A balanced bill modernising regulation and striking a balance between promoting innovation, mitigating risk and protecting consumers. 

Monday 8^th June saw the Financial Services & Markets Bill start its parliamentary scrutiny in the House of Lords. “A balanced bill” according to the Government. A power grab by unaccountable regulators, according to many members of the House of Lords, including some from the Government benches.

By and large, Peers were concerned that the new Financial Services Bill is set to sweep away many of the provisions which were earnestly instilled by parliament during the post-crash amendments of Financial Services and Markets Act 2000, such as the requirement for the financial regulators to be “proportional” in making their decisions.

Through this new bill, the Government aims to bolster the financial services sector, described as the UK’s greatest economic success story and responsible for 20% of UK exports. “Modernisation” was the catchphrase of the Government with an urge to strike a balance between promoting innovation, mitigating risk and protecting consumers.

What’s in the Bill?

Part 1, Clause 1 and Schedule 1 of the Bill will see the FSMA regime gobble-up much of the Consumer Credit Act 1974. Clause 2 brings forward long-awaited changes to the Common Bond of Credit Unions which may pave the way for their expansion in the UK. Similarly, Clause 3 is aimed at improving access to banking through giving the FCA more powers.

Part 2 of the Bill and Clauses 4 to 12 reforms the workings of the Financial Ombudsman Service and consumer redress.  Clauses 6 introduces a sunset on liability.

Part 3 deals with the regulators and may yet prove one of the more controversial sections of the Bill from the reaction of Peers. This covers clauses 13 to 22. Having only been spun out of the FCA in 2013, the Payment Systems Regulator will merge back into the FCA under these provisions and Schedule 2. To the clear irritation of peers, Clause 17 stripping of duties placed on the FCA and PRA’s “to have regard” to the regulatory principles has riles those on all sides of the Lords.

Part 4 and Clauses 23 to 28 improve protections for consumers who purchase products through “appointed representatives” ensuring that complaints can be made to the Financial Ombudsman Service.

Clauses 29 and 30 will give rise to powers for the FCA to create temporary permissions for firms. Clauses 31 to 36 and Schedule 3 deal with changes to the Senior Managers Regime. Clauses 37 and 39 overseas recognition schemes and the Gibraltar authorisation regime.

Part 5 of the Bill tackles a veritable smorgasbord of different topics with Clauses 39 to 40 on changes to the Ring-Fencing Regime for larger firms. Commercial credit data sharing (clauses 41-43) transformer and insurance vehicles (clauses 44 – 45) and crypto assets (clauses 46-47), under which the FCA will gain new powers and scope over anti-money laundering and powers to seize crypto assets.

Part 6 of the Bill deals with its machinery and also creates a general power to make consequential amendments to legislation where these are necessary.

Following a critical debate in the Lords, the Bill now enters committee with many Peers pledged to amend the legislation with a particular focus from some Peers on extending regulation to tech firms and fintechs. We may yet see the Bill toughened as the Government sustained criticism from all sides.

The Bill will commence its scrutiny in Lords Committee on the 22^nd June.

You can read more about the Financial Services and Markets Bill and access the Bill documents here.

Barndoor Strategy

June 2026