U.K. and E.U. Regulatory Update - July to September 2025

European Union Updates

Retail Investment Strategy

The Danish Council Presidency continues to push the Retail Investment Strategy (RIS) forward. Trilogues have occurred throughout the last quarter and the next is scheduled for 30^th September. Discussions will focus on the Value for Money (VfM) framework, inducements and other items. For more details you can read the “Agenda for working party on RIS in preparation for 3^rd political trilogue”.

Here are the key points:

• The Danish Presidency’s papers propose avenues for a simplified version of the Commission’s approach in its recent non-papers. At this stage, these are initial explorations for discussion and nothing is actually agreed. Discussions remain at an early stage within the Council but all parties (Council, Commission and Parliament) do agree on the need to simplify the PRIIPs KID^[i], citing the need to improve clarity for consumers and reduce burden for firms.
• The Commission’s upcoming drafting suggestions will inform the discussions and will shape how Member States assess the proposed alternatives.

For more details on the Danish Presidency's programme of work, you can read more in “A strong Europe in a changing world”.

ESA Updates

The European Supervisory Authorities (ESA) were busy during June and July, publishing numerous papers, guidelines and updates. Here are some of the more significant updates:

• European Securities and Markets Authority (ESMA) asks input on the retail investor journey. Read the insight “ESMA asks input on the retail investor journey as part of simplification and burden reduction efforts”.
• On 23^rd June, ESMA released a ‘Discussion Paper’. ESMA aims to ease reporting burdens but is considering major changes, including a unified template, use of existing data, ESMA as a supervisory data hub, securities-level detail, and more frequent reporting for UCITSⁱⁱ and AIFsⁱⁱⁱ. Read the ESMA “Discussion paper on the integrated collection of funds’ data”
• ESMA also published its advice to the European Commission (EC) regarding the UCITS Eligible Asset Directive on 26^th June. For more information you can read the press release or you can view the “Final Report - Technical advice to the European Commission on the review of the UCITS Eligible Assets Directive”.
• Updated guidelines on market abuse under Markets in Crypto-Assets (MiCA) on 9^th July.
• ESMA updated its Q&A for UCITS on 15^th July. View the ESMA QA 2609

SFDR Updated Q&As

ESMA updated its Q&A for Sustainable Finance Disclosure Regulation (SFDR) on 4^th August mainly focusing on guidance on Article 8 disclosures. The four new joint Q&As focused on the practical application of SFDR covering:

• PAI Indicator 6: Water Usage and Recycling
• Real Estate: Energy Consumption per m²
• Disclosing Environment & Social Investment Commitments
• Methodologies for Periodic Disclosures

For more details access the document “Consolidated questions and answers on the SFDR and the SFDR Delegated Regulation”.

Additional News

On 2^nd July, a proposed update (version 4.3) to the European MiFID^iv Template (EMT) was announced by FinDatEx. It proposes the inclusion of an optional Assessment of Value (AoV) section for structure products / securities in France. Feedback to FinDatEx was due by 18^th July. A timeline for the live date of version 4.3 has not been published as of the date of this publication.

In August, FinDatEx also launched a survey to gather feedback on the use of its standardised templates, which support regulatory frameworks such as MiFID, PRIIPs, Solvency II, and ESG. Since its creation in 2019, FinDatEx has grown significantly and now plays a key role in facilitating data exchange among financial institutions, product manufacturers, and distributors.

The survey aims to understand how the templates are used, identify primary users, and capture industry needs and challenges. Insights will guide the future development and improvement of FinDatEx templates and processes.

FinDatEx encourages all users of the templates to participate and it closes on the 10^th October. For more information you can read the insight “FinDatEx launches survey on its templates’ usage”.

United Kingdom Updates

Consumer Composite Investments

The Financial Conduct Authority (FCA) convened workshops in June and July with asset managers, platforms and third-party providers, which covered a number of topics such as: costs, disclosure format, manufacturer and distributor relationship and legal requirements. The goal was to help the FCA formulate the final rules which are due in “late 2025”.

Sustainability Disclosure Requirements

As stated in on this FCA report, the FCA plans to simplify climate risk disclosure rules for asset managers, insurers, and pension providers, scaling back strict alignment with the Taskforce on Climate related Financial Disclosures (TCFD). Firms had reported that the TCFD framework was overly detailed, especially in requiring forward looking data such as scenario analysis, while backward looking metrics were easier to provide. Industry consultations also raised concerns that such information was too complex for retail investors to interpret.

This shift marks a significant change from the UK’s earlier ambition to be a leader in sustainable finance regulation. The FCA is now reviewing the broader sustainability reporting framework, including new SDR, climate transition plans, and UK Sustainability Reporting Standards (SRS). The FCA stress the need for international alignment, tackling greenwashing, and providing clarity with clear timelines. The FCA and FCA regulated firms are urging the government to adopt the UK SRS quickly as the reporting regime pivots away from TCFD.

For more information, You can read the FCA’s report “Climate reporting by asset managers, life insurers and FCA- regulated pension providers”.

FCA Consultation on “Targeted Support”

On 30^th June, the FCA published CP25/17 on proposals for a new form of support, referred to as “targeted support”, for consumers' pensions and retail investment decisions. This is intended to bridge the advice gap and increase retail investment in UK capital markets. The consultation closed on 29^th August. The FCA remians concerned about the challenges consumers face in making informed financial decisions.

You can access the document here for “Supporting consumers’ pensions and investment decisions: proposals for targeted support”

AI Update

The FCA have launched an incentive to encourage firms to participate in AI growth. They want to enable the safe and responsible use of AI in UK financial markets, driving growth, competitiveness and innovation in the sector. Firms had until 20^th August to apply for the FCA’s ‘AI Live Testing’ lab.

For more information you access the FCA AI Lab

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Key Terms

^{i Packaged Retail Investment and Insurance Products Key Investor Information Document}

^{ii Undertaking for Collective Investment in Transferable Securities}

^{iii Alternative Investment Fund}

^{iv Markets in Financial Instruments Directive}