On 10 September 2026, the European Parliament’s Committee on Economic and Monetary Affairs (“ECON”) has adopted its position on the reform of the Sustainable Finance Disclosure Regulation (“SFDR”), marking a significant milestone in the SFDR 2.0 legislative process. The position is expected to be endorsed by the European Parliament (the “
FinReg Monthly Update
Welcome to the FinReg Monthly Update, a regular bulletin highlighting the latest developments in UK, EU and international financial services regulation.
Key Developments in July 2026:
United Kingdom
General Financial Services – Cross Sector
31 July – FCA Handbook: The FCA has published Handbook Notice 143, which sets out changes to the FCA Handbook made
FCA remuneration reform: what private capital investors need to know
The FCA’s proposed overhaul of the remuneration rules is relevant not only to regulated firms, but also to private capital investors buying, financing or selling them.
CP26/27 would replace the separate MIFIDPRU, AIFM and UCITS remuneration codes with a single regime. It would also remove much of the prescription around deferral, malus and clawback, guaranteed
SFDR 2.0: Where the Reform Stands
The EU institutions agree that SFDR should move away from Articles 8 and 9 towards three product categories. They remain divided, however, on two questions that matter particularly to private markets: fossil fuel exposure and an exemption for alternative investment funds offered exclusively to professional investors.
Where the process stands
The European Commission published its
Next steps for Non-EU Groups in Scope of the CSRD
On 23 July 2026, EFRAG published an “Exposure Draft“ of the proposed sustainability reporting standards for certain non-EU undertakings under Article 40a of the Accounting Directive, known as the “ESRS-40a Standards”. The Exposure Draft sets out how in-scope non-EU groups would report under the CSRD framework. We summarise the key points below.
1
FCA and HM Treasury Publish Detailed Proposals to Streamline UK Asset Management Regulation
On 14 July 2026, HM Treasury published the draft Alternative Investment Fund Managers Regulations 2026 (the “Draft AIFM Regulations”) and an accompanying policy note (the “HMT Policy Note”), setting out proposed legislative changes to the UK AIFM framework. On the same day, the Financial Conduct Authority (“FCA”) published three consultation papers designed to streamline the
FinReg Monthly Update
Welcome to the FinReg Monthly Update, a regular bulletin highlighting the latest developments in UK, EU and international financial services regulation.
Key Developments in June 2026:
United Kingdom
General Financial Services – Cross Sector
29 June – Consumer Duty: The FCA has published a consultation paper (CP26/23) on changes to the scope and proportionality of the
Employment Law and Regulatory Reform: How Financial Services Firms Can Prepare for Change
UK Employment Rights Act 2025 and FCA Non-Financial Misconduct Guidance — Key Considerations for Financial Services Employers
Financial services firms face a concentrated period of reform. The Employment Rights Act 2025[1] (the “ERA 2025”) introduces the most significant changes to UK employment law in over a decade with staggered implementation dates[2]
Council position on SFDR reform agreed – with increased uncertainty ahead for private markets
On 24 June 2026, the Council of the European Union (the “Council”) agreed its negotiating position on reforms to the Sustainable Finance Disclosure Regulation (“SFDR”). The stated aims are to simplify sustainability transparency rules, reduce administrative burdens and make it easier for investors to understand and compare sustainable financial products.
This
FCA consults on simplifying product-level climate disclosures: key points for private capital
What is the FCA proposing?
The Financial Conduct Authority (“FCA”) launched its quarterly consultation paper CP26/17 on 5 June 2026 (the “Consultation”). Among other topics in this Consultation, the FCA is consulting on removing the current requirement for product-level Taskforce on Climate-related Financial Disclosures (“TCFD”) reports and replacing it with a narrower, more