Posted on: February 21, 2025

Securities Transactions Settlement Time

UK Finance and the Financial Conduct Authority advised that the time to settle securities trades will be reduced to ‘T+1’ from 11th October 2027. Transition to ‘T+1’ in the EU will be on the same day and was communicated by the EU Commission. A ‘T+1’ settlement will bring the UK and EU into line with the US, Canada and Mexico, where this operating timeline has been in force since May 2024.

Joint Financial Regulatory Forums

Earlier this year, the UK had third meetings under separate cooperation forums with the EU and Japan. Of note is the EU’s Cryptoassets regulation that was implemented on 30 December 2024. In response, the UK has brought forward plans to create its own regulatory regime for Cryptoassets. Interestingly, all parties to the forums emphasised the importance of full implementation of the Basel framework as soon as possible. It is expected that in the UK, Basel 3.1 will be effective from 1st January 2027.

Product Sales Data Consumer Credit Reporting

Three regulatory reporting templates will be introduced for consumer credit data. For firms classed as ‘large’, the first report reference date is 30th Sep 2025. All other institutions subject to the reporting will have their first reference date as 31st March 2026. The templates covering ‘Backbook’, Sales and Performance are included in Whistlebrook’s WIRES software.

Further details are in the FCA’s policy statement 24-3.

Exit Planning for non-systemic UK Incorporated Firms

As a business as usual activity, a firm will be required to produce a ‘Solvent Exit Analysis’ to show how it would leave the market in an orderly way. Were an exit (not necessarily because a firm is failing) deemed a reasonable next step for the entity, it would need to prepare a ‘Solvent Exit Plan’, describing the path to be taken to remove itself from the market.

These requirements will be effective from 1st October 2025.

Further details are in PRA policy statement 5-24.

MREL

In October 2024, the Bank of England issued a consultation about changes to Minimum Requirements for Own Funds and Eligible Liabilities (‘MREL’). Of note are:

  • Firms with a preferred resolution strategy of ‘partial transfer’, will have their MREL reduced to the higher of Pillar 1 plus Pillar 2A capital or the amount of Tier One that satisfies the leverage ratio requirement where applicable.
  • The asset threshold used to support the Bank’s classification of a firm’s resolution strategy, is subject to a proposed increase. A range of £15bn to £25bn (above which may suggest ‘bail-in’) would be increased to £20bn to £30bn under the proposal.

The publication can be accessed via the following link – https://www.bankofengland.co.uk/-/media/boe/files/paper/2024/amendments-to-the-boe-approach-to-setting-a-mrel.pdf

Planned WIRES Releases

Version Target Release Date Content
7.0 30 June 2025 Small enhancements and bug fixes

This regulatory update is Whistlebrook’s understanding of the position as at 21st February 2025.