Regulatory Updates Newsletter: July 2026
- Staff Correspondent
- Aug 2
- 7 min read
Welcome to the July 2026 Ed. of our Regulatory Newsletter.
As July came to a close, regulators around the world continued rolling out new measures to strengthen financial resilience while responding to changing technologies and market dynamics. Key developments include the Bank of England's latest Financial Stability Report, the Federal Reserve's proposed overhaul of AML program requirements, new cross-border bond market measures from the HKMA and PBoC, and the EBA's updated ICT security guidelines. Regulators also introduced reforms covering uncleared swaps, regulatory reporting, and payment systems, underscoring the growing focus on financial stability, operational resilience, and responsible innovation.
Let's dive in.
BoE’s Financial St2ability Report
The BoE’s Financial Policy Committee released its latest Financial Stability Report.
It noted that UK financial institutions remain resilient but flagged “vulnerabilities in risky asset valuations, sovereign debt and credit markets” that have generally intensified since December 2025. In particular, equity valuations (notably for AI-related companies) are “more stretched” and leverage in hedge funds and credit markets has risen.
The report also stressed that recent advances in frontier AI amplify cyber and operational risks: AI-driven automation can both strengthen defences and increase firms’ exposure to sophisticated cyber-attacks.
On the other hand, UK households and banks entered this period with relatively strong balance sheets - low debt-to-income ratios and robust capital buffers - which the FPC expects to sustain lending even if stress events occur.
The FPC did not propose immediate rule changes, instead reinforcing existing macroprudential tools (e.g. holding the UK countercyclical capital buffer at 2%) to preserve resilience.
Implications
Signals an unchanged tough stance on asset-price bubbles (especially tech/AI sectors) and on maintaining bank capital buffers.
Banks should monitor AI-related risk intensities (e.g. vendor concentration, cyber-readiness) in their stress tests. Continued focus on credit risk, given global debt levels; expect supervisors to scrutinize leverage in non-bank credit and private credit funds.
Firms should note the FPC’s shift toward more “usable” capital buffers to support lending during stress.
U.S. Federal Reserve Board Proposes AML Program Rule
The Fed announced a notice of proposed rulemaking (NPRM) to overhaul AML/CFT program requirements for banks.
The proposal would mandate banks to adopt a risk-based approach aligned with FinCEN’s expectations - for example, identifying and resourcing higher-risk customers and transactions, and explicitly incorporating customer due diligence into program design. It also would require each bank’s AML Compliance Officer to be based in the U.S. and clarify that only significant program failures justify enforcement.
U.S. banks should start updating AML frameworks to emphasize higher-risk areas and meet new documentation standards. The proposed rule signals that examiners will focus on outcomes (risk-based controls and continuous monitoring) rather than boilerplate procedures.
Bank compliance teams need to inventory customer risk factors and ensure program officers are empowered to direct resources where risks are greatest.
Implications
Enables regulators to expect banks to target suspicious activity resources to the riskiest customers/transactions, consistent with AML Act mandates.
Banks must ensure their AML/CFT compliance officer and processes fully align with FinCEN guidance (e.g. expanded CDD).
Once finalized, banks will need to adjust AML systems and training to meet the new thresholds and definitions.
HKMA and PBoC Unveil Bond and RMB Market Measures
The Hong Kong Monetary Authority and China’s PBoC jointly announced 11 new measures to deepen Hong Kong’s fixed-income and offshore RMB markets.
Key steps include expanding the size and range of Mainland bond markets accessible via Bond Connect, launching a new infrastructure to enhance Mainland-HK bond market liquidity, and streamlining the process for RMB issuers in Hong Kong.
The authorities also set tighter timelines for RMB trade clearing between Hong Kong and China, enhanced risk management for Hong Kong’s stock-bond connectivity schemes, and pledged support for cross-border bond issuance (for example, encouraging Mainland issuers to list in Hong Kong).
Implications
These reforms strengthen Hong Kong’s role as a global RMB hub and bridge between Mainland and international markets.
Bond investors can anticipate broader product offerings and easier access (e.g. more corporate/government bonds via Bond Connect). RMB business (settlement, investment) will become more efficient, reinforcing Hong Kong’s offshore RMB liquidity.
Financial firms should prepare for increased Mainland linkages: capital markets desks must align systems for cross-border bond flows and RMB clearing.
In time, Hong Kong’s role as a conduit for China’s capital may grow, challenging international banks to update their China market strategies.
CFTC Finalizes Uncleared Swaps Margin Rules
The CFTC issued a final rule amending the margin requirements for uncleared swap transactions. Notably, the rule excludes “seeded” or emerging funds from initial margin for three years (to facilitate new fund hedging) and aligns the definition of “portfolio margin” for inter-affiliate trades to a single direction across products. It also expands eligible collateral by removing haircuts on certain listed equity funds.
This means, asset managers and hedge funds will have more flexibility to use newly seeded funds for trading without immediate margin costs, improving liquidity for incubating funds. Swap dealers should update margin models for affiliates’ offsetting trades and accept a broader set of fund securities as collateral.
Overall, the changes reduce collateral charges for legitimate hedges and move U.S. rules closer to international standards.
Implications
Newly created funds can hedge with swaps for up to three years without posting initial margin, lowering financing costs for asset managers.
Expands collateral choices (e.g. certain equity funds exempted from haircuts), increasing available liquidity for swaps.
Swap dealers and clearing firms must update agreements and systems to implement the new margin definitions and collateral tables.
UAE Inaugurates “Jaywan” National Card Scheme
H.H. Sheikh Mansour bin Zayed, chairing the CBUAE, announced the launch of Jaywan - the UAE’s first national payments card scheme.
Jaywan is a domestically operated credit/debit card network, akin to Visa/Mastercard, now being issued by local banks and fintechs for use nationwide.
The CBUAE highlighted this as a strategic step to “reinforce the UAE’s sovereignty over its financial infrastructure” and build an advanced national payments ecosystem. Jaywan cards (across consumer and commercial categories) will be accepted at POS terminals, ATMs, e‑commerce platforms and digital wallets, domestically and abroad, with contactless and online transaction support. A rewards program (travel, retail, hospitality) will roll out for holders.
Implications
Establishing a local card network strengthens UAE financial autonomy (reducing reliance on foreign card schemes) and may lower transaction costs in the long run.
Banks and payment service providers must update their processing systems to route Jaywan transactions and comply with CBUAE’s clearing rules.
Merchants will soon need to enable Jaywan on terminals.
Over time, the move could boost financial inclusion (by expanding card access) and data sovereignty. Regional neighbors may observe the UAE model; joint cooperation (as CBUAE has with Indonesia) may extend such national schemes to cross-border interoperability.
EBA Issues ICT and Cybersecurity Guidelines
The European Banking Authority published its final Guidelines on ICT and Security Risk Management for EU banks.
These rules tighten requirements on governance, incident response, and outsourcing related to cyber and ICT risk. They mandate that banks establish clear cybersecurity governance structures, conduct regular risk assessments, report major incidents to supervisors, and enforce robust third-party management frameworks.
The guidelines (effective Jan 1, 2027) build on previous EBA proposals and align with the EU’s Digital Operational Resilience Act (DORA) principles.
Banks operating in the EU must immediately prepare to implement or update their cybersecurity controls and incident-reporting frameworks. In practice, this means formalizing board-level ICT risk oversight, testing cyber resilience, and ensuring full visibility into outsourcing (including cloud) arrangements. Firms should audit current ICT policies against the new guidelines to identify gaps. Enhanced incident reporting rules will require banks to refine their escalation and disclosure processes to regulators and customers in the event of disruptions.
Implications
Banks will need to map ICT risk roles clearly up to the board and refine incident-response playbooks per the new expectations.
Outsourcing and cloud service contracts must be reviewed to ensure service providers meet stricter security and supervision standards.
Firms should integrate these guidelines into their internal controls ahead of the Jan 2027 effective date to avoid supervisory criticism.
EBA Publishes Draft Reporting Framework Version 4.4
The EBA released a draft technical package (version 4.4) of its COREP/FINREP reporting framework.
This package primarily adds new IFRS 18 lease accounting disclosures and expands ESG/green asset templates under Pillar 3. It also includes technical updates to accommodate future national initiatives.
European banks must prepare for updated data requirements related to leases and climate disclosures.
Reporting teams should begin mapping how IFRS 18 and enhanced ESG metrics will impact their templates. Even though the draft is non-binding, early review allows firms to adjust internal systems and validation rules.
The final framework (expected later in 2026) will become mandatory, so banks should use this consultation period to test legacy data systems against the upcoming taxonomies.
Implications
Banks should inventory lease accounting and ESG data sources now, as these fields will soon flow into regulatory reports.
IT and finance teams must coordinate to capture IFRS 18 transition figures and incorporate them into capital and liquidity reports.
While the draft is subject to change, firms can use the release to identify any logic conflicts between new and existing reporting items.
Summary of Other Notable Updates
Regulator | Jurisdiction | Update | Source |
CFTC | US | Issued an emergency order requiring KalshiEX contracts to settle despite a state court injunction, reinforcing the enforceability of trades executed on CFTC-regulated markets. | |
ECB | EU | Extended climate-adjusted collateral haircuts to non-financial corporate debt, further integrating climate risk into the Eurosystem's collateral framework. | |
ECB | EU | Launched four consultations under the revised Deposit Guarantee Schemes Directive (DGSD3), covering depositor information, cross-border data exchange, payout rules, and investment strategies. | |
FCA | UK | Published its Annual Report highlighting stronger enforcement against illegal financial promotions and market abuse, including action against social media "finfluencers." | |
CBUAE | UAE | Imposed an AED 1.82 million financial sanction on a foreign bank's UAE branch for breaches of regulatory compliance requirements. | |
OSFI | Canada | Allowed eligible natural catastrophe bonds to qualify as reinsurance for capital purposes, expanding insurers' risk transfer options under the Minimum Capital Test. |
Stay informed with our regulatory updates and join us next month for the latest developments in risk management and compliance!
For any feedback or requests for coverage in future issues (e.g., additional countries or topics), please contact us at info@riskinfo.ai. We hope you found this newsletter insightful.
Best regards,
The RiskInfo.AI Team
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