---

Financial Services and Markets Bill [HL]: HL Bill 5 of 2026–27

Approximate read time: 61 minutes

The bill aims to support growth and investment and modernise the regulation of financial services. It would make reforms to several areas of financial regulation, including:

• reforms to the Financial Ombudsman Service, with the aim to align its decisions more closely with Financial Conduct Authority (FCA) rules and to prevent it acting as a quasi-regulator
• abolishing the Payment Systems Regulator and transferring its functions to the FCA.
• introducing a ‘provisional licences’ authorisation scheme, and making reforms to the UK’s bank ring-fencing regime.

Many of the provisions follow consultations conducted by the government and reflect different government strategy documents including its ‘Financial services growth and competitiveness strategy’ and ‘Regulation action plan’. The bill would also reform what it sees as a complex, inflexible and disproportionate consumer credit regime. Other reforms include to bank ring-fencing and senior manager rules. The bill contains a number of provisions that would create delegated powers, for example in relation to the independent review into in-person banking access.

Following publication of the bill, political reaction has so far been limited. However, other comment since the bill’s publication suggests that changes including those proposed to the Financial Ombudsman Service, consumer credit regulation and the access to banking services review will be of interest to stakeholders.

Photo by Tadas Petrokas on Unsplash