Implications Of The New FCA Regulatory Initiatives Grid

The April 2025 Regulatory Initiatives Grid signals a decisive reset: regulators, steered by the Government’s growth agenda, are pivoting from EU-inherited rules to a leaner, UK-tailored framework. Nineteen new projects flow straight from FSMA 2023’s repeal-and-replace programme, all aimed at stripping cost and complexity from firms and sharpening the UK’s competitive edge.

Among the new or unforeseen developments, the FCA’s removal of the Consumer Duty Board champion requirement (without consultation), stands out as a major change in supervisory approach.There is also a notable delay of the Basel 3.1 implementation by one year, in coordination with the PRA and HM Treasury, to provide more clarity around international (particularly US) plans. This has knock-on effects on related prudential policy areas, such as the “Strong and Simple” framework for smaller banks. Hopefully it will have a knock-on impact of freeing up smaller banks to provide more credit to UK firms, especially SME’s, who are facing greater cost pressures now than at any time since the 2008 financial crisis.

Additionally, the much-anticipated final rules on diversity and inclusion have been withdrawn for for the time being, due to legislative developments and feedback.

Across all sectors, the Grid introduces a broad range of new cross-sectoral initiatives, including a long-term regulatory framework for Open Banking, new guidance on cloud computing and encryption, updates to the Money Laundering Regulations, and the regulatory regime for ESG ratings. There is also a continued drive to modernise and automate data collection in regulatory reporting.

The guidance on Cloud Computing and encryption aligns to the focus on operational resilience Impact tolerences and the deadline was the end of March 2025.

In sector-specific developments, banking and lending feature 21 new initiatives, among them are reviews of mortgage rules, a new approach to remuneration regimes, and further requirements for solvent exit planning. In payments and crypto-assets, seven new initiatives reflect the evolving regulatory regime for crypto assets and stable coins, alongside the implementation of the National Payments Vision and the planned overhaul of the payments regulatory framework. Investment management sees new consultations on fund tokenisation, streamlined value assessment reporting, and a continuing review of the UK funds regime.

Insurance and wholesale markets also have several targeted new entries, such as simplification of insurance rules, captive insurance consultation, introduction of a T+1 settlement cycle, digital securities sandbox, and reforms to the short selling regime.

A further point of note is the high number of completed or stopped initiatives (90 since the last Grid),this includes several initiatives that were both started and finished within this period and reflects both regulatory de-cluttering and the shift in priorities.

In summary, this edition of the Grid highlights an era of regulatory streamlining and a clear intent to align financial regulation with the UK’s economic priorities which are focused squarely on growth.

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