Regulatory Updates April 2025

Our regulatory newsletter aims to provide insight into the previous month’s changes and updates which may have an impact on your firm. At Objectivus, we are well positioned to provide context and support for firms working to understand such changes.

 

In this issue we cover:

• The FCA’s agenda to combat market abuse
• Results of a multi-firm review into trading apps
• The FCA establishes an international presence
• Changes to capital rules
• Removal of unnecessary data reporting
• FCA simplifies supervisory letters

 

The FCA’s Agenda to Combat Market Abuse

In a recent speech, the Financial Conduct Authority’s Therese Chambers has outlined the regulators agenda to combat market abuse. It centres around their “three P’s” approach, being predictable, proportionate and purposeful. Market abuse is receiving heightened attention as Organised Crime Groups increasingly turn towards financial markets to move illicit funds. The FCA has vowed to disrupt the work of OCGs and reduce the reporting burden for firms. The regulator sees Suspicious Activity Reports, or SARs, as the most effective way to combat market abuse. Read our full write up on the market abuse speech here.

 

Results of a Multi-Firm Review into Trading Apps

The FCA has published high-level findings from its multi-firm review into trading apps and how app features may mislead or encourage risky behaviour. At a glance:

• Business models – firms acting as introducers must understand their obligations as both manufacturers and distributors
• Revenue drivers – models based on fees, subscriptions, or interest on cash balances may need reassessment to ensure fair value
• Digital engagement – while firms are aware of the risks, features like push notifications and nudges must be used responsibly
• Appropriateness testing – firms offering high-risk investments should strengthen processes to assess customer understanding and risk suitability

How do trading app features encourage risky behaviour? Find out in our post tomorrow

• Push notifications & in app messages can oversimplify risk and create urgency without supporting informed choices
• Frictionless onboarding with limited appropriateness checks, especially for high-risk products like crypto and CFDs
• Prize draws and incentives risk trivialising investment decisions and distorting user behaviour
• Gamification features, like reward schemes, may influence decision-making and downplay the serious nature of investing
• Poor clarity on fees, charges and pricing mechanisms as some apps fail to clearly explain how charges, spreads or interest are applied

 

The FCA Establishes an International Presence

As part of its strategic commitment to support UK financial services growth, the FCA is establishing an office in Washington, DC and Australia – its first physical presence outside the UK. Tash Miah will represent the FCA at the British Embassy in DC, supporting UK-US regulatory cooperation and from July 2025, Camille Blackburn will lead the FCA’s APAC office, helping firms in the region navigate UK regulation.

The FCA aims to improve international access, foster global regulatory dialogue, and strengthen the UK’s global position. This move comes after the FCA announced its growth agenda, aiming to boost exports and attract inward investment.

 

Changes to Capital Rules

The FCA has announced proposals to streamline rules on what qualifies as regulatory capital for investment firms, cutting legal text by 70%. While the level of capital firms must hold remains unchanged, the aim is to simplify outdated, bank-focused regulations and remove burdens that don’t reflect investment firms’ business models.

Simon Walls, Interim Executive Director of Markets, highlighted that the changes are part of the FCA’s wider growth strategy and commitment to making the rulebook proportionate, effective, and easier to navigate.

This is another step in supporting UK financial services competitiveness while maintaining resilience and consumer protection.

 

Removal of Unnecessary Data Reporting for 16,000 Firms

The FCA is proposing the removal of three unnecessary data collections, simplifying requirements for around 16,000 firms and reducing regulatory friction.

The changes would eliminate outdated returns from the Handbook and are part of the FCA’s promise to reduce barriers to growth, in line with commitments made to the Prime Minister.

Jessica Rusu, Chief Data, Intelligence and Information Officer, stated: “We’re getting rid of these data requests, saving time and money for thousands of firms, and we will review more in the future.”

Firms can also benefit from the newly launched My FCA platform—centralising all regulatory tasks in one place.

Feedback on the consultation is open until 14 May 2025.

 

FCA Simplifies Supervisory Letters

From 30 April 2025, the FCA will retire portfolio letters and replace them with a smaller number of market reports, offering targeted, firm-type-relevant insights.

The change will also see outdated supervisory letters—including older Dear CEO letters—clearly marked as historical but still accessible.

This move supports the FCA’s Consumer Duty Requirements Review and its mission to deliver smarter, more efficient regulation.

Until the first market reports are released later this year, firms should continue to refer to existing supervisory letters for guidance. Dear CEO letters will still be used for major issues requiring action at senior management level.

 

Please reach out to info@objectivus.com if you have any questions or require further clarity on any of the points raised.