UKSPA LRAC Bulletin - Second Quarter 2026

Second Quarter 2026

Geopolitical events have continued to dominate the financial news. Oil and commodity prices have remained volatile following the Middle East tensions earlier in the year, and stock markets have continued to see elevated share price volatility. Concerns over a possible AI bubble and stress in parts of the private credit market have both intensified, with several private credit funds limiting redemptions. The SpaceX IPO took place in June 2026, and UK retail investors were able to participate under the new electronic public offers platform (POP) regime that had been established in January 2026.

In the EU, the “One Europe, One Market” roadmap sets out a political and operational push to deepen the EU single market by setting a deadline of the end of 2027 to finalise pending initiatives. The main body of the EU Listing Act changes to the EU Prospectus Regulation (EUPR) took effect on 5 June 2026, affecting prospectuses for structured products sold to EU investors.

In the UK, the new Consumer Composite Investments (CCI) regime replacing PRIIPs and the targeted support regime both commenced on 6 April 2026, the start of the UK financial year, alongside various Consumer Duty changes. On 30 June 2026, the FCA published five landmark policy statements finalising key aspects of the UK's cryptoasset regulatory regime, together with associated guidance, marking the culmination of over three years of consultation. The Bank of England also launched the scenario phase of its private markets system-wide exploratory scenario (SWES) exercise on 19 June 2026.

We are pleased to set out our second quarter of 2026 update covering legal and regulatory developments affecting structured products below.

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EU

Single Market

“One Europe, One Market” roadmap

On 24 April 2026, the European Parliament, the Council of the European Union and the European Commission announced an initiative to create a more integrated EU single market. The announcement states that existing initiatives are to be completed by the end of 2027 and lists five main target areas: (1) simplifying rules; (2) more integration, including by removing the ten most harmful barriers; (3) championing strong trade; (4) reducing energy prices and decarbonising; and (5) driving the digital and AI transformation.

Specific deadlines are listed for specific initiatives, such as the Digital Euro and European Business Wallet initiatives which are to be completed by the end of 2026.

EU Listing Act

EU Prospectus Regulation Changes

As reported in the Q1 2026 bulletin, the delegated acts implementing the detailed changes to the EU Prospectus Regulation (EUPR) being made by the amending Regulation (EU) 2024/2809 are coming into effect in three stages:

• 5 March 2026: Changes to the format, content and sequence of EU Follow-on and EU Growth issuance prospectuses applied from 5 March 2026. Commission Delegated Regulation (CDR) 2026/773 was not passed until 18 June 2026 because of the requirement for a 3-month scrutiny period post-adoption.
• 5 June 2026: The most significant changes, which affect the standardised format, consent and sequence of prospectuses (including debt prospectuses, though these retain some flexibility), took effect on 5 June 2026. The relevant CDR had been adopted but not yet passed at the end of Q2 2026 so ESMA issued a statement saying that market participants should follow the adopted act in the meantime.
• 22 June/10 July 2026: Changes on metadata and list of information that can be incorporated by reference were effected through CDR 2026/395 that mostly came into effect on 22 June 2026, with the exception of those that were specified to apply from 10 July 2026.

These changes are directly relevant for structured products sold to EU investors and affect the drafting of prospectuses. See this Simmons & Simmons briefing about the changes.

EU Member State implementation of Directive 2024/2811

Another part of the EU Listing Act that came into effect in Q2 2026 is Directive 2024/2811, which amends MiFID II by including measures to make EU public capital markets more attractive for companies and facilitate access to capital for small and medium-sized enterprises. In particular, it relaxes rules on investment research.

This Directive had to be transposed into national law by 5 June 2026. However, 18 EU Member States had not done so on time, so the European Commission has opened infringement proceedings against them.

Although not directly relevant to structured products, this may be relevant for disclosures based on investment research prospectuses. See this Simmons & Simmons briefing about the changes.

New market abuse disclosure regime in force

The new MAR disclosure regime introduced by the EU Listing Act entered into application on 5 June 2026, these were also set out in Regulation (EU) 2024/2809 and further details set out in CDR 2026/789. Under this, issuers are no longer required to disclose inside information relating to intermediate steps in a protracted process until the process concludes, and the former "must not mislead the public" condition for delaying disclosure has been replaced with a requirement that delayed information must not contradict the issuer's latest public announcement on the same matter. The ESMA final guidelines on this are expected in Q4 2026.

Issuers should review and update their inside information disclosure and delayed-disclosure procedures, and update their trading policies for persons discharging managerial responsibilities (PDMR) to reflect the extension of closed-period trading exemptions under MAR Article 19(12) to instruments other than shares. They may well affect specific structured products as well.

Inside Information

ECJ Judgments

The Court of Justice of the European Union handed down two significant rulings clarifying what constitutes "precise" inside information and when inside information ceases to be non-public:

• Finansinspektionen v. Carnegie Investment Bank AB (C-363/24) on 19 March 2026. In this case, (a) Carnegie owned Starbreeze shares as collateral for a loan, (b) Starbreeze informed Carnegie that the Starbreeze CEO had been added to an insider list and therefore unable to sell shares, and (c) following a fall in the share price, the loan was undercollateralised and Carnegie sold the shares. It was determined that, among other things, the mere fact that the Starbreeze CEO was on an inside list was not sufficient to constitute inside information, more information would need to be added; and
• Brännelius (C-229/24) on 16 April 2026, which states that information is considered to be public when disclosed in compliance with MAR Article 17 and Commission Implementing Regulation (CIR) 2016/1055 Article 2(1).

The question of what constitutes inside information turns heavily on the facts. These issues may well be relevant for specific structured products, especially those linked to share prices.

EU Retail Investment Strategy

Endorsement by EU Member States

On 5 June 2026, the EU Member States approved the EU retail investment strategy text. The European Parliament is now working on the final versions, and in the meantime has updated its procedure files on (a) the proposed Regulation amending the PRIIPs Regulation (1286/2014) to modernise the key information document (KID) (2023/0166 (COD)) and (b) the proposed Directive on retail investor protection (2023/0167(COD)).

The final versions are expected later in 2026. Issuers of structured products to retail investors will need to be aware of the changes.

Digital Assets

Digital euro

On 23 June 2026, the Economic and Monetary Affairs Committee (ECON) of the European Parliament voted in favour of the digital euro legal framework. This would be a new form of electronic money issued by the European Central Bank (ECB) and work both online and offline. Structured products issuers may be interested in this in due course as it would facilitate tokenisation, as well as smart contracts.

Anti-Money Laundering

AMLA Consultations – new Q2 consultations launched

During Q2 2026, the EU Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) launched further consultations on anti-money laundering under Regulation (EU) 2024/1624 (AMLR), including:

• On 16 April 2026, two public consultations:
  • One on draft guidelines for business-wide risk assessment under AMLR Article 10(4).
  • The other on draft regulatory technical standards on requirements for subsidiaries and branches in third countries under AMLR Articles 16(4) and 17(3).
• On 3 June 2026, AMLA launched a further public consultation on draft Guidelines for the ongoing monitoring of business relationships, including transaction and activity monitoring, under AMLR Article 26(5).

Further consultations are expected throughout the remainder of 2026 and into 2027 as AMLA builds out its Single Rulebook, and the hard deadline for regulatory and operational compliance remains 10 July 2027.

Structured products issuers will need to be aware of the provisions and may need to revise their internal frameworks and models, though the regulatory changes should not otherwise have a significant impact on their business.

Benchmarks Regulation (BMR)

Exemption for certain spot FX benchmarks

On 17 May 2026, Commission Implementing Regulation (EU) 2026/905 came into force exempting a number of listed spot FX benchmarks from BMR: USDINR, USDKRW, USDPHP and USDTWD.

EU Market Integration and Supervision (MISP)

Draft reports on MISP package

On 12 June 2026, the European Parliament’s Economic and Monetary Affairs (ECON) Committee published draft rapporteur reports with draft amendments to the three MISP Regulations/Directives:

• Master Regulation, which will amend 14 existing EU Regulations including the ESMA Regulation, EMIR, MiFIR, CSDR, SFTR, CBDR, MiCA and BMR. Broadly, the changes are aimed at increasing harmonisation, removing barriers and facilitating innovation.
• Master Directive aimed at removing barriers that UCITS, AIFMs and trading venues face.
• Regulation on Settlement Finality to replace the existing Settlement Finality Directive.

These drafts will form the basis for ongoing discussions by the European Parliament. It is too early to say what the final outcome will be, though structured products issuers will need to be aware of the final versions in due course. For more information about the initial proposals, see this Simmons & Simmons briefing.

UK

UK Prospectus Regime

First use of Public Offer Platform

As reported in the Q1 2026 bulletin, the UK public offers regime involving the Public Offers and Admissions to Trading Regulations (POATRs) and supporting FCA PRM Sourcebook came into effect on 19 January 2026. One of the exemptions from the prohibition on offers to the public is POATRs Schedule 1 paragraph 13 for an offer “made by means of a regulated platform”. FCA PS26/10 described the final rules for this and referred to them as public offer platforms (POP) – it was strongly influenced by the Gloster Report findings on the London Capital & Finance failings, which was about the issuance and marketing of high-risk unregulated and illiquid mini-bonds.

The SpaceX IPO took place on 12 June 2026. This was an SEC registered issue in the US, but UK retail investors were able to participate through the POP regime – the FCA authorised POP operator was Marex Financial and the electronic trading platform used was Winterflood Retail Access Platform. In particular, the prospectus filed with the SEC was over 400 pages long, whereas the disclosure statement produced by the POP operator was considerably shorter at 63 pages.

Structured products issuers should consider whether POPs would be useful for their UK retail offers. Although the SpaceX IPO was for shares, they also cover debt issuances, and were initially expected to be used by smaller UK companies rather than big foreign companies.

Retail Investments

CCI regime and targeted support

As previewed in the Q1 2026 bulletin, the new Consumer Composite Investments (CCI) regime, the targeted support regime, and various changes to the Consumer Duty rules all commenced on 6 April 2026. The UK PRIIPs Regulation and associated KID legislation were revoked with effect from that date, but note the transitional period up to 8 June 2027 during which manufacturers can choose between providing the CCI product summary or legacy PRIIPs/UCITS disclosures. Structured products are explicitly within scope of the CCI regime.

This Simmons & Simmons client briefing describes the CCI changes.

Digital Assets

FCA Publishes Final UK Cryptoasset Regulatory Regime

On 30 June 2026, the FCA published five landmark policy statements finalising the UK's cryptoasset regulatory regime. The specific consultations are:

• PS26/9 (Crypto Regime: Admissions & Disclosures and Market Abuse Regime for Cryptoassets).
• PS26/10 (Crypto Regime: Stablecoin issuance).
• PS26/11 (Crypto Regime: Regulated Cryptoasset Activities).
• PS26/12 (Crypto Regime: A Prudential Regime for Cryptoasset Firms).
• PS26/13 (Crypto Regime: Application of FCA Handbook for Regulated Cryptoasset Activities).

The package caps more than three years of consultation following the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, which were made on 4 February 2026. The new regime applies to newly authorised firms from 25 October 2027, with the application gateway for authorisation open between 30 September 2026 and 28 February 2027.

Alongside the policy statements, the FCA published finalised non-Handbook guidance: FG26/5 on the application of the Consumer Duty to cryptoasset firms; FG26/6 on operational resilience; and FG26/7 on the FCA's approach to international cryptoasset firms. The FCA also published two further guidance consultations on prudential risk assessment, both closing on 30 July 2026: GC26/4; and GC26/5. Another consultation on Perimeter Guidance was also launched, closing on 3 June 2026.

Further consultations on decentralised finance (DeFi) guidance and updates to the Financial Crime Guide are expected later in 2026, and the FCA plans to consult in September 2026 on a proposed deferral mechanism for the admissions and disclosures regime for cryptoassets already in circulation when the wider regime takes effect.

Structured products issuers interested in digital assets now have certainty as to the final shape of the UK cryptoasset regime and should begin preparing authorisation applications where relevant, noting that use of the 30 September 2026 to 28 February 2027 application window is needed to benefit from transitional arrangements.

Structured products issuers interested in digital assets will need to be aware of these provisions and take advice where necessary, particularly given the breadth of the finalised conduct, prudential and market abuse rules.

Simmons & Simmons have published a number of client briefings on these changes: here, here, here, here and here.

FCA Quarterly Consultation 52 (CP26/17) – Cryptoasset ETN and Fee Proposals

On 8 June 2026, the FCA published its Quarterly Consultation Paper No. 52 (CP26/17), which included proposals of particular note for structured products and fund issuers:

• A proposed 10% cap on the proportion of an authorised fund's assets that may be allocated to cryptoasset exchange-traded notes (ETNs), with qualified investor schemes excluded from the cap and long-term asset funds and certain alternative investment funds excluded from holding crypto ETNs altogether; funds would still not be permitted to hold cryptoassets directly, only gain exposure via ETNs.
• Proposed reforms to the FCA's regulatory fee mechanism and simplification of financial promotion compliance requirements applicable to authorised firms and cryptoasset-linked structured products.

The consultation window is short, closing on 13 July 2026, after which the FCA will publish final rules following a further transitional period. Structured products issuers offering funds with cryptoasset ETN exposure, or considering doing so, should review the proposed cap and fee changes now.

Basel 3.1

PRA consults on market risk internal model approach (CP9/26)

On 19 June 2026, the PRA published a further consultation paper, CP9/26, proposing targeted adjustments to the internal model approach (IMA) for market risk, having reviewed data from the Basel Committee's Quantitative Impact Study and firms' IMA applications since PS1/26. The PRA confirms the IMA implementation date remains 1 January 2028. This consultation closes on 18 September 2026.

The changes introduce more risk-sensitive standardised approaches for calculating risk weighted assets (RWAs) and introduce minimum floors based on standardised models beyond which internal models cannot reduce further.

These changes are technical and will need to be factored into calculations by some structured products issuers with market risk exposure calculated under the IMA.

Private Credit

Bank of England launches private markets stress test scenario

On 19 June 2026, the Bank of England published the stress scenario for the scenario phase of its second system-wide exploratory scenario (SWES) exercise, focused on private markets, first announced in December 2025. The Bank issued 46 participating firms, including major alternative asset managers, banks and institutional investors, a hypothetical five-year global recession scenario to model their behaviour under severe stress. The July 2026 Financial Stability Report will set out initial insights, with interim findings coming later in 2026 and a final report in 2027.

For structured products issuances, no changes are needed imminently, but issuers with private markets exposure should monitor the Bank of England’s findings as they emerge.

Trade Association Updates

Credit Derivatives Governance Committee

Proposed Developments

On 27 April 2026, the Credit Derivatives Governance Committee (GC) published minutes of its meeting continuing discussions on potential changes to the CDS market. In particular, they discussed: (a) applying Asset Package Delivery to high-yield European corporates (and potentially all European corporates); (b) technical changes to the DC Rules (see next paragraph); and (c) the use of private information when making determinations.

Draft updates to the DC Rules were published on 30 April 2026 making a number of structural reforms proposed by the GC, including adding independent members and increasing transparency, to ensure the DCs continue to function as trusted market infrastructure.

If the Asset Package Delivery provisions are applied more broadly, then they will have a major effect on credit linked notes referencing European and potentially North American Reference Entities. It is not clear whether an ISDA Protocol will be involved yet. Structured products issuers should consider how existing transactions as well as new transactions would be affected.

ISDA

New DC Secretary

On 4 June 2026, it was announced that S&P Global Market Intelligence would be the new DC Secretary following the tender process, taking over from DC Administration Services, Inc. This may be relevant for the descriptions in credit linked notes issuance documents.

ICMA

New ICMA Bond Data Taxonomy Appendix

On 19 May 2026, ICMA published amendments to its Primary Market Handbook adding a new Appendix C1 Bond Data Taxonomy, providing an introductory guide for issuers, agents, service providers and investors seeking to integrate the ICMA Bond Data Taxonomy (BDT) into their offering processes, with the aim of supporting collaboration and data harmonisation across the bond issuance process. As reported in the Q1 2026 bulletin, the revised UK selling restrictions (Appendix A13b) and UK final terms provisions reflecting the POATRs/PRM regime and the CCI regime remained on ICMA's pending amendments page and had not been formally published as at the end of Q2 2026.

Structured products issuers involved in bond issuance should consider adopting the new Bond Data Taxonomy where relevant, and should continue to monitor for formal publication of the pending UK selling restrictions and final terms amendments, ensuring appropriate wording is included in offer documents in the meantime.

EU T+1 Industry Committee

T+1 Securities Settlement Handbook

On 17 June 2026, the EU T+1 Industry Committee published a second version of the EU T+1 Securities Settlement Handbook. This complements the EU’s High-Level Roadmap to T+1 and provides additional guidance and clarification in relation to some of the key recommendations in the Roadmap. Changes to the first version published in February 2026 are clearly shown, and include a new section on derivatives.

Structured products issuers will need to be aware of the changes and ensure compliance with relevant provisions before the 11 October 2027 deadline.

ICMA

New UK selling restrictions and legends

On 13 March 2026, ICMA circulated a revised draft of the UK selling restrictions to the working group (Appendix A13b to the ICMA Handbook), which makes some adjustments to the POATRs/PRM wording issued previously in conjunction with amendments to reflect the new POATRs and adds in Consumer Composite Investments (CCI) provisions. Those revised UK selling restrictions are available along with the draft changes to the UK final terms (Parts I, VIII, IX and X of Appendix A8 to the ICMA Handbook) are shown on the password protected ICMA website. ICMA still shows these amendments as pending on its pending amendments page.

The changes for POATRs/PRM were described in the last bulletin for Q4 2025, but note there is a slight change to amend the definition of “retail investor” to remove the “neither/nor” language and replace it with simpler language defining a retail investor as “either one (or both) of the following: not a professional client… and not a qualified investor…” to reflect the remote possibility that a person could fall under both limbs.

The UK CCI changes are broad enough to be included in offer documents even if the issuer chooses to stick with UK PRIIPs key information documents rather than switch to UK CCI product supplements during the optional period that runs up to 8 June 2027.

The ICMA Handbook will be officially updated in due course. Structured products issuers should ensure that the appropriate wording is included before then.

AFME

DLT-Based Capital Market Report 2025

On 24 February 2026, AFME published its DLT-Based Capital Market Report for FY 2025. This report provides a comprehensive overview of the evolving DLT landscape in terms of the size and growth of the global DLT wholesale market in specific areas. Providing detailed statistics and comprehensive market data, the information and analysis covers the primary DLT-based fixed income market, the growth of stablecoins, DLT-based repo transactions, and the use of tokenisation in capital markets activities during 2025 to provide a comprehensive picture of activity across the world.

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