2026 LEGAL AND REGULATORY TO DO LIST
US TREASURY SECURITIES CLEARING MANDATE
The first deadline for the requirement to centrally clear transactions in US secondary market treasury securities is 31 December 2026, applying to secondary market sales and purchases. It will be followed by the second deadline of 30 June 2027 for repo transactions involving US treasury securities. The new rules will have global application to all those involved in US treasury securities markets; the requirements will have a significant impact on trading and repo activity, including the need to establish and operationalise new relationships with clearing providers and intermediaries.
Key workstreams: Significant numbers of new legal agreements will be required across trading and clearing relationships. Legal opinion coverage will also need to be confirmed. In 2026, we expect SIFMA to add ‘done away’ template documents to its library of template documents, for use where market participants trade with a counterparty but clear through a third-party clearing service.
See our articles for more information:
US Treasury Clearing Mandate — Temple Square Chambers
T+1 SECURITIES SETTLEMENT IN EUROPE
The EU, UK, Switzerland and Liechtenstein will move standard securities settlement times to T+1 in October 2027. Industry and governmental groups have made it clear how much work is required to be done, noting that the industry will need to pick up the pace through 2026.
Key workstreams: Changes to operations and technology will be essential, with many commentators noting that increased automation holds the key to successful delivery of T+1 settlement. Legal agreements supporting trading and settlement relationships will need review to amend provisions which are inconsistent or unclear with the new framework. Since clearing failures will incur penalties, market participants need to ensure they have clarity on settlement requirements, and each party’s responsibilities, in their legal agreements.
See our article for more information: T+1 Securities Settlement — Temple Consulting
CRD VI
The sixth iteration of the capital regulations includes requirements that banking services which are currently provided by firms outside of the EU to customers in the EU will, from January 2027, now be required to be provided from an authorised branch (or subsidiary) inside the EU. This will impact deposit takers, lenders and guarantee providers.
Key workstreams: Firms should have determined how they will be providing impacted services to EU customers, whether establishing a branch or a subsidiary or transferring the activity to an existing EU entity in their group. New legal agreements, or novation of existing agreements, will need to be completed, with significant changes to jurisdictional and regulatory provisions.
See our article for more information: CRD VI — Temple Square Chambers
PSD3
For the payments service industry, the third iteration of the Payments Services Directive is expected to take effect in 2027, with the EU Council and Parliament having recently reached provisional agreement on the final text (which is yet to be released). Key changes to note are the removal of the separate status of electronic money institutions and the requirement for firms to apply for reauthorisation. Other changes include pro-consumer provisions, alignment of the payment regulations with recent EU regulation such as MICAR, DORA and GDPR and incorporation of developments in technology.
Similar changes are also being made to the UK payments regime, and we should expect more information on the extent to which the two regimes will align, following the HM Treasury consultation exercise in October.
Key workstreams: As well as technological, process and operational changes, existing payment firms need to assess the potential requirement to apply for reauthorisation and prepare winding-up plans and other requirements of Article 3 of the draft Directive.
See our article for more information: Payment Services Directive 3 — Temple Consulting
AIFMD 2
The revised Alternative Fund Manager’s Directive (EU 2024/927) will go live in April 2026. New requirements for liquidity management will apply to open-ended AIFs requiring the implementation of 2 liquidity management tools governed under a liquidity management policy. Rules applying to loan originating alternative investment funds will be harmonised by AIFMD 2. EU and non-EU AIFMs will need to be ready for forthcoming changes.
Also included in the new regulations, despite the title, are changes to UCITS regulations which include requirements on human and technical infrastructure for UCITS management companies and further rules on delegation, conduct and conflict rules, liquidity management, SFDR compliance and ‘MIFID top-up’ permissions.
Key workstreams: Prospectuses and constitutional documents, investment management agreements and administration agreements will require updates to reflect these changes.
MOTOR FINANCE COMPENSATION PROGRAM
Following the Supreme Court ruling in Johnson v FirstRand Bank in 2025, 2026 will be a busy year for financial services firms facing compensation claims from UK consumers who used finance packages to purchase cars and were wrongly charged commissions. The Financial Conduct Authority is currently consulting on its proposed compensation programme and is expected to present this in early 2026. Firms subject to complaints will need to have sent their final responses by 31 May 2026. (Firms who are subject to separate complaints on leasing should be sending final responses now.)
The FCA have estimated that there are at least 4m potential claims and although the regulator would prefer a single channel for claims, it is likely that firms will face claims under the FCA scheme, through the Financial Ombudsman’s service and through the courts.
Key workstreams: Responses will be required to consumer complaints as well as responses to ombudsman and court proceedings. The decision of the Supreme Court should be analysed to understand the grounds on which the case succeeded and the parameters which should be applied in responding to claims.
See our article for more information: Hopcraft -V- Close Brothers — Temple Square Chambers
Watching Brief: SECURITISATION REFORMS
The European Commission announced reforms to the Securitisation Regulation in June 2025, which included lighter due diligence requirements for investors, reduced reporting obligations, simplified supervision structures, changes to standardised securitisations and to capital regulations. In addition, changes to capital regulations under Solvency II are also aimed at allowing insurers greater participation in securitisation markets.
How can Temple help?
Temple Consulting is a consultancy of financial services experts in U.K., EU and international law and regulation and Temple Square Chambers provided legal advice and representation. At Temple we have capital markets, securities trading, legal documentation and regulatory change specialists, making us an ideal partner for all your financial regulatory needs.
Keith Blizzard is a Barrister and specialist with over 20 years’ experience in banking and capital markets.
December 2025
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