FinTech Global FS Regulatory Round-up - w/e 13 February 2026

UK

FMSB: AI in trading – a practitioners’ view of the current landscape

The Financial Markets Standards Board (FMSB) has published a spotlight review which provides a practitioner‑focused examination of the rapidly evolving use of AI in electronic trading systems. The review highlights emerging use cases, tangible risks and the governance considerations required as AI adoption accelerates across global wholesale markets.

The paper provides insight into how firms are integrating AI within trading systems, the implications for model and trading risk, and whether existing control frameworks remain fit for purpose. The review finds that while autonomous AI in trading could emerge in the future and pose systemic risks, such fully autonomous trading systems are not yet present in financial markets. [13 Feb 2026]  #AI

FCA finalises rules on regulation of deferred payment credit (unregulated BNPL)

The FCA has published Policy Statement 26/1 – Regulation of Deferred Payment Credit (unregulated Buy Now Pay Later): Feedback to CP25/23 and final rules (PS26/1). The new rules seek to ensure that consumers are:

• given information that equips them to understand the potential risks, their obligations, rights and protections under a deferred payment credit (DPC) agreement;
• able to borrow sustainably and affordably, miss fewer repayments and consequently be charged fewer late fees; and
• given appropriate support if they are approaching, or are in, financial difficulty.

From 15 July 2026, lenders that offer a DPC agreement to finance the purchase of goods or services from a merchant will come under FCA regulation. The regulator expects DPC lenders to consider the final rules and make the necessary changes to their systems and controls in anticipation of this date. Firms undertaking DPC activity that do not currently hold the necessary consumer credit permissions will need to register for the Temporary Permissions Regime from 15 May 2026. [11 Feb 2026]  #Payments

TSC: BoE letter on costs of adopting emerging technology in payment systems

The Treasury Select Committee (TSC) has published the letter from BoE Governor Andrew Bailey which details the cost of work at the BoE towards introducing the benefits of emerging technology into the payments system.

In the 2024/2025 financial year, the BoE spent £18m across a portfolio of work which includes activity on: AI; quantum computing; distributed ledger technology (DLT); new forms of digital money; and innovations in payment and settlement, including work on a digital pound design phase. The Governor explains: 'This is one of the smallest of the Bank’s policy areas, amounting to 6% of the Bank’s spend on policy activities and 2% of total Bank spend in that year.' [11 Feb 2026]  #DLT #DigitalPound #Quantum

FCA takes global crypto exchange firm to court

The FCA has announced that it issued legal proceedings against a global crypto exchange firm. The regulator said it had previously warned the firm about illegally promoting crypto services in the UK, but the firm has continued to breach these rules through its website and social media platforms. It also highlighted that repeated attempts to engage with the firm had been ignored.

Since issue of the proceedings, the firm has taken steps to restrict new UK customers from registering an account, however, existing UK users can still log in and access unlawful financial promotions.

The FCA has also requested that social media companies prevent UK consumers from accessing the firm's social media accounts and has asked for its applications to be removed from app stores in the UK. [10 Feb 2026]  #Crypto #DigitalAsset

HM Treasury: U.S.-UK Transatlantic Taskforce hosts industry engagement

HM Treasury has reported that it hosted representatives from the U.S. Treasury and regulatory agencies in London on 26 January 2026 to conduct joint senior-level industry engagement for the Transatlantic Taskforce for Markets of the Future, which was established in September 2025. The discussions explored opportunities to improve links between the countries' capital markets and to collaborate on digital assets.

The US Treasury and HM Treasury will continue to work together, with additional joint engagements in the United States anticipated this month. The Taskforce aims to report back to both finance ministries on its recommendations via the UK-US Financial Regulatory Working Group in Summer 2026. [10 Feb 2026]  #DigitalAsset

FCA writes to trade associations on development of Future Entity for open banking

The FCA has published the template version of its letter to trade associations providing an update in respect of the development of a Future Entity for open banking. The letter confirms the appointment of KPMG to provide an independent assessment of proposals to establish a standards-setting body for UK open banking application programming interfaces (APIs) capable of becoming the FE. It explains the purpose and scope of the assessment, the respective roles of the FCA, industry, trade associations and the independent assessor, and how firms can engage in the process. The letter also includes indicative key milestones. [9 Feb 2026]  #OpenBanking #FutureBanking

Europe

EBA: Opinion on supervisory priorities at end of transition period under no-action letter on interplay between PSD2 and MiCAR

The European Banking Authority (EBA) has published an opinion advising national competent authorities (NCAs) under the revised Payment Services Directive (PSD2) on how to proceed once the transition period that is set in the EBA's no-action letter comes to an end on 2 March 2026.

The transition period allows crypto asset service providers (CASPs) nine months to continue transacting electronic money tokens (EMTs) that qualify as payment services while submitting, and awaiting response to, their application for authorisation under PSD2. The opinion outlines the conditions under which NCAs are advised to allow CASPs to continue providing EMTs that qualify as a payment service after 2 March 2026. [12 Feb 2026]  #Payments #PSD #Crypto #MiCAR #DigitalAsset

Australia

APRA Chair speaks at Senate Economics Legislation Committee

John Lonsdale, Chair of the Australian Prudential Regulation Authority (APRA), has addressed the Senate Economics Legislation Committee, setting out a number of uncertainties and risks which APRA will address in 2026.

Among other points, Mr Lonsdale addressed the elevated frequency and intensity of cyber-attacks across the financial system and said that ‘lifting cyber security policies and practices across our regulated industries is another top priority’. In the superannuation sector, APRA are requiring several trustees to bring forward actions to harden their cybersecurity controls. [11 Feb 2026]  #Cybersecurity

ASIC enforcement results in Federal Court order for FIIG Securities to pay $2.5 million over cyber security failures

ASIC has announced that the Federal Court have ordered FIIG Securities Limited to pay AUD$2.5 million in pecuniary fines and pay $500,000 towards ASIC’s costs due to its failure to protect thousands of clients from cyber security threats. FIIG is a fixed-income specialist providing retail and wholesale investors with access to fixed income investments and bond financing, operating under an AFS licence.

In 2023, FIIG was the subject of a cyber-attack which saw around 385 gigabytes of confidential information stolen and highly sensitive client data leaked onto the dark web. FIIG admitted that adequate cyber security measures would have detected and responded to the data breach sooner and that it had failed to comply with its AFS licence obligations. Additionally, FIIG admitted that complying with its own policies and procedures could have supported earlier detection and prevented some or all of the client information from being downloaded.

ASIC Deputy Chair Sarah Court said ‘ASIC expects financial services licensees to be on the front foot every day to protect their clients’ and noted that ‘[t]his is the first time that the Federal Court has imposed civil penalties for cyber security failures under the general AFS licensee obligations’. ASIC detailed FIIG’s cyber security failings as not:

• allocating necessary financial resource to have suitably qualified and experienced people available, or implement adequate technological resources to manage cyber security;
• implementing adequate cyber security measures, including multi-factor authentication for remote access users, strong passwords and access controls for privileged accounts;
• having a structured plan to ensure key software systems were being updated to address security vulnerabilities;
• having qualified IT personnel monitoring threat alerts to identify and respond to cyber-attacks;
• providing mandatory cyber security awareness training to staff; and
• having an appropriate cyber incident response plan that was tested at least annually.  [9 Feb 2026]  #Cybersecurity

Hong Kong

HKMA Deputy Chief Executive provides banking sector 2025 year-end review and priorities for 2026

The HKMA's Deputy Chief Executive, Mr Arthur Yuen, has delivered a presentation on the HKMA’s 2025 year-end review and priorities for 2026 for the banking sector. 

Building on the work done in 2025, the HKMA plans to focus on the following areas (among others) in 2026:

• Operational and technology risks – Supporting banks on the implementation of the operational resilience framework and shifting to sustaining 'business as usual' post-May 2026, strengthening cyber resilience maturity across the risk management lifecycle, conducting cyber mapping, implementing new international standards on third-party risk management, and deepening supervisory engagement on cloud adoption (based on the new practice guide);
• Fintech 2030 – Advancing 'DART' initiatives, including holistic risk data strategies, supporting the responsible use of artificial intelligence (via the GenA.I. Sandbox++ and Responsible A.I. Toolkit), promoting innovation via the supervisory incubator for distributed ledger technology, and promoting resilience (though the fintech cybersecurity baseline, real-time cyber threat index and the quantum preparedness index); and
• Investor protection – Strengthening the customer‑centric bank culture, introducing cross‑sector reference checking, supporting the sustainable and responsible development of the digital asset sector, reviewing the sale of higher‑risk insurance products and banks' insurance referral businesses.  [12 Feb 2026]  #Cyber #AI #Quantum #DigitalAsset

CBUAE and HKMA deepen financial cooperation and market connectivity with third bilateral meeting

The Central Bank of the United Arab Emirates (CBUAE) and the HKMA held their third meeting on 11 February 2026 in Abu Dhabi to further strengthen cooperation and connectivity between the financial sectors of both jurisdictions, building on the progress achieved from the second meeting held in Hong Kong in December 2024 (see our previous update).

The CBUAE and the HKMA conducted in-depth discussions on various areas, including:

• Developments in digital assets, tokenisation, and central bank digital currency; and
• Development of regulatory frameworks for stablecoins. [12 Feb 2026]  #DigitalAsset #Tokenisation #Stablecoin #CBDC 

SFC announces further initiatives to progress VA market development under ASPIRe Roadmap

The SFC has announced various initiatives as part of its ASPIRe Roadmap (see our previous update) to enhance Hong Kong as a global virtual asset (VA) hub. 

High-level framework for VA perpetual contract offering

• The high-level framework, which forms part of Pillar P (Product) of the ASPIRe Roadmap, sets out the SFC's regulatory approach for SFC‑licensed VA trading platform (VATP) operators proposing to offer VA perpetual contracts, which are leveraged instruments and should only be offered to professional investors.
• The framework sets out requirements relating to assessment of client knowledge, reference assets, product design, trading and settlement, margin arrangements and loss allocation management, market surveillance, and disclosure.  VATP operators are welcomed to discuss their proposed perpetual contract structure with the SFC.

Circular permitting VATP operators to accept affiliated market makers

• The SFC has issued a circular setting out its regulatory approach and expected standards for licensed VATP operators to allow affiliated companies to engage in market making activities on their platforms, provided that strong safeguards are in place to mitigate conflicts of interest.  Participation of these affiliates should provide licensed VATPs with an additional avenue for liquidity, consistent with Pillar A (Access) of the ASPIRe Roadmap.
• A VATP operator accepting affiliated market maker participation will be subject to the terms and conditions set out in the appendix to the circular, which will be imposed on the operator’s licence.  The operator must provide advance notice to the SFC before allowing an affiliate to engage in market making activities on its platform.

Circular on offering of financing for VA dealing, access to shared order book, and safeguarding client VAs relating to withdrawals

• The SFC has issued a circular setting out its framework to enable licensed corporations providing VA dealing services under an omnibus account arrangement (VA brokers) with SFC-licensed VATP operators to offer financing for VA dealing, subject to the sufficiency of collateral and robust investor safeguards.  This would enable margin clients with strong credit profiles and collateral to participate more actively in VA trading, thus enhancing the liquidity of Hong Kong’s market in a risk-controlled manner.
• The circular also lays out expected standards for VA brokers participating in shared order books, as well as requirements for client VA safeguards by VA brokers permitting VA withdrawals.

Digital Asset Accelerator

• The SFC's Executive Director for Intermediaries, Dr Eric Yip, announced at Consensus Hong Kong 2026 that a Digital Asset Accelerator will be set up under Pillar Re (Relationships) of the ASPIRe Roadmap, which will operate as a structured communication channel between the SFC and industry innovators.
• Through an appointed agent, the accelerator will support innovation through providing clarity for market builders, and help regulators and practitioners allocate resources efficiently while exploring new market-making models, financing mechanisms, and leveraged products.  [11 Feb 2026]  #DigitalAsset

Malaysia

BNM: DAIH charts 2026 strategy with focus on Ringgit stablecoins and tokenised deposits

The Bank Negara Malaysia (BNM) has announced that the Digital Asset Innovation Hub (DAIH) has onboarded three initiatives to test real-world applications involving ringgit stablecoins and tokenised deposits in 2026. The three initiatives will focus on wholesale payment use cases across both domestic and cross-border transactions, including to enable the settlement of tokenised assets.

These initiatives will be conducted in a controlled environment and involve collaboration with ecosystem partners, including corporate clients of financial institutions and other regulators. Certain use cases will also explore Shariah-related considerations.

The testing will allow BNM to assess the implications to monetary and financial stability and inform our policy direction in these specified areas. Notably, BNM intends to provide greater clarity on the use of ringgit stablecoins and tokenised deposits by end-2026. These efforts could also be a precursor to future integration with existing work by BNM such as on wholesale central bank digital currency (wCBDC). [11 Feb 2026] #DigitalAsset #Stablecoin #Tokenisation

US

SEC Chair before the Senate Banking Committee

The Securities and Exchange Commission (SEC) has published the testimony of Chair Paul S. Atkins before the U.S. Senate Committee on Banking, Housing, and Urban Affairs. During his remarks, Chair Atkins outlined the current work of the SEC, including engagement with the Commodity Futures Trading Commission (CFTC) on Project Crypto. 

The SEC Chair's testimony before the House Financial Services Committee on the preceding day has also been published.  [Feb 12, 2026]  #Crypto #DigitalAsset

FDIC extends comment period on proposal to establish GENIUS Act application procedures for FDIC-supervised institutions seeking to issue payment stablecoins

The FDIC has announced a 90-day extension to the comment period on its notice of proposed rulemaking (NPR) that would implement the application provisions under the GENIUS Act for FDIC-supervised state nonmember banks and state savings associations seeking to issue payment stablecoins through a subsidiary.

The deadline for comments is extended from February 17, 2026, to May 18, 2026.  [Feb 6, 2026]  #Stablecoin #DigitalAsset