Europe and the UK
EBA consultation on third party risk for non ICT services
On 8 July 2025, the EBA opened a consultation on draft Guidelines for managing third-party risk related to non-ICT services - an area often less scrutinized but still critical. These Guidelines update the 2019 outsourcing rules to align with the Digital Operational Resilience Act (DORA). Stakeholders can comment until 8 October 2025, with a virtual hearing scheduled for 5 September.
Bulgaria to adopt the euro on 1 January 2026
On 8 July 2025, the Council of the EU approved Bulgaria’s accession to the eurozone, setting the conversion rate at 1.95583 BGN per euro. Bulgaria entered the Exchange Rate Mechanism (ERM II) in July 2020, and since October 2020, the ECB has supervised Bulgarian banks under the close cooperation framework. Bulgaria will officially adopt the euro on 1 January 2026.
FCA guidance on PEP treatment
On 7 July 2025, the UK FCA published FG25/3, its finalized guidance on how firms should apply a risk-based approach to politically exposed persons (PEPs) under UK anti-money laundering law. The document clarifies expectations for proportionality and due diligence.
EBA consultation on Ancillary Services Undertakings (ASUs)
On 7 July 2025, the EBA launched a consultation on draft Guidelines to define what qualifies as an Ancillary Services Undertaking (ASU) under Article 4(1)(18) of the Capital Requirements Regulation (CRR). The deadline for feedback is 7 October 2025.
EBA hotfix for Reporting Framework 4.1
On 4 July 2025, the EBA published a hotfix to its Reporting Framework 4.1, correcting various technical issues to improve data consistency and reduce error rates.
FCA proposal on major changes to the SI regime for bonds and derivatives
On 4 July 2025, the UK Financial Conduct Authority (FCA) published CP25/20, consulting on significant reforms to the Systematic Internaliser (SI) regime for bonds, derivatives, structured finance products, and emission allowances. These changes follow the FCA’s previous transparency reforms under PS24/14, which eliminated SI pre-trade transparency obligations for non-equity markets from December 2025.
ESAs and AMLA sign MoU on cooperation and information sharing
On 3 July 2025, the EBA, EIOPA, ESMA, and the new Anti–Money Laundering Authority (AMLA) signed a multilateral Memorandum of Understanding (MoU) to establish structured cooperation and information exchange mechanisms across financial supervision and AML/CFT.
EBA consultation on credit conversion factors methodology
On 2 July 2025, the EBA opened a consultation on how banks should estimate and apply Credit Conversion Factors (CCFs) under the CRR. The aim is to harmonize internal approaches. Consultation ends on 15 October 2025.
EBA consultation on revised definition of default
Also on 2 July 2025, the EBA published draft amended Guidelines on the definition of default. It proposes retaining the 1% threshold for net present value loss in debt restructuring, balancing flexibility with strong risk management. Comments are due by 15 October 2025.
EBA Guidelines on ADC exposures to residential property
On 1 July 2025, the EBA issued final Guidelines under the CRR for treating Acquisition, Development, and Construction (ADC) exposures. Qualifying loans may receive a 100% risk weight (instead of 150%) if they meet strict criteria on cash reserves, equity contributions, and presale thresholds. These guidelines followed a public consultation launched in May 2024 and were informed by the 2024 Quantitative Impact Study (QIS).
ECB approves two-track DLT settlement strategy
On 1 July 2025, the ECB announced a dual-track strategy for settling transactions via Distributed Ledger Technology (DLT). The short-term track, Pontes, will pilot DLT-to-TARGET platform connectivity by late 2026. The long-term track, Appia, will explore a fully integrated solution. The ECB aims to preserve safety while embracing financial innovation.
EBA technical advice on EMIR model validation fees
On 30 June 2025, the EBA issued its technical advice to the European Commission on fee structures for validating pro forma models under the European Market Infrastructure Regulation (EMIR).
EBA and ECB push for harmonized NACE classification
Also on 30 June 2025, the EBA and ECB endorsed recommendations to apply the updated NACE Rev. 2.1 classification consistently across EU reporting frameworks, aiming to cut compliance costs and improve statistical coherence.
ESAs consultation on ESG stress testing
On 27 June 2025, the ESAs (EBA, EIOPA, ESMA) opened a consultation on how supervisors should incorporate ESG risks into stress testing frameworks. The draft Joint Guidelines apply to the banking and insurance sectors. The consultation ends on 19 September 2025.
EBA Risk Assessment Report: Spring 2025
Also on 27 June 2025, the EBA released its Spring 2025 Risk Assessment Report, highlighting continued resilience in capital and liquidity levels across the EU banking sector. However, it warned that geopolitical tensions may challenge long-term profitability.
UK FCA removes legacy reporting rules
Effective 27 June 2025, the UK FCA abolished three reporting forms: FSA039, RMA F, and Form G. This removed a compliance burden for over 16,000 firms, and the regulator estimates annual savings of £1.3 million.
FCA opens discussion on digital reporting – DP25/2
On 27 June 2025, the FCA released DP25/2, seeking industry input on expanding Digital Regulatory Reporting (DRR) via APIs, modular architecture, and common taxonomies. Feedback is requested by 16 September 2025.
ISSB publishes proposed climate transition plan guidance
On 23 June 2025, the ISSB issued draft guidance to help companies disclose their climate transition plans under IFRS S2. The proposal focuses on governance, ambition, and execution. Comments are open until August 2025, with a focus on aligning plans to national and international net-zero targets.
Asia-Pacific
Treatment of Deposits under Money Safe
On 26 June 2025, the Hong Kong Monetary Authority (HKMA) published a letter about the treatment of deposits from customers using Money Safe (MS) for the purposes of the Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR). As an anti-fraud and anti-scam measure, MS enables customers to arrange additional protection for their bank deposits. Given the nature of MS, the HKMA considers it appropriate for category 1 institutions to recognise MS as an “other established relationship” (as defined under rule 39 of the Banking (Liquidity) Rules (BLR)) for the purpose of identifying “stable retail deposits” for LCR and NSFR calculations.
Update from People's Bank of China (PBOC)
On 25 June 2025, People's Bank of China (PBOC) issued the "Notice on Issuing the Local Validation Results Collection Standards and Data Resubmission Standards for the Data Quality Management Plan Supporting the Financial Sector's 'Five Major Areas of Finance'". This notice, building upon the "Data Quality Management Plan for Financial Base Data Supporting the 'Five Major Areas of Finance' (Trial)" released in March 2025, specifies the collection standards for local validation results of financial base data. For data that fails either Category I or Category II validation, financial institutions are required to submit the number of non-compliant records and an explanation of the reasons. Furthermore, the notice explicitly defines the resubmission application process and promulgates the data collection standards applicable to resubmitted data. The implementation date of this notice remains to be specified and will be notified by PBOC.
RBI eases KYC update for Inoperative Accounts via V-CIP & Business Correspondents RBI has amended its inoperative account rules to make KYC updation easier and more accessible. Banks must now offer KYC update services at all branches (including non-home branches). Banks are also encouraged to enable Video Customer Identification Process (V-CIP) and leverage Business Correspondents (BCs) to assist customers in reactivating dormant accounts. This move supports broader financial inclusion and customer convenience, especially in rural and underserved areas. Read the official amendment – Notification Id 12864.
Americas
OSFI gives progress update on the Data Collection Modernization Initiative
OSFI is leading the Data Collection Modernization (DCM) project in partnership with the Bank of Canada and the Canada Deposit Insurance Corporation. The DCM project is a multi-year initiative running from May 2023 to April 2028 with two key objectives:
- Modernize the regulatory data collection technology platform
- Advance prioritized data initiatives and enhance data quality
Over time, both the technology and data initiatives aim to better manage the regulatory reporting burden. During the planning phase, which lasted from May 2023 to April 2025, the three agencies created a foundation for implementing the technology and data initiatives through active industry engagements. The DCM implementation phase began in May 2025. During this phase, the agencies will establish a Technology Forum to roll out the new data collection platform by industry segment. In parallel, the agencies will establish a new Data Forum and working groups to initiate work on prioritized data initiatives. Detailed implementation plans will be shared first through the forums and then broadly with all industry stakeholders via webinars.
FRB – Board publishes agenda for its conference on Large Bank Capital Requirements
On July 22, the FRB will host a conference to provide expert perspectives on the key pillars of the regulatory capital framework, including Basel III Endgame, stress testing, the capital surcharge for the largest banks, and leverage requirements. The conference will explore those interactions, consider approaches for implementation, and the implications they may have for the efficiency and overall functioning of the financial system. The Federal Reserve welcomes the opportunity to consider a broader range of perspectives when considering the future of capital framework reforms. The conference will be broadcast live at federalreserve.gov and YouTube. This event has a limited seating capacity for in-person attendance. Media who wish to register in person should contact Public Affairs at [email protected]. Non-media who wish to register for in-person attendance should contact [email protected].
Agencies request comment on proposal to modify certain Regulatory Capital Standards
The OCC, FRB, and FDIC are inviting public comment on a notice of proposed rulemaking (proposal) to modify the enhanced supplementary leverage ratio standards applicable to U.S. bank holding companies identified as global systemically important bank holding companies (GSIBs) and their depository institution subsidiaries. Specifically, the proposal would modify the enhanced supplementary leverage ratio buffer standard applicable to GSIBs to equal 50 percent of the bank holding company’s method 1 surcharge as determined by the Board’s GSIB risk-based capital surcharge framework.
The proposal would also modify the enhanced supplementary leverage ratio standard for depository institution subsidiaries of GSIBs to have the same form and calibration as the GSIB parent level standard. The proposed modifications would help ensure that the enhanced supplementary leverage ratio standards serve as a backstop to risk-based capital requirements rather than as a constraint that is frequently binding over time and through most points in the economic and credit cycle, thus reducing potential disincentives for GSIBs and their depository institution subsidiaries to participate in low-risk, low-return businesses. The Board is also proposing to amend its total loss-absorbing capacity and long-term debt requirements to maintain alignment between these requirements and the enhanced supplementary leverage ratio standards.
The OCC is proposing to revise the methodology it uses to identify which national banks and Federal savings associations are subject to the enhanced supplementary leverage ratio standards to better align with the agencies’ regulatory tailoring framework for large banking organizations and ensure that the standards apply only to those national banks and Federal savings associations that are subsidiaries of a GSIB. The FRB is also proposing to make conforming amendments to relevant regulatory reporting forms. The FRB and FDIC are also proposing to make certain technical corrections to the capital rule.
