In her Mansion House speech, Chancellor Rachel Reeves set out HM Treasury’s Financial Services Growth and Competitiveness Strategy, branded the Leeds Reforms, framing it as the most wide-ranging package of reforms to financial services regulation in more than a decade. The package combines proposed changes to redress and conduct frameworks with sector-specific initiatives, adjustments to prudential and resolution requirements for banks, and measures aimed at increasing retail investment. Key proposals and commitments include reforms to the Financial Ombudsman Service, including a proposed 10-year limit for claims, alongside the Financial Ombudsman Service’s decision to reduce the pre-decision interest rate from 8% to Bank of England base rate plus 1%. HM Treasury will set new targets for the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) to cut authorisation and approval times, has tasked the FCA with assessing whether the Consumer Duty unduly affects wholesale activity, and will streamline the Senior Managers and Certification Regime by reducing burdens on firms by 50% and shortening approval timelines. Targeted measures include a new competitive framework for captive insurance, draft legislation to “futureproof” the asset management regime in early 2026, a decision not to pursue a green taxonomy in favour of work with regulators through the Transition Finance Council, and a PRA and FCA scale-up unit for innovative firms. On capital and structural reform, the speech backed the Bank of England’s move to raise the asset threshold for minimum requirement for own funds and eligible liabilities (MREL) to between GBP 25 billion and GBP 40 billion, confirmed an approach to Basel 3.1 that applies lower capital requirements for domestically focused banks from January 2027, committed to “meaningful” reform of ringfencing, and noted the Financial Policy Committee’s review of the overall level of bank capital needed for UK financial stability, due to report back by end-2025. Retail investment measures include allowing Long-Term Asset Funds within stocks and shares ISAs, developing a new form of targeted consumer support with the FCA ahead of the new financial year, a retail investment campaign due to launch next April, and a review of risk warnings reporting back in January. Next steps and timelines set out in the speech include the Office for Investment’s new concierge service launching by October, first trading events for PISCES due later this year, draft asset management legislation in early 2026, and Basel 3.1 changes for domestically focused banks from January 2027. Further ISA changes remain under consideration, with wider engagement planned in the coming months.
HM Treasury 2025-07-15
United Kingdom's HM Treasury launches Financial Services Growth and Competitiveness Strategy with Leeds Reforms on ombudsman, SMCR and bank capital
Chancellor Rachel Reeves announced HM Treasury's Financial Services Growth and Competitiveness Strategy, the Leeds Reforms, marking the most extensive regulatory overhaul in over a decade. Key initiatives include reforms to the Financial Ombudsman Service, streamlined authorisation processes, and adjustments to prudential requirements for banks. The strategy also outlines measures to enhance retail investment and supports the Bank of England's capital reform efforts.