Leeds Reforms
On 15 July 2025, the Chancellor delivered her Mansion House speech, unveiling a series of reforms aimed at enhancing the UK's financial services sector, collectively referred to as the “Leeds Reforms”. These reforms are designed to bolster the UK's position as a leading global financial centre, improve consumer protection, and foster innovation within the industry.
To help you to navigate these reforms, we have provided a summary of the key themes with links to the relevant regulatory publications. We will be providing more commentary and analysis on the reforms over the coming weeks.
Date published
24 July 2025
A faster, more flexible regulatory framework
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The PRA supports the government’s proposal to shorten the statutory deadlines for regulatory applications and will implement internal targets that go beyond the legislative deadlines. The FCA also intends to reduce its targets for new firm authorisations and variations of permissions and will make other improvements such as digitising applications forms and improved communications during the application process. |
Performance will be measured against the new statutory deadlines and voluntary targets from January 2026. |
Letter from Sam Woods (PRA CEO and BoE Deputy Governor) to the Chancellor (15 July 2025) FCA sets faster targets for authorisations | FCA
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Learn more in our insights
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This consultation sets out several proposals for targeted reforms to the regulatory environment, including a review of key performance indicators such as deadlines for processing authorisations and applications, streamlined authorisation conditions, ensuring regulators have clear long-term strategies to advance the objectives and rationalising the regulators’ reporting requirements. As part of a consultation on the regulatory framework, the FCA has been asked to report on how it plans to address concerns about the Consumer Duty’s application for firms primarily engaged in wholesale activity. |
The consultation is open until 9 September 2025. |
Regulatory Environment -
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Growth and competitiveness
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HMT has published an Overview following the 2024 Call for Evidence on the Financial Services Growth and Competitiveness Strategy which summarises the strategies areas of focus. |
The strategy will be implemented through the specific measures which have their own timelines. |
Financial Services Growth and Competitiveness Strategy - GOV.UK
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Learn more in our insights
Leeds Reforms: Financial Services Growth and Competitiveness Strategy
Leeds Reforms: FS Sector Strategy: Cross-Cutting Reforms and Speeding Up Regulatory Approvals
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HMT has written to the Bank of England recognising the role it plays as the regulator of FMI firms and highlighting the FMI Committee’s role in protecting financial stability, facilitating innovation and supporting the UK’s growth and competitiveness objectives. |
The FMI Committee is to continue to report on its progress annually. |
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Attracting and developing talent is key to the success of the UK FS sector and HMT has welcomed proposals from the FSSC to create a compact to accelerate skills within the sector and for a steering group to be set up. |
A steering group is to be formed by the end of 2025. |
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A Policy Note providing further detail on the Central Counterparties (Amendment) Regulations 2025 has been published. This Policy Note is intended to be considered alongside the new CCP rule book which will be published for consultation on 18 July 2025. |
Comments on the draft SI are requested by 18 November 2025 with the intention being to lay the SIs in 2026. |
Updating the UK's regulatory framework for central counterparties |
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Bank of England Consultation Paper - Ensuring the resilience of CCPs |
The Bank of England is consulting on updates to the UK’s regulatory framework for Central Counterparties (CCPs). The proposals aim to enhance resilience, support innovation, and streamline regulation under the Bank’s new rule-making powers granted by the Financial Services and Markets Act 2023. |
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Bank of England Draft Supervisory Statement - Draft supervisory statement on CCP margin |
Bank of England Draft Supervisory Statement - Draft supervisory statement on CCP margin |
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Draft statement of policy: The Bank of England's approach to comparable compliance permissions |
Sets out the Bank’s approach to granting comparable compliance permissions to systemic non-UK central counterparties (CCPs) recognised in the UK. Part of the UK’s post-Brexit regulatory framework under the Financial Services and Markets Act 2000 (FSMA). |
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The Bank of England’s supervisory approach to onboarding new financial market infrastructure firms |
To provide clarity and transparency on how the Bank supervises new Financial Market Infrastructure (FMIs) entering the UK market. |
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Bank of England's appraoch to modification and waiving of rules for: |
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Bank of England - Fundamental Rules for Financial Market Infrastructures: policy statement |
Introduces a new set of Fundamental Rules for UK Financial Markets Infastructure firm to enhance financial stability, operational resilience, and risk management. |
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Bank of England Fundamental Rules for Financial Market Infrastructures: supervisory statement |
Provides guidance on how UK Financial Markets Infrastructure firms should comply with the newly introduced Fundamental Rules. |
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Sets out the Bank of England’s approach to: |
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Draft statement of policy: The Bank of England's approach to tiering non-UK central counterparties |
Explains how the Bank of England determines whether a non-UK CCP is systemically important to UK financial stability. |
Reforming the Senior Managers and Certification Regime
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Following the Call for Evidence in 2023, consultations have now been published to reform the Senior Managers and Certification Regime. The changes are intended to reduce the burden imposed on firms without undermining the effect of SM&CR on maintaining high standards. There are three consultations on the reforms to the regime as HMT is responsible for the statutory basis of the regime whereas the FCA and PRA use rules and policy to make the regime operational. |
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HMT Consultation |
HMT’s consultation ends on 7 October 2025. |
Reforming the Senior Managers & Certification Regime - Consultation |
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FCA Consultation |
The FCA’s consultation closes on 7 October 2025 and a Policy Statement is expected mid-2026. |
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PRA Consultation The proposals include reducing application approval delays and making the process more transparent and efficient, offering more than 12 weeks’ flexibility for firms to recruit new senior management roles in the event of an unforeseen departure or temporary absence, clarification to give firms better understanding about the SMF process and reducing duplication where there are overlapping certification roles.
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The PRA invites responses by 7 October 2025 and proposes an implantation date of mid-2026 |
CP18/25 - Review of the Senior Managers and Certification Regime |
Streamlining prudential rules
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The UK is replacing retained EU law with the FSMA 2000 model which enables the regulators to set rules directly to allow a more flexible, tailored and responsive regulation. A Policy Paper has been published which covers HMTs approach to Basel 3.1, the Overseas Recognition Regime and definitions in the UK Capital Requirements Regulation (CRR) which will be retained in legislation going forward. Draft legislation has been published with the Policy paper and legislation will be made to revoke the parts of the CRR relating to the definition of capital and total loss-absorbing capacity. |
The consultation is open until 5 September 2025. The revocation of the CRR provisions is intended to take effect from 1 January 2026. The transitional regulations and legislation needed for the PRA to restate the remaining assimilated law will be made before 1 January 2027 so that Basel 3.1 can be implemented by that date. |
The Capital Requirements Regulation (Amendment) Regulations 2025 The Capital Buffers and Macro-prudential Measures Regulations [2024] |
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PRA - CP19/25 – CRR Definitions: restatement in PRA Rulebook |
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The Bank of England has published a webpage setting out the various updates it is making to the resolution requirement. |
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MREL Statement of Policy |
The updated Statement of Policy on the MREL framework will be effective from 1 January 2026. |
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Amendments to MREL reporting |
The consultation closes on 31 October 2025 and the intention is that MREL reporting policy would be effective on 1 January 2027. |
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Increasing the Resolution Assessment threshold and recovery plans review frequency |
The consultation closes on 31 October 2025. |
CP14/25 – Amendments to Resolution Assessment threshold and Recovery Plans review frequency |
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Disclosure: resolvability resources, capital distribution constraints and the basis for firm Pillar 3 disclosure |
The consultation closes on 31 October 2025 with a Policy statement and final rules expected in Early 2026. |
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Reforming redress
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The Treasury has launched a consultation on proposed reforms of the Financial Ombudsman Service (FOS). The consultation is looking at proposals to adapt the “fair and reasonable test”; formalise FCA and FOS collaboration in regard to interpreting FCA rules and wider implication issues; creation of a long stop complaint date of 10 years for referral to FOS; as well other proposals. In November 2024, the FCA and FOS launched a call for input on modernising the redress system. The FCA and FOS are now consulting on proposed changes to modernise the financial redress system including aligning the FOS’s “fair and reasonableness test” more closely with FCA rules, defining and setting out a process for mass redress events and a formal referral mechanism to allow the FOS to seek FCA guidance on regulatory interpretation. The FCA and FOS have also published an updated memorandum of understanding setting out how they will work together. |
The Treasury consultation closes on 8 October 2025 The FCA and FOS consultation closes on 8 October 2025 with a policy statement expected in the first half of 2026. |
Review of the Financial Ombudsman Service Consultation CP25/22: Modernising the redress system Memorandum of Understanding between the FCA and the scheme operator, the Financial Ombudsman Service |
Learn more in our insights
Leeds Reforms: Focus on the Financial Ombudsman Service and modernising the redress system
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The FOS has published a Policy Statement setting out that it intends to change the interest rate it applies to compensation awards to the average of 1% above Bank of England base rate with the 8% rate only being applied where compensation is paid late. |
The change is intended to apply to complaints issued after 1 January 2026 and further guidance will be provided in Autumn 2025. |
Financial Ombudsman Service announces change to compensation interest levels |
Digitalisation of financial markets
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A Policy Paper has been published recognising opportunities to improve efficiency and resilience in wholesale markets through digitalisation. It proposes to drive forward digitalisation through market optimisation, market transformation and market leadership. |
Further updates on tokenisation pilots and legal reforms are expected by late 2025. |
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Views have previously been sought on the delivery of DIGIT and a Policy paper has now been published. This is part of the UK’s broader strategy to modernise capital markets and explore the use of digital assets in sovereign debt issuance. |
The expected launch of DIGIT within the digital securities sandbox is expected in late 2025/early 2026. |
Digital Gilt Instrument (DIGIT) pilot update |
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The Digitisation Taskforce has published a report setting out the steps needed to implement digitisation across the UK shareholding framework. The government has responded to the Taskforce’s report supporting the proposals and acknowledging that a digitised shareholding framework will support the government’s Wholesale Financial Markets Digital Strategy to make UK capital markets more efficient, resilient and competitive. The government intends to make and amend existing legislation to support the transition. |
The Report recommends a staged approach to the implementation with the first steps, to digitise share registers and replace physical share certificates with digital entries happening before the end of 2027. |
Digitisation Taskforce Final Report - July 2025 |
Payments
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The Payments Vision Delivery Committee( the Committee) was established under the National Payments Vision (NPV) to drive the implementation of the key activities within the NPV. The Committee have agreed a new public-private model to deliver innovation in the UK retail payments infrastructure which includes a new Retail Payments Infrastructure Board, a delivery Company and Pay.Uk continuing to operate the existing systems. |
The NPV Committee will publish its strategy for retail payments infrastructure in Autumn 2025. |
Payments Vision Delivery Committee Update - GOV.UK |
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The Governor of the Bank of England spoke at Mansion House about the about the world economic situation and the need to restore multilateral institutions to ensure economic growth and stability setting out four proposals for the IMF. He also spoke about the opportunities technology presents in the retail payment sector such as lower costs, fraud reduction and improvements to functionality of payments. |
Mr Bailey mentioned an “urgent need for innovation now” in the payment sector and that the Bank would work in collaboration with the authorities and industry to deliver the next generation of UK retail payments infrastructure. |
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Insurance and Reinsurance
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Following a consultation in November 2024 upon a new framework for captive insurance companies, HMT has published a consultation response paper which summarises the responses received and details how the government intends to proceed with introducing the new regime. |
The government is “determined to proceed at pace” which the PRA consulting on new rules in summer 2026 and an aim to implement the new framework in mid-2027. |
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This consultation proposes reforms to allow the use of insurance linked securities to open up access to direct funding from investors in capital markets enabling insurers to spread their risk across the wider economy. It follows the consultation on captive insurance and the proposal to use protected cell companies more widely. |
The consultation is open until 8 October 2025. |
Financial Services Growth and Competitiveness Strategy - GOV.UK Changes to the Risk |
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International markets
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Memorandum of Understanding (MOU) This MOU covers how HMT, the Bank of England, the PRA and the FCA will work together to co-ordinate their work in relation to the ORRs. HMT will make formal decisions on whether to designate an overseas jurisdiction whereas the regulators will provide technical advice, assess regulatory equivalence and may make recommendations to HMT. |
We could see new designations under the ORRS in the remainder of 2025 and monitoring in accordance with the regime is ongoing. |
Memorandum of Understanding: Overseas Recognition Regimes - GOV.UK |
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Overseas Recognition Regimes Guidance Document - GOV.UK |
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This agreement between the UK and Switzerland is intended to enable cross-border trade in financial services based on outcomes-based mutual recognition of domestic laws and regulations. UK and Swiss firms will be able to provide certain financial services across borders without needing to obtain local authorisation so long as they are registered in their home jurisdiction. It should allow UK firms to gain a competitive edge in accessing Swiss markets and vice versa. |
The UK and Switzerland have agreed to implement the agreement so that firms can start registering to use it on 1 January 2026. |
The Berne Financial Services Agreement - GOV.UK |
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FCA has created a website page for the Bern Financial Services Agreement which enables UK insurance companies to provide wholesale insurance services into the Swiss domestic market without requiring Swiss authorisation. Swiss firms will also be able to provide investment services to UK high net worth clients, professional clients and eligible counterparties, without requiring authorisation in the UK. |
Capital markets
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The FCA is making Operating a Public Offer Platform (POP) a regulated activity under the new UK framework for public offers and admissions to trading of securities. The regime is intended to provide a proportional regulatory approach, allowing greater flexibility to smaller and scaling companies to raise capital from a wider investor base. The FCA has also published a Policy Statement upon new rules for the public offers and admissions to trading regime which will replace the UK Prospectus Regulation. The changes are intended to make it easier and cheaper for companies to raise capital in UK public markets. |
The new POP regime comes into force on 19 January 2026 together with the Public Offers and Admissions to Trading Regulations framework. |
PS25/10: Final rules for public offer platforms Policy Statement |
ESG
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HMT has published its Consultation Response on the UK Green Taxonomy. The government focus on growth has meant that the Green Taxonomy will not be developed as part of the sustainable finance framework, other policies will be taken forward to support the transition to net zero and to limit greenwashing. |
The UK Green Taxonomy will not be developed further but the government will continue to monitor and assess whether steps need to be taken to address greenwashing. |
Mortgages
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A new, permanent Mortgage Guarantee Scheme has been launched to support homebuyers with small deposits. The scheme is intended to sustain the availability of 91-95% loan to value mortgages by providing lenders who offer them with a government backed guarantee. |
The scheme was made available to lenders on 15 July 2025. |
2025 Mortgage Guarantee Scheme - GOV.UK 2025 Mortgage Guarantee Scheme Rules HM Treasury 2025 Mortgage Guarantee Scheme as FCA eases advice and affordability rules |
Pensions, asset and wealth management
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Following a review of the regulatory boundary between financial advice and guidance, the government and the FCA are implementing a new regime of targeted support. Targeted support is intended to enable firms to provide support to consumers around investments and pensions by allowing them to make recommendations designed for groups of consumers with similar characteristics and circumstances. A draft SI has been published setting out the regime. |
Comments on the draft SI are requested by 29 August 2025. |
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