EU & UK Reg Round-Up: 26/06/2025
European Banking Authority
The EBA reviews standardised terminology in relation to payment accounts and concludes it remains fit-for-purpose
The EBA reviewed standardised terms for payment account services under the Payment Accounts Directive, finding them fit-for-purpose. The 2018 terms aid consumer comparison of fees/offers. Despite the potential inclusion of instant credit transfers, costs outweigh benefits, so no changes are proposed. A reassessment is planned in four years or upon major market/legislative shifts.
The EBA publishes key regulatory products on operational risk capital requirements and related supervisory reporting
The EBA issued three final draft technical standards to support the EU Banking Package, enhancing supervision of operational risk capital requirements. These include: RTS refining Business Indicator (BI) calculations with updated standards and merger/disposal adjustments; ITS mapping BI to FINREP for consistency; and amended ITS enhancing operational risk reporting with detailed BI data.
Link: Final Report on draft TS on Business Indicator mandates for operational riskLink: Final report on draft ITS Supervisory reporting for operational risk (CRR3 - phase 1)
EBA publishes onboarding plan to implement the Pillar 3 data hub
EBA published an onboarding plan for the Pillar 3 Data Hub (P3DH), a centralized platform for public disclosures under the Capital Requirements Regulation (CRR3). The plan outlines steps for large and other institutions to access and submit data via the EUCLID Regulatory Reporting Platform, with a phased-in approach allowing compliance with existing Pillar 3 obligations in 2025. The P3DH, effective from December 2025, enhances transparency and comparability of prudential data, fostering market discipline. FAQs support implementation, and transitional provisions give banks time to align processes. This aligns with the CRR3/CRD6 Banking Package and Basel III reforms.
The EBA releases final technical package for its 4.1 reporting framework to support compliance assessment of issuers and the Pillar 3 data hub
The European Banking Authority (EBA) issued a revised list of validation rules in its Implementing Technical Standards (ITS) on supervisory reporting, highlighting those which have been deactivated either for incorrectness or for triggering IT problems. Competent Authorities throughout the EU are informed that data submitted in accordance with these ITS should not be formally validated against the set of deactivated rules. The EBA also released a small validation package including a micro taxonomy package and DPM VR deactivation updates scripts, which are needed from release 4.0, for each deactivation exercises, to deactivate rules in taxonomy and in DPM in a consistent manner.
Link: EBA Validation Rules release 4.0 2025-06-12 (new format)
European Securities and Markets Authority
ESMA publishes the final report on the active account requirement under EMIR 3
ESMA’s final report on the Active Account Requirement (AAR) under EMIR 3 outlines Regulatory Technical Standards mandating EU market participants to hold active accounts with EU CCPs for certain derivatives, reducing reliance on third-country (Tier 2) CCPs. Simplified operational conditions, stress-testing, and reporting requirements were introduced based on stakeholder feedback.
ESMA’s activities in 2024 focused on strengthening the EU capital markets and putting citizens and businesses at the heart of it
ESMA’s 2024 Annual Report outlines efforts to strengthen EU capital markets, focusing on stability, supervision, investor protection, sustainable finance, and innovation. Key actions include issuing 20 recommendations for market effectiveness, finalizing T+1 settlement and crypto-asset rules, progressing ESAP, enhancing CCP oversight, issuing ESG guidelines, and upgrading data/AI tools. ESMA also prepared for new supervisory roles over green bond verifiers and ESG rating providers.
Link: 2024 Annual Report
ESMA publishes Principles for third-party risk supervision
The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, has today published newly developed Principles on third-party risks supervision. These principles aim at supporting a common and effective EU-wide supervisory culture.
The 14 principles on third-party risks were developed to address the growing risks observed over recent years in the use of outsourcing, delegation or other types of third-party services by supervised firms.The principles provide a common supervisory basis to National Competent Authorities (NCAs) and ESMA, enhancing the robustness of supervisory frameworks and help supervised entities understand and manage third-party risks.
ESMA provides advice and recommendations to streamline prospectuses
ESMA’s final reports recommend streamlining prospectuses under the Prospectus Regulation by updating content, format, and ESG disclosure annexes, and aligning data reporting with the Listing Act and ESAP. On civil prospectus liability, ESMA’s Call for Evidence found the current regime balanced, with no immediate reform needed. Reports were submitted to the EC, with decisions on data reporting RTS due within 3–4 months and a liability report by December 31, 2025.
Bank of England
Bank Rate maintained at 4.25% - June 2025
At its June 18, 2025 meeting, the Bank of England’s Monetary Policy Committee (MPC) voted 6–3 to maintain Bank Rate at 4.25%, with three members favoring a 0.25% cut to 4%. The MPC aims to meet the 2% inflation target while supporting growth and employment. Key Points:
- Inflation: CPI inflation rose to 3.4% in May from 2.6% in March, driven by regulated and energy prices, expected to hover near 3.5% in 2025 before falling toward 2% in 2026.
- Economy: UK GDP growth remains weak, with Q1 2025 at 0.7% but Q2 projected at ~0.25%. The labor market is loosening, with pay growth moderating to ~5.1%.
- Global Risks: Elevated uncertainty persists due to trade policies and Middle East conflict-driven energy price rises (Brent oil up 27% to $59/barrel).
- Policy Stance: Monetary policy remains restrictive to curb persistent inflation, with a gradual approach to easing restraint. Risks are two-sided, requiring vigilant monitoring of inflation and supply-demand balance.
Agents' summary of business conditions - 2025 Q2
The Bank of England’s Agents’ intelligence, gathered in the six weeks to mid-May 2025 and considered by the Monetary Policy Committee (MPC) in June, reflects weakening economic sentiment, with demand recovery expected in 2026. The summary covers consumer spending, investment, trade, business services, manufacturing, construction, credit, employment, costs, prices, and property. Key Points:
- Demand and Investment: Sentiment is waning across retail, manufacturing, construction, and business services, with subdued investment due to uncertainty from tariffs, weak demand, and cost pressures (e.g., National Insurance Contributions, Extended Producer Responsibility). Some investment persists in AI, cybersecurity, and renewable energy.
- Trade: Export sales weakened due to tariffs and global uncertainty, with firms increasing U.S. inventories or diversifying markets. Goods exports to non-U.S. markets show slight improvement but face Chinese competition.
- Employment and Pay: Employment intentions are mildly negative, with recruitment easing and pay settlements stable at 3.5%–4%. Rising labor costs (NICs, National Living Wage) prompt headcount reductions, lower pay awards, or price increases.
- Costs and Prices: Cost pressures from April 2025 (NICs, NLW, EPR) drive modest price increases, more advanced in goods (e.g., food at 4% peak expected) than services. Consumer services inflation is rising, but weak demand limits pass-through in some sectors.
- Consumer Spending: Weak consumer confidence persists, with flat retail volumes, subdued eating out, and stable car sales. Premium supermarket lines grow, but discretionary spending (e.g., furniture, fashion) declines.
- Property: Housing demand is firming with mid-single-digit price growth, except in London/South. Rental inflation moderates but remains elevated. Commercial real estate sees demand for prime spaces, with cautious optimism for improved investor conditions.
Amendments to the UK EMIR Trade Repository reporting requirements – June 2025
The Bank of England and the Financial Conduct Authority (FCA) issued a joint consultation paper proposing minor amendments to the UK EMIR reporting regime following the UK EMIR Refit implementation in March 2025. The changes aim to enhance clarity and streamline derivatives reporting for central counterparties (CCPs), other counterparties, trade repositories (TRs), and third-party reporting service providers.Key Proposals:Proposal 1: Add an optional “Execution agent” field (Field 30) to Table 3 of the Annexes in the Technical Standards to align with existing trade reporting fields, addressing an oversight identified during industry testing. This simplifies reporting for firms using execution agents (e.g., investment managers delegating via brokers).Proposal 2: Correct a cross-referencing error in Article 8(5) of Annex B (Unique Transaction Identifier) in the Technical Standards on reporting standards, formats, and frequency.Implementation: Proposed effective date is December 1, 2025, aligning with other transparency updates (PS24/14). Feedback is due by June 30, 2025, with final standards to be published August 1, 2025, pending HM Treasury approval.