Global Trustee and Fiduciary Services Bite-Sized Issue 5 2025

17 QUICK LINKS AIFMD (UK) CRYPTOASSETS DATA EMIR FINTECH FSB IOSCO MARKET ABUSE REGULATION MICA MIFID II/MIFIR SUSTAINABLE FINANCE/ ESG ASIA PACIFIC AUSTRALIA EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM Global Trustee and Fiduciary Services Bite-Sized | Issue 5 | 2025 UNITED KINGDOM FCA: 70%Cut in Capital Rules Red Tape On 24 April 2025, the Financial Conduct Authority (FCA) announced that it is proposing streamlining the rules on the types of funds investment firms must hold to absorb losses and maintain financial resilience during periods of stress. The FCA says that the proposals do not change the rules about howmuch capital firmsmust hold but focus on simplifying and consolidating the existing rules about what qualifies as regulatory capital. The FCA explains that the current regulatory capital rules were designed for banks, making them complex and not tailored to investment firms’ business models. Therefore, the FCA proposes removing large sections which are not relevant to the vast majority of firms and making others simpler. These changes would reduce the volume of legal text by 70%. The FCA says that this is part of its work to make sure its rulebook works better for the UK market and to remove unnecessary burdens on firms, bolstering growth and investment. It is part of the actions the FCA set out to support growth in its letter to the Prime Minister. The proposals contained in CP 25/10: ‘Definition of capital for FCA investment firms’ are part of the FCA’s wider strategy to help support growth and underpin the continued competitiveness of the UK’s world-leading financial services. The measures do not propose a change to the level of capital firms are required to hold, and the FCA says it does not expect firms to change their capital arrangements as a result. The FCA are asking for comments on CP25/10 by 12 June 2025. Link to CP25/10 here FCA Simplifies Supervisory Letters On 24 April 2025, the FCA announced that it was making it easier for firms to find up-to-date supervisory communications on its website. From 30 April 2025, the FCA state that it will stop issuing and publishing portfolio letters. Instead, the FCA will publish a small number of market reports. The market reports will include communications relevant to different types of firms and insights from its supervisory work. The FCA says it will also make it easier for firms to find up-to-date supervisory communications on its website by retiring historical portfolio letters and Dear CEO letters. These will clearly be marked as ‘historical’ and no longer current, with a few exceptions. Until market reports are published later this year, the FCA says that firms should continue to refer to relevant portfolio letters and Dear CEO letters for guidance, and the FCA will continue to review its approach to other historical communications and consider how it can routinely review outdated material. Finally, the FCA says that Dear CEO Letters will still be used to address senior people management about significant issues that require action. Link to FCA Announcement here