Structured Products Bulletin - Q4 2025

World affairs continue to be uncertain and stock markets have been volatile amidst concerns about a possible artificial intelligence (AI) bubble, albeit hitting further historic highs towards the end of the year. Trading in single-name credit default swaps has increased substantially. US regulators have been easing regulatory requirements and restrictions for US financial institutions, while the EU and UK are pushing forward with initiatives to improve the competitiveness of their financial markets.

On 4 December 2025, the European Commission (EC) adopted its Market Integration Package, which comprises several proposed measures aimed at integrating EU capital markets and harmonising member states’ requirements, among other things transferring several powers from national competent authorities to the European Securities and Markets Authority (ESMA) and extending the use of distributed ledger technology (DLT). In addition, on 19 November 2025 the European Commission launched its Data Union Strategy, including its Digital Package comprising omnibus measures to simplify rules and boost innovation, which makes changes to existing cybersecurity, data protection and AI rules, and its Business Wallet proposal for a secure digital tool to manage identity verification and generally reduce red tape.

UK regulators have been especially active in publishing new regulations that will supersede certain assimilated EU laws. The new Public Offers and Admissions to Trading Regulations 2024 (POATRs) and supporting PRM Sourcebook took effect on 19 January 2026, and the FCA has published related forms/checklists and technical notes (this briefing has been delayed to cover these materials as well). The FCA has published a set of reforms to boost retail participation in investments, including a Policy Statement setting out final rules for Consumer Composite Investments (CCI) from 6 April 2026 (full implementation by 8 June 2027), a Discussion Paper on retail access to investments, a Consultation Paper on redrawing the boundary between retail and professional clients, and the final policy on targeted support.

We are pleased to set out our fourth quarter of 2025 update covering legal and regulatory developments affecting structured products below.

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EU

Market integration

Market integration package

The European Commission officially launched its EU Market Integration Package on 4 December 2025. This proposes legislative amendments to almost 20 existing EU financial market legislative measures to facilitate the greater integration of EU financial markets under the Savings and Investment Union (SIU) strategy. The changes are to be effected using two Regulations and a Directive (drafts of these have been published) and are expected to apply in steps over a period from mid-2027 to 2029.

To ensure harmonisation, a number of discretions are being moved away from national competent authorities to ESMA. EU Regulations that have direct application in EU member states are preferred to EU Directives, and gold-plating of specific legislative items in national legislation is being substantially reduced.

From a structured products perspective generally, the changes are not especially important. The points that may be relevant for specific structured products include:

• The Distributed Ledger Technology Pilot Regulation (DLTPR) (2022/858) is to be modified to increase the regime’s flexibility and proportionality, as well as extend its scale and scope and address concerns around the durability of the regime by removing the time limits of the permissions granted under the pilot.
• The Markets in Crypto-Assets Regulation (MiCA) (2023/1114) is to be amended to transfer responsibility for the authorisation, monitoring and supervision of all crypto-asset service providers (CASPs) to ESMA, with other entities already providing some crypto-asset services remaining under national competent authority supervision until such time as crypto-asset activity becomes their main activity.
• The Benchmark Regulation (BMR) (2016/1011) is to be amended to align the procedural regime for benchmark providers with the new horizontal supervisory framework established under the ESMA Regulation, and amending the provisions relating to fines and ESMA fees.
• Replacing the Settlement Finality Directive (SFD) (98/26/EC) with a new Regulation and amending the Financial Collateral Regulations (2002/47) to convert the SFD into a new Settlement Finality Regulation (SFR) to ensure more harmonised implementation and address national discrepancies, which could affect structured products backed by swaps with EU counterparties and the treatment of netting provisions in insolvency.

The package is subject to further negotiation. Several member states are reported to be resistant to giving up national supervisory powers over entities authorised in and operating within their jurisdictions and do not want ESMA to have centralised power. This could prove to be a major stumbling block to reaching EU-wide agreement on the legislative package.

EU Listing Act

EU Listing Act – Consultation on delegated regulation

The EU Listing Act came into force on 4 December 2024, but most of its provisions are not yet in effect and the European Commission is consulting on various Commission Delegated Regulations required to implement it in full. The EU Listing Act modifies the EU Prospectus Regulation, the EU Market Abuse Regulation (EU MAR) and the EU Markets in Financial Instruments Regulation (EU MiFIR).

On 4 December 2025, the European Commission launched a consultation on proposed amendments to certain aspects of Commission Delegated Regulation 2019/980 under the Prospectus Regulation, which sets out details on the content of prospectuses. In particular, it introduces (i) a new EU “follow-on prospectus” for listed issuers seeking to issue further securities and (ii) a new EU “growth issuance prospectus” for listed and unlisted SMEs which will replace the existing simplified prospectus for secondary issuance and the EU Growth Prospectus from 5 March 2026. The amendments provide for reduced content, a standardised content and set order of those prospectuses.

Digital

Digital package

On 19 November 2025, the European Commission published its Digital Package, covering data, cybersecurity and AI. It is intended to boost innovation and reduce costs. It was accompanied by the Data Union Strategy, which is aimed at making high quality data available for AI development, and a proposal for European Business Wallets intended to simplify business operations across the EU.

From a structured products perspective, the changes could be substantial. For example, requirements for hard copy paper documents will be reduced in favour of electronic versions, registration and post-market monitoring for certain high-risk AI will be reduced, and data governance/security requirements will be harmonised across EU member states thereby reducing the cost of compliance. Structured products linked to crypto assets will also be affected.

The proposed changes are subject to further discussion and negotiation, but some of the provisions could be implemented as early as mid-2026.

Retail investments

Retail investments under MiFID

ESMA announced on 2 December 2025 that it will undertake a Common Supervisory Action (CSA) with national competent authorities (effectively, an exchange of information intended to enhance supervisory convergence) to assess how firms comply with their obligations under MiFID II to identify, prevent and manage conflicts of interest in the distribution of investment products to retail clients. The CSA will focus on: the impact of staff remuneration and its impact on the products offered to investors; the role of digital platforms in directing investors to products; and how conflicts of interest between firms’ profits and the needs of retail investors are managed.

Progress on retail iInvestment strategy and PRIIPs

The European Council and Parliament have been considering the Commission’s Retail Investment Strategy (RIS) package which comprises an Omnibus Directive (which includes proposed amendments to MiFID, PRIIPs, AIFMD and UCITS from a product governance perspective and aligns the Insurance Distribution Directive and Solvency II with MiFID) and a proposal to amend the Regulation on Packaged Retail and Insurance-based Investment Products (PRIIPs). The European Parliament and Council have now announced that they have reached informal agreement on the package (see Parliament and Council announcements), with the provisional agreement still to be approved by both Parliament and Council and the text finalised before it can enter into force. The legislative amendments are not expected to enter fully into force until some time in 2027 or later (since the amending Directives will apply 30 months after their publication in the Official Journal and the Regulation amending PRIIPs will apply 18 months following publication). In terms of the PRIIPs Key Information Document, the proposals are aimed at ensuring that information on costs, risk and expected returns are made more visible to investors, with new templates to be developed by ESMA, the EBA and EIOPA. In addition, 30 months after the new rules take effect, information in KIDs will have to be provided in machine-readable format to ensure they are compatible with digital innovations, and allow for better comparison between products.

For further information, see the Simmons & Simmons EU RIS View: December 2025.

Credit default swap stability

Credit default swaps – analysis and policies

In November 2025, the European Systemic Risk Board (ESRB) published an analysis of single name credit default swaps (CDSs), noting the importance of credit spreads as a “lead-lag” indicator of counterparty credit risk and criticising the opacity of single name CDS data as it creates information asymmetries and deprives market supervisors of important information for their decision making.

The ESRB makes four policy proposals: (i) enhance post-trade market transparency on single name CDSs; (ii) strengthen supervisory access to information through improved quality and standardisation of data reported as well as enhanced global cooperation; (iii) promote efficiency and functioning of the single name CDS market (focus on demand, supply and competition); and (iv) improve credit risk assessment frameworks by reducing reliance on CDS spreads and raising awareness of price formation mechanisms.

These proposals are not directly aimed at structured products that are not in standard CDS form. However, structured products commonly reference single-name CDSs and their spreads, and many are likely to be treated in a similar manner by regulators, so any changes in this area will need to be monitored carefully for structured products as well.

UK

UK prospectus regime

FSMA Commencement Order No. 11

As expected, The Financial Services and Markets Act 2023 (Commencement No. 11 and Saving Provisions) Regulations 2025 statutory instrument was made to repeal the assimilated EU Prospectus Regulation 2017 and its subordinated EU legislation from UK law with effect from 19 January 2026. The new Public Offers and Admissions to Trading Regulations 2024 (POATRs) and the Financial Conduct Authority’s “PRM: Admission to Trading on a Regulated Market” (PRM) Sourcebook applied from that date, with some transitional provisions for grandfathered base prospectuses.

For a summary of the changes, see the Simmons & Simmons high-level client briefing.

POATRs amendment regulations

The Public Offers and Admissions to Trading (Amendment and Consequential and Transitional Provisions) Regulations SI 2025 No. 1076 was made on 13 October 2025. It changed certain provisions of the POATRs to ensure it functions correctly.

FCA quarterly consultation No.50

On 5 December 2025, the FCA proposed minor amendments to its listing rules and processes (under the UKLR Sourcebook) to reflect the new prospectus regime, in CP25/35. Under the new regime, the FCA will only process listing applications for new securities (further issuances will be automatically listed). As a result, the FCA proposed to streamline the listing applications process and the related rules in UKLR, as well as making other minor clarifications, consolidations and amendments to the Handbook to remove redundant and outdated provisions. These include: clarifying the information needed from an applicant for listing; reflecting the fact that the FCA will no longer review, pre-admission, an issuer’s reliance on a prospectus exemption for a further issuance; deleting the continuing obligation for issuers of securitised derivatives to send copy guarantor accounts to the FCA; expanding the scope of information that may be incorporated by reference to include management reports; and various other minor drafting changes. Comments on these aspects were requested by 19 January 2026.

FCA forms and checklists

The FCA has published an updated webpage which provides links to all of the revised listing forms and checklists needed for listings, primary market oversight and payments under the new PRM Rules. These include Cross-reference Checklists for issuers to show compliance with PRM requirements; Pre-PRM Implementation Submission Form (for issuers submitting draft documents for pre-review under the PRM regime between 1 December 2025 and 18 January 2026 inclusive); PRM Form A and PRM No change confirmation template letter (both only for submission on or after 19 January 2026); PRM Upfront submission form (use is optional and only applicable to debt documents); UK Listing Rules Checklists (updated to reflect changes to the UKLR as a result of the new POATRs/PRM regime; and the Same-day service (SDS) form for supplementary prospectuses to be approved under the PRM and only for submission on or after 19 January 2026.

Primary Market Bulletins (PMBs)

In October 2025 and January 2026, the FCA covered various prospectus-related issues in recent PMBs, particularly PMB58 and 61.

PMB58 clarified that the last day for prospectus approvals under the pre-19 January 2026 prospectus regime was Friday 16 January 2026. Any prospectuses submitted before then but for which the FCA review process was not completed by then would need to comply with the new regime. PMB58 also consulted on various proposed changes to guidance notes.

PMB61 announced the outcome of the consultation in PMB58 on the proposed changes to the guidance notes, resulting in 4 new guidance notes, updates to 42 guidance notes and the deletion of 7 guidance notes. See the row on FCA Knowledge Base below.

FCA knowledge base

The FCA has updated its Knowledge Base webpage containing links to POATRs/PRM related materials, including its guidance notes that clarify specific issues and common questions. The guidance notes comprise: (a) Technical Notes (TNs), which address interpretation of regulatory requirements and policy; and (b) Procedural Notes (PNs), which explain procedural steps for interacting with the FCA.

Consumer Composite Investments (CCIs)

FCA Policy Statement 25/20: Final Rules for Consumer Composite Investments (CCIs)

On 8 December 2025, the FCA published PS25/20 which sets out the FCA’s final Rules for the CCI regime in the UK which will replace the PRIIPs and UCITS product disclosure rules with a new UK regime underpinned by the relevant legislation (the Consumer Composite Investment (Designated Activities) Regulations 2024 (SI 2024 No.1198, the CCIs SI)) and aspects of the FCA’s Consumer Duty.

A CCI is an investment where the returns are dependent on the performance of, or changes in, the value of underlying or reference assets. Structured products and structured deposits are explicitly in scope (as well as open/closed ended funds, recognised funds, contracts for difference, insurance-based investment products and other complex products such as derivatives – this is not an exhaustive list and firms will need to consider whether their products are CCIs). The new UK regime removes prescriptive documents and templating so as to facilitate innovation and the provision of communications about CCIs that genuinely help consumers, moving away from the overly-prescriptive EU-derived PRIIPs and UCITS disclosure requirements. Some of the key headlines from the final Policy Statement include:

• Scope: the new rules apply to firms that manufacture (i.e. create, develop, design, issue, manage, operate or carry out a CCI) or distribute (offer, advise on, sell or provide investment services relating to a CCI to retail investors) CCIs. The FSMA Designated Activities Regime applies, such that both authorised and unauthorised firms (including unauthorised overseas firms) are covered by the Rules, and where more than one firm is involved in manufacturing activities, the firms must agree among themselves their respective areas of responsibility.
• Related consumer initiatives: the CCI Rules go hand in hand with the FCA advice guidance boundary reforms and the new framework for Targeted Support (which will allow firms to make specific recommendations for groups of consumers). They are also underpinned by the Consumer Duty, on which the FCA plans to consult in the first half of 2026 regarding changes to the application and requirements of the Duty including in relation to firms working together in distribution chains and on information sharing through that chain (and in the meantime, a Clarificatory Statement has been released which clarifies the FCA’s expectations in terms of these firms’ approach to decision-making, the allocation of responsibility, liability and outsourcing arrangements).
• The Rules: most of the Rules are contained in amendments to these FCA Sourcebooks: Glossary, COBS, PROD, COLL, FUND, DISC and PRM.
• Proportionate approach: manufacturers will have to provide “product summaries” (replacing KIDs) to consumers, but will have considerable freedom over the design of such summaries, with standardised minimum requirements applying only to certain essential information on costs, risk and return and past performance (to which firms may add additional information if it would help consumer understanding). Information must be provided simply and clearly using language consumers can understand, and manufacturers must provide this to distributors in machine-readable format. Distributors will have to make the unamended product summary available to consumers at the point of sale or shortly after (and in a durable medium) and will have the option of highlighting the key information (and at a minimum must highlight a brief explanation of the product, the ongoing and other relevant costs, and the risk and return score/brief explanation of the risk and return profile and any warnings). They are expected to use the information provided by manufacturers to produce “compelling” consumer journeys.
• Non-retail products: the FCA explicitly excludes vanilla corporate bonds issued by commercial companies (with the FCA clarifying that the new “Plain Vanilla Listed Bonds” (PVLBs) under the new POATRs regime are excluded). In addition, bonds tracking EURIBOR and other IBORs are not in scope of the CCIs regime. Also, pension products and pure protection insurance products are excluded from the scope of the regime. Firms will also be able to ‘opt-out’ of selling their products to retail clients by clearly marking communications and marketing material as “not for retail”, and taking steps to ensure the product is not directed to retail investors.
• Structured products: responding to feedback that structured products should not have to use the risk score methodology, the FCA’s Rules now require that structured products must calculate their risk and return score using a value-at-risk equivalent volatility (VEV) model. 3 broad categories of structured product will be: capital guaranteed notes; structured capital-at-risk products (SCARPs); and structured deposits. Manufacturers would then have to determine the risk and return score for these structured products according to Table 1 on page 36 of the PS.
• Implementation: firms will have an 18-month implementation period, starting on 8 December 2025, before the new regime comes fully into force (during which they should familiarise themselves with the new Rules and make changes to their systems and processes). The new CCIs legislation will come into force on 6 April 2026 and firms can move to providing the new CCI product summary from that date, with the full regime under the legislative framework and FCA Rules coming into force on 8 June 2027.

FSMA Commencement Order No. 11

The Financial Services and Markets Act 2023 (Commencement No. 11 and Saving Provisions) Regulations 2025 statutory instrument also fixed 6 April 2026 as the date for the repeal of UK PRIIPs and implementation of the new CCI regime.

CCIs Amending Regulation

The CCIs legislation was amended by the Consumer Composite Investment (Designated Activities) (Amendment) Order 2025 (SI 2025 No.1347) statutory instrument, which provides transitional provisions allowing a temporary exemption from the financial promotion restriction (in FSMA s.21(1)) and the scheme promotion restriction (in FSMA s.238(1)) for KIDs produced under Article 13 of the existing UK PRIIPs Regulation, for a transitional period. This period includes the ‘CCI transitional period’ (which runs until the full new CCI regime is in place on 8 June 2027) and beyond, with a long-stop date of 8 December 2028. This will allow unauthorised manufacturers of CCIs (e.g. those outside the UK) to continue producing KIDs and offering PRIIPs to UK customers (where they are in compliance with the PRIIPs regime and the CCI transitional provisions) without the need to have them signed-off by an FCA-authorised person, thus allowing a smooth transition to the new CCIs regime.

Expanding consumer access to investments

FCA’s new Handbook launch

The FCA has launched its new handbook, which is part of its strategy to be a “smarter regulator”. The Handbook’s structure and format remains broadly the same but the look and feel is slightly different and navigation is supposedly easier, with links included to legal instruments and related parts of the Handbook – see the FCA’s Handbook Navigation Guide. The legacy version of the Handbook will remain available for a short period. The specific Sourcebooks relevant for structured products (e.g. UKLRs, DTR, COBS, DEPP) are available in the new format.

UK MiFID Org Regulation

FCA Discussion Paper 25/3: Expanding consumer access to investments

On 8 December 2025, the FCA also launched a related Discussion Paper 25/3 on expanding consumer access to investments which seeks views by 6 March 2026 on how to ensure consumers are equipped with the confidence to invest and can take informed risks.

Client categorisation and Conflicts of interest

FCA consultation Paper 25/36: Client categorisation and conflicts of interest

On 8 December 2025, the FCA published CP25/36 which sets out its proposals to more clearly redraw the boundary between retail and professional investors, with the aim of calibrating its rules appropriately for wholesale firms that operate with professional clients who do not need retail protections. The FCA proposes:

• Clear standards for the identification and categorisation of clients that can be opted-out of retail protections (including the Consumer Duty), with their informed consent, and subject to firms demonstrating they are meeting those rigorous standards, through:
  • Changes to the elective professional client categorisation rules by:
    • Allowing very wealthy individuals to opt out of retail protections where they have investable assets of at least £10million (the existing threshold is €500,000);
    • Removing the “quantitative test” in COBS 3.5.3R(2) which requires at least 2 of 3 tests to be satisfied (the tests relate to the client having carried out a minimum of 10 transactions per quarter, its portfolio being over €500,000, and having held a professional position in financial markets for over one year which requires knowledge of the relevant transaction(s));
    • Enhancing the existing “qualitative” assessment which requires firms to undertake a robust assessment of a client’s expertise, experience and knowledge, with new relevant factors which must be considered (including occupational experience, investment history, financial resilience, knowledge, understanding and ability to assess risk, objectives for opting out of retail protections and any adverse information available to the firm) to determine whether a client meets the threshold to be considered an elective professional client); and
    • Improved safeguards to ensure clients must actively request to be categorised as an elective professional client and given informed consent to opt-out of all retail protections.
  • Simplifications to the “per se” professional client category (under which certain clients automatically belong to a particular category based on e.g. size, nature or regulatory status without needing to opt-in or be assessed, e.g. SPVs), to make it easier for firms to verify that a client meets the criteria.
• Rationalisation of conflicts of interest rules to make them more proportionate and clearer for firms to interpret and implement (these do not represent changes to the rules, merely a reduction in the length and complexity of the current rules):
  • The rules in the Senior Management Systems and Controls Sourcebook (SYSC) Chapters 10 (and 3) on conflicts of interest would be amended and simplified to make it easier for firms to understand the obligations and how they apply to specific business models and scenarios.

More details are set out in this Simmons & Simmons client briefing. The changes will clearly be relevant for structured products issuances.

Targeted support

FCA policy statement PS25/22 on targeted support

Following its previous consultation on proposals for “targeted support” measures in retail investments (and pensions), on 11 December 2025 the FCA issued its near-final Rules in Policy Statement PS25/22 which outlined the FCA’s policy to address the “advice gap” by allowing firms to provide “targeted support” to groups of retail customers with similar characteristics by way of making recommendations and directing them to products which may improve their financial position. Amendments to the Regulated Activities Order to provide for the new specified activity of “providing targeted support” are also being made by HM Treasury. The targeted support rules are outcomes-focused and appear to be product-agnostic so they could apply to suggesting structured products / packaged retail investment funds to retail investors. The FCA notes that the new rules are complemented by the new CCI rules (see above), and they are also underpinned by the Consumer Duty and existing product governance rules. Where targeted support recommendations include financial instruments (e.g. recommendations relating to securities, structured deposits and relevant investments), they will fall within the scope of MiFID and the COBS rules. The targeted support rules will take effect from 6 April 2026, subject to the relevant legislation being passed in advance.

Digital assets

New UK Digital Assets Act

The Property (Digital Assets etc) Bill received Royal Assent on 2 December 2025 and has become the Property (Digital Assets etc) Act 2025. The short Act provides simply that a thing (including a thing which is digital or electronic in nature) is not prevented from being the object of personal property rights merely because it is neither a thing in possession nor a thing in action. The Act’s intention is to ensure that digital property (such as crypto-tokens and digital assets) can be recognised as property under English law, with the development of the boundaries of the applicable law left to the courts to develop. The Act came into force as of 2 December 2025 in England & Wales and Northern Ireland (but note not Scotland).

New UK cryptoasset legislation

The draft Financial Services and Markets Act 2023 (Regulated Activities and Miscellaneous Provisions) (Cryptoassets) Order 2025 published in 2025, on which the FCA based its accompanying proposed rules in CP25/14. These set out the future UK regulatory regime for stablecoins and cryptoassets, to bring certain regulated activities within the scope of FCA regulation.

The final legislation, namely the draft Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2025 has now been laid before Parliament where it will be subject to scrutiny by both houses before finalisation. Cryptoasset firms are expected to be subject to regulation under the legislation from 25 October 2027. In particular, the legislation:

• Establishes the regulatory regime for the designated activities of “public offers of qualifying cryptoassets” and “admissions to trading on a qualifying cryptoasset trading platform” (including a “general prohibition” plus exemptions, which largely replicate the new POATRs regime and relevant exemptions), the requirements of the “qualifying cryptoasset disclosure document” and “supplementary disclosure document” required to be published, as well as the market abuse regime related to those activities (with FCA designated activity rules required to set out the firm-facing requirements – see the recent FCA consultations below);
• Specifies the new regulated activities of issuing qualifying stablecoin, safeguarding of certain cryptoassets, operating cryptoasset trading platforms, dealing in cryptoassets as principal or agent, arranging deals in cryptoassets, and cryptoasset staking – all of which are subject to detailed exemptions and will require authorisation under Part 4 FSMA (and the Regulated Activities Order will be amended to include these);
• Makes amendments to the Financial Promotion Order to provide for certain controlled activities relating to cryptoassets, and amends other secondary legislation (including the Electronic Money Regulations 2011, AIFM Regulations 2013, Payment Services Regulations 2017 and the Money Laundering Regulations 2017) to make provision for the new activities.

The FCA released a series of Consultation Papers (all of which closed for comment on 12 February 2026) to seek views on its proposed firm-facing rules under the new regime:

FCA consultations on cryptoasset regulatory regime

• Consultation paper 25/40: Regulating Cryptoasset Activities – CP25/40 covers the FCA proposals for authorising and regulating firms operating Cryptoasset Trading Platforms (CATPs), which will be responsible for the admissions and disclosures regime and market abuse regime (with UK CATP operators and intermediaries generally only able to do so for cryptoassets that are admitted to a UK CATP with a compliant disclosure document), with high-level expectations set out and further guidance to come. Proposed rules for intermediaries (dealing as principal/agent and arranging deals) would apply to lending and borrowing activities (client categorisation guidance will follow), and the FCA sets out provisions on execution, conflicts of interest, transparency and settlement. Rules covering transparency and record-keeping requirements for CATPs, cryptoasset lending and borrowing activities, requirements on regulated staking firms, and rules for firms engaged in decentralised finance (DeFi) are all set out for consultation, with the bulk of the rules in the new CRYPTO Chapter of the FCA Handbook.
• Consultation paper 25/41: Admissions & Disclosures and Market Abuse Regime – CP25/41 covers proposed rules for the new admissions to trading and disclosure regime as well as market abuse rules. These include rules about CATPs’ processes for admission to trading (including the requirement that they establish and publish admission criteria, conduct due diligence and meet record-keeping requirements), the content of Qualifying Cryptoasset Disclosure Documents (QCDDs) including the “material information” requirement, the requirements the FCA will expect CATPs to have in their own rules (such as rules about form and content of QCDDs, the governance mechanisms and characteristics of the cryptoasset, underlying technology, ownership, liability etc., and the inclusion of a “key information summary” in a QCDD), publication and filing of QCDDs, responsibility for a QCDD, financial promotions and Consumer Duty Considerations. A set of rules for UK-issued qualifying stablecoin issuance are also proposed (these are separate since the FCA will directly authorise these stablecoin issuers), including the information required by the disclosure document and updates provided on a website. The proposed market abuse regime is also set out for consultation.
• Consultation paper 25/42: Prudential Regime for Cryptoasset Firms – CP25/42 covers the prudential rules which would be set out in new FCA sourcebooks COREPRU and CRYPTOPRU and build on proposals already consulted on previously for stablecoin issuers and custodians of cryptoassets, focusing on the remaining cryptoasset activities, namely operating a qualifying cryptoasset trading platform (CATP), staking, arranging deals, dealing as agent and dealing as principal in qualifying cryptoassets. Prudential rules would require overall financial adequacy, an own funds requirement, minimum funds requirement, liquid assets requirement, fixed overheads requirement, K-factor requirement (an activity or exposure based requirement capturing the operational risk involved) as well as risk monitoring, assessment and disclosure obligations.
• Further consultation in 2026: a further consultation on Q1 2026 will cover the application of existing FCA Handbook requirements to cryptoasset firms, such as the Consumer Duty, Conduct of Business Sourcebook, and access to the Financial Ombudsman Service. The FCA has been consulting on different aspects of the future regulatory regime for cryptoassets, as set out in the Crypto Roadmap. The recently published consultation papers CP25/14, CP25/15, and CP25/25 explain how the FCA’s proposals align with its strategic and statutory objectives.

Benchmark Administrators

Future UK regulatory regime for Benchmark Administrators

On 17 December 2025, HM Treasury issued a Consultation Paper seeking views (by 11 March 2026) on changes to the regulatory regime for benchmark administrators in the UK. The existing EU-derived Benchmarks Regulation (BMR) regime would be replaced by a new Specified Authorised Benchmarks Regime (SABR) that would be more “agile”, “proportionate” and “tailored to the UK”. This would involve regulating only those benchmarks or benchmark administrators that are designated due to their importance to the integrity of UK financial markets (an estimated 80-90% reduction in the number of administrators caught by the scope of regulation would result from the proposals). HM Treasury notes that, as of 1 January 2026, the UK was the only jurisdiction with a benchmarks regime that regulates all benchmarks produced within the jurisdiction, and is seeking to adopt a simpler, more proportionate approach. Key aspects of the Consultation Paper are:

• Scope of regulation: under the new SABR, only benchmarks and administrators posing systemic risks to UK financial markets would be regulated. The existing categories of “critical” or “significant” benchmarks based on qualitative usage thresholds would not be retained. In addition, any requirement on users to use only regulated benchmarks would be removed. The new regime would seek only to address circumstances where there are risks of significant disruption to UK markets where:
  • For benchmarks: where a benchmark ceased to be produced, when there are no available substitutes, or where switching to an alternative is not practicable; or where a benchmark is no longer representative of the underlying market it seeks to measure. HM Treasury would “designate” benchmarks or their administrators that meet these criteria (impact on integrity of the UK financial system and consumers, or impact on the market it seeks to measure), which would be set out in legislation (based on advice from the FCA).
  • For benchmark administrators: HM Treasury would designate administrators that produce a large number of benchmarks (where the aggregate impact of the benchmarks administered could significantly affect the integrity of the UK financial system and consumers if they ceased without notice, were provided on the basis of data no longer fully representative of the underlying market or economic reality, were determined on the basis of unreliable data, or were not administered correctly according to their methodologies). Specific feedback is sought on the period of “notice” that should be considered sufficient to transition away from a benchmark that is due to cease.
  • Designation process: based on recommendations from the FCA (which may include available usage data, benchmark type and the contexts in which a benchmark is used, e.g. loans, derivatives), HM Treasury would designate the benchmark administrator within a specific timeframe. A designated administrator would need to be authorised, comply with the relevant obligations, and be subject to FCA supervision (unless they can use an overseas regime, see below). Transitional provisions for administrators regulated under the current regime would be provided, and de-designation processes developed. No opt-in process would be provided.
  • Regulation: moving to the ‘FSMA model’, the FCA would set the detailed firm-facing requirements (including governance, conflicts of interest, oversight, transparency and record-keeping). The specific requirements for interest-rate benchmarks, regulated data benchmarks and commodity benchmarks would be removed from legislation and the FCA would have flexibility to set proportionate requirements for the different types of benchmarks.
  • ESG benchmarks: feedback is also sought on another specific impact of the proposed regime’s narrower scope, which is that many ESG benchmarks would fall outside the SABR regime. For ESG benchmarks remaining in scope, the FCA would set detailed requirements regarding ESG disclosures. Feedback is sought on any operational or unforeseen challenges in the operation of the proposed SABR and its interaction with the new ESG ratings regime.
• Benchmark Contributors: it is proposed that the existing obligations upon authorised contributors to designated benchmarks (governance and control, conflicts of interest, data accuracy etc) would be maintained, and both authorised and non-authorised contributors would be subject to requirements under the regime (authorised contributors subject to the legislation and rules, and non-authorised contributors subject to the rules).
• Users of Benchmarks: as mentioned above, it would no longer be necessary under the proposed regime to require authorised firms to only use regulated benchmarks. However, the FCA will continue to be able to make rules for authorised firms as their conduct regulator and supervisor, and these could include rules or guidance as to how the FCA expects firms to manage risks associated with benchmarks. Feedback is sought on the cross-over between provisions in the BMR regime with other rules such as for prospectuses, the market abuse regime and the MiFID regime.
• Overseas benchmarks: the existing regime under the BMR provides three routes by which an overseas benchmark may be used (by being added to the FCA Third Country Benchmarks Register): equivalence (currently Australia, Singapore and the EEA are deemed equivalent); recognition; and endorsement. Challenges with some of these routes are smoothed by transitional provisions for overseas benchmarks under the BMR which are currently in place until end-2030, allowing UK firms to use overseas benchmarks that are not on the FCA’s Register. The new regime would involve a Overseas Recognition Regime (ORR) for jurisdictions with equivalent benchmark regimes, plus options for designated benchmarks from jurisdictions without an ORR designation (feedback on the implications of which is requested).
• Intervention and wind-down powers: the FCA’s existing powers over “critical” benchmarks would be largely replicated but with application to designated benchmarks only (therefore a much narrower set of benchmarks). Powers may be retained for the FCA to direct firms to restrict benchmark use in certain circumstances, and it may be given powers to intervene (e.g.) to mandate continued publication of benchmarks.

These changes will clearly be relevant for structured products referencing these benchmarks.

Short Selling

FCA Consultation Paper 25/29 on Short Selling

Following finalisation of the UK’s new Short Selling Regulations (SI 2025 No. 29) which set out the high-level legislative requirements for the UK’s new short selling regime, the FCA has issued Consultation Paper 25/29 on the related firm-facing rules to accompany the regime, which includes a Statement of Policy on how the FCA will use its emergency powers under the new regime. While not fundamentally changing the regime (as inherited from the EU), the FCA’s proposals aim to create a more efficient, effective and coherent domestic regime. Some key differences in the new UK regime include:

• Position reporting: the deadline by which persons are required to notify a change in their net short positions (NSPs) will be extended to 23:59 T+1 (from 15:30 T+1), and the FCA will provide guidance on the calculation of NSPs;
• Reportable Shares List: as required by the Regulations, the FCA must publish a list of admitted shares to which its rules apply (the reportable shares list or RSL). This will replace the current list of admitted shares which are exempt from the FCA’s rules. The FCA proposes to expand the criteria it uses to determine which shares should be subject to reporting and covering requirements, reducing the number of shares on the RSL. In addition, the FCA proposes changing the date on which it updates the RSL every 2 years, from 1 January to 1 April;
• Covering arrangements: there will be a minor change to ensure that records demonstrating appropriate covering agreements and arrangements are held by persons short selling for a minimum of 5 years;
• Market Maker exemptions: the FCA’s proposals would streamline and automate its systems for receiving position reporting and market maker exemption notifications to make submissions easier, quicker and less burdensome; and
• Public disclosure: the FCA proposes to combine and publish the NSPs reported to it above the 0.2% threshold as aggregate NSPs in relation to each company, with net short positions reported by individual position holders anonymised, without disclosing the identity of any individual.

To take account of the operational changes required, the FCA proposes that the rules are implemented in two phases: Phase 1 when the new Regulations and the new Short Selling Sourcebook take effect (this is subject to commencement under FSMA), and Phase 2 six months later once the systems used to send position reports and market maker exemption notifications have been updated. Comments on the proposals were requested by 16 December 2025.

These changes are likely to be significant for structured products that create economic short equity positions in UK shares.

Stress Test

Bank of England to stress test private markets

On 4 December 2025, the Bank of England launched a “system-wide exploratory scenario” involving private markets (both private equity and private credit), which is intended to focus on how the private markets ecosystem operates under stress, and the potential implications for financial stability and the UK economy. Noting that there is a broad “ecosystem” for the provision of long-term financing arrangements for businesses (including though private equity and private credit), this has not been tested in a stress scenario, so the Bank will aim to understand: how banks and non-banks in private markets would respond to a severe but plausible global downturn; the systemic interaction between firms (rather than individual firms’ resilience); and whether stress is amplified across the financial system. A report will be published in early 2027, with an update expected in 2026 while the exercise is running.

Any changes resulting from this may well affect structured products connected to private markets, possibly increasing issuance costs and reducing the availability for some. Collateralised loan obligations (CLOs) is a specific example, and might extend to repackagings of private credit or credit linked notes referencing private credit.

Deeds

CCLS FLC / LMA Commentary on face-value requirement for deeds

Following the decision in McDonald Hotels Ltd & Another v Bank of Scotland plc ([2025] EWHC 32 (Comm)), there has been some discussion in the market about the “face value” requirement in s1(2)(a) of the Law of Property (Miscellaneous Provisions) Act 1989 (which provides that an instrument shall not be a deed unless it makes clear on its face that it is intended to be a deed by the person making it or the parties to it). Obiter comments made by the Court in the McDonald case raised doubts about whether, in cases where only some of the transacting parties intend a document to be a deed, s1(2)(a) LPMPA would be satisfied.

To provide clarity, the City of London Law Society’s Financial Law Committee (FLC) has published this Note on s1(2)(a) LPMPA to assist parties to financing transactions, in which it is commonplace to have “split execution” whereby some parties sign as a deed and others sign under hand. The CLLS's view is that the face-value requirement is not a prescriptive test. It also notes that the courts have held that documents are deeds based on a variety of facts and not always because there is a statement that the relevant document is intended to be a deed. The opinion of the CLLS is that, if a document purports to be a deed, it will take effect as one in relation to the party correctly executing it as a deed. For the party that signs under hand, the document will take effect as a contract (and correspondingly, different limitation periods will apply). The LMA’s recommended form of intercreditor documentation is provided as an example of split execution. In the CLLS's opinion, the combination of the testimonium clause and execution blocks in the LMA intercreditor agreement complies with the face-value requirement sufficiently and no amendment is required. Consequently, the LMA confirmed in a short Statement (member login required) that it will not be amending the testimonium provision in the LMA intercreditor documentation.

Trade Association Updates

Credit Derivatives Governance Committee

Credit Derivatives Governance Committee Meeting

On 1 December 2025, the new Credit Derivatives Governance Committee (GC) resolved to make a number of changes to the structure of the credit derivatives market, including approving the new rules making it easier to select new Standard Reference Obligations (SRO Rules), adding a provision to the DC Charter clarifying that DC members can vote in writing or electronic form, and modifying the Credit Derivatives Determinations Committee (DC) Rules to allow DCs to make minor procedural changes if necessary. Other points were discussed but not yet resolved, such as the new DC Secretary selection process.

The new SRO Rules were approved and published on 12 December 2025 and will affect the next iTraxx index roll in March 2026.

The proposed changes to the GC Charter had a deadline of 6 February 2026 for comments.

These changes should not have a significant effect on structured products as they fit in with the existing Credit Derivatives Definitions, but they may well affect disclosures and risk factors.

ISDA

OTC Compliance Calendar

ISDA has published the latest version of its OTC Derivatives Compliance Calendar which flags the key dates on which new requirements will come into force, and compliance deadlines take effect, across various jurisdictions including the US, EU, UK, Switzerland, Singapore, China, Japan and others, which affect OTC derivatives markets and participants. The updated calendar tracks developments through 2026 and 2027, and includes some dates up until 2029.

While the focus is on derivatives, the changes may well be relevant for structured products in the relevant jurisdictions or involving swap counterparties in the relevant jurisdictions.

ICMA

New UK selling restrictions and legends

On 4 December 2025, ICMA circulated a mark-up of Appendix A13b of the Primary Market Handbook – Selling Restrictions and Legends (UK) to a working group (the ICMA Primary Documentation Group) which show the proposed changes required as a result of the new UK POATRs regime that took effect on 19 January 2019, subject to transitional provisions for FCA approved base prospectuses. ICMA decided to hold off publishing the final version pending further feedback from the market and also the forthcoming new UK CCI regime that replaces UK PRIIPs from 6 April 2026 (incidentally, there is an optional transition period for CCI from 6 April 2026 to 8 June 2027).

The Appendix A13b drafting changes show the amendments made to the MTN and standalone debt prospectus selling restrictions and legends to prohibit sales to retail investors under UK PRIIPS and POATRs. On 9 January 2026, similar changes were made to drafts of Appendix A8 (Final Terms and Pricing Supplement) and Appendix A12b (Products Governance (UK) Language) from 19 January 2026 circulated to the ICMA Primary Documentation Group.

For further information on any of the topics covered in this Bulletin, please contact the authors, or your usual Simmons & Simmons structured products contact.