Regulatory Shifts in Financial Services
This episode puts the spotlight on the FCA’s transfer of MiFID rules, industry-wide claims management reforms, and the UK's upcoming move to T+1 settlement. Vicky and Rachel discuss what each change means for compliance, and how financial advisers can prepare for new operational and client-service realities.
Chapter 1
MiFID Organisational Regulation Moves to the FCA Handbook
Unknown Speaker
Hey everyone, welcome back to the B-Compliant Podcast! I’m Vicky Pearce and I’m joined by Rachel MacRae, as always. Rach, are you ready to jump into another packed episode?
Rachel MacRae
Absolutely, Vicky! There’s loads to dig into this week. We are starting with… everyone’s favourite topic—MiFID regulations, right?
Unknown Speaker
Yeah, it’s the hot ticket item for anyone who enjoys, erm, a spot of regulatory detail. The FCA’s just published Policy Statement PS25 13, which basically finalises the transfer of the MiFID Organisational Regulation—so, these are requirements that used to come straight from EU law—into the FCA Handbook itself.
Rachel MacRae
Exactly. And the big thing, at least for firms listening, is that this move isn’t really about changing the rules—at least not for now. It’s more about getting everything fitted nicely into the UK’s own system so we’re less reliant on old EU regs. No big shifts in policy or scope at this stage, but I know the words “Handbook amendments” can still be anxiety-inducing for compliance folk!
Unknown Speaker
Don’t get me started on Handbook formatting! But in fairness, the FCA’s stuck to mostly just tweaking the drafting—making it clearer, not adding new hurdles. These changes come into effect from the 23rd October, so firms need to be aware.
Rachel MacRae
Yeah, and let’s just pick out some of the practical updates. There’s amendments to SYSC—so systems and controls, COBS, MAR, REC, DISP. Those are the big buckets for conduct and transparency. Oh, and that definition of “durable medium” got a refresh—so, from January 2026, electronic communication will become standard for retail clients. No more hard copy as default! Bit overdue, if you ask me.
Unknown Speaker
Yeah, I mean, how many clients want paper post these days, really? I suppose there will always be some, but this will definitely nudge the industry forward. Another headline for advisers is the confirmation that COBS 16A.4.3 meaning Article 3 firms will no longer be required to notify retail clients of a 10% portfolio drop. That lines things up with MiFID firms now, so… less admin, at least for some.
Rachel MacRae
It’s little things like that which do save time over a year, isn’t it? One thing that stood out to me—later this year, the FCA plans to consult on streamlining conflicts of interest rules, and modernising client categorisation. So, this Handbook update might be the start of a few more tweaks on how firms manage conflicts and client types. Vicky, didn’t we talk about client categorisation in, ooh, was it episode 10 with Consumer Duty tweaks?
Unknown Speaker
Yeah, we did! And this is building on that whole theme of smarter, more proportionate regulation, right? Just giving the FCA more flexibility in the future. But for now, firms mostly just need to check their documentation, reference updates—and maybe give the compliance teams a heads-up for next year. It’s not a compliance bombshell, more like a spring clean.
Chapter 2
Regulators join forces to tackle poor claims management practices
Rachel MacRae
So, moving on to something with a bit more action—the regulators are joining forces on claims management. When was the last time we saw the FCA, SRA, ICO, ASA—basically, the compliance Avengers—all working so closely together, Vicky?
Unknown Speaker
Not often enough, if you ask me. This time, they’re tackling poor conduct in claims management companies and law firms, mainly around motor finance claims. But honestly, the expectations here are wider. They’re cracking down on things like inadequate disclosure, unfair fee structures, and misleading ads—which, let’s face it, pop up in lots of claims areas, not just motor finance.
Rachel MacRae
Yep, and the regulators aren’t just waving a finger. The FCA’s been using powers under the Consumer Rights Act and the new Digital Markets rules to force firms to be clear on exit fees and client terms. And where firms haven’t played ball, they’ve actually taken enforcement action. The others—SRA, ICO, ASA—they’re dealing with dodgy law firms, targeting direct marketing misuse, and taking down ads that overpromise… or outright mislead.
Unknown Speaker
Did you see the stat about adverts? Since January, more than 740 adverts got binned or changed. It just shows how much questionable marketing was floating around. And, from what I’ve seen, plenty of compliance teams weren’t even aware their firm’s adverts were an issue until the regulator intervened.
Rachel MacRae
And even if you’re not in the motor finance game, this whole episode serves as a classic reminder. If you get claims or complaints via CMCs or law firms, the same expectations are going to apply. First up—make absolutely sure you’ve got proper client authority before you communicate with the CMC. Don’t just assume a random letter means you need to share all the client's details!
Unknown Speaker
Exactly. And the info has to be spot-on—complaint details, client data, all needs to match what you’ve got on your records. If things don’t add up, or if you’re seeing what smells like duplicate or speculative complaints, you need to treat those with care. It’s not just regulatory box-ticking, it’s about protecting your business from time-wasters and consumers from being pulled into spurious claims.
Rachel MacRae
Yeah, and it’s easy to underestimate the admin drain from dealing with “try-your-luck” claimants, isn’t it? But, actually, by catching these things early, you help both clients and your ops team. If any listeners aren’t sure about a CMC complaint, we’re always happy to help review and guide—don’t struggle through those on your own!
Unknown Speaker
Definitely—prevention saves hours later. And if this collaboration between the regulators has proven anything, it’s that a joined-up approach really does keep standards up across the sector. Hopefully, it keeps some of the more creative marketeers in check as well. But it’s a message for all intermediated business: transparency, client verification, full disclosure—you ignore these at your peril!
Chapter 3
Preparing for T+1 Settlement and Implications of Unemployment Insurance Reform
Rachel MacRae
Right, we should talk about the UK’s move to T+1 settlement now—because this is creeping up and, honestly, there’s a risk people will leave it too late! Jamie Bell at the FCA’s been pretty direct—firms can’t afford to procrastinate. The deadline’s October 2027, but as we’ve seen in past episodes, last-minute scrambles don’t go well for anyone.
Unknown Speaker
Yeah, especially because it’s a complete shake-up of market settlement processes. Moving to a one-day window for settling trades is a big deal—designed to cut down risk and get the UK in line with other big markets, although as we know, our post-trade set-up is a bit more messy than the US. So firms really do need to take stock now, not just cross their fingers and hope custodians will fix it all for them.
Rachel MacRae
Some are out in front, mapping the order-to-settlement workflow, sniffing out any manual steps that’ll slow them down, and getting automation investments lined up, but there’s still a big “wait and see” camp just watching. As the FCA says, your process is only as strong as the weakest link—so even if you’re on point, you need to check everyone you depend on is ready as well. Custodians, platforms, overseas counterparties… if they stall, so do you.
Unknown Speaker
It’s a bit like prepping for Consumer Duty, isn’t it? The firms that review, adapt, and engage early tend to have a smoother time of it. So, for T+1: draw your workflows, identify any bits that are still manual, talk to your partners about their readiness, and start slotting those T+1 tweaks into next year’s planning cycle. It’s a long runway, but the clock’s already ticking.
Rachel MacRae
I want to squeeze in the unemployment insurance changes as well, before we wrap. The IFS has backed the government’s plans for a new unemployment insurance scheme—which, if it all goes ahead, means bigger payouts for the short term, say 140 pounds a week, but only for part of the year. So, a six- or twelve-month cap, but not much for long-term claimants compared with some of our neighbours in Europe. Did you spot anything in the analysis that caught your eye?
Unknown Speaker
Yes, the bit about the transition needing to be managed very carefully—especially for those with health issues or longer-term unemployment. It’s tempting to focus on the headline savings, but for advisers, this really means we need to keep an eye on how it all interacts with disability benefits, PIP, and so on. Making sure clients are clued in about their entitlements and how reforms might affect their planning is just as important as the technical compliance side.
Rachel MacRae
Absolutely—it’s about giving holistic advice, not just ticking the “are you covered?” box. So, big operational changes, possibly more complexity for some clients, and as ever, a need to keep reviewing suitability and advice as the landscape shifts.
Unknown Speaker
Well, that’s all we’ve got time for today. Thanks so much for listening—don’t forget to subscribe so you don’t miss our next run-down of regulatory changes. Rach, always a pleasure!
Rachel MacRae
Always, Vicky! And thanks to everyone tuning in. If you’ve got questions on any of today’s topics or want to revisit past episodes, just reach out—we love a good compliance chat. See you next time!