Category: Consultation

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HM Treasury publishes consultation on proposed changes to the legislative regime for appointed representatives

Earlier today, on 12 February 2026, HM Treasury published a press release and a consultation paper on proposed changes to the legislative regime for appointed representatives.

This consultation follows the Government’s press release and policy statement, published on 11 August 2025, setting out its intention to “shore up confidence in the use of Appointed Representatives and to safeguard the future of the UK’s Appointed Representatives regime“.

The key proposals are:

– to require firms wishing to use appointed representatives to first obtain permission from the Financial Conduct Authority (which aims to ensure the principle is suitable to be authorised);

– to provide “appropriate consumer protection when things go wrong” by allowing a complainant to take a complaint to the Financial Ombudsman Service where the authorised firm is not responsible for the issue (for example, where an appointed representative acts outside of the scope of what the principal accepts responsibility for); and

– to bring appointed representatives within the scope of the Senior Managers and Certification Regime so that it is better aligned with the framework applying to authorised firms.

The consultation closes on 9 April 2026.

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FCA says it will consult on a proposed motor finance compensation scheme

Earlier today, on 3 August 2025, the UK Financial Conduct Authority published a press release and a statement setting out its plan to consult on a proposed motor finance compensation scheme.

The devil is always in the detail (particularly on a complicated topic like this) so we will need to wait to see what the FCA says (a consultation is likely to be published in October 2025 with a six week period for responses).

If a scheme is made then the FCA says it expects most compensation payments to be ‘no more than £950’ and for payments to be made ‘in 2026’.

But there are many points raised, and questions left unanswered, by the FCA’s announcement. And some parts of their announcement require a lot of work and buy in from Treasury.

The FCA has also published a transcript of a call with market analysts which took place at 5pm on 3 August 2025.

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Financial Conduct Authority publishes consultation paper on its proposed rules and guidance for regulation of unregulated Buy Now Pay Later (now called ‘deferred payment credit’)

Earlier today, on 18 July 2025, the UK Financial Conduct Authority (the FCA) published a press release and a consultation paper, ‘Deferred Payment Credit (unregulated Buy Now Pay Later): Proposed approach to regulation’ (CP25/23), setting out its proposed rules and guidance for regulation of unregulated Buy Now Pay Later (which will now be called ‘Deferred Payment Credit’ or DPC).

The FCA is inviting responses by 26 September 2025.

The key proposals are:

– information requirements: the FCA proposes to introduce new rules requiring customers to be given information to help them make “effective, timely and informed decisions about DPC borrowing before they enter into an agreement, and throughout the lifetime of the agreement” (including if they miss payments) (see paragraphs 3.9 to 3.75 of CP25/23).

– creditworthiness assessments: the FCA wants DPC lending to be affordable. The FCA will expect firms to “do proportionate creditworthiness assessments, so that borrowers can keep up repayments without harming their financial wellbeing“. The FCA proposes to “apply our existing principles-based rules and guidance at CONC 5.2A” (see paragraphs 3.76 to 3.102 of CP25/23).

– high-level standards and existing consumer credit rules: the FCA wants the consumer duty to apply (requiring firms to act to deliver good outcomes to retail customers) and it will also apply some existing consumer credit rules to DPC (see, for example, paragraphs 2.35 to 2.42, and chapter 4, of CP25/23).

– dispute resolution: customers under a DPC agreement will be able to complain and refer their complaints to the Financial Ombudsman Service (see chapter 5 of CP25/23).

– data reporting: the FCA will expect “better and more up-to-date information about the DPC sector and customer outcomes” (see paragraphs 4.18 to 4.40 of CP25/23).

– authorisation: the FCA proposes to introduce a temporary permissions regime while firms apply for a relevant authorisation from the FCA (see chapter 6 of CP25/23).

Like anything with consumer credit, the devil is always in the detail. For example, the FCA proposes that the key provisions on pre-contractual information will be set out in CONC 4.2A. There are proposed new rules on continuous payment authorities in CONC 4.6.2AR. There are also proposed new rules in CONC 7.20 dealing with information to customers about missed payments and giving notice before taking certain steps. The aim of these proposed rules is to make disclosures and documentation more meaningful and accessible to customers, whilst reducing unnecessary burdens on firms.

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HM Treasury publishes ‘Phase 1’ consultation on consumer credit reform, and response to feedback on plans to regulate BNPL

Earlier today, on 19 May 2025, HM Treasury published:

– a press release and a ‘Phase 1’ consultation paper on reform to the Consumer Credit Act 1974;

– an update to its consultation and its response to the feedback to its consultation on regulating buy-now, pay-later products (BNPL); and

– a news story on its proposals to regulate buy-now, pay-later.

The ‘Phase 1’ consultation on reform seeks views on information requirements, sanctions and criminal offences. The deadline for responding is 21 July 2025.

On BNPL, HM Treasury “intends to lay the [statutory instrument] before Parliament shortly after this responsible is published”. Once the SI is made, the FCA will then have 12 months to draft, consult on, and finalise its rules for BNPL Lending. BNPL products will then be regulated from mid-2026. The FCA will shortly publish a consultation on its rules.

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HM Treasury publishes a policy paper setting out a new approach to ensure regulators, and regulation, support growth

On 17 March 2025, HM Treasury published a policy paper and a news story setting out a new approach to ensure regulators, and regulation, support growth.

HM Treasury says it will overhaul the regulatory system so that it:

– supports growth;

– is targeted and proportionate;

– is transparent and predictable; and

– adapts to keep pace with innovation.

HM Treasury says that its reforms “will apply to all bodies exercising regulatory powers and functions“. This will therefore include the UK Financial Conduct Authority and the UK Prudential Regulation Authority.

The proposed actions are:

– action 1: tackling complexity and the burden of regulation (which includes consolidating the Payment Systems Regulator mainly within the FCA);

– action 2: reducing uncertainty across the regulatory system (HM Treasury will look to review the number of the PRA’s and FCA’s “have regards” to identify opportunities to rationalise them and ensure a focus on their priorities; it will ensure the Financial Ombudsman Service is “set up in such a way that it works well for consumers, small businesses and for financial services firms” and reviewing some of the key criticisms of the Ombudsman); and

– action 3: challenging and shifting excessive risk aversion in the system (the review will hold regulators to account for their performance and reduce administrative costs; the aim is to strike the right balance between consumer protection and growth).

There are some key regulator pledges at Annex A. The FCA’s pledges, and the PRA’s pledges, are:

FCAProvide a dedicated case officer to every firm within the FCA’s regulatory sandbox.
FCAProvide 50% more dedicated supervisors to early and high growth firms, to help them navigate the regulatory system and support their growth.
FCAExtend pre-application support to all wholesale payments, and crypto firms.
FCAIndicate more often that the FCA is ‘minded to approve’ start ups to help them secure funding.
FCASimplify its mortgage and advice rules to support greater home ownership.
FCAWelcome FCA work to review the contactless payment limits, including removing the £100 limit on individual payments.
FCAAccelerate a review of capital requirements for specialised trading firms.
FCA + PRAHMT will review the FCA’s and PRA’s ‘have regards’ to rationalise them and ensure a focus on their priorities.
FCA + PRAReduce regulatory reporting requirements for firms.
PRAThe PRA will consult this April on a matching adjustment investment accelerator aimed at reducing the time between life insurers identifying a productive investment opportunity and making that investment.

This announcement marks an important step forward in achieving a proportionate financial services regulatory system which works for both firms and for users of the services provided by firms. The devil is, of course, always in the detail and firms will no doubt be keeping a close eye on future annoucements.

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Financial Conduct Authority publishes two ‘Dear CEO’ letters on authorised push payment fraud reimbursement

On 7 October 2024, the UK Financial Conduct Authority (the FCA) published two ‘Dear CEO’ letters setting what it expects firms to do on authorised push payment (often called ‘APP’) fraud reimbursement. The letters are addressed to:

– banks and building societies; and

– payment and e-money institutions.

These letters quickly follow the Payment Systems Regulator’s policy statement, PS24/7, which was published on 3 October 2024 setting out new maximum reimbursement limits for APP fraud victims at £85,000 (which followed the Payment Systems Regulator’s press release and consultation on 4 September 2024). That decision came into force on 7 October 2024.

The Dear CEO letters set out the FCA’s expectations. These include:

– Anti-fraud systems and control: Firms should have effective governance arrangements, controls and data to detect, manage and prevent fraud, and regularly review their fraud prevention systems and controls to ensure that these are effective. Firms should also maintain appropriate customer due diligence controls (both at onboarding and throughout the relationship).

– Consumer duty: There is a perhaps unnecessary reminder that the consumer duty requires firms to avoid causing foreseeable harm. There is an example of such harm: a consumer becoming victim to a scam where a firm has inadequate systems to detect and prevent scams.

– On us APP fraud reimbursement: Where there are internal transfers (often called “on us” or intra-firm payments) which do not use an external payment system, the FCA is concerned that consumers may not understand that a different (and lower level) protection will be provided. Firms are required to ensure their approach complies with the consumer duty.

– Capital and liquidity: for payment and e-money institutions, the FCA reminds firms to recognise and manage their potential liability and the impact APP fraud may have on their capital and liquidity.

– Systems and controls: the FCA says firms must ensure that they have appropriate oversight, systems and controls in place to comply with its requirements.

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Payment Systems Regulator publishes new Powers and Procedures Guidance

On 20 September 2024, the UK Payment Systems Regulator (the PSR) published an updated version of its guidance entitled ‘Powers and Procedures Guidance’. Section 96 of the Financial Services (Banking Reform) Act 2013 requires the PSR to published guidance.

The guidance updates the PSR’s guidance which was first published in 2015 (and updated in 2020). The PSR’s response paper sets out the changes. These updates include:

– changes to paragraph 5.7 of the guidance: dealing with the process for opening an investigation; and

– changes to paragraph 5.12 of the guidance: dealing with flexibility for staff deployed on monitoring or enforcement to work across functions.

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FCA consults on further pause for handing motor finance discretionary commission arrangements

🚨 Earlier today, on 30 July 2024, the FCA published a consultation paper entitled ‘CP24/15 – Extending the temporary changes to handling rules for motor finance complaints’ and a press releaseproposing to extend the current pause to the time that firms have to respond to motor finance complaints about discretionary commission arrangements.

📆 The FCA says it proposes to set out its next steps in May 2025 (and not September 2024).  By then, the FCA says it’ll have analysed: (a) the data it has collected from motor finance firms and (b) the outcome of Barclays’ judicial review of the Financial Ombudsman’s decision to uphold a DCA complaint.

✋ The proposed pause to 4 December 2025 will allow the FCA to (for example) consult on a redress scheme or ask firms to deal with motor finance complaints relating to discretionary commission models.  Firms will not be required to respond to such complaints before 4 December 2025.

📝 The FCA also proposes to give consumers until the later of 29 July 2026, or 16 months from the date of their final response letter, to refer any complaint to the Financial Ombudsman Service.

👨‍💻 The deadline for responding to the consultation is 28 August 2024.

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Bank of England, FCA, PRA and PSR conduct review of Memorandum of Understanding for payment systems in the UK

On 28 March 2024, the UK Financial Conduct Authority published a statement about the joint-authority Memorandum of Understanding which is in place between the FCA, the Bank of England, the Prudential Regulation Authority and the Payment Systems Regulator.

The statement confirms those authorities have carried out their eighth review of the MoU in 2023.

The key points are the authorities:

– consider their co-operation is “working well”;

– continue to exchange “expertise, information and data related to regulated activities”;

– continue to “work together closely on issues of common regulatory interest and seek to avoid duplication in their requirements and engagement with industry”;

– have “identified areas for future co-operation and co-ordination, including revisions to the MoU regarding proposed stablecoin regulation, embedding the reforms from the Financial Services and Markets Act 2023 (FSMA 2023), as well as further enhancing the sharing of information and data”; and

– will continue “to work, as needed, with the Treasury in its preparation of a National Payments Vision”.

Firms will therefore need to be acutely aware of the overlap, and co-operation, between authorities throughout their engagement and interaction with those authorities.