UK & Ireland Focus | Monthly Compliance Update
February 2026 was not a quiet month. Across the UK and Ireland, a series of regulatory developments confirmed what many compliance teams have been bracing for: the shift from policy design into active implementation is well underway.
Here is what moved, what it means, and where firms should focus their attention.
The headline: BNPL regulation is now confirmed
The biggest development of the month came from the FCA's publication of PS26/1, which finalised the regulatory framework for Buy Now Pay Later products, formally described as Deferred Payment Credit.
From 15 July 2026, any lender offering a deferred payment agreement to finance a purchase will come under full FCA regulation. That means creditworthiness assessments are mandatory. Pre-contract information requirements apply. Financial promotions must comply.
For firms still treating BNPL compliance as a future planning exercise, that window has closed. The rules are set. July is confirmed. The first half of 2026 is the readiness phase, not the preparation phase.
UK crypto regulation: the legal architecture is in place
The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 were made on 4 February. The legislation defines regulated cryptoasset categories and brings activities including staking and custody within the FCA's regulatory remit.
The regime is expected to come into force on 25 October 2027, but firms cannot afford to wait. The FCA's authorisation gateway opens on 30 September 2026. That means gap analysis needs to happen now, not when the gateway opens.
The FCA's three core consultation papers – CP25/40, CP25/41, and CP25/42 – covering conduct, market abuse, and prudential rules – also closed for responses in February. These will form the backbone of the final rulebook. Firms that engaged will have a head start; those that did not need to get up to speed quickly.
Consumer Duty: from implementation to active supervision
The FCA launched a centralised Consumer Duty hub on 24 February, consolidating its cross-cutting rules and outcomes in one place. The same day, it published updated guidance on annual board reports, with additional insight specifically aimed at smaller firms.
The signal here is clear. The FCA is no longer asking firms to confirm they have implemented the Duty. It is asking for evidence that the Duty is working. Boards are expected to demonstrate outcomes, not intentions. Firms relying on tick-box annual reports are likely to fall short of what the FCA now expects.---## The
Payments Forward Plan: a three-year roadmapHM Treasury and the Payment and Value Data Corporation published a comprehensive three-year roadmap for the payments sector on 26 February. The plan covers the consolidation of the PSR into the FCA, the evolution of Open Banking rules, and infrastructure design.For payments firms, this is now the definitive planning document. PSR functions are scheduled to begin transferring to the FCA in late 2026. The first live payments under the UKPI Variable Recurring Payments scheme are expected by the end of Q1 2026.
ESG reporting: final standards published
The UK Sustainability Reporting Standards were finalised on 25 February by the Department for Business and Trade. These standards will underpin mandatory disclosures for listed firms going forward.
Listed companies should review the final standards alongside the FCA's CP26/5 consultation on aligning sustainability disclosures with international standards, and begin mapping their reporting obligations now.
AI and financial crime: two areas of sustained focus
Two data points from February reinforce what regulators are watching most closely.
First, the FCA's Q3 2025/26 Skilled Person data showed that financial crime continues to account for approximately 40% of all skilled person reviews. AML and CTF controls remain a high enforcement priority across the sector.
Second, the FCA announced a formal review into how insurers use AI in underwriting and claims, with a specific focus on whether algorithms are producing fair outcomes for consumers. Alongside the Mills Review – which examined how generative and agentic AI will reshape retail financial markets – this signals that AI governance is moving from a general supervisory interest into active scrutiny.
Ireland: operational resilience and customer outcomes
In Ireland, the Central Bank published its third annual Regulatory and Supervisory Outlook, identifying operational and cyber risks as very high priorities. Boards are expected to integrate these findings into risk management and stress-testing processes for 2026.
On the consumer side, the CBI identified the absence of a customer-centric culture as a persistent risk and announced cross-sectoral thematic reviews into the treatment of vulnerable customers. With the revised Consumer Protection Code effective from March 2026, firms should be preparing to demonstrate genuine compliance with Standards for Business, not just formal acknowledgement of them.
The pattern across all of this
The common thread running through February's developments is the same one that has been building since late 2024: the regulatory environment has shifted from consultation and policy design to implementation and supervision.
BNPL rules are finalised. The crypto legal framework is made. Consumer Duty has moved into active oversight. ESG reporting standards are set.
For firms that have been waiting for regulatory certainty before building out their compliance frameworks, that certainty has now arrived. The question is no longer what the rules will be. It is whether firms have the processes, audit trails, and oversight structures to demonstrate they are following them.
This update covers selected regulatory developments from February 2026 relevant to UK and Ireland-based financial services firms. It is intended as a summary overview and does not constitute legal or regulatory advice. For the full detail on any item, we recommend consulting the primary sources linked in our full Horizon Scanning document.
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