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The Financial Services Growth and Competitiveness Strategy, Leeds Reforms, the Chancellor of the Exchequer Mansion House speech.

The Chancellor helpfully broke down the reforms into four areas.

1. Cutting back on excessive regulation

Reforms to the Financial Ombudsman Service (FOS) will include limiting claims to ten years, which will speed up consumer redress, and returning FOS to its original arbitration role rather than acting as a quasi-regulator.

The Senior Managers and Certification Regime (SMCR) will be streamlined, with the government and regulators pledging to reduce firm burdens by 50% and cut approval timelines. Greater flexibility around the "12-week rule" and the government's plans to replace the certification regime with a more proportionate system will be particularly welcomed.

Statutory timescales for authorisations, variations of permissions, and SMCR approvals will be reduced and the regulators have been given new targets to shorten the time for authorisations and approvals.

The FCA will also assess the Consumer Duty's impact on wholesale-focused firms.

2. Targeted changes in UK strength areas

Insurance reforms will introduce a competitive framework for captive insurance to maintain the UK's position for underwriting complex, high-value risks.

In early 2026 the government will publish draft legislation to future-proof the regulatory regime for asset management, supporting the UK's position as the world's second-largest asset management centre.

The government has decided not take forward a UK Green Taxonomy.  Instead it will work with regulators through the Transition Finance Council to capitalise on the £200 billion net-zero transition opportunity.

The government is seeking to make the UK a global FinTech capital. The PRA and FCA are launching a scale-up unit for innovative firms, with consultation on a streamlined authorisation process for start-ups later this year.   The government will continue to focus on developments in blockchain technology including tokenised securities, stablecoins, and a new Digital Gilt Instrument.

The Office for Investment will launch a concierge service by October for companies considering UK expansion.

3. Changes to capital requirements

The government supports the Bank of England's decision to raise the asset threshold for MREL requirements to between £25 and £40 billion, which will help challenger banks and increase competition.

Basel 3.1 implementation will result in lower capital requirements for domestically focused banks from January 2027, while preserving flexibility for international banks.

The ringfencing regime will be reformed to tackle inefficiency and boost growth whilst retaining financial stability protections.

A bank capital review by the Financial Policy Committee will report by the end of 2025, and mortgage lending changes may enable tens of thousands more people to secure mortgages.

4. Boosting retail investment

ISA reforms will allow Long-Term Asset Funds in stocks and shares ISAs, with further changes under consideration.

The government is working with the FCA to introduce a new targeted consumer support ahead of the financial year.  The government welcomes the campaign to promote the benefits of retail investment, launching in April 2026, and action to review the current approach to risk warnings, which reports back in January 2026. 

Industry response

The reaction to date has been generally positive, although some will no doubt feel the reforms do not go far enough. This is admittedly an ambitious programme; all the key stakeholders will need to work in lockstep to deliver it. 

Concerns remain that prioritising growth and innovation may risk financial stability and investor protection. At a Select Committee hearing, also on 15 July, regulators played down the risk that a reduction in regulation would increase the risk of another financial crisis.

What is clear is the need for a public debate around risk appetite, which the FCA has repeatedly called for.  It is hoped that these reforms will provide the necessary impetus for such a crucial conversation.