Listen to our latest payments podcast in which we look ahead to the FCA’s new-look safeguarding regime for payments and e-money firms.
UK
Payments
- Government consults on closure of PSR: HM Treasury has opened a consultation on folding the functions of the Payment Systems Regulator into the Financial Conduct Authority. The plans seek to mirror the scope and substance of the existing regulatory regime for overseeing payment systems. Open questions include whether the FCA should make directions or set rules and how the FCA’s objectives and regulatory principles should change. The consultation closes on 20 October 2025.
Read our blogpost: UK consults on closing the Payment Systems Regulator
- FCA suggests removing contactless limit: Payment service providers are currently not required to apply strong customer authentication for contactless payment transactions below certain limits. The FCA has proposed rewriting the exemption to remove the limits, allowing PSPs to process contactless payments where they identify the risk of a payment transaction to be low. PSPs could still set their own contactless payment limits. The proposal is included in the FCA’s quarterly consultation No. 49 (CP25/24) which closes on 15 October 2025.
Read our blogpost: FCA lays groundwork for scrapping contactless limit
Cryptoassets
- FCA plans to extend existing rules to crypto firms: In CP25/25 the FCA is consulting on the application of its Handbook for regulated cryptoasset activities. Existing rules that would apply to licensed cryptoasset businesses include the FCA’s Principles, Senior Managers and Certification Regime, and operational resilience regime. The consultation includes a discussion paper on the application of the Consumer Duty, conduct of business rules and Financial Ombudsman Service. The deadline for responses to the discussion chapters is 15 October 2025 and 12 November 2025 for the consultation chapters.
Read our blogpost: FCA tailors how its rulebook will apply to cryptoasset activities
- Crypto-related changes to AML regime: HM Treasury has published draft amendments to the Money Laundering Regulations. The amendments include lowering the threshold for the change in control regime for cryptoasset firms under the MLRs from 25% to 10%. HMT also wants to restrict crypto firms’ use of correspondent relationships. HMT expects to lay the amendment regulations before Parliament in early 2026.
Read our blogpost: UK drafts changes to Money Laundering Regulations
AI
- FCA shares feedback on AI testing: The FCA has released a statement summarising the feedback to its engagement paper on its live AI testing service. In FS25/5, the FCA confirms that it has decided to proceed with live testing as part of the existing FCA AI Lab. The application window for the second cohort of AI Live Testing will open before the end of the year. The FCA will evaluate the project next year.
- FCA new webpage on its approach to AI: The FCA has published a new webpage on its approach to supporting the safe and responsible adoption of AI in UK markets. It explains that the FCA is relying on existing frameworks that mitigate many of the risks associated with AI and confirms that the FCA does not plan to introduce extra regulations for AI.
- Parliamentary committee writes to tech firms about AI: The Treasury Committee has sent a series of letters , dated 17 September 2025, to AI providers about AI in financial services. The letters include questions about the impact of the UK critical third parties regime and preparations for outages in its cloud and AI systems.
Watch our webinar: AI in financial services: Applying operational resilience rules to AI
General
- New UK-US Taskforce: The UK and US have announced a new “Transatlantic Taskforce for Markets of the Future” to explore co-operation on capital markets and digital assets regulation. The Taskforce will look at, among other things, short-to-medium term collaboration on digital assets and options for longer-term collaboration on wholesale digital markets innovation. Officials from HMT and US Treasury will chair the Taskforce which is expected to report on recommendations in Q1 2026.
- Updated Implementation Plan for T+1: The Accelerated Settlement Taskforce has updated the UK Implementation Plan to reflect work completed since publication of the report in February and the publication by the EU taskforce of its own report. The aim is to settle UK cash securities trading on a T+1 cycle by 11 October 2027.
EU
Operational resilience
- EBA to close consultation on third party risk guidelines: The European Banking Authority is consulting on an update to its outsourcing guidelines. The new guidelines will relate not only to outsourcings but other third party arrangements as well, except for ICT services which are covered by the EU’s Digital Operational Resilience Act. As well as continuing to apply to banks and other payment service providers, the revised guidelines will extend to other types of firm including issuers of asset-referenced tokens. The consultation closes on 8 October 2025.
Read our blogpost: EBA to extend its outsourcing guidelines to cover all third party risks outside DORA
Payments
- Instant payments milestone: The EU Instant Payments Regulation requires banks in euro area Member States to be ready to send instant payments in euro by 9 October 2025. They must also apply verification of payee from the same date. Banks in non-euro area Member States have until 2027 to prepare to receive and send instant payments and provide verification of payee.
- Access to payment systems: From October 2025, non-bank payment service providers will be able to start accessing TARGET, including T2 (for settling payments) and TIPS (for settling instant payments). The Instant Payments Regulation broadens the range of entities eligible to participate in designated payment systems to include non-bank PSPs.
Cryptoassets
- New MiCA technical standards: Two new sets of technical standards have been made law under the Markets in Crypto-Assets Regulation. Commission Delegated Regulation (EU) 2025/1125 specifies the information required in an authorisation application for offering asset-referenced tokens to the public or seeking their admission to trading. Commission Implementing Regulation (EU) 2025/1126 provides the related forms and procedures. Both regulations take effect as of 5 October 2025.
General
- Commission seeks feedback on simplification agenda: The European Commission is seeking ideas on how to simplify rules for data, cybersecurity and AI. The Commission plans to take forward legislative measures via a digital omnibus. The Commission describes its call for evidence as a “first step” in simplifying the EU’s digital rulebook. The call for evidence closes on 14 October 2025.
International
Cryptoassets
- FSB to review crypto frameworks: The Financial Stability Board is expected to publish its peer review report on its global regulatory framework for cryptoasset activities in October 2025.
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