Why the Financial Services and Markets Bill is a chance to reset regulation

The Financial Services and Markets Bill is a chance to refresh the map of regulation. It’s an opportunity to make the system simpler, fairer, and easier for everyone to navigate. 

By pushing forward the Leeds Reforms, especially the changes to the Financial Ombudsman Service and the Senior Managers & Certification Regime, the Bill starts to rebuild something the sector has been missing for years – confidence in how rules are applied and products are judged. 

Take the FOS. 

Ombudsman

It plays a vital role in protecting consumers, but too often firms and consumers have been left guessing how complaints will be handled, sometimes long after a product was sold. 

That review shouldn’t wait for primary legislation. A focused piece of work, with input from industry and consumer groups, to explore how the right lessons can be learned without creating a whole new set of quasi-regulatory requirements, could make meaningful improvements now.

David Otudeko, ABI

The Bill’s move to tie decisions more closely to the rules that actually applied at the time is a big step toward restoring predictability.  And the government’s decision to not to include the proposed “carve-out” power removes an additional source of uncertainty. 

Another crucial reform is the introduction of a clear, specified time limit to bring complaints. While there are valid arguments for different time periods, the principle of clarity will be transformative for businesses. And the consumer benefits must not be overlooked either, as this change will have a significant impact improving FOS efficiency and speeding up complaint resolution.  

The FOS and Financial Conduct Authority have also promised to tackle “read across” – the idea that a single FOS decision can end up being treated like a rule for the whole market. 

That review shouldn’t wait for primary legislation. A focused piece of work, with input from industry and consumer groups, to explore how the right lessons can be learned without creating a whole new set of quasi-regulatory requirements, could make meaningful improvements now. 

While the bill brings many positive changes, there’s still work to do. The continued use of “codes of practice” in the fair and reasonable test risks dragging ambiguity back in through the side door. If they stay, firms need clear guidance on which codes will be used, as well as when and how.  

Another valuable opportunity where the reforms can make a real difference is by creating a clearer path for firms to challenge FOS decisions. When a case depends on how the FCA’s rules should be understood, the FOS needs a simple way to check that understanding. A referral mechanism that lets the FOS ask the FCA for clarity will help make decisions more consistent and give everyone greater confidence. 

While a referral mechanism would help with cases where the rules are unclear, some disputes raise broader questions about how decisions are made. In those situations, firms need a fair and proportionate way to challenge an outcome. A limited right of appeal, used only in tightly defined circumstances, would provide that safeguard. 

Taken together, these changes can strengthen confidence in the FOS and give firms the certainty they need to drive growth. 

Managers Regime

The recalibration of the Senior Managers & Certification Regime is another important move. 

The government’s plan to take the Regime out of statute gives regulators the freedom to rebuild it into something more flexible and less burdensome. 

That matters, because while the current Certification Regime has helped shift culture in the right direction, it has also become heavy, repetitive, and expensive to run.  

If the government is serious about cutting the cost of the regime by around 50%, the replacement must deliver a change firms can actually feel – not just on paper – while preserving the strong accountability and consumer protection that underpin trust in financial services. Getting this right will require genuine, ongoing engagement with the industry.  

These reforms matter because insurance powers so much of the UK economy. But the sector can only deliver that strength when regulation is predictable. That’s the real opportunity here. 

Growth doesn’t come simply from stripping rules away, but from smart regulation that protects consumers and gives firms the certainty to invest and innovate. 

The Bill takes important steps in that direction, and with continued partnership between government, regulators and industry, we can build a system that supports both consumer confidence and long-term economic growth.