Category: HM Treasury

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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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HM Treasury publishes new amending regulations changing the form and content of default, enforcement and termination notices

On 11 November 2020, HM Treasury laid before Parliament the Consumer Credit (Enforcement, Default and Termination Notices) (Coronavirus) (Amendment) Regulations 2020 and published an explanatory memorandum.

These regulations amend the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983, which prescribe the form and content of:

– an enforcement notice under Section 76(1) of the Consumer Credit Act 1974;

– a default notice under Section 87(1) of the Consumer Credit Act 1974; and

– a termination notice under Section 98(1) of the Consumer Credit Act 1974.

These changes make significant changes to the form and content of such notices. The changes come into force on 2 December 2020.

By Regulation 9 of the Consumer Credit (Enforcement, Default and Termination Notices) (Coronavirus) (Amendment) Regulations 2020, there is a transitional period of six months from 2 December 2020 during which time a notice under Sections 76(1), 87(1) or 98(1) of the Consumer Credit Act 1974 will be compliant if it complies with the Consumer Credit (Enforcement, Default and Termination Notices) Regulations 1983 immediately before its amendment on 2 December 2020.

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HM Treasury consults on regulatory framework for the approval of financial promotions

Earlier this week, on 20 July 2020, HM Treasury published a consultation on the regulatory framework for the approval of financial promotions.

HM Treasury says that experience in recent years suggests the regime needs “additional safeguards to ensure that approval by an authorised person is a genuinely effective means of ensuring that consumers are protected from deficient or potentially harmful financial promotions“.

To strengthen the Financial Conduct Authority’s ability to ensure the approval of financial
promotions operates effectively, the Government proposes to establish a regulatory ‘gateway’, which a firm must pass through before it is able to approve the financial promotions of unauthorised firms. Any firm wishing to approve the financial promotions of unauthorised firms would therefore first need to obtain the FCA’s consent.

The deadline for responding is 12pm on 25 October 2020.