Money Covered: The Week That Was – 27 February 2026

Welcome to The Week That Was, a round-up of key events in the financial services sector over the last seven days.

On the fifth episode of Season 4 of our podcast, Money Covered – The Month That Was, Mel is joined by David Allinson to discuss the FCA’s proposed section 404 consumer redress scheme for vehicle finance.

To listen to this and all previous episodes, please click here.

Headline Development

Seven influencers sentenced for unlawful financial promotions

Seven social media influencers have been sentenced at Southwark Crown Court for promoting an unauthorised foreign exchange trading scheme.

Biggs Chris, Jamie Clayton, Lauren Goodger, Rebecca Gormley, Yazmin Oukhellou, Scott Timlin and Eva Zapico each pleaded guilty to one count of communicating unauthorised financial promotions.

The court imposed the following penalties:

• Lauren Goodger was fined £3,750 and ordered to pay costs of £5,778.18.
• Biggs Chris was fined £600 and ordered to pay £1,000 in costs.
• Jamie Clayton was fined £820 and ordered to pay £1,000 in costs.
• Rebecca Gormley received a conditional discharge and was ordered to pay £2,866.42 in costs.
• Yazmin Oukhellou was fined £974 and ordered to pay £1,000 in costs.
• Scott Timlin was fined £938 and ordered to pay £1,000 in costs.
• Eva Zapico received an absolute discharge and was ordered to pay £1,770.44 in costs.

The FCA said the individuals had promoted the scheme to a combined social media following of around 4.5 million people.

Steve Smart, executive director of enforcement and market oversight at the FCA, said the regulator would continue to take action against those who unlawfully promote financial products and would work with responsible influencers to improve standards.

To read more, please click here.

Auditors

What next for audit and regulatory reform in 2026?

The Government may have scrapped the Audit Reform and Corporate Governance Bill (the Bill), but that does not mean reform has fallen away altogether. Sophie Wales, ICAEW’s Director of Regulatory Policy, sets out what is still expected.

One of the headline measures in the Bill was the creation of the Audit, Reporting and Governance Authority (the ARGA) to replace the Financial Reporting Council. With the Bill withdrawn, ARGA will not now be established. That said, the government has indicated it still plans to put the FRC on a statutory footing. Wales makes clear that it is not yet obvious what that will involve in practice, or what it will mean for ICAEW in its role as an audit regulator and for its firms and members.

There is also uncertainty around other parts of audit reform. This includes insolvency regulation. At present, insolvency is regulated on an individual basis. There have been proposals to move to firm-based regulation, in line with other areas. The scrapping of the Bill means those changes are likely to be delayed, although Wales suggests they could still happen at some point.

Anti-money laundering supervision is another area facing change. Under current proposals, professional bodies would no longer act as AML supervisors, with responsibility transferring to the Financial Conduct Authority. Wales says this is a significant development and confirms that ICAEW is engaging with Government to understand what it means and how members would be supported through any transition.

On tax, the government has decided not to establish a new independent regulator for the profession and will not require tax advisers to belong to a professional body. Instead, advisers will need to register with HMRC. A tougher penalty regime is also expected, including stricter consequences for advisers who intentionally facilitate a tax loss, potentially extending to paying part of a client’s underpaid tax.

Local audit reform is also in train. A new Local Audit Office is expected to be set up in the autumn. As part of the revised system, ICAEW will act as the new External Registration Body overseeing local audit work. Wales notes that firms not currently active in this area may want to consider whether it is something to expand into.

Wales stresses that there are no immediate actions required from firms. However, she says it is important to stay informed so firms understand how these developments may affect them going forward.

To read more, please click here.

Regulatory developments for FCA regulated entities

FCA updates examples of good and bad practice for smaller firms’ Consumer Duty board reports

On 24 February 2026, the FCA updated its webpage setting out examples of good and bad practice in Consumer Duty board reports. The update is intended to provide guidance on how smaller firms can meet its requirements.

Firms within scope of the Consumer Duty must provide an annual report for their governing body setting out the results of their monitoring of customer outcomes and any actions required as a result of that monitoring.

Following its 2024 review of board reports, the FCA said it recognised that smaller firms face different challenges. It has therefore set out suggestions on how smaller firms might meet the requirements and indicated that it is open to considering more targeted work where that would be beneficial.

The updated guidance covers four areas:

• On governance, the FCA acknowledges that smaller firms may lack dedicated compliance and audit functions. It suggests that firms could benefit from appointing a knowledgeable “critical friend” to provide impartial feedback on their approach to Consumer Duty. This could include informal benchmarking, identifying practical improvements and supporting forward-looking activities such as horizon scanning.
• On monitoring and outcomes, firms are encouraged, where proportionate, to draw insights from external data sources, including the Financial Ombudsman Service and relevant trade bodies.
• In relation to actions taken to comply with Consumer Duty obligations, the FCA notes that smaller firms may find external experts, including trade bodies, helpful in advising on effective actions. Firms could also build the gathering of customer feedback into their interactions.
• On future business strategy, the FCA makes clear that although smaller firms may encounter fewer customers with different specific needs, they are still expected to learn from transactions with different groups of customers to ensure they deliver good outcomes in the future.

Separately, in CP25/37 the FCA proposed piloting a sector-specific, directory-style guide for the credit broking sector, setting out examples of good and poor practice. It is currently analysing feedback and developing more detailed options to test with stakeholders. It will continue to engage with its Smaller Business Practitioner Panel and other smaller firm stakeholders.

The FCA has also published a new webpage providing information about the Consumer Duty, including information on the outcomes it wants to see.

To read more, please click here.

FCA intends to launch review of AI use by the Insurance Industry

On 24 February 2026, the Financial Conduct Authority (FCA) stated its intention to launch an investigation into the use of artificial intelligence (AI) by insurers.

The investigation forms the latest step in the strategy outlined in the FCA's Regulatory Priorities Document for the insurance sector. Previously, the FCA had warned insurers about the risks of reduced transparency with the automation of underwriting decisions.

There are concerns that personal risk factors are being automated into underwriting algorithms and that this will unfairly prejudice certain consumer groups. In 2022, the FCA noted that there was a particular risk of "ethical harm" in protected characteristics such as race being used as factors to calculate the price of insurance cover where underwriting decisions were automated.

The FCA has acknowledged the difficulty with introducing AI safely and responsibly and has pledged to support insurers' use of AI. The regulator has however stressed that insurers "must monitor outcomes for consumers closely".

To read more, please click here. 

FCA consults on data sharing requirements for firms in the credit and mortgage markets

On Wednesday the FCA opened a consultation on its approach to implementing remedies following its credit information market study (CIMS) in December 2023.

The proposals include a mandatory reporting requirement for firms in the credit and mortgage markets and connected obligations to create a regulatory framework for how credit information is shared and used across these markets.

Consultation paper (CP26/7) sets out new Handbook rules to improve the coverage and quality of credit information. It focuses on:

• Remedy 2A: Mandatory data sharing with designated consumer credit reference agencies (DCCRAs). The FCA is proposing new mandatory reporting requirements for firms undertaking certain activities to share consumer credit information with DCCRAs, including related obligations concerning the use of consumer credit information.
• Remedy 2D: Requirements for firms on improving the accuracy of information shared, including processes for dealing with error correction/disputes and reporting satisfied County Court Judgments (CCJs).

To access the consultation (which closed on 1 May 2026) please click here.

FCA announces Regulatory Priorities reports

On 24 February 2026, the FCA announced that it will be publishing regulatory priorities reports (the Reports), setting out the FCA's specific key priorities for each sector. The FCA states that the Reports will replace portfolio letters, and that they have been shaped by feedback from firms, trade bodies, and other stakeholders.

By replacing the portfolio letters, the FCA is aiming to provide a clearer, more consistent way of communicating its sector-specific priorities, and to help firms understand what it expects and where to focus. This will be in terms of helping firms better understand what's expected, strengthening compliance, supporting innovation, and ultimately delivering improved outcomes for consumers. Where there are market events and other identified risks, the FCA has said that it will respond.

The FCA states that firms will need to identify which priorities and recommendations apply to them, and whether they have business lines which could be included in other Reports.

This new approach was tested with pilot for insurance firms, and in March 2026, reports will be published for the following sectors:

• Consumer investment
• Pensions
• Retail banking and mortgages
• Consumer finance
• Wholesale buy-side
• Wholesale markets
• Payments

To read the FCA's announcement, please click here.

To read the FCA's accompanying blog, please click here.

FCA's Enforcement Watch reveals regulator's approach to naming and shaming firms

The FCA has published its first Enforcement Watch newsletter which provides insight into the watchdog's enforcement activity and the circumstances in which it will 'name and shame' firms under investigation.

The focus of the newsletter is the FCA's "publicity policy in action", with the FCA confirming its approach to the 'exceptional circumstances' test in its publicity policy. In brief,  the FCA will only name a firm or individual subject to an enforcement investigation if it is desirable to:

1. Maintain public confidence in the UK financial system or the market.
2. Protect consumers or investors.
3. Prevent widespread malpractice.
4. Help the investigation itself. For example, by bringing forward witnesses.
5. Maintain the smooth operation of the market.

The newsletter confirms:

When we open a case, we will always consider whether to announce and regularly revisit this through the course of the investigation. In deciding whether to make an announcement, we consider the potential prejudice that we believe may be caused to any persons who are, or are likely to be, a subject of the investigation. 

This is reflected in the FCA's approach to enforcement, based on the newsletter which confirms that 6 of the 23 enforcement operations opened between 3 June and 31 December 2025 involved investigations into individuals which have not been publicised because "the bar for announcing an investigation into an individual is high". The FCA has also opened 12 operations into authorised firms but named only one as a firm under investigation – The Claims Protection Agency Ltd (TCPA) – on the basis it met the ‘exceptional circumstances’ test because of the FCA's concerns about harm in the motor finance area, with TCPA said to have mislead and unfairly promoted motor finance complaints. Readers may recall that TCPA brought an unsuccessful judicial review application challenging the FCA's decision to announce the investigation.

The FCA has also confirmed 3 investigations into listed issuers following an announcement by the firm under investigation (these were John Wood Group plc, Drax Group plc, and WH Smith plc).

The fact that only 1 of the 23 enforcement operations has been found to have met the 'exceptional circumstances' threshold would suggest that the FCA will be applying the test properly, and any decision to name a firm will not have been taken lightly.

Click here to read the Enforcement Watch 1.

Independent Football Regulator and FCA Memorandum of Understanding

On 24 February 2025, the Financial Conduct Authority (FCA) and the Independent Football Regulator (IFR) signed a memorandum of understanding (Memorandum). The Memorandum establishes a framework for how the two organisations will share information and cooperation where there is an overlap between football governance and financial regulation.

The Memorandum sets out the legal basis for the sharing of information between the two organisations, and how requests for information should be made.

The hope is that structured collaboration between the FCA and IDR will provide clarity on which organisation is to lead on specific issues, thereby reducing the risk of regulatory gaps and duplication.

The Memorandum will be subject to an annual review.

To read more, please click here.

With thanks to this week's contributors: James Parsons, Alison Thomas, Daniel Goh, Heather Buttifant, Ben Simmonds, Kerone Thomas, Rebekah Bayliss

If you have any queries please do get in contact with a member of the team below, or your usual RPC contact.