Regulatory Updates November 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:

• FCA publishes consultation on UK transaction reporting regime
• FCA & PRA amend margin rules for non-centrally cleared derivatives
• SI regime for bonds and derivatives removed
• PRA holds model risk oversight roundtables on AI and machine learning

 

FCA publishes consultation on UK transaction reporting regime

On 21 November 2025, the FCA launched a consultation paper aiming to overhaul the UK’s onshore MiFIR transaction reporting regime (CP25/32). The proposals would reduce the number of reportable fields, limit mandatory reporting to instruments traded on UK venues, remove FX derivatives from the reporting scope and shorten the default back-reporting period for corrections from five to three years.

If implemented, these changes could yield substantial cost and operational savings, the FCA estimates savings of over £100 million per year across the industry.

 

FCA & PRA amend margin rules for non-centrally cleared derivatives

On 27 November 2025, the FCA and PRA published PS25/16, their Policy Statement updating margin requirements under UK EMIR for non-centrally cleared derivatives. The update includes an indefinite exemption for single stock equity options and index options from bilateral margining requirements, as well as adjustments to the calculation of the Average Aggregate Notional Amount (AANA) for legacy contracts.

 

SI regime for bonds and derivatives removed

On 28 November 2025, the FCA issued PS25/17, announcing that the systematic internaliser (SI) regime for bonds, derivatives, structured finance products and emission allowances will be formally repealed, effective on 1 December 2025. The repeal additionally lifts prior restrictions that prevented SIs from operating organised trading facilities (OTFs) or engaging in matched principal trading.

This could create new flexibility for firms, particularly market makers or trading venue operators, to restructure trading operations, offer OTF services or adapt business models more freely.

 

PRA holds modelrisk oversight roundtables on AI and machine learning

During November, the PRA held roundtable sessions with regulated firms to discuss the use of AI and machine learning systems under the supervisory expectations of its model risk management principles (SS1/23), with the aim to clarify how the PRA expects firms to govern, validate and monitor models used in risk, compliance or operations. 

As AI and machine learning becomes more embedded in risk modelling, pricing and compliance analytics, it is increasingly important to develop robust documentation, validation, and governance over these systems.

 

Please contact us at info@objectivus.com if you have any questions or require further clarity on any of the points raised.