April 16, 2026

Compliance Newsletter: Volatility, Recalibration and Rising Expectations

The first quarter of 2026 has been characterised by heightened uncertainty across global markets

Geopolitical tensions, evolving monetary policy expectations, and shifting investor sentiment have contributed to increased volatility - reinforcing the importance of stability, transparency and confidence across the precious metals market.

Against this backdrop, the role of robust infrastructure, credible standards and effective governance becomes ever more critical. As the market navigates this period of uncertainty, LBMA continues to focus on supporting participants through a combination of market engagement, standard-setting and practical tools.

LBMA Update: Supporting the Market Through Change

A key area of focus in Q1 has been the ongoing transition of the platinum and palladium benchmarks. Given the importance of benchmark pricing to market functioning, the Regulatory Affairs Committee has been meeting monthly to monitor developments and ensure continued engagement across stakeholders.

The latest update from ICE Benchmark Administration, which will take on responsibility for the benchmarks, confirms that the transition remains on track for the agreed auction go-live date of 1 July 2026 and can be accessed here.

Alongside this, LBMA has launched a new precious metals-specific Anti-Money Laundering (AML) e-learning programme, designed to support firms in navigating increasingly complex financial crime risks associated with precious metals. As regulatory expectations continue to evolve, particularly in relation to data, governance and risk-based approaches, practical and accessible training will play an important role in ensuring consistency across the market.

In relation to market conduct, LBMA has recently completed a review of developments in the FX and Money Markets Codes. Given that the changes would not materially impact the Global Precious Metals Code (GPMC), and in light of the recent recognition of GPMC v2 by the Financial Conduct Authority, the Executive has taken the decision to reprioritise the drafting and publication of GPMC v3 to 2027.

This does not diminish the importance of the Code. The GPMC is not intended to be a one-off attestation exercise, but a framework that should continue to guide behaviour, decision-making and market conduct. Training on the Code remains available via ACI, and we encourage firms to engage with this to ensure ongoing understanding and effective implementation.

Looking more broadly, LBMA continues to play an active role in shaping the global narrative around precious metals. In collaboration with the World Gold Council, a new website has been launched to highlight the data and evidence supporting gold’s role as a high-quality liquid asset. This reflects a growing focus on the strategic importance of gold within financial markets and broader economic resilience.

Finally, we look forward to welcoming many of you to the upcoming Sustainability & Responsible Sourcing Summit in June, jointly hosted by the World Gold Council. If you are planning to attend, please do reach out. It would be great to connect during the event.

For further information on any of the above, or to discuss how these developments may affect your organisation, please contact us at [email protected].

Regulatory Updates

Whilst the regulatory horizon remains broadly unchanged for the precious metals market, a number of wider developments across ESG, technology, and conduct and governance are beginning to shape expectations in ways that may be relevant to market participants. Below, we highlight a selection of themes that are currently on our radar. 

Q1 2026 – Shifting Priorities, Not Reduced Risk

The first quarter of 2026 signals a subtle but important shift in regulatory direction.

While policymakers - particularly in Europe - are moving toward simplification and reducing reporting burdens, supervisory and enforcement activity continues to intensify. At the same time, technological developments are introducing new risks that existing frameworks are not yet fully equipped to address.

The result is not a lighter compliance landscape, but a more nuanced one - requiring firms to focus less on form, and more on substance, governance and real-world outcomes.

ESG: Simplification vs Enforcement

Recent EU developments indicate a recalibration of ESG regulation, with measures proposed to scale back elements of the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD).

This reflects increasing political and economic pressure to streamline reporting requirements. However, it does not signal a reduction in ESG-related risk.

Regulatory scrutiny and enforcement continue to build, particularly in relation to environmental claims and climate risk. At the same time, ESG-related litigation is becoming more prominent - reinforcing that sustainability is now firmly embedded within legal, financial and reputational risk frameworks.

In parallel, the Financial Conduct Authority is consulting on UK Sustainability Reporting Standards, pointing toward more consistent and decision-useful disclosures, albeit with potential divergence from EU approaches. The introduction of a UK Carbon Border Adjustment Mechanism further signals that sustainability considerations are increasingly being embedded directly into trade and supply chains.

Key takeaway: A reduction in reporting scope does not equate to reduced expectations. The focus is shifting toward the credibility, consistency and defensibility of underlying ESG frameworks.

Technology and Market Structure: AI Moves Faster Than Governance

A recent review by the Financial Markets Standards Board highlights the growing use of artificial intelligence within electronic trading systems across wholesale markets.

While adoption is still developing, the pace of change is accelerating - introducing new forms of model risk, operational risk and conduct risk. Critically, it raises questions as to whether existing governance and control frameworks are sufficient to oversee these developments.

This is not a future-state challenge. Elements of AI-driven decision-making are already beginning to influence market activity, often within frameworks not originally designed for them.

Key takeaway: It would be prudent for firms to begin actively assessing how existing governance and risk frameworks apply to AI-driven activity - particularly in relation to oversight, accountability and model validation.

Regulatory Direction: Outcomes Over Process

The Financial Conduct Authority has launched its new Enforcement Watch publication, providing greater transparency on regulatory priorities and emerging themes.

This reflects a broader shift toward more targeted, intelligence-led supervision - with a clear emphasis on:

  • individual accountability;

  • effective governance; and

  • demonstrable outcomes, rather than procedural compliance.

Alongside this, continued developments under the Senior Managers and Certification Regime (SMCR) reinforce the expectation that responsibility for decision-making and risk management remains clearly defined and actively exercised.

Key takeaway: Regulators are increasingly focused on how firms operate in practice. Clear accountability, effective governance and evidenced outcomes remain critical.

Looking Ahead

Taken together, these developments point to a more complex compliance environment:

  • Less prescriptive regulation in some areas, but greater scrutiny overall;
  • Rising enforcement and litigation risk, particularly in ESG;
  • Rapid technological change introducing new governance challenges.

For firms, the priority is not simply keeping pace with regulatory change, but ensuring that governance frameworks are robust, adaptable and capable of responding to both evolving expectations and market innovation.

Supporting the Market

As these themes continue to evolve, LBMA remains committed to supporting Members and stakeholders through:

  • ongoing regulatory monitoring and horizon scanning;

  • development of key standards; and

  • practical tools and engagement across the market.

If you would like to discuss any of the topics covered, please do not hesitate to get in touch at [email protected].

Kind Regards,

Emmy Richardson
Senior Compliance Associate
LBMA

Disclaimer: This newsletter is for informational purposes only and does not constitute advice.