East vs. West: The FRTB divergence is official. Hong Kong and China have implemented the new market risk rules, while the US delay has triggered a cascade of postponements across Europe and the UK to 2027.
The UK Prudential Regulation Authority has confirmed a segmented timeline for the Fundamental Review of the Trading Book (FRTB), prioritizing a robust capital floor over complex modelling. While the core Basel 3.1 standards and the binding 72.5% Output Floor will take effect on 1 January 2027, the implementation of the Internal Models Approach (FRTB-IMA) has been delayed until 1 January 2028. This strategy effectively elevates the Standardised Approach to a binding constraint a full year ahead of internal models, forcing firms to navigate a dual compliance track involving both legacy and future frameworks.
The Global AI Regulatory Landscape: A Patchwork of Compliance
As jurisdictions move from voluntary frameworks to mandatory rules, the compliance burden is shifting. The global map is fragmenting: the EU is enforcing strict risk categorizations, the US is leveraging existing civil rights laws to target algorithmic discrimination, and UK financial regulators are actively testing AI in live markets. Discover the critical differences between horizontal legislation and sector-led supervision in our global overview.
Basel III Endgame: one framework, very different strategic paths.
US regulators are overhauling market risk capital via the "Basel III Endgame," replacing Value-at-Risk with Expected Shortfall and mandating a dual-stack calculation that binds banks to the higher of the new "Expanded Risk-Based Approach" or current standardized requirements,,. Explore how the elimination of internal models for credit risk and the introduction of varying liquidity horizons will reshape the trading landscape for banks with over $100 billion in assets...
FRTB implementation in the EU is entering its most critical phase.
The European Commission has officially postponed the binding application of FRTB capital requirements to January 1, 2027, to safeguard the international level playing field. However, this is not a pause for compliance teams: mandatory reporting obligations remain in force. Read our executive summary to understand the "dry run" phase and what this timeline shift means for your implementation roadmap.
EU AI Act - December 2025 Update: The "Digital Omnibus" Course Correction and the Financial AI Trap
As we close 2025, the EU AI regulatory landscape has shifted dramatically. While the core AI Act prohibitions have been enforced since February, the European Commission just announced a major "course correction" on November 19 with the Digital Omnibus Regulation Proposal. This new proposal aims to centralize oversight of General-Purpose AI (GPAI) and delay high-risk rules until technical standards are ready.
However, financial institutions remain in the crosshairs. Regulators have confirmed a "Regulatory Nexus" where AI failures are treated as breaches of fiduciary duty under MiFID II and Solvency II. Read the full executive summary to understand the new "Tripartite Oversight Model" and how the Digital Omnibus changes your compliance timeline.
The coordinated global rollout of the Fundamental Review of the Trading Book (FRTB) has officially splintered.
The coordinated global rollout of the Fundamental Review of the Trading Book (FRTB) has officially splintered.
While Hong Kong successfully implemented the new market risk framework on 1 January 2025, Western jurisdictions have hit the brakes. Citing the need to preserve a level playing field amid uncertainty over the U.S. "Basel III Endgame," the European Union has officially postponed market risk capital requirements to 1 January 2027. Similarly, the UK has delayed its implementation to 2027, with internal models pushed further to 2028....
The UK has charted a distinct course for Artificial Intelligence regulation, rejecting a single, prescriptive AI statute in favor of a "pro-innovation," sector-led framework empowered by existing regulators. Financial services firms must now navigate a convergence of expectations from the FCA, PRA, and ICO, where compliance relies on interpreting established conduct rules, data protection laws, and prudential standards like the Consumer Duty and Model Risk Management. With 75% of UK financial firms already deploying AI—and concerns rising regarding algorithmic bias and third-party dependency—regulatory focus has shifted firmly toward governance and demonstrable accountability.
The U.S. AI Regulatory Patchwork: What Financial Institutions Need to Know Does the United States have a federal AI law? Not exactly—but that does not mean the technology is unregulated. Unlike the European Union’s centralized legislation, the U.S. is deploying a "sectoral" enforcement model where existing statutes regarding civil rights, consumer protection, and financial safety are applied directly to new technologies. Federal agencies have united behind a single warning for financial institutions: there is "no AI exemption" to the law, and algorithmic complexity is no excuse for non-compliance. From the adoption of NIST technical standards to the looming constitutional battle between state mandates and federal deregulation, navigating this landscape requires a robust, multi-layered compliance strategy.
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