Regulatory horizon scanning Q2 2025
The regulatory calendar for Q2 2025 is dense, with several significant implementation deadlines, consultation closing dates, and legislative milestones falling between April and June. Firms should ensure that their horizon scanning processes have captured all relevant items and that responsibility for monitoring and responding to each has been allocated. The following summary covers the key items across FCA, PRA, ICO, and HM Treasury workstreams, with reference to parallel EU developments that are relevant for cross-border firms.
The FCA's consultation on reforming the Appointed Representatives (AR) regime (CP25/3) closes in May 2025. The FCA is proposing further changes to the due diligence and oversight obligations of principal firms, following the enhanced AR rules introduced in December 2022. Firms operating as principals to appointed representatives should review the proposals carefully — the FCA has signalled that further restrictions on the types of activities that can be delegated to ARs are under consideration, and that capital and reporting requirements for principals may be tightened. Responses to CP25/3 are due by 30 May 2025, and principals that have not assessed the impact of the proposals should prioritise this before the deadline.
The FCA's final rules on the advice guidance boundary reform (following CP25/1 on targeted support) are expected in Q2 2025, with implementation timelines to follow. The targeted support regime — enabling firms to provide more useful guidance to customers without crossing into regulated advice — is a significant commercial and compliance opportunity for platforms, workplace pension providers, and banks. Firms that have been waiting for final rules before developing their targeted support propositions should begin their product design and compliance assessment work now, as the implementation timeline is likely to be tight.
HM Treasury is expected to publish the draft Payment Services Regulation (the replacement for the Payment Services Regulations 2017) in Q2 2025, following its 2023 consultation. The draft regulation will set out the new framework for payment services and electronic money, including updated open banking requirements, revised authorisation criteria, and new rules on liability for payment fraud. Payments firms and e-money institutions should prepare for a period of transition that may require updates to their authorisation arrangements, terms and conditions, and operational processes.
In the EU, the implementing rules under DORA continue to be published, with several RTS and ITS finalised in early 2025 covering ICT incident classification, register of information requirements, and oversight framework for critical ICT third-party providers. UK firms with EU operations should ensure their DORA implementation teams are tracking these developments and updating their compliance arrangements accordingly. The European Banking Authority (EBA) is also expected to publish final guidelines on IRRBB (interest rate risk in the banking book) during Q2 2025, which will be relevant for PRA-regulated banks and building societies.
Key deadlines: Q2 2025
Summary of notable deadlines: FCA CP25/3 response deadline (May 2025); DORA ITS on register of information (live, continuous obligation from January 2025); FCA consumer duty board reports for the period ending 31 July 2024 (must be completed, not necessarily published, before the annual report date — many firms will have a June year-end); Annual remuneration disclosures for MIFIDPRU firms (typically due six months after financial year end); and UK EMIR backloading corrections for any firms that identified reporting errors during the September 2024 transition.