs (e.g. no ‘implicit’ TCs), risk/return and past performance information.

However, the FCA also continue to depict the manufacturer’s obligation to ensure the CCI Product Summary is directly sourced from the Core Product Information (i.e. “calculated in line with detailed methodologies in our rules” and prepared as “a machine-readable file” [Figure 2, p.24]. Both items remain interlinked throughout the FCA’s legal text.

Moreover, a reminder the UK-CCI regime is “underpinned by the Consumer Duty”. During H1-2026, the FCA will consult on further rule changes “in relation to firms working together and sharing information in distribution chains”. These will further modify the Product Disclosure sourcebook (DISC), already entirely re-written (p.129-191) by the new CCI regime.

Given the above, how many fund firms will decide to become early UK-CCI adopters, before the ‘full regime’ goes live? We will soon find out.

3. Retail Investment Strategy Level 1 texts published

Just before Christmas, the EU Parliament and Council confirmed reaching agreement on the Retail Investment Strategy (RIS) package (first adopted by the EU Commission back in May 2023).

• The ‘Omnibus’ Directive [amending UCITS, AIFMD, MiFID and IDD regimes] will outline the final ‘Value for Money’ framework, with ‘peer-group comparisons’ now a likely requirement for asset managers.  This will include a clear definition of ‘undue costs’.
• The revised PRIIPs Regulation will reveal a new ‘Digital PRIIPs KID’, including a new ‘Product at a glance’ section, to be provided by means of an “interactive tool”.

The final ‘Level 1’ RIS legal texts are now expected to appear in “early 2026”.

NB: draft ‘Level 2’ RIS technical standards may also appear this year (i.e. with the European Supervisory Authorities on standby).

4. AIFMD II / UCITS VI legally apply; ESMA reporting data collection model

On 16 April, the revised AIFMD II / UCITS VI regime will legally apply. This will include new Liquidity Management Tool (LMT) rules, driven by recently adopted Level 2 technical standards and amended Level 3 guidelines.

On the same day, the European Securities and Markets Association (ESMA) are mandated to deliver a landmark report on how to develop of the integrated collection of EU supervisory fund data.

Their recent eye-catching discussion paper proposed a new, harmonised EU-level template for AIFMD and UCITS supervisory reporting, to enable better re-use of data by all regulatory authorities. This would replace the current “Annex IV reporting” process, which varies widely across EU member states.

ESMA floated the idea of extending this template to incorporate MMF reporting, EU statistical data, local EU national reporting and Transaction-level reporting (per EMIR / SFTR / MiFIR regimes). They also asked firms to consider submitting all their reporting data using a new ‘centralised system’ (i.e. bypassing local EU regulators entirely).  

Shortly after Easter, we’ll discover just how radical the future UCITS/AIFMD fund data collection blueprint will be

5. UK review local AIFMD laws

Also this Spring, the UK Treasury will publish draft legislation on their local AIFMD regime (as part of the local Financial Services Growth & Competitiveness Strategy).

This will be backed by an FCA consultation, which will include a draft implementation timeline.  The FCA have observed that “the AIFM reporting regime has not been reviewed since it was introduced”; they now “want to achieve a more effective reporting regime that is proportionate in its demands on firms”. 

How much extra burden will this add to firms’ EU/UK supervisory reporting change management efforts?

6. SDR re-aligned to ISSB global standards?

On 2 April, the first annual ‘Ongoing product-level report’ is required for those within scope of the UK Sustainability Disclosure Requirements and labelling regime (SDR). This relates to products in scope from 2 December 2024 (i.e. 16 months after the first use of SDR labels or naming terms).

In their 2023 SDR policy statement, the FCA said they “expect over time to build out entity and product-level disclosure expectations as the International Sustainability Standards Board (ISSB) develops further sustainability-related reporting standards”.

Since then, the FCA stated they now “consider sustainability reporting as a whole”: covering local SDR, TCFD and TPT disclosure regimes. In 2026, they are likely to publish proposed next steps, following active industry engagement.

NB: the pivotal consultation on extending the UK-SDR regime to EU-UCITS (within the OFR) remains elusive.

7. EU trilogue no.1: SFDR II

The EU Commission recently issued a draft set of ‘Level 1’ changes to the Sustainable Finance Disclosure Regulation (SFDR), following a long-running legal assessment. Ongoing, they propose new official ESG product categories, to scrap the entity-level PAI statement, while simplifying product-level disclosures to 2-pages (max).

NB: These proposals are now open for feedback until 5 March.

This year, we will learn of the EU Parliament and Council respective positions concerning these changes, ahead of ‘trilogue’ with the EC. Latest expert estimates vary from 12-18 months, before a finalised ‘SFDR II’ regime is published in the EU Official Journal.

8. EU trilogue no.2: MISR legal package

A separate set of EU co-legislator discussions may prove more challenging in 2026.

Last month, the EC unveiled their new ‘Market integration package’. This is a major legal shakeup to “remove barriers and unlock the full potential of the EU single market for financial services”.

The draft Market Integration & Supervision Directive (MISD) and Regulation (MISR) legal texts are a central component of the current Savings and Investment Union strategy. Together, they aim to ‘innovate’ the financial sector, ‘simplify’ the capital markets framework and ‘streamline’ the current EU supervision model.

However, certain member states (e.g. Luxembourg and Ireland) seem likely to contest ESMA’s proposed new direct supervision mandates, plus expanded oversight of NCAs during cross-border fund distribution.

It seems reasonable to assume this EU ‘trilogue’ will remain unsettled well into 2027.

9. Can EPT (etc) continue to bridge the gap?

Despite Brexit, FinDatEx industry templates have (until now) managed to maintain dual coverage of diverging EU and UK fund regimes. However, several unfolding developments (summarised above) may again put that to the test.

In 2026, there is likely to be a debate over how exactly the European PRIIPs Template (EPT) can continue to reflect both a revamped EU-PRIIPs framework, alongside the brand-new UK-CCI regime (which is effective from April). 

NB: over time, the European ESG Template (EET) will need to combine elements from the evolving EU-SFDR II regime (e.g. product categories, revised disclosure templates) as well as any UK-SDR/ISSB disclosure reporting fields deemed necessary by local Distributors.

10. FinTech surge continues

Last, but not least: the role of rapidly advancing technology-driven solutions will again require close attention.

The EC’s interim Digital Fitness Check (to ensure EU digital rules “are effective, proportionate and fit for the future”) is open for comments until 11 March.

Longer-term, the new EU Digital Simplification Package seeks to boost innovation and streamline digital rules to simplify compliance.  During 2026, the EU Parliament and Council have to decide yet more ‘trilogue’ positions in relation to:

• EU Artificial Intelligence Act: including amended ‘AI literacy’ requirements and delay of ‘high-risk AI regime’ to 2 Dec 2027;
• EU Digital Legal Framework: including specific simplified data, privacy and cyber laws, plus streamlined cybersecurity incident reporting.

Separately, Crypto-asset service providers must obtain a full MiCA authorisation by 1 July, or cease EU operations.

ESMA’s key 2026 projects include rollout of their Data Platform, and development of AI-powered supervisory tools. Their flagship European Single Access Point (ESAP) will also move closer to its July 2027 launch date.

Across the Channel, the Bank of England’s consultation on Sterling Stablecoin will close on 10 February.

Finally, the FCA will proceed with their extensive Artificial Intelligence activity schedule over the course of this year.