The UK government has confirmed plans to introduce a financial services bill in the King's Speech scheduled for 13 May 2025.
The legislation is intended to complete a range of regulatory reforms affecting key institutions in the country's financial system, including the abolition of a dedicated payments regulator and changes to the dispute resolution body for financial services.
According to officials briefed on the measure, the bill will receive a priority slot in the next parliamentary session. The Treasury has committed to several reforms that require primary legislation to take effect.
Regulatory changes in scope
Among the reforms the bill is expected to enable is the merger of the Payment Systems Regulator (PSR) into the Financial Conduct Authority (FCA), a move that would consolidate oversight of payment systems under the existing conduct regulator. The bill is also expected to overhaul the Financial Ombudsman Service, which handles consumer complaints against financial firms.
The legislation is additionally expected to dismantle the senior managers certification regime, a framework introduced following the 2008 financial crisis that requires firms to assess and record the fitness of thousands of senior staff annually. The FCA announced steps to ease the regime ahead of the bill's introduction, though the government has indicated it intends to go further with structural changes to the rules.
According to Financial Times, a further measure requiring primary legislation is a proposed provisional licensing regime for early-stage financial companies. Under the plan, eligible firms would be permitted to operate for 18 months whilst fulfilling the requirements for full authorisation, a framework aimed at reducing barriers for new entrants to the regulated sector.
Scope and industry reaction
Whether the bill will address ringfencing rules ( which require banks to separate investment banking from retail operations) remains uncertain, as agreement with the Bank of England has not yet been confirmed.
Industry observers have noted the risk that the bill could attract a wide range of additions during its parliamentary passage. With multiple industry groups and legislators seeking to include provisions on consumer protection and risk management, there are concerns the legislation could expand significantly in scope beyond its original intent.
David Postings, chief executive of the banking trade body UK Finance, described the King's Speech as an opportunity to advance financial services priorities through legislation, noting that a substantial portion of the government's regulatory reform programme requires primary legislation to proceed.
The financial services bill forms part of a broader effort by the Treasury to reduce regulatory complexity and improve the competitiveness of the UK's financial sector. Chancellor Rachel Reeves has previously signalled ambitions to streamline oversight frameworks while maintaining individual accountability for senior managers.
