The UK government has introduced the Financial Services and Markets Bill to Parliament, a wide-ranging piece of legislation designed to modernise how the country’s financial sector is regulated, strengthen consumer protections and unlock greater lending and investment.
The bill proposes to streamline the regulatory landscape, most notably by dissolving the Payment Systems Regulator and absorbing its functions into the Financial Conduct Authority (FCA). The move is intended to reduce the number of overlapping bodies firms must engage with and accelerate decision-making processes. Additionally, the bill targets a 50% reduction in the burden of the Senior Managers and Certification Regime, the framework that holds senior figures in financial firms personally accountable for their conduct.
On lending and investment, the bill proposes to update the statutory framework supporting the ring-fencing regime — the rules that require major banks to keep UK retail banking operations separate from investment banking activities. The government says the changes will improve access to finance for businesses across the country, particularly smaller firms.
The legislation also sets out significant reforms for consumers. Terms and conditions will need to be written in plainer language, and the Financial Ombudsman Service will be reformed to resolve disputes more quickly and with greater certainty. Rules governing credit union membership eligibility would also be widened, aiming to bring affordable finance to more people and communities — part of the government’s ambition to double the size of the mutual and co-operative sector.
Provision is also made to protect access to in-person banking, though subject to an independent review. The government would gain powers to ensure communities — particularly rural areas and older people not using online services — retain face-to-face banking where it is still required.
Economic Secretary to the Treasury Rachel Blake said, “Our financial services sector is world-leading, creating jobs, boosting growth and firing up our economy in Leeds, Manchester, Edinburgh and London. This Bill will unlock even more growth in the sector, making red tape less burdensome to business and boosting protections for consumers – part of our plan to build a stronger and fairer economy.”
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