Regulators Unite to Address Market Vulnerabilities

Regulatory bodies have been busy in recent weeks, releasing updates on various fronts to address market vulnerabilities and improve regulatory frameworks. The European Securities and Markets Authority (ESMA) published its Trends, Risks and Vulnerabilities Report of 2026, which included an analysis of prediction markets. ESMA highlighted concerns regarding investor protection and market integrity in these platforms.

Additionally, the Financial Conduct Authority (FCA) released its Primary Market Bulletin 65, addressing issues such as regulatory announcements being used as marketing materials and inconsistent practices in classifying inside information. The FCA also introduced a new inside information declaration form for listings document submissions via the Electronic Submission System.

On the banking side, the European Central Bank (ECB) updated its Guide to Licence Applications, outlining assessment criteria and procedures for licensing credit institutions within the Single Supervisory Mechanism (SSM). The EU Commission also adopted delegated regulation on temporary market risk operational relief measures, which will allow institutions to use alternative internal model approaches until 31 December 2029.

The European Banking Authority (EBA) consulted on revised technical standards for reclassifying investment firms as credit institutions when they exceed the EUR 30 billion total assets threshold. The EBA's consultation paper proposed draft regulatory technical standards reflecting 2024 amendments to the Capital Requirements Directive.