The Financial Services and Markets Bill 2026-27 could reach Royal Assent by the end of 2026.

The Bill was introduced in the House of Lords on 19 May 2026. In the 2026 King’s Speech, it was originally referred to as the “Enhancing Financial Services Bill,” which is indicative of what the legislation aims to do.

The Bill doesn’t spell out most of the detailed rules. Instead, it hands powers to the Treasury, FCA, and PRA to create guidelines later, through secondary legislation or regulator rulebooks. Because of this, Simmons & Simmons suggests that firms treat it as “the starting gun for a sustained period of regulatory change rather than a single compliance event.”

Its goal is to boost growth and investment in financial services while modernising consumer protection, as part of the government’s “Leeds Reforms” agenda, which aims to “to make the UK the number one destination for financial services in the next ten years.”

In the 51-page briefing, dozens of complex alterations are laid out. Some of those key elements are:

  1. The Financial Ombudsman Service (FOS) is being brought closer into line with the rules of the UK’s Financial Conduct Authority (FCA). The bill introduces a recalibrated version of the FOS “fair and reasonable” test. Right now, this test is flexible: the FOS can rule against a firm even if the firm followed FCA rules, based on its own judgment. This new bill changes that: if a firm followed FCA rules, the FOS must side with the firm. It can only rule against a firm if FCA rules were broken, or if no rule existed at all. This keeps FOS decisions closer to what the FCA actually requires.
  2. The bill abolishes the Payment Systems Regulator (PSR) entirely, folding its powers into the FCA. Right now, the PSR oversees payment systems, separate from the FCA, which oversees most other financial firms. That’s meant two regulators, two sets of rules, and two points of contact for an industry that already deals with the FCA for almost everything else. Under the bill, the FCA takes over the PSR’s objectives and powers. This includes the ability to cap fees and direct access to payment systems, so payments regulation moves under the same roof as the rest of financial services.
  3. The Consumer Credit Act 1974 is rewritten. Consumer credit rules are currently split across three places: the Consumer Credit Act 1974 itself, secondary legislation, and FCA rules. The government says this is a patchwork system that’s confusing for both firms and consumers. The bill repeals most of what’s left of the 1974 Act and hands the detail to the FCA, which will rewrite it as rules focused on outcomes rather than fixed legal requirements. For example, some previously rigid penalties, such as an entire loan agreement becoming unenforceable over a minor paperwork error, would be replaced by more proportionate FCA enforcement.

The reaction so far has been broadly positive from industry; UK Finance and the Building Societies Association have welcomed the reforms. Skeptics have signalled closer scrutiny ahead, particularly of (1) the bill’s ring-fencing changes, which loosen rules separating retail from investment banking and (2) its extensive delegated powers, which hand much of the detail to future Treasury and regulator rule-making).

One sector-specific consequence is worth flagging for law firms in particular. Now, the SRA supervises law firms exclusively, so its requests and expectations are shaped by an understanding of how legal practices actually operate. The FCA, by contrast, supervises a much broader range of financial firms and tends to be more data-driven in its approach. Firms moving under FCA supervision should expect more extensive data and information requests than they’re used to under the SRA. Ahead of the transition, compliance teams should start reviewing what data they currently collect, retain, and where the gaps might be. Firms may also want to start mapping FCA reporting expectations now, rather than waiting for the detailed rules to land.

The bill’s second reading date has yet to be confirmed, but there’s cautious optimism it could reach Royal Assent by the end of the year. Even then, most provisions won’t take effect immediately. They’ll be enacted gradually through Treasury regulations, meaning this is the opening stage of a multi-year regulatory shift rather than a single moment of change.