June 2026 Regulation Update

Bank of England Banking Taxonomy 4.1.0

The Bank of England published a new taxonomy, 4.1.0. This taxonomy is effective from 1 January 2027 and supports changes to MREL (Minimum Requirements for Own Funds and Eligible Liabilities) reporting. The Basel 3.1 and SDDT requirements specified in taxonomy 4.0.0 are unchanged and are carried forward into 4.1.0. Whistlebrook’s regulatory reporting solution will be upgraded to include the new taxonomy. It will not be essential for clients to implement the upgrade if they are not subject to MREL reporting.  They can instead use the version with taxonomy 4.0.0.

Mortgage Rule Review: Support First Time Buyers and Underserved Consumers

The Financial Conduct Authority (FCA) published its Consultation Paper 26-18 in which it proposed ways to improve the accessibility of affordable residential mortgages. It is expected that a Policy Statement will be available later this year. Of note are the following proposals:

• If the interest only (IO) element of a residential mortgage is less than 25% of the secured property’s value, the requirement for a ‘credible repayment strategy’ at the end of the term, will no longer be necessary.
• In the case where the IO part is at least 25% and up to 50% of the property value, the need for evidence to support sufficient equity (upon sale) to purchase a cheaper alternative, at the end of the term, will be removed.
• For IO in excess of 50% of the property value, there must still be evidence of sufficient equity to purchase a cheaper alternative, but the paper refers to it being mortgage free.
• Retirement IO mortgages – for joint borrowers, no consideration of the ability of a surviving partner to continue to make payments, will be essential.
• Credit impaired borrowers – firms are encouraged not to apply the strict definition of credit impaired, particularly where there is low level impairment or recovery is present. The idea is that unless a mortgage is being used for debt consolidation, there can be more flexibility in provision of residential mortgages.
• Bridging loans – the maximum term including any extensions, will be 24 months, rather than 12.

Ring Fencing

It is understood that the Prudential Regulation Authority (PRA) will publish a consultation paper in the summer, on Ring Fencing. This paper will propose ways in which operational resources (e.g. Information Technology and Processing) can be shared across the ring fence, within organisations subject to the rules.

Capital Requirements Directive VI – Non EU Firms

Non-EU headquartered firms that are providing core banking services (including deposit taking and lending) within the EU, must have at a least a branch in the member state in which they are operating. The change is mostly effective from Autumn 2026 with full enforcement on 11 January 2027 and thereafter.

WIRES Releases

 

Version No.	Content	Estimated Release Date
7.3.0	Basel 3.1 and the Small Domestic Deposit Takers Regime – Bank of England Banking Taxonomy 4.0.0 (DPM, validation rules, templates)	01/07/2026

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This regulatory update is Whistlebrook’s understanding of the position as at 26th June 2026.