Regulatory landscape shifts as 2023 initiatives focus on innovation, sustainability and cross-border oversight

January’s regulatory calendar delivered a steady stream of initiatives across the UK, EU and US that together signal a year of sharpened oversight and stepped‑up efforts to adapt rulebooks to technological change and evolving market structures.

In asset and wealth management, the United Kingdom and the European Commission took complementary steps aimed at boosting clarity and cross‑border competitiveness. According to the Financial Conduct Authority’s consultation paper CP25/36, the FCA proposed fundamental changes to client categorisation and conflicts of interest rules, including the removal of the existing quantitative test for categorising clients, the introduction of an alternative wealth assessment and strengthened protections for clients who opt out of retail safeguards. The consultation closed on 2 February 2026. Meanwhile, the European Commission opened a targeted consultation on 15 January to examine reforms to the regulatory framework for venture and growth capital funds as part of its Savings and Investments Union agenda, seeking input from fund managers, investors and public authorities until 12 March 2026. The parallel moves reflect a push to make fund management more effective domestically while improving the passporting and distribution environment across the single market. ESMA’s third report on cross‑border marketing requirements, published on 6 January, fed into that agenda by assessing where marketing rules could be streamlined to aid pan‑EU fund distribution.

The growth of private markets remained under scrutiny. The House of Lords Financial Services Regulation Committee published a report on 9 January reviewing developments since post‑2008 reforms, setting out concerns and recommendations for policymakers to ensure private markets support the wider financial system and economy.

Sustainable finance continued to command regulator attention. The FCA launched a consultation on 30 January proposing that UK Sustainability Reporting Standards replace the current sustainability disclosure framework for in‑scope listed companies. At EU level, the Commission published a delegated regulation on 9 January that simplifies certain technical screening criteria under the EU Taxonomy, and ESMA on 14 January issued a thematic note on the need for sustainability‑related claims to be clear, fair and not misleading, with a particular focus on ESG strategies. The Commission also published guidance in the Official Journal on how the EU sustainable finance rules apply to the defence sector, underlining tensions between environmental objectives and sensitive economic activities.

Regulators broadened enforcement and transparency measures on sanctions and financial crime. The UK’s Office of Financial Sanctions Implementation published both a response to consultation on civil enforcement processes and new enforcement data on 30 and 26 January respectively, illustrating heightened scrutiny of sanctions compliance. In the crypto space, OFSI published a blog on 28 January describing its co‑ordination with law enforcement to tackle crypto‑enabled money laundering.

Crypto regulation advanced on multiple fronts. The House of Lords launched an inquiry into stablecoins on 29 January, reflecting concerns about their expanding role in payments and financial stability. The European Securities and Markets Authority published guidance on 29 January establishing criteria to assess staff knowledge and competence at cryptoasset service providers under MiCA. The FCA’s consultation CP26/4, published on 23 January, set out proposals for how the FCA Handbook should apply to regulated cryptoasset activities and included guidance on applying the consumer duty to crypto firms, underscoring a regulatory determination to bring consumer protections into the rapidly evolving crypto sector.

Digital transformation and artificial intelligence were high on supervisors’ agendas. The Bank of England published a speech by Sasha Mills on 29 January at the Tokenisation Summit outlining the Bank’s approach to the opportunities and risks from tokenisation as part of a broader digital finance strategy. The FCA launched a review and call for input on 27 January into the implications of advanced AI for retail financial services, and the House of Commons Treasury Committee published a report on AI in financial services on 20 January, signalling cross‑institutional focus on the governance and consumer‑protection challenges posed by large‑scale machine learning.

Banking prudential reform continued to be implemented. The Prudential Regulation Authority issued final rules on Basel 3.1 via policy statement PS1/26 on 20 January and followed up the same day with PS3/26 on restating provisions of the UK Capital Requirements Regulation. The Financial Stability Board published its 2025 resolution report on 22 January and set priorities for 2026, while the European Banking Authority finalised technical standards on booking arrangements for third‑country branches under CRD VI on 9 January.

The insurance sector saw a mixture of supervisory reviews and strategic planning. The FCA published interim findings from a market study into distribution of pure protection products on 29 January and released a multi‑firm review on how smaller mutual life insurers are meeting its Consumer Duty on 16 January. The International Association of Insurance Supervisors set out its 2026–27 roadmap on 20 January and EIOPA updated its programming document for 2026–28 and strategic priorities through 2030 in mid‑January.

Across the Atlantic, US developments centred on private funds, antifinancial‑crime timelines and agency appointments. California’s Department of Financial Protection and Innovation finalised the annual survey required under the new Fair Investment Practices by Venture Capital Companies Law; affected managers face a first registration deadline of 1 March 2026 and an initial reporting deadline of 1 April 2026. FinCEN delayed the effective date of the investment adviser anti‑money‑laundering rule by two years to 1 January 2028 while signalling an intent to further tailor the rule. The SEC also proposed revisions to its “small entity” definitions for advisers and funds on 7 January that could affect how regulatory impacts are assessed. Commissioner turnover continued at the SEC after Caroline Crenshaw left at the start of January, leaving two vacancies on the five‑member Commission.

Taken together, the documents and consultations issued in January point to an enforcement‑minded year ahead, with regulators seeking to reconcile innovation, consumer protection and market integrity. Policymakers in the UK and EU are pressing to make fund and sustainability rules more navigable for market participants, while authorities on both sides of the Atlantic prepare extended compliance timelines and refined supervisory expectations for firms confronting new technologies and cross‑border activity.