The 2026 Regulatory Landscape: 5 Things to Watch

After a volatile 2025, investors are keen to understand the key drivers of the investment landscape today. In order to provide value to these clients, financial professionals need to anticipate the investment regulatory changes in store for the UK and EMEA this year. 

Our recent webinar with chief policy officer Andy Pettit, head of international government affairs Branimira Radoslavova, and senior policy research analyst Lia Mitchell, sought to shed light on these developments. 

By understanding regulatory trends, you can anticipate challenges, seize opportunities, and be better positioned to deliver value in a rapidly evolving market. Here are five key insights they shared. 

Pettit: I think one of the biggest drivers or themes is stemming from the desire of many governments to drive more growth, and I see two major strands to that.

First is this desire to stimulate more retail investment through a mix of education, incentives, and removing barriers. And the other is eliminating frictions for product providers: making it easier for them to bring things to market, simplifying and streamlining the rules that they have to follow.

So in the UK, the theme was largely set for the year with the FCA's big December package of rules, consultations and discussion papers. And similarly in Europe, the pre-Christmas agreement on the retail investment strategy will trigger a degree of parallel developments on many of the same issues such as value for money, inducements, suitability tests, and the PRIIP KID disclosure documents.

I'd also mention continuing developments in the pensions arena and of course sustainable finance.

Pettit: There's the revamping of product disclosure rules in the UK through the introduction of the consumer composite investment rules (CCIs), and there’s the imminent introduction of targeted support.

The CCIs have landed in a pretty good place. I think that's partially due to a lot of the proactive engagement that the FCA undertook with the industry covering asset managers, platforms, and advisors. And although a product summary is still required in the form of a formal document, I think the rules lay a concrete foundation to start transitioning the emphasis of disclosures from fixed format documents to more flexible and interactive online information. In doing so, firms will have a lot more flexibility in how they present product information both in the document itself and with supplementary online tools.

A few standout points for us:  

• The FCA wrote back on the original idea of distributors being able to produce their own versions of product summaries, so there'll just be one version across the market.

• Second, they've landed on centering cost disclosure on the well-known ongoing charges figure, rather than trying to introduce another all-in fund cost indicator.

• Third, I think one that everybody's relieved about is ending the requirement to report implicit transaction costs. These were complex to calculate and confusing for investors to understand.

The one negative I'd share is that we would have liked to see continued disclosure of performance fees, rather than just getting an explanation of them. Because typically they're complex both in how they're structured and obviously very variable from year to year.

Mitchell: In the UK, the pension schemes bill was introduced in parliament last summer, and it’s expected to be passed into law this year. And it includes several policies that deal with both defined-benefit and defined-contribution pensions.

One is a requirement for multi-employer schemes in the auto-enrollment market to have at least 25 million GBP assets across pension products by 2030, which is often referred to as the mega funds portion of the pension scheme bill. So trying to achieve greater scales, particularly in the default pension options. And getting more people in more assets in the system and looking to grow that to be a more useful size to really drive change.

There are also guidelines around value for money for trust-based schemes. The FCA is currently working on this for the contract-based schemes, but this would expand the framework across both sides of the pension landscape.

And I'll touch on the decumulation side, where the bill lays the framework for the guided retirement duty, which is aimed at implementing default solutions in the decumulation stage.

So since we've had auto-enrollment, there's obviously been development on the accumulation side in terms of understanding what those defaults look like when people are auto-enrolled into the plan. And there's now recognition that maybe something similar is needed on the decumulation side as people are approaching retirement.

The last thing I'll mention on the UK is the pensions dashboard, which went live last year. There's a deadline for providers to connect by October of this year. And there's been ongoing testing of the dashboard with users, which has yielded some interesting findings on how this tool can help ensure that investors are really understanding what’s in their pension system and what their options are.

And in the EU, there's definitely interest in growing the pension space. There's an acknowledgement that pensions are often where the journey of getting invested potentially starts for folks. But it can be harder in the EU, just from an implementation perspective.

Ultimately, much of pension's policy is intertwined with tax policy. That's something that EU member states have full control over, so there can be stark differences between different countries and how their tax policies are set up. Things such as your contribution limits can be different in different countries. Whether taxes are applicable on contribution or on withdrawal—all of those can change across borders.

So there's some recognition of the challenges around pensions in Europe, particularly for personal pension products, where it's aimed at serving people who potentially move across borders throughout their career and want to be able to continue investing in the same vehicle rather than having to open new pensions every time they move.

Radoslavova: The Omnibus I was the EU's first big push last year to simplify sustainability reporting burdens under two directives—CSID and the corporate due diligence directive—and it was finally agreed in December after some contentious negotiations.

There are three key changes here. First, reporting thresholds significantly increased on the CSID to reach now over a thousand employees, as well as 450 million in net turnover for EU companies, which of course means that it will dramatically reduce the number of companies required to report going forward. Second, the implementation timeline was shifted by two years. So, companies that would have started reporting this year will now begin in 2028.

And third, and perhaps most controversially, the obligation for companies to adopt and implement a climate transition plan under the corporate due diligence directive was entirely deleted. This was one of the most significant changes because, in effect, it eliminates what would have been a behavioral requirement for large corporations to reduce their climate impact. And this is now simply a disclosure requirement under CSID.

So, it's all about disclosing whether a transition plan exists rather than mandating adoption and implementation. Those changes were overall driven by a political focus on simplification as a way to stimulate growth and competitiveness.

In the UK, we're expecting the government to issue the final standards in the coming weeks following last year's quite extensive consultation.

In the meantime, the FCA launched a consultation on how this new framework will apply to UK-listed companies, and they're now consulting based on the draft standards to ensure that they give firms sufficient implementation time. And they may tweak those once the government issues the final standards.

So the FCA proposed a phased approach. First, mandatory reporting for climate disclosures and that builds on the strong TCFD foundation that companies in the UK already have. Second, they propose to keep Scope 3 emissions on a comply or explain basis only. And third, the sustainability reporting, which includes potentially nature, social factors etc. Those would also apply on a comply or explain basis as well and that is because the regulator recognises that this will be new territory for many listed companies.

Overall, what we are seeing both in the UK and the EU on sustainable finance is this further push toward simplification, flexibility and a lot more voluntary approaches.

Pettit: I do. There's no denying there's a huge amount of work coming down the track. But I think you've got to view that against the positives.

We've spoken about improved disclosures, more of an emphasis on value rather than cost in isolation, getting broader access to products and professional support for investors. So many of these things are contributing to that. But there's no denying that a lot of work comes with it.