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UK Watchdog Seeks Crypto Industry Feedback on Investment Reforms

7 hours ago
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UK watchdog invites crypto industry feedback on investment reforms as FCA and BoE finalize 2026 EMIR reporting updates.

 

The UK’s Financial Conduct Authority (FCA) has called for feedback from crypto companies on its proposed investment reforms.

The consultation will help shape regulations that aim to enhance consumer access to investments while addressing risks in the crypto sector. Crypto companies are being encouraged to respond to the FCA’s proposals by February and March 2026.

FCA Proposes Changes to Client Categorization and Conflicts of Interest

The FCA’s consultation paper outlines several key changes to investment regulations. One of the proposals focuses on amending the rules for client categorization.

The watchdog suggests that a personal investment history involving high-risk assets, such as crypto assets, should not automatically be used to classify someone as a professional investor.

The FCA aims to improve protections for consumers who engage with high-risk products like crypto assets. According to the watchdog, crypto trading, especially through leveraged products, has contributed to significant underperformance on certain digital engagement platforms.

The FCA is concerned about the lack of warnings and risk assessments for consumers engaging in such activities.

To address these issues, the FCA proposes introducing clearer guidelines for firms offering digital assets. This would include stronger responsibilities for firms to ensure that their clients fully understand the risks involved.

The changes aim to balance consumer protection with more flexible rules for companies in the sector.

FCA & BoE Finalise UK EMIR Updates from January 2026

In addition to its consultation on investment reforms, the FCA is also finalizing updates to the UK’s EMIR regulations. These updates, effective from January 2026, include new Q&As, fields, and XML schemas to streamline reporting requirements for financial institutions.

The updates are designed to ensure greater clarity and consistency in the reporting of derivative transactions.The Bank of England (BoE) has been closely involved in finalizing these updates alongside the FCA.

Additionally, these changes are expected to help financial institutions better comply with reporting obligations under the European Market Infrastructure Regulation (EMIR), which the UK has adopted post-Brexit.

According to the FCA’s December 2025 Compliance Report, these updates will bring key changes in how transactions are reported, especially for firms involved in digital assets. The new requirements will likely impact firms operating within both traditional financial markets and the emerging crypto sector.

Firms will need to update their reporting systems and ensure they comply with the new Q&As and XML schemas.

Related Reading: FCA Approves Eunice to Trial Crypto Disclosure Templates in Sandbox

UK’s Crypto Landscape and Regulatory Evolution

The UK has become a prominent hub for crypto businesses. Over the years, the country has established clearer rules for digital assets, attracting companies looking for regulatory certainty.

In December, the UK government passed a law recognizing digital assets as property, which has improved clarity on their treatment in legal matters like recovery and insolvency.

Despite the growing interest in cryptocurrencies, the UK has recently considered restricting crypto donations to political parties. This development highlights the ongoing debate over how best to regulate the crypto sector while promoting innovation.

With crypto adoption on the rise, the FCA’s consultation reflects the evolving regulatory landscape. Hence, as the market continues to grow, the UK aims to ensure that its regulations keep pace with emerging trends in digital finance.

Source: https://www.livebitcoinnews.com/uk-watchdog-seeks-crypto-industry-feedback-on-investment-reforms/