Following the FCA's publication of the final rules on Consumer Composite Investments (CCI) in December 2025, implementation planning continued through the second quarter. In April, FinDatEx confirmed that it will begin work on changes to the European MiFID Template (EMT) and European PRIIPs Template (EPT) to support the UK-specific disclosure framework.

In June, the FCA consulted on simplifying the investment disclosure regime, with proposals aimed at making cost and charges clearer and more consistent across platforms, advisers and wealth managers. On 2nd July, the FCA published a further consultation on to allow consumers to better understand investment costs and make informed decisions. The proposals would simplify and consolidate disclosure requirements across MiFID, the Insurance Distribution Directive, and non-MiFID investment business. In particular, the FCA proposes aligning MiFID-derived cost disclosure rules more closely with the CCI regime. Feedback is due by 21st August.

The consultation also provides helpful clarification on the transition from existing KIDs and KIIDs to CCI product summaries. In particular, the FCA proposes that manufacturers would not be required to update legacy KIDs or KIIDs during the transition period unless an update is required under existing rules, for example because of a material change or where market events have materially changed the product's risk-return profile. From June 2027, those legacy KID/KIID documents would no longer need to comply with the CCI regime. The FCA says this approach is intended to strike a proportionate balance between ensuring consumers continue to receive accurate and effective information and reducing operational burden as firms move to the new framework.

The FCA also proposes that where a manufacturer produces a product summary during the transition period, it should continue to make the relevant disclosure document publicly available on its website, helping distributors identify which document can continue to be used.

For more information you can read:

FinDatEx - Upcoming review of EMT & EPT in relation to the UK FCA’s CCI rules

FCA - Financial regulator to simplify investment disclosure regime

FCA - CP26/24 simplifying consumer investment disclosures

ESMA has published the outcome of its 2025 Call for Evidence on the retail investor journey. Based on stakeholder feedback, ESMA identified a number of areas where it intends to support simplification and improve retail investor access to capital markets.

ESMA will focus follow-up work on three key areas:

• Streamlining disclosure requirements and tackling information overload for investors.
• Reducing complexity in suitability and appropriateness assessments.
• Simplifying MiFID II requirements on sustainability preferences.

ESMA said this work will help shape future technical advice on MiFID II delegated acts and any further changes linked to the Retail Investment Strategy (RIS).

There were also continued political discussions during the quarter on the broader RIS package. Industry commentary remained mixed, with some stakeholders arguing the package risks adding complexity without materially improving retail participation.

Despite this Member States endorsed the latest compromise text at COREPER on 5th June, allowing the file to move back to the European Parliament for formal endorsement. The next expected steps are a vote in the ECON Committee, tentatively scheduled for early September, followed by plenary approval currently expected around mid-September.

If adopted on this timetable, the final text is expected to be published in the Official Journal by the end of 2026. On the current indicative timeline, transposition would likely fall in Q4 2028, with application expected in Q2 2029. As a result, the focus is beginning to shift from high-level political negotiation towards implementation planning, including the development of Level 2 measures and technical standards.

More broadly, the Retail Investment Strategy remains closely linked to the EU's wider market integration agenda. The package continues to sit alongside broader discussions on supervisory convergence, market data and simplification under the Market Integration and Supervision Package (MISP), which may shape how retail disclosure reforms are implemented in practice over time.

For more information you can read:

ESMA - ESMA sets out actions to simplify the retail investor journey and make investing more accessible [EM1] 

EUR-Lex - Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 1286/2014 as regards the modernisation of the key information document

EUR-Lex - Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directives (EU) 2009/65/EC, 2009/138/EC, 2011/61/EU, 2014/65/EU and (EU) 2016/97 as regards the Union retail investor protection rules

Reporting simplification remained a major theme in the EU during the quarter. ESMA published work on the integrated collection of funds’ data and on simplifying EU reporting frameworks for funds and transactions. The reports argue that the current framework is fragmented and duplicative. ESMA also proposed a more harmonised reporting model built around a common regulatory data dictionary, a single dynamic reporting template and more centralised collection of data.

On 2 July, ESMA published its final report on the simplification of transaction reporting and recommended a staged approach to a single integrated reporting framework across MiFIR, EMIR and SFTR based on a “report once” principle. The proposed model would use a common modular structure to reduce duplication while preserving supervisory data quality.

ESMA estimates that the proposals could deliver annual net savings of between €250 million and €1 billion. The report is likely to be an important reference point for future changes to firms’ reporting architecture, data governance and operating models.

ESMA also issued a letter on the prioritisation of its 2026 deliverables. In light of the burden of work linked to MiCA, EMIR, the Market Integration and Supervision Package (MISP) and other projects, ESMA said it would postpone, deprioritise or cancel selected lower-priority items. This includes delays to certain AIFMD/UCITS, EMIR, MiFIR and DLT-related deliverables.

Separately, on 10 July 2026, ESMA published additional Q&As under MiFIR in the secondary markets space, including guidance relevant to Consolidated Tape Provider matters. While narrower in scope than the broader reporting simplification agenda, the Q&As add to the growing body of practical interpretive material relevant to firms following EU market structure reform.

This reflects a wider regulatory push toward simplification and burden reduction, although implementation of the MISP agenda may also introduce significant structural change in parallel.

For more information you can read:

ESMA - ESMA advances the simplification of EU reporting frameworks for funds and transactions

ESMA - Prioritization of 2026 ESMA Deliverables

ESMA - Final Report on the Call for Evidence on a comprehensive approach for the simplification of financial transaction reporting

AIFMD II implementation continued to develop across Member States. Luxembourg and Ireland remained focal points during the quarter as firms assessed local implementation approaches, particularly for loan origination, liquidity management tools and reporting.

At an EU level, delegation also remained a focus of policy discussion as part of the Market Integration and Supervision Package. Proposed changes to the supervision of delegation arrangements prompted concern from UK and Irish industry participants, particularly where EU management companies delegate portfolio management outside the EU. The FCA warned that the proposed approach risks undermining the UCITS framework and damaging growth prospects in both the UK and the EU.

Funds are also directly affected by ESMA’s broader work on integrated reporting and data collection. As noted in the reporting simplification section above, ESMA is proposing a more harmonised reporting architecture for funds and transactions, intended to reduce duplication and support more centralised supervisory oversight.

For more information you can read:

ESMA - Final report on the integrated collection of funds’ data

Irish Presidency - Programme of the Irish Presidency of the Council of the European Union

Sustainable finance has remained a major area of policy development. At an EU institutional level, the Joint Committee of the ESAs published its 2025 Annual Report, identifying digitalisation, cyber resilience and sustainable finance as key priorities.

ESMA also consulted on draft guidelines on endorsement under the ESG Ratings Regulation and published supervisory messaging on MiFID II sustainability requirements, encouraging a proportionate approach during the current transition period.

As mentioned previously, on 10 July 2026, ESMA also published new Q&As, with some focusing on the EU ESG Ratings Regulation. The new material addresses topics including consulting activities to investors and undertakings, the two-working-day notification period and the treatment of ESG ratings used for internal purposes or within in-house financial services. Firms within scope should review the Q&As alongside ESMA’s developing guidance on the regime.

The wider sustainable finance framework also continued to evolve politically. The European Parliament’s ECON committee advanced work on the SFDR review, including a proposed product categorisation model. Debate continued on principal adverse impacts, product thresholds, disclosure burden and the treatment of transition products. The Council of the EU also agreed its negotiating position on the SFDR overhaul.

Alongside this, the Commission’s broader sustainability simplification agenda continued to generate strong market reaction, in particular in relation to potential changes to ESRS reporting and the proposed narrowing of certain sustainability disclosures for asset managers.

There was also an editorial update to EET V1.1.3 in April.

For more information you can read:

ESMA - ESMA promotes proportionate supervision of MiFID II sustainability requirements

ESMA - ESMA consults on guidelines on endorsement under the ESG Ratings Regulation

European Parliament - Draft report on SFDR

Solvency II reporting also developed during the quarter, with FinDatEx’s Solvency II Technical Working Group setting out the proposed approach for TPT v8 and the related consultation process. The update reflects changes arising from the Solvency II 2020 Review as well as the wider EU simplification agenda. In this context, the working group indicated that the revised template is expected to remove a limited number of datapoints from the current version while maintaining the core information needed for operational use.

The proposed timeline foresees a targeted feedback phase from mid-June 2026, followed by a public consultation running from end June to end August 2026. Feedback processing and finalisation are expected in mid-September, with validation of the final TPT v8 targeted for end September 2026. Market participants are then encouraged to begin implementation from early January 2027, ahead of an expected mandatory implementation in Q1 2027.

The working group also emphasised the importance of market feedback on the draft template, consultation approach, implementation timeline and communication plans, reflecting the technical significance of the proposed changes for insurers, asset managers and service providers.

For more information you can read:

FinDatEx – Solvency II TPT v8 consultation / working group communication

Tokenisation remained high on the agenda in both policy and market discussions. ESMA’s annual market report noted that tokenisation adoption remains relatively low, but momentum is building, including in tokenised money market funds. ESMA also emphasised that tokenisation must ultimately deliver tangible benefits for retail investors if it is to support broader market participation.

The European Commission launched its review of MiCA, including both public and targeted consultations on the future of the EU crypto-assets framework. The review is examining whether MiCA remains fit for purpose and whether the following areas require recalibration:

• stablecoins
• crypto-asset service providers
• DeFi
• lending
• staking
• tokenised deposits
• legal certainty around token ownership

ESMA also published new MiCA Q&As on 10 July 2026. These clarify aspects of scope for authorised CASPs providing custody, administration or transfer services for crypto-assets issued after a public offer, and address the treatment of crypto-asset lending services under MiCA. The update is a useful reminder that firms should track not only legislative review of MiCA but also the growing body of supervisory interpretation.

The MISP debate also includes proposals relevant to crypto supervision and the DLT Pilot Regime, underlining the continued integration of digital asset issues into the broader EU capital markets agenda.

For more information you can read:

European Commission - Commission seeks feedback on the functioning of EU crypto-assets rules

European Commission - Targeted consultation on the review of regulation on the markets in crypto-assets

Minister of Finance Mr. Nikos Keravnos - Increasing the Attractiveness and Competitiveness of the European Capital Market

Crypto regulation advanced significantly in the UK during the quarter.

In April, the FCA launched a consultation on the future crypto regime, covering the FCA’s proposed approach to regulated crypto-asset activities including:

• issuing qualifying stablecoins
• operating trading platforms
• safeguarding cryptoassets
• staking

The consultation forms part of the UK’s final phase of policymaking before the gateway opens in September 2026.

Later in the quarter, the FCA confirmed that firms preparing for the new crypto regime can request pre-application meetings from 11 May 2026, with formal applications opening from 30 September 2026 and the new regime commencing on 25 October 2027.

In June, the FCA set out what it described as landmark crypto rules, including prudential, conduct and market abuse requirements, alongside tailored rules for stablecoins. The FCA also consulted on allowing authorised UCITS funds to invest a limited portion of assets in crypto ETNs, bringing the UK closer to the approaches seen in Luxembourg and Germany.

For more information you can read:

FCA - FCA consults on guidance on UK’s future crypto regime

FCA - FCA leads first crackdown on illegal crypto trading

FCA - Cryptoasset firms can request pre-application meetings from 11 May 2026

FCA - FCA sets landmark crypto rules to cement the UK’s place as a global hub

Tokenisation has a standout UK theme with the FCA publishing finalised guidance designed to support innovation in fund tokenisation and to clarify how distributed ledger technology can be used within existing fund rules. The guidance also provides for an optional direct-to-fund (D2F) model that would allow investors to deal directly with a fund, whether traditional or tokenised.

Separately, the FCA and Bank of England published a shared vision for tokenisation in UK wholesale markets. The paper highlights areas where firms have requested more clarity, including prudential treatment, tokenised collateral and settlement infrastructure, and marks the start of a broader roadmap for digital wholesale markets.

The wider market response suggests interest is growing, with some firms reportedly preparing applications for tokenised authorised funds. At the same time, senior FCA commentary indicated that market take-up remains cautious and that wider progress will depend on commercial adoption as well as regulatory clarity.

For more information you can read:

FCA - FCA sets out guidance to support innovation in fund tokenisation

FCA - FCA and Bank of England set out shared vision for tokenisation in UK wholesale markets

Bank of England - FCA and Bank of England set out shared vision for tokenisation in UK wholesale markets

AI remained a central regulatory theme in the UK. The FCA announced the second cohort of firms selected for its AI Live Testing service. This reflected strong demand from firms exploring the use of AI across consumer-facing, operational and market functions. The FCA said the programme will help support the safe and responsible deployment of AI in UK financial markets.

The Bank of England also published a summary of AI roundtables held with firms, trade bodies and technology providers. The discussions highlighted the continued caution of regulated firms, the challenges of validating increasingly complex AI systems, third-party risks, and the importance of data quality and governance.

The FCA’s wider speechmaking during the quarter also emphasised a shift toward a more adaptive and innovation-focused regulatory approach, including a major speech by Nikhil Rathi on rethinking regulation for the age of AI.

For more information you can read:

FCA - FCA announces second cohort for AI Live Testing

FCA - Rethinking regulation for the age of AI

In the UK, the FCA continued reshaping its sustainability and disclosure agenda.

The FCA invited ESG rating providers to join a voluntary pilot designed to inform future UK reporting requirements once the ESG ratings regime comes into force. The pilot is intended to test whether proposed metrics are clear, proportionate and useful for supervision.

The FCA also consulted on simplifying climate-related disclosures for investment products. The proposals would remove current TCFD-aligned product reporting requirements and replace them with a narrower, more targeted and outcomes-based framework. For retail investors, firms would be expected to disclose materially relevant climate risks while for institutional clients, firms would provide emissions data on request.

These changes align with the FCA’s broader move toward the CCI disclosure regime and plainer, more focused consumer communications.

For more information you can read:

FCA - FCA invites ESG rating providers to join a voluntary reporting pilot

FCA - Simpler climate reporting rules could save firms £20m annually

FCA - Quarterly Consultation CP26/17

The FCA also consulted on targeted changes to the listing rules for closed-ended investment funds. The proposals focus on conflict management, board independence and the protection of shareholder rights, particularly where changes affect investment management arrangements or fees.

Separately, the FCA proposed narrowing the application of Consumer Duty for wholesale firms. This would be done by removing certain genuinely non-UK business from scope and also clarifying firms’ responsibilities where they work together in distribution chains and product design.

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AIFMD — Alternative Investment Fund Managers Directive

AIFMD II — Alternative Investment Fund Managers Directive II

CCI — Consumer Composite Investments

COREPER — Committee of Permanent Representatives for the Council of the European Union

CP26/17 — Consultation Paper 26/17

D2F — Direct-to-Fund

DeFi — Decentralised Finance

DLT — Distributed Ledger Technology

ECON — Committee on Economic and Monetary Affairs

EMIR — European Market Infrastructure Regulation

EMT — European MiFID Template

EPT — European PRIIPs Template

ESA — European Supervisory Authority

ESAs — European Supervisory Authorities

ESG — Environmental, Social and Governance

ESMA — European Securities and Markets Authority

ESRS — European Sustainability Reporting Standards

ETNs — Exchange-Traded Notes

FCA — Financial Conduct Authority

KID — Key Information Document

MEP — Member of the European Parliament

MiCA — Markets in Crypto-Assets Regulation

MiFID — Markets in Financial Instruments Directive

MiFID II — Markets in Financial Instruments Directive II

MiFIR — Markets in Financial Instruments Regulation

MISP — Market Integration and Supervision Package

PRIIPs — Packaged Retail and Insurance-based Investment Products

RIS — Retail Investment Strategy

SEC — Securities and Exchange Commission

SFDR — Sustainable Finance Disclosure Regulation

TCFD — Task Force on Climate-related Financial Disclosures

UCITS — Undertakings for Collective Investment in Transferable Securities