Context
HM Treasury has published its findings following the consultation on ensuring the financial services regulatory environment is effective, proportionate and in line with the Government’s ambition on regulation.
Background
In March 2025 the government set out its Regulation Action Plan which intended that the regulatory system supported growth, was targeted and proportionate, transparent and predictable, while being adaptive to keep pace with innovation. The objective was to make a number of targeted interventions in the regulatory framework, to enhance their statutory objectives.
The Government consulted on this between July and September 2025 through its “Regulatory Environment – Cross Cutting Reforms” document, on proposals which
- Set new and shorter deadlines for determining priority regulatory applications, to make it quicker and easier to do business in the UK
- Requiring the regulators to set out their strategic approach to regulation and supervision
- Strip away duplicative processes to enable the regulators to be more agile and responsive
43 responses were received to the consultation and overall respondents were broadly supportive of the proposed reforms.
Key points to note
The government intends to legislate to bring in:
- New, shorter statutory deadlines for determining applications for new firm authorisations, variations of permission and senior manager approvals
- Require the FCA and PRA to produce new long term strategies at least once every five years
- Require the regulators to have regard to regulatory and supervisory principles, as well as remit letters containing recommendations from the Treasury, when these strategies are produced, and remove the requirement for the regulators to consider these when making day-to-day decisions
- Remove a range of reporting and other procedural requirements from the regulators, which are of lower value to stakeholders.
There will be other legislation to shorten a number of other statutory deadlines such as deadlines for determining requirements imposed by the regulators, financial promotion approvals, and SM&CR variations. The Government has welcomed these steps being taken by the FCA and PRA. The response also referenced the Government’s plans to develop a provisional licences regime for early-stage financial services firms seeking FCA authorisation. The reforms are expected to drive further improvements to the UK’s regulatory environment, to the benefit of firms and consumers.