A round-up of financial services developments.

A round-up of financial services developments, including (among other things) ESMA publishes interim and final reports on fund and transaction reporting simplification; and EIOPA consults on its draft technical advice on insurance guarantee schemes.

This Practice Note explores key elements of the Money Market Funds (MMFs) Regulation (Regulation (EU) 2017/1131) (EU MMF Regulation) which is designed to improve investor protection and minimise the risk that MMFs could pose to the stability of financial markets. What is an MMF? MMFs are investment funds that invest in short-term debt instruments and thereby play a key role in the short-term financing of the economy.  In particular, MMFs are open-ended, liquid investment funds that invest in fixed income in the form of short-term debt, for example money market instruments issued by banks, governments or companies (including treasury bills, commercial paper and certificates of deposit) which pay interest. They therefore represent an important link between demand for and offer of short-term debt. Further information on the eligible assets of an MMF is set out in Investment policies of MMFs below. MMF investors, including corporate treasury departments, may invest in MMFs if they need to hold large amounts of cash on a short-term basis, and an investment in an MMF may therefore be an alternative to a bank

The European Parliament has endorsed a negotiation mandate with Member States to ensure fair trainee working conditions and prevent companies from disguising standard jobs as traineeships. The mandate, prepared by the Employment and Social Affairs Committee, proposes changes to EU rules on traineeships to curb abusive practices. It requires written traineeship agreements that clearly define pay, duration, tasks, learning objectives, and access to social protection such as health insurance. MEPs stress that traineeships should be limited in duration and involve entry-level work. The new rules would cover all types of traineeships, except mandatory educational traineeships for academic credit and apprenticeships. The mandate also calls for organisations to appoint a contact person for trainees to report suspected malpractice, and specifies that any traineeship lacking pay, training, mentorship, or evaluation should be considered abusive. Parliament’s position builds on its 2023 call for minimum quality standards and aligns with the European Commission’s draft directive. Interinstitutional negotiations with the Council will now begin.

Ofgem has launched a consultation on proposed licence and price-control changes to enable National Gas Transmission plc (National Gas) to recover costs associated with maintaining and, where appropriate, reinstating continental European gas interconnector import capability. Ofgem has separately approved an agreement between National Gas and Interconnector Limited (INT) to prevent a further reduction in import capability through the GB–Belgium gas interconnector. The proposed modifications would create a pass-through mechanism allowing National Gas to recover payments and eligible costs for qualifying interconnector arrangements. Ofgem says declining UK Continental Shelf production and reduced interconnector import capability have weakened gas-system resilience under rare stress scenarios. The five-year INT agreement would maintain about 61 mcm/d of import capability but would not procure gas or guarantee flows. The estimated bill impact is £1.19 per domestic gas meter per year. The consultation closes on 20 November 2026.

The Office of National Statistics (ONS) has published research entitled 'Experiences of displaced young people living in England: January to March 2023', based on interviews with displaced young people aged 14 to 19 years old. The research details their experiences arriving in the UK, getting housing, going to school and receiving healthcare, and analyses cross-cutting themes from participant accounts. Participants said that long waiting periods for decisions to be made about their futures in the UK caused stress and made it difficult for them to feel settled. Those receiving accommodation in hotels, such as those receiving asylum support, described poor living conditions and having to stay in temporary hotel accommodation for much longer periods than expected. Participants said adapting to new systems in school was anxiety-inducing and they struggled with the language barriers. They also said that language barriers and the complexity of systems affected their access to health services.

This Practice Note focuses on why (re)insurers and intermediaries need to address environmental, social, and governance (ESG) risks. For guidance on the ESG initiatives, regulations and legislation that are relevant to (re)insurers and intermediaries, see Practice Note: ESG and insurance—essentials. Risk landscape Physical risks Catastrophic losses Losses related to physical risk factors, such as severe weather (including floods, wildfires and storms), can be insured and may directly affect insurance companies through higher claims. Recent catastrophe-loss data illustrates the scale of this exposure: • Munich Re reported that worldwide natural disasters caused losses of approximately USD 320 billion in 2024, of which around USD 140 billion were insured, materially above the inflation-adjusted averages for the previous ten and 30 years • Swiss Re similarly reported that global insured losses from natural catastrophes reached USD 137 billion in 2024 and projected that, if the trend continues, insured losses could approach USD 145 billion in 2025 • Aon reported global economic losses from natural disasters of USD 368 billion in 2024, driven in particular by

A round-up of financial services developments.

The Local Government Association (LGA) has published an independent report, prepared by Isos Partnership, which examines the rising needs of children under five and explores how councils and early years providers are responding to these challenges. The report finds that councils and providers are consistently seeing an increase in both the volume and complexity of needs, particularly communication and interaction difficulties, with more children presenting with very limited or no language and social communication skills. It cites poverty, family stress, neurodivergence and pandemic lockdowns as contributing factors, noting that providers are adapting to support these children but often face funding and capacity pressures. Practitioners and councils call for greater funding, a national workforce strategy and curriculum reforms to improve early years inclusion. The LGA urges the government to address these challenges through special educational needs and disability (SEND) system reforms and the Best Start in Life agenda.

The three European Supervisory Authorities (the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority—ESAs) have published their Spring 2025 Joint Committee update, highlighting significant challenges to financial stability due to growing geopolitical tensions and rising cyber risks. These include trade disputes, shifting policies, international conflicts, and economic fragmentation, requiring heightened vigilance and adaptability. Financial institutions are called to manage uncertainties such as exposure to international markets, liquidity risks, and the evolving role of AI. The ESAs stress the importance of proactive risk management, stronger cyber resilience, and close monitoring of global financial linkages. They recommend preparing for market volatility, potential liquidity risks, and adverse developments, along with robust data governance and compliance with the AI Act and Digital Operational Resilience Act (DORA).

The Council of the EU has adopted a Regulation and a Directive establishing common internal market rules for renewable and natural gases and hydrogen, which reforms the current EU gas legislation. The new rules will ensure the move to renewable and low-carbon gases, especially hydrogen, in the energy system, to achieve the EU’s decarbonisation targets and will stress the importance of integrated and transparent network planning across the EU. The new rules will also ensure that vulnerable customers and customers affected by energy poverty will have better protection and will include a voluntary mechanism to support the hydrogen market for five years. The Regulation and the Directive will now be signed and published in the Official Journal of the EU. The Regulation will apply six months following its publication and Member States will have two years to transpose provisions of the Directive into their national legislation.

The Solicitors Regulation Authority (SRA) has increasingly been focusing on issues around culture and wellbeing in the workplace. It has issued guidance on the risks of failing to protect and support colleagues in the workplace environment and conducted a thematic review of workplace culture. This Workplace culture—SRA action list brings together questions for law firms to ask themselves and suggested actions to take to improve their workplace culture, as identified and recommended by the SRA in its thematic review. For more information on wellbeing, see Practice Note: Protecting staff wellbeing in the workplace environment—law firms. Mental health and challenging stigma Questions to ask yourself Does your firm: • challenge stigma and raise awareness through initiatives such as wellbeing days? • train managers proactively to spot the signs of stress or burnout? • invite colleagues to train as mental health first aiders to support wellbeing? • hold regular one-to-one meetings to facilitate discussions about health and wellbeing? • use risk assessments to monitor risks including the work/clients you deal with? • promote psychological safety at work