With the latest changes to the MiFID Organisational Regulation, the FCA continues to align its regulatory framework with market realities. Our investments team examines the changes and what they mean for businesses.
The FCA has just released PS 25/13, updating the MiFID Organisational Regulation. The Policy Statement (PS) affects a wide range of firms, including:
- MiFID investment firms;
- MiFID ‘Article 3’ exempt firms;
- UCITS fund managers;
- and Alternative Investment Fund Managers (AIFMs).
Four changes have been announced, including a change to COBS, the glossary, prospectus rules and the definition of Systematic Internalisers.
The Changes to The MiFID Organisational Regulation
1. Removal of the 10% Portfolio Depreciation Reporting Rule
From 23rd October 2025, FCA will revoke the COBS 16A.4.3UK requirement for firms to report to their clients a 10% drop in portfolio value. Although this requirement has not been imposed since 2020, the FCA is finally updating the handbook to reflect that this is no longer expected from firms.
2. Redefining Systematic Internalisers
From 1st December 2025, the FCA will shift the definition of Systematic Internalisers (SIs) from quantitative to qualitative:
| Aspect | Old Definition under MiFID II | New Definition under PS 25/13 |
| Basis for SI status | Quantitative thresholds based on trading volumes | Qualitative criteria based on firm behaviour and market role |
| Mandatory designation | Firms automatically became SIs if they exceeded thresholds | Firms voluntarily opt in based on their business model |
| Pre-trade transparency | Required for both equity and non-equity instruments | Required only for equities; non-equity SIs are exempt |
| Post-trade reporting | SI status used to determine reporting obligations | SI status no longer used for post-trade reporting |
| Notification to FCA | Mandatory if thresholds met | Firms choose to notify FCA if they opt in as SIs |
Firms already listed as SIs do not need to relist. The new regime gives firms more control over whether they classify as an SI and some firms may choose to volunteer for SI status to benefit from certain transparency or client engagement advantages.
3. Updating the Definition of Durable Medium
From 12th January 2026, the definition of durable medium will be changed to reflect that electronic communication is the default medium of communication with retail clients. This long-awaited change to the glossary makes the FCA’s expectations for the way firms communicate with their clients more in line with reality.
However, the FCA has made it clear that this is not an excuse for firms to digitally exclude clients and firms will still need to inform retail clients of the option of receiving paper copies. This means that assuming clients will use electronic media and only providing paper copies on request is insufficient, therefore firms must offer clients the option of receiving paper copies up front.
4. Introducing a New Prospectus Regime
From 19th January 2026, the current prospectus regime will be replaced by the Public Offers and Admissions to Trading Regulations and the Prospectus Rules. Changes include increasing the threshold of share capital to issue a prospectus, reducing the number of days the prospectus must be available before the offer closes and allowing a single admission for both listing and trading.
These changes will help many UK firms by reducing the regulatory and administrative burden, however firms should also be aware that there are new ESG disclosure requirements and new guidance on protected forward-looking statements is expected over the next few months.
It is encouraging to see the FCA updating the handbook to reflect the reality of the environment firms are operating in and delivering on its promises to reduce the regulatory burden firms are currently under, whilst maintaining the high standard of the UK market.
With a consultation paper announced for next month regarding changes to SYSC 10 conflicts of interest and COBS 3 client classification rules, the FCA is continuing its progress to make the UK a more attractive economy to do business in for financial services firms.
How Thistle Initiatives Can Help
Straight-talking and transparent investment compliance services to help FCA regulated businesses within the investment wholesale and retail sector navigate the complexities of becoming authorised and staying compliant.
If you’d like to discuss how we can support your firm in light of the new action plan, get in touch at info@thistleinitiatives.co.uk or call 020 7436 0630 to speak with our team.
Meet the Expert
Melissa Buckingham, Compliance Consultant 
Melissa joined Thistle Initiatives in 2025, bringing with her a strong background in managing conflicts of interest and cross-border regulatory activity from her time at a Tier 1 bank.
With a deep understanding of both the regulatory landscape and operational pressures facing firms, Melissa adopts a thorough and detail-oriented approach to helping clients achieve and maintain compliance.
She supports clients across a range of sectors, but primarily in the investments and wealth management space.