On 12 May 2026, HM Treasury published its formal response to its July 2025 consultation on cross-cutting reforms to the UK regulatory framework, a key pillar of the government’s Financial Services Growth and Competitiveness Strategy.
The response confirms that the government will introduce primary legislation to reform the legislative framework around how the Financial Conduct Authority (FCA) and Prudential Regulatory Authority (PRA) operate. These reforms will include shortening statutory deadlines for determining authorisation applications, detailing long-term regulatory strategy, streamlining the need to have regards to certain regulatory principles in decision-making and reducing procedural requirements.
Shortening statutory deadlines for determining authorisation applications
For firms seeking or expanding their regulatory licence, the commitment to shorten statutory deadlines is the most significant reform.
The FCA and PRA have made efforts to improve their performance against existing statutory deadlines in recent years, but stakeholder feedback identified continued concerns that processing times for applications remain too long relative to other jurisdictions.
The government will legislate to shorten the statutory deadlines for new firm authorisations, variations of existing regulatory permissions, and Senior Manager and Certification Regime (SMCR) approvals. The proposed new deadlines are:
| Application type | Current deadline | New deadline |
| New firm authorisations (complete application) | 6 months | 4 months |
| New firm authorisations (incomplete application) | 12 months | 10 months |
| Variations of permission (complete application) | 6 months | 4 months |
| Variations of permission (incomplete application) | 12 months | 10 months |
| SMCR-approved persons | 3 months | 2 months |
In addition, the government identified additional statutory deadlines to shorten, including for financial promotion approvals and SMCR variations. For example, the statutory deadline for a complete financial promotion approval application would reduce from six to four months.
The government has committed to keeping these statutory deadlines under review and will have the power to amend them through secondary legislation, particularly if regulators harness technology to process these applications faster.
While the legislation has yet to be passed, the regulators are already working towards these proposed targets.
Long-term regulatory strategy
A consistent theme arising from the government’s Financial Services Growth and Competitiveness Strategy is that the regulatory system lacks a driving, long-term strategy with clear goals, and that the cumulative impacts of regulators’ policies were not consistently considered.
The government will therefore legislate to require the FCA and PRA to produce long-term strategies at least once every five years, setting out their strategic priorities, including with respect to their objectives and supervision. They must provide an annual update on delivery against these strategies and update their strategy (or explain why no update is required) if HM Treasury issues new recommendations.
In producing these strategies, the FCA and PRA will be required to have regard to the Financial Services and Markets Act (FSMA) 2000 regulatory principles, recommendations by HM Treasury, principles in the Legislative and Regulatory Reform Act 2006 and the associated Regulators’ Code, as well as their general duties. The FCA will also receive an additional “have regard” consideration related to payment systems, reflecting its new responsibilities following the consolidation of the Payment Systems Regulator into the FCA.
Streamlining the impact regulatory principles have on regulator decision-making
Currently, the FCA and PRA must consider and document their analysis of each of the eight regulatory principles in section 3B of FSMA 2000, as well as HM Treasury recommendations and other principles, each time they discharge any of their day-to-day functions. The government concluded that this creates a disproportionate burden on the regulators, reducing their agility, while producing information that can be too granular to effectively support an overall assessment of regulatory performance.
The government will legislate to remove the requirement to consider each of these principles when carrying out day-to-day functions and instead require regulators to consider the regulatory principles and HM Treasury recommendations when producing their long-term strategies, with an obligation to report on implementation in their annual reports.
Cutting procedural requirements
Over time, a large number of reporting and procedural requirements have accumulated on the FCA and PRA.
The government will legislate to remove a small, but impactful, number of prescriptive requirements, including removing obligations to consult on guidance and minor rule changes – meaning firms should be aware that regulatory changes may come into force more rapidly going forward.
Key takeaways
The government’s response represents a step towards a more streamlined UK regulatory framework. Key practical implications include:
- Authorisations and permissions: Firms in the authorisation pipeline – or planning applications, variations of permissions (VoPs), financial promotion approvals or SMCR approvals – should factor the new timelines into their planning. The regulators are already publishing metrics against more ambitious voluntary targets.
- Reduced procedural friction: The removal of obligations to consult on minor rule changes and guidance may mean that regulatory changes happen more quickly and with less advance notice. Firms should maintain close monitoring of FCA and PRA publications.
To note, formalising these changes still requires primary legislation. Firms should not expect the new statutory deadlines to be formally binding immediately but should note that regulators are already moving in that direction voluntarily.
We will continue to monitor developments in this area as the legislative process advances.