Financial Services and Markets Bill [HL] 2026-27

After Clause 3, insert the following new Clause—
“Access to affordable credit
(1) The Financial Conduct Authority must—
(a) within 12 months of the day on which this Act is passed, establish and publish a framework for assessing and rating the performance of relevant deposit takers in providing access to affordable credit,
(b) annually publish updated ratings and scores produced by the FCA under the framework, and
(c) keep the framework established under paragraph (a) under review and publish an updated framework as it deems necessary.
(2) The framework must—
(a) assess the extent to which relevant deposit takers serve the credit needs of individuals, households and small businesses, including those who are underserved by mainstream financial services, and
(b) enable comparisons to be made between relevant deposit takers.
(3) In developing the framework, the FCA must have regard to—
(a) the distribution of lending across income groups, geographic areas and customer characteristics,
(b) the availability of affordable credit to consumers who may otherwise be at risk of financial exclusion,
(c) the provision of affordable credit to small and medium-sized enterprises, and social enterprises,
(d) the extent to which a bank supports access to affordable credit through partnerships, referral arrangements and funding agreements, with credit unions, community development finance institutions or other community-based lenders, and
(e) such other matters as the FCA considers relevant to the objective of promoting access to affordable credit.
(4) For the purposes of subsection (2), the FCA may—
(a) make use of regulatory data already collected by it, including product sales data,
(b) require relevant deposit takers to provide such information as it reasonably considers necessary for the purposes of the framework, and
(c) make different and proportionate provision for different sizes of business.
(5) Where a relevant deposit taker receives a score or rating below a minimum threshold prescribed by rules made under this section, the FCA must require the deposit taker to take proportionate remedial action to improve its rating.
(6) For the purpose specified in subsection (5), the FCA may—
(a) make such rules or issue such guidance applying to designated persons as appear to the FCA to be necessary or expedient, and
(b) give a direction under this section to a designated person if it considers that it is desirable to give the direction.
(7) For the purposes of this section, “relevant deposit takers” are—
(a) banks, within the meaning given in section 2 of the Banking Act 2009;
(b) building societies, with the meaning of section 119 of the Building Societies Act 1986;
which meet an FCA-set threshold for the total volume of personal and small and medium business lending.”

This amendment requires the FCA to establish a framework assessing banks’ and building societies’ provision of affordable credit, including via partnerships with credit unions and community development finance institutions. It uses existing regulatory data where possible, with proportionate requirements for firms of different sizes.

Clause 17, page 21, line 34, leave out subsections (2) to (11) and insert— “(2) In section 3B (regulatory principles to be applied to both regulators), after subsection (1)(h) insert— “(i) the need to consider financial stability risks associated with climate change.””

After Clause 1, insert the following new Clause—
“Duty to ensure non-diminution of consumer credit protections
(1) In exercising any power under this Act to repeal, amend or replace provisions of the Consumer Credit Act 1974 with rules made by the Financial Conduct Authority, the Treasury and the FCA must secure, so far as reasonably practicable, that the overall level of protection and rights of redress afforded to consumers is not diminished.
(2) For the purposes of subsection (1), the protections and rights of redress to be maintained must include—
(a) statutory sanctions regarding the legal enforceability of agreements where a firm has failed to comply with required conduct or information duties,
(b) continuity of statutory rights and protections where a credit agreement is assigned, sold, securitised or otherwise transferred,
(c) protections against predatory interest rate adjustments or variations by an assignee, purchaser or special purpose vehicle, and
(d) the right of a consumer to apply to a court for a determination that a credit relationship is unfair, and for the court to order appropriate remedies equivalent to those provided under sections 140A to 140C of the Consumer Credit Act 1974 (unfair relationships).
(3) Where rights under a regulated credit agreement are assigned, sold, securitised or otherwise transferred—
(a) the consumer shall retain all statutory rights, protections and avenues of redress against the transferee as against the original creditor, and
(b) if any person to whom rights under the agreement have passed is an inactive lender or closed book owner, any variable interest rate or fee structure applied to the consumer must not exceed a reasonable market proxy determined by the FCA .
(4) Any person exercising rights of enforcement arising from a regulated credit agreement is treated as a creditor for the purposes of this section.”

This amendment seeks to ensure that when provisions of the Consumer Credit Act 1974 are repealed or replaced by FCA rules, the overall level of consumer protection is not diminished. It preserves statutory rights when credit agreements are sold, assigned or securitised, prevents predatory interest rate variations by inactive lenders or SPVs, and retains the unfair relationship court remedy.

Clause 3, page 2, line 4, at end insert—
“(2A) Regulations may only make provision arising directly from the review carried out under subsection (2).”

This amendment would restrict the scope of the regulations so that they may only implement matters that have been reviewed and consulted upon. It seeks to prevent the power from being used more broadly than Parliament intended.

Leave out Clause 7

Leave out Clause 8

After Clause 13, insert the following new Clause—
“Reimbursement of fraud: liability of technology companies
(1) The FCA must make rules providing that, where a person is to be reimbursed in respect of losses arising from an authorised push payment fraud, the cost of that reimbursement is to be borne, in whole or in part, by any relevant technology company on whose service the fraud was initiated, facilitated or communicated.
(2) Rules under subsection (1) must provide for—
(a) the apportionment of the cost of reimbursement between relevant technology companies and payment service providers, by reference to the extent to which each contributed to the fraud occurring,
(b) a process by which a payment service provider that has reimbursed a victim may recover the apportioned cost from a relevant technology company, and
(c) the information that a relevant technology company must provide to the FCA and to payment service providers for the purposes of the rules.
(3) In making rules under this section, the FCA must have regard to the principle that the cost of reimbursing victims of fraud should fall, so far as is reasonable, on the persons best able to prevent the fraud.
(4) In this section—
“authorised push payment fraud” means a transfer of funds executed by a payment service provider on the instruction of a payer, where the payer was deceived into giving that instruction;
“relevant technology company” means a person who provides—
(a) a user-to-user service or a search service within the meaning of the Online Safety Act 2023,
(b) an electronic communications service, or
(c) any other online service by means of which an authorised push payment fraud may be initiated, facilitated or communicated.”

This new Clause would require the FCA to make rules placing liability for the cost of reimbursing victims of authorised push payment fraud, in whole or in part, on the technology companies on whose platforms the fraud originates, rather than solely on payment service providers, and to apportion that cost according to who is best able to prevent the fraud.

After Clause 14, insert the following new Clause—
“Anti-money laundering: provision of support to professional services firms
(1) Within three months of the day on which this Act is passed, the Treasury must publish an assessment of the arrangements that will be made to provide education, guidance and compliance support to professional services firms subject to anti-money laundering supervision by the FCA.
(2) The assessment must include a comparison between—
(a) the education, guidance and compliance support currently provided by professional body supervisors, and
(b) the support that will be provided by the FCA.
(3) The Treasury must lay the assessment before Parliament.”

This amendment seeks to require the Government to explain how education, guidance and bespoke compliance support currently provided by professional body supervisors will be maintained following the transfer of anti-money laundering supervisory functions to the FCA.

After Clause 14, insert the following new Clause—
“Anti-money laundering supervisory functions
(1) Within the period of three months beginning with the day on which this Act is passed, the Treasury must publish a timetable for the implementation of the transfer of anti-money laundering supervisory functions to the FCA.
(2) The timetable must include—
(a) the expected date of publication of draft regulations,
(b) the anticipated commencement date of the new supervisory regime,
(c) key transition milestones, and
(d) arrangements for firms supervised under the existing regime during the transition period.
(3) The Treasury must lay the timetable before Parliament.”

This amendment seeks to require the Government to publish a clear implementation timetable for the transfer of anti-money laundering supervisory functions to the FCA.

After Clause 14, insert the following new Clause—
“Professional expertise in anti-money laundering supervision
(1) In exercising anti-money laundering supervision, the FCA must have regard to the desirability of ensuring that supervisory staff possess relevant professional expertise and experience of the sectors being supervised.
(2) This includes, in particular, expertise and experience relating to—
(a) taxation;
(b) accountancy;
(c) legal services;
(d) trust and company service provision.”

This amendment seeks to require the FCA to have regard to the desirability of employing staff with relevant professional expertise and experience in the sectors subject to anti-money laundering supervision.

After Clause 14, insert the following new Clause—
“Anti-money laundering: assessment of supervisory costs
(1) Before assuming anti-money laundering supervisory functions, the FCA must publish an assessment of the likely impact of the transfer on supervisory fees payable by professional services firms.
(2) The assessment must include—
(a) estimated fee levels under the new regime,
(b) a comparison with fees payable under the existing supervisory arrangements, and
(c) measures proposed to ensure that costs remain proportionate, particularly for small firms.”

This amendment seeks to require publication of an assessment of the impact of the transfer on supervisory fees payable by professional services firms.

After Clause 14, insert the following new Clause—
“Anti-money laundering: regional supervision
(1) Within six months of the day on which this Act is passed, the FCA must publish a report on its capacity to undertake anti-money laundering supervisory activity across all parts of the United Kingdom.
(2) The report must include—
(a) the geographical distribution of relevant staff,
(b) plans for recruitment and deployment of staff outside existing FCA office locations, and
(c) arrangements for ensuring supervisory staff have knowledge of regional business practices and risk profiles.”

This amendment seeks to require the FCA to report on how it will maintain effective anti-money laundering supervision across all regions of the United Kingdom.

Clause 40, page 48, line 7, after “rules,” insert “assessments,”

This amendment, and others in the name of Baroness Kramer, seeks to require the PRA to assess whether existing law and regulation makes sufficient provision in the case of ring-fenced bodies owned by overseas groups.

Clause 40, page 48, line 19, at end insert—
“(za) in subsection (1), for “D” substitute “E”;”

This amendment, and others in the name of Baroness Kramer, seeks to require the PRA to assess whether existing law and regulation makes sufficient provision in the case of ring-fenced bodies owned by overseas groups.

Clause 40, page 48, line 21, at end insert—
“(c) after subsection (5) insert—
“(5A) Condition E is that, in the case of a ring-fenced body of the kind to which section 142H(1B) refers, the appropriate regulator does not consider that there is sufficient provision for the purposes of subsection (1) or (1D) of section 142H and considers that this is unlikely to be rectified by the appropriate regulator making, or taking steps to enforce, rules.””

This amendment, and others in the name of Baroness Kramer, seeks to require the PRA to assess whether existing law and regulation makes sufficient provision in the case of ring-fenced bodies owned by overseas groups.

After Clause 40, insert the following new Clause—
“Ring-fencing rules etc (No. 2)
In Schedule 1ZB of the Financial Services and Markets Act 2000 (the Prudential Regulation Authority), in paragraph 19—
(a) after sub-paragraph (1)(fb), insert—
“(fc) a summary of the PRA’s opinion of whether—
(i) under section 142H (ring-fencing rules) subsection (1), there is sufficient provision to ensure the effective provision to a ring-fenced body of services and facilities that it requires in relation to the carrying on of a core activity, and
(ii) under section 142H (ring-fencing rules), there is sufficient provision to achieve the group ring-fencing purposes, and”;
(b) at the end of sub-paragraph (1A)(a) insert “and, where applicable, any differences in the extent of such compliance between ring-fenced bodies that have a parent undertaking incorporated outside the United Kingdom and ring-fenced bodies that do not have such a parent undertaking”.”

This amendment, and others in the name of Baroness Kramer, seeks to require the PRA to assess whether existing law and regulation makes sufficient provision in the case of ring-fenced bodies owned by overseas groups.

After Clause 46, insert the following new Clause—
“Digital assets strategy
(1) Within 12 months of the day on which this Act is passed, the Treasury must prepare, publish and consult on a strategy for the regulation and development of digital assets and related digital financial market infrastructure in the United Kingdom.
(2) A strategy under subsection (1) must consider, in particular—
(a) the Government’s approach to the regulation of digital assets, including cryptoassets, qualifying stablecoins, Central Bank Digital Currencies, tokenised securities and other digital and tokenised financial assets,
(b) the practical operation of digital asset businesses and activities under current legal, regulatory and market conditions in the United Kingdom,
(c) the extent to which firms carrying on, or seeking to carry on, digital asset activities in the United Kingdom are able to obtain and maintain appropriate access to banking, payment and settlement services,
(d) the risks to competition, innovation and lawful market participation arising from the withdrawal or denial of such services, including where this is done on a blanket or insufficiently risk-sensitive basis,
(e) developments in the law, regulation and supervisory practice of other jurisdictions so far as relevant to the safe regulation of new asset classes and digital financial market infrastructure, including digital currency exchanges,
(f) the interaction between the regulation of digital assets and the development of related regimes and initiatives, including in relation to tokenisation, stablecoins, digital settlement assets and other digital payment or settlement arrangements relevant to financial markets,
(g) the implications of the current and proposed framework for consumer protection, market integrity, financial stability and the international competitiveness of the United Kingdom, and
(h) any legislative or regulatory changes which the Treasury considers may be required.
(3) In preparing a strategy under subsection (1), the Treasury must consult—
(a) the Bank of England,
(b) the Prudential Regulation Authority,
(c) the Financial Conduct Authority,
(d) representatives from industry forums, and
(d) such other persons as the Treasury considers appropriate.”

This amendment seeks to require the Treasury to prepare and consult on a strategy for digital assets, including regulation, tokenisation, practical operating conditions, access to banking and payment services, and international regulatory developments.

After Clause 3, insert the following new Clause— “Access to affordable credit (1) The Financial Conduct Authority must— (a) within 12 months of the day on which this Act is passed, establish and publish a framework for assessing and rating the performance of relevant deposit takers in providing access to affordable credit, (b) annually publish updated ratings and scores produced by the FCA under the framework, and (c) keep the framework established under paragraph (a) under review and publish an updated framework as it deems necessary. (2) The framework must— (a) assess the extent to which relevant deposit takers serve the credit needs of individuals, households and small businesses, including those who are underserved by mainstream financial services, and (b) enable comparisons to be made between relevant deposit takers. (3) In developing the framework, the FCA must have regard to— (a) the distribution of lending across income groups, geographic areas and customer characteristics, (b) the availability of affordable credit to consumers who may otherwise be at risk of financial exclusion, (c) the provision of affordable credit to small and medium-sized enterprises, and social enterprises, (d) the extent to which a bank supports access to affordable credit through partnerships, referral arrangements and funding agreements, with credit unions, community development finance institutions or other community-based lenders, and (e) such other matters as the FCA considers relevant to the objective of promoting access to affordable credit. (4) For the purposes of subsection (2), the FCA may— (a) make use of regulatory data already collected by it, including product sales data, (b) require relevant deposit takers to provide such information as it reasonably considers necessary for the purposes of the framework, and (c) make different and proportionate provision for different sizes of business. (5) Where a relevant deposit taker receives a score or rating below a minimum threshold prescribed by rules made under this section, the FCA must require the deposit taker to take proportionate remedial action to improve its rating. (6) For the purpose specified in subsection (5), the FCA may— (a) make such rules or issue such guidance applying to designated persons as appear to the FCA to be necessary or expedient, and (b) give a direction under this section to a designated person if it considers that it is desirable to give the direction. (7) For the purposes of this section, “relevant deposit takers” are— (a) banks, within the meaning given in section 2 of the Banking Act 2009; (b) building societies, with the meaning of section 119 of the Building Societies Act 1986; which meet an FCA-set threshold for the total volume of personal and small and medium business lending.”

Clause 17, page 21, line 34, at end insert— “(b) after subsection (6) insert— “(6A) For the purposes of subsection (1) “proportionate” includes— (a) ensuring that any burden or restriction which is imposed on a person, or on the carrying on of an activity, is proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction; (b) recognising the differences in the size, nature and objectives of businesses carried on by different persons (including different kinds of persons such as mutual societies and other kinds of business organisation).””

Clause 17, page 21, line 37, at end insert— “(3A) In section 2B (the PRA’s general objective)— (a) at the end of subsection (1) insert “and is proportionate”; (b) after subsection (3) insert— “(3A) For the purposes of subsection (1) “proportionate” includes— (a) ensuring that any burden or restriction which is imposed on a person, or on the carrying on of an activity, is proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction; (b) recognising the differences in the size, nature and objectives of businesses carried on by different persons (including different kinds of persons such as mutual societies and other kinds of business organisation).””

Clause 40, page 47, line 30, leave out from beginning to end of line 2 on page 48 and insert— “(1) The appropriate regulator must consider whether there is sufficient provision to ensure the effective provision to a ring-fenced body of services and facilities that it requires in relation to the carrying on of a core activity. (1A) Subject to subsection (1B), when considering whether there is sufficient provision for the purposes of subsection (1) concerning services and facilities that are provided to a ring-fenced body by another member of its group, the appropriate regulator must take account of all relevant circumstances, including— (a) the appropriate regulator’s ability to assess and influence the terms on which such services and facilities are made available to a ring-fenced body, (b) the availability, continuity and sufficiency of such services and facilities, including in circumstances where the Bank of England would be entitled to exercise any of the stabilisation powers under the Banking Act 2009, and (c) any assessment that the Bank of England has made of a group of which the ring-fenced body is or proposes to become a member under a statement of policy that the Bank of England has issued pursuant to section 3B(9) (safeguards relating to directions under section 3A) of the Banking Act 2009 and, where applicable, the absence of any such assessment. (1B) The appropriate regulator must not consider that there is sufficient provision for the purposes of subsection (1) where a ring-fenced body is, or proposes to become, a member of a group for all or part of which the appropriate regulator is not responsible for consolidated supervision, and such services and facilities are provided to the ring-fenced body from outside the United Kingdom by a member of the group that is not in a part of the group that is subject to consolidated supervision by the appropriate regulator, unless the appropriate regulator has made rules to ensure that— (a) there is no less uncertainty concerning the availability, continuity and sufficiency of such services and facilities than there would be where they are provided to a ring-fenced body within a group that is subject as a whole to the consolidated supervision of the appropriate regulator, and (b) the ring-fenced body is not permitted to receive such services and facilities unless the provider of those services and facilities is adequately resourced and the arrangements under which those services and facilities are provided would facilitate the orderly exercise by the Bank of England of its stabilisation powers under the Banking Act 2009 in circumstances where the Bank of England would be entitled to exercise those powers. (1C) If, having regard to all the circumstances, including the matters referred to in subsection (1A), the appropriate regulator does not consider that there is sufficient provision for the purposes of subsection (1) or may not do so under subsection (1B), the appropriate regulator must exercise its power to make rules requiring a ring-fenced body to make arrangements to ensure the effective provision referred to in subsection (1). (1D) The appropriate regulator must consider whether there is sufficient provision to achieve the group ring-fencing purposes. (1E) The appropriate regulator must not consider that there is sufficient provision for the purposes of subsection (1D) where a ring-fenced body is or proposes to become a member of a group for all or part of which the appropriate regulator is not responsible for consolidated supervision, unless the appropriate regulator has made rules to ensure that there is no less uncertainty concerning the achievement of the group ring-fencing purposes in those circumstances than would be the case where the ring-fenced body is a member of a group that is subject as a whole to the consolidated supervision of the appropriate regulator. (1F) If the appropriate regulator does not consider that there is sufficient provision to achieve the group ring-fencing purposes, or may not do so under subsection (1E), the regulator must exercise its power to make rules for the group ring-fencing purposes that apply— (a) to ring-fenced bodies, or (b) to authorised persons who are members of a ring-fenced body’s group.”

Clause 16, page 19, line 17, at end insert—
“(5A) A strategy published under this section must include—
(a) a description of any major regulatory initiatives which the regulator expects to undertake during the period of the strategy, including major consultations, rule reviews, implementation programmes and significant supervisory initiatives;
(b) a provisional timeline for such initiatives and the expected form of each initiative;
(c) an identification of any major anticipated trade-offs between the regulator’s statutory objectives and an explanation of how the regulator expects to balance those objectives;
(d) an overall assessment of delivery against the previous strategy, including where delivery has not been achieved and the reasons for non-delivery;
(e) an explanation of how the strategy reflects the regulator’s statutory duties, including the regulatory principles and any recommendations made by the Treasury under section 1JA.”

This amendment, together with another amendment in the name of Baroness Bowles, inserts a minimum content requirement for the FCA and PRA strategy documents. The amendment aligns the strategy document with the type of forward-looking reporting expected of listed companies and regulated entities, and ensures that Parliament has sufficient information to scrutinise the regulators’ strategic direction.

Clause 16, page 20, line 28, at end insert—
“(5A) A strategy published under this section must include—
(a) a description of any major regulatory initiatives which the regulator expects to undertake during the period of the strategy, including major consultations, rule reviews, implementation programmes and significant supervisory initiatives;
(b) a provisional timeline for such initiatives and the expected form of each initiative;
(c) an identification of any major anticipated trade-offs between the regulator’s statutory objectives and an explanation of how the regulator expects to balance those objectives;
(d) an overall assessment of delivery against the previous strategy, including where delivery has not been achieved and the reasons for non-delivery;
(e) an explanation of how the strategy reflects the regulator’s statutory duties, including the regulatory principles and any recommendations made by the Treasury under section 1JA.”

This amendment, together with another amendment in the name of Baroness Bowles, inserts a minimum content requirement for the FCA and PRA strategy documents. The amendment aligns the strategy document with the type of forward-looking reporting expected of listed companies and regulated entities, and ensures that Parliament has sufficient information to scrutinise the regulators’ strategic direction.

After Clause 1, insert the following new Clause— “Duty to ensure non-diminution of consumer credit protections (1) In exercising any power under this Act to repeal, amend or replace provisions of the Consumer Credit Act 1974 with rules made by the Financial Conduct Authority, the Treasury and the FCA must secure, so far as reasonably practicable, that the overall level of protection and rights of redress afforded to consumers is not diminished. (2) For the purposes of subsection (1), the protections and rights of redress to be maintained must include— (a) statutory sanctions regarding the legal enforceability of agreements where a firm has failed to comply with required conduct or information duties, (b) continuity of statutory rights and protections where a credit agreement is assigned, sold, securitised or otherwise transferred, (c) protections against predatory interest rate adjustments or variations by an assignee, purchaser or special purpose vehicle, and (d) the right of a consumer to apply to a court for a determination that a credit relationship is unfair, and for the court to order appropriate remedies equivalent to those provided under sections 140A to 140C of the Consumer Credit Act 1974 (unfair relationships). (3) Where rights under a regulated credit agreement are assigned, sold, securitised or otherwise transferred— (a) the consumer shall retain all statutory rights, protections and avenues of redress against the transferee as against the original creditor, and (b) if any person to whom rights under the agreement have passed is an inactive lender or closed book owner, any variable interest rate or fee structure applied to the consumer must not exceed a reasonable market proxy determined by the FCA . (4) Any person exercising rights of enforcement arising from a regulated credit agreement is treated as a creditor for the purposes of this section.”

Leave out Clause 8

Leave out Clause 1

This amendment, along with another in the name of Baroness Neville-Rolfe, seeks to allow for a debate on the Government’s intentions around a new regime to be laid down in the regulatory rule book in place of that established by the Consumer Credit Act 1974 and associated legislation, and how they will ensure parliamentary and industry oversight of such a regime.

Leave out Clause 3

Clause 17, page 21, line 34, after “duties)” insert—
“(a) in subsection (1), at end insert—
“(c) ensures that any burden or restriction which is imposed on a person, or on the carrying on of an activity, is proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction;
(d) recognises the differences in the size, nature and objectives of businesses carried on by different persons (including different kinds of person such as mutual societies and other kinds of business organisation);
(e) is as transparent as possible.”;”

This amendment places proportionality and transparency (currently regulatory principles) into the general duties of the FCA and restores protections for the differences in size, nature and objectives of businesses from the original FSMA regulatory principles.

Clause 17, page 21, line 34, after “duties)” insert—
(a) in subsection (1), at end insert—
“(c) is proportionate.”;”

Clause 17, page 21, line 34, at end insert—
“(b) after subsection (6) insert—
“(6A) For the purposes of subsection (1) “proportionate” means—
(a) ensuring that any burden or restriction which is imposed on a person, or on the carrying on of an activity, is proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction, and
(b) recognising the differences in the size, nature and objectives of businesses carried on by different persons (including different kinds of persons such as mutual societies and other kinds of business organisation).””

Clause 17, page 21, line 37, at end insert—
“(3A) In section 2B(1) (the PRA’s general objective), at end insert—
“(b) ensures that any burden or restriction which is imposed on a person, or on the carrying on of an activity, is proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction;
(c) recognises the differences in the size, nature and objectives of businesses carried on by different persons (including different kinds of person such as mutual societies and other kinds of business organisation);
(d) is as transparent as possible.””

This amendment places proportionality and transparency (currently regulatory principles) into the PRA’s general objectives and restores protections for the differences in size, nature and objectives of businesses from the original FSMA regulatory principles.

Clause 17, page 21, line 37, at end insert—
“(3A) In section 2B (the PRA’s general objective)—
(a) at the end of subsection (1) insert “and is proportionate”;
(b) after subsection (3) insert—
“(3A) For the purposes of subsection (1) “proportionate” means—
(a) ensuring that any burden or restriction which is imposed on a person, or on the carrying on of an activity, is proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction, and
(b) recognising the differences in the size, nature and objectives of businesses carried on by different persons (including different kinds of persons such as mutual societies and other kinds of business organisation).””

Clause 18, page 23, line 35, leave out subsections (10) to (13)

This amendment restores PRA and FCA reporting which are key inputs for Parliamentary and Select Committee scrutiny of the regulators.

Clause 18, page 24, line 8, at end insert—
“(13A) In paragraph 11(1) of Schedule 1ZA (FCA annual report), after paragraph (ic) insert—
“(id) how the regulator has applied the regulatory principles and other statutory duties, including methodology for determining relevance and examples of application,”.
(13B) In paragraph 19(1) of Schedule 1ZB (PRA annual report), after paragraph (fb) insert—
“(fc) how the regulator has applied the regulatory principles and other statutory duties, including methodology for determining relevance and examples of application,”.”

This amendment inserts a requirement into FSMA 2000 for the annual reports by the FCA and PRA to contain a statement on how the regulatory principles and other statutory duties have been applied.

Leave out Clause 18

Clause 18 would significantly reduce the information available to Parliament about the work of the financial regulators by repealing a number of existing reporting, transparency and “have regard” duties. The amendment preserves the accountability framework, without changing the strategy document format of clauses 16 and 17, so that Parliament can continue to scrutinise the regulators effectively.

Leave out Schedule 1

This amendment, along with another in the name of Baroness Neville-Rolfe, seeks to allow for a debate on the Government’s intentions around a new regime to be laid down in the regulatory rule book in place of that established by the Consumer Credit Act 1974 and associated legislation, and how they will ensure parliamentary and industry oversight of such a regime.

Clause 16, page 19, line 17, at end insert— “(5A) A strategy published under this section must include— (a) a description of any major regulatory initiatives which the regulator expects to undertake during the period of the strategy, including major consultations, rule reviews, implementation programmes and significant supervisory initiatives; (b) a provisional timeline for such initiatives and the expected form of each initiative; (c) an identification of any major anticipated trade-offs between the regulator’s statutory objectives and an explanation of how the regulator expects to balance those objectives; (d) an overall assessment of delivery against the previous strategy, including where delivery has not been achieved and the reasons for non-delivery; (e) an explanation of how the strategy reflects the regulator’s statutory duties, including the regulatory principles and any recommendations made by the Treasury under section 1JA.”

Clause 16, page 20, line 28, at end insert— “(5A) A strategy published under this section must include— (a) a description of any major regulatory initiatives which the regulator expects to undertake during the period of the strategy, including major consultations, rule reviews, implementation programmes and significant supervisory initiatives; (b) a provisional timeline for such initiatives and the expected form of each initiative; (c) an identification of any major anticipated trade-offs between the regulator’s statutory objectives and an explanation of how the regulator expects to balance those objectives; (d) an overall assessment of delivery against the previous strategy, including where delivery has not been achieved and the reasons for non-delivery; (e) an explanation of how the strategy reflects the regulator’s statutory duties, including the regulatory principles and any recommendations made by the Treasury under section 1JA.”

Clause 17, page 21, line 34, after ‘“duties)’ insert— (a) in subsection (1), at end insert— ‘‘(c) is proportionate.’’;’’

Clause 17, page 21, line 34, at end insert— ‘‘(b) after subsection (6) insert— ‘‘(6A) For the purposes of subsection (1) ‘‘proportionate’’ means— (a) ensuring that any burden or restriction which is imposed on a person, or on the carrying on of an activity, is proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction, and (b) recognising the differences in the size, nature and objectives of businesses carried on by different persons (including different kinds of persons such as mutual societies and other kinds of business organisation).’’’’

Clause 17, page 21, line 37, at end insert— ‘‘(3A) In section 2B (the PRA’s general objective)— (a) at the end of subsection (1) insert ‘‘and is proportionate’’; (b) after subsection (3) insert— ‘‘(3A) For the purposes of subsection (1) ‘‘proportionate’’ means— (a) ensuring that any burden or restriction which is imposed on a person, or on the carrying on of an activity, is proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction, and (b) recognising the differences in the size, nature and objectives of businesses carried on by different persons (including different kinds of persons such as mutual societies and other kinds of business organisation).’’’’

Clause 18, page 23, line 35, leave out subsections (10) to (13)

Clause 18, page 24, line 8, at end insert— ‘‘(13A) In paragraph 11(1) of Schedule 1ZA (FCA annual report), after paragraph (ic) insert— ‘‘(id) how the regulator has applied the regulatory principles and other statutory duties, including methodology for determining relevance and examples of application,’’. (13B) In paragraph 19(1) of Schedule 1ZB (PRA annual report), after paragraph (fb) insert— ‘‘(fc) how the regulator has applied the regulatory principles and other statutory duties, including methodology for determining relevance and examples of application,’’.’’

Leave out Clause 1

Leave out Clause 3

Clause 17, page 21, line 34, after “duties)” insert— “(a) in subsection (1), at end insert— “(c) ensures that any burden or restriction which is imposed on a person, or on the carrying on of an activity, is proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction; (d) recognises the differences in the size, nature and objectives of businesses carried on by different persons (including different kinds of person such as mutual societies and other kinds of business organisation); (e) is as transparent as possible.”;”

Clause 17, page 21, line 37, at end insert— “(3A) In section 2B(1) (the PRA’s general objective), at end insert— “(b) ensures that any burden or restriction which is imposed on a person, or on the carrying on of an activity, is proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction; (c) recognises the differences in the size, nature and objectives of businesses carried on by different persons (including different kinds of person such as mutual societies and other kinds of business organisation); (d) is as transparent as possible.””

Clause 18, page 23, line 35, leave out subsections (10) and (11)

Clause 18, page 24, line 1, leave out from “report),” to end of line 3 and insert “after paragraph (ic) insert— (id) how the regulator has applied the regulatory principles and other statutory duties, including methodology for determining relevance and examples of application,”

Clause 18, page 24, line 5, leave out from “report),” to end of line 8 and insert “after paragraph (fb) insert— (fc) how the regulator has applied the regulatory principles and other statutory duties, including methodology for determining relevance and examples of application,”

Leave out Clause 18

Leave out Schedule 1

172E

After Clause 47, insert the following new Clause— “Review of regulatory provisions for the protection of commercially sensitive information (1) The Treasury must, within 12 months of the day on which this Act is passed, carry out a review of the regulatory provisions for the protection of commercially sensitive information by financial services firms. (2) In carrying out the review, the Treasury must consult— (a) the Financial Conduct Authority, (b) the Prudential Regulation Authority, (c) the Competition and Markets Authority, (d) such persons representing the interests of financial services firms, and (e) such persons representing the interests of employees, senior managers and other individuals working in financial services as the Treasury considers appropriate. (3) The Treasury must lay before Parliament, and publish, a report setting out— (a) the findings of the review, (b) any steps the Treasury considers should be taken by the Government or by regulators in consequence of the review, and (c) whether the Treasury considers that further legislative provision is necessary. (4) In this section “commercially sensitive information” includes information, data, documents, systems, processes, models, methodologies, algorithms, trading strategies, client information, pricing information, business plans and other information whose disclosure or misuse could reasonably be expected to prejudice the commercial interests of a financial services firm.”

172F

After Clause 47, insert the following new Clause— “Review: senior management regime (1) Within 12 months of the day on which this Act is passed, the Treasury must lay before Parliament a report on the effectiveness and operation of the senior managers regime under Part 5 of the Financial Services and Markets Act 2000 and other relevant financial services regulations and enactments. (2) The review must in particular consider the effect of the regulatory regime for senior managers on— (a) the ability of authorised persons to recruit, retain or deploy individuals to perform senior management functions; (b) the attractiveness of the United Kingdom as a location for senior management functions in internationally active financial services firms.”

165A

After subsection (2)(a), insert— “(aa) the provision of preparatory training relating to the interpretation and application of the provisions of this Act,”

142F

After Clause 22, insert the following new Clause—
“Offices for regulatory evaluation
(1) The Financial Services and Markets Act 2000 is amended as follows.
(2) After section 1RB (requirements in connection with public consultations), insert—
“FCA Office for Regulatory Evaluation
1RC FCA Office for Regulatory Evaluation
(1) The FCA must establish and maintain an office for regulatory evaluation, to be known as the FCA Office for Regulatory Evaluation (“the Office”), to provide independent evaluation of the FCA’s regulatory actions.
(2) The FCA must appoint a person as Director of the Office who will be responsible for the activities of the Office.
(3) Treasury approval is required for the appointment or dismissal of the Director.
(4) The FCA must provide the resources that are required by the Director to carry out the evaluation of the FCA’s regulatory actions.
(5) The Director must draw up a statement of policy of how the evaluation of the FCA’s regulatory actions will be carried out.
(6) The Director must report to the governing body of the FCA at least every six months on the work of the Office and the report must be—
(a) published,
(b) sent to the Treasury, and
(c) sent to the Committees of Parliament referred to in paragraph 28(7) of Schedule 1ZA (the Financial Conduct Authority).
(7) The Director must report to the chair of the FCA and be independent of the FCA’s board of directors and its executive management.
(8) The chair of the FCA will be responsible for the remuneration of the Director and for settling any disputes about the resources allocated by the FCA to the work of the Office.
(9) “Regulatory actions” means any actions carried out by the FCA in discharging its general functions under section 1B and supervision, monitoring and enforcement under section 1L.”
(3) After section 2NB (requirements in connection with public consultations), insert—
“Bank of England Office for Regulatory Evaluation
2NC Bank of England Office for Regulatory Evaluation
(1) The Bank of England must establish and maintain an office for regulatory evaluation, to be known as the Bank of England Office for Regulatory Evaluation (“the Office”), to provide independent evaluation of the regulatory actions of the PRA and the Bank of England in respect of its financial market infrastructure (FMI) functions.
(2) The Bank of England must appoint a person as Director of the Office who will be responsible for the activities of the Office.
(3) Treasury approval is required for the appointment or dismissal of the Director.
(4) The Bank of England must provide the resources that are required by the Director to carry out the evaluation of the regulatory actions of the PRA and the Bank of England in respect of its FMI functions.
(5) The Director must draw up a statement of policy of how the evaluation of regulatory actions will be carried out.
(6) The Director must report to the court of directors at least every six months on the work of the Office and the report must be—
(a) published,
(b) sent to the Treasury, and
(c) sent to the Committees of Parliament referred to in paragraph 36(7) of Schedule 1ZB (the Prudential Regulation Authority).
(7) The Director must report to the chair of the court of directors and be independent of the court of directors, the Prudential Regulation Committee, the Financial Markets Infrastructure Committee and the executive management associated with those Committees.
(8) The chair of the court of directors will be responsible for the remuneration of the Director and for settling any disputes about the resources allocated by the Bank of England to the work of the Office.
(9) “Regulatory actions” means any actions carried out by—
(a) the PRA in discharging its functions under section 2AB and supervision of PRA-authorised persons under section 2K, and
(b) the Bank of England in respect of its FMI functions under section 30D of the Bank of England Act 1998.””

144A

After Clause 28, insert the following new Clause—
“Appointed representatives: impact assessment
(1) Before any provision of this Act relating to the appointed representatives regime comes into force, the FCA must conduct and publish an impact assessment of the effect of those provisions on—
(a) the number of principal firms choosing to maintain appointed representative relationships,
(b) the total number of appointed representatives operating in the United Kingdom,
(c) consumer access to regulated financial advice, with particular reference to consumers with modest investable assets who may be dependent on appointed representatives as their primary source of regulated financial advice, and
(d) the viability of smaller principal firms for whom the costs of compliance with the new senior manager function requirement for appointed representative oversight may be disproportionate relative to the revenue derived from appointed representative relationships.
(2) The impact assessment required under subsection (1) must—
(a) have regard to the existing contraction of the appointed representatives population,
(b) include a quantitative assessment of the likely further reduction in appointed representative numbers attributable to the provisions of this Act, and
(c) assess the consequent effect on the availability and accessibility of regulated financial advice to retail consumers.
(3) If the impact assessment concludes that the provisions of this Act are likely to result in a material reduction in consumer access to regulated financial advice, the FCA must publish proposals for mitigating measures before those provisions come into force.”

This amendment calls for an impact assessment to ensure that the measures in this Act do not lead to a large drop in the number of appointed representatives who often provide services to smaller clients thereby promoting financial inclusion.

160A

After Clause 40, insert the following new Clause—
“Removal of ring-fencing regime for banks
(1) In the Financial Services and Markets Act 2000, omit Part 9B (ring-fencing).
(2) In consequence of subsection (1)—
(a) secondary legislation made under Part 9B of the Financial Services and Markets Act 2000, so far as it relates to ring-fencing, is repealed;
(b) in the Financial Services (Banking Reform) Act 2013, omit—
(i) sections 1 to 8 (ring-fencing and ring-fencing review), and
(ii) Schedule 1 (ring-fencing transfer schemes);
(c) any other provision made by or under any enactment, so far as it is consequential on Part 9B of the Financial Services and Markets Act 2000, is repealed.
(3) The Treasury must, within the period of 12 months beginning with the day on which this Act is passed, publish draft legislation containing provision in connection with the repeal made by subsection (1).
(4) Draft legislation under subsection (3) may in particular—
(a) amend, repeal or revoke any provision made by or under primary or secondary legislation;
(b) make provision governing the transition of ring-fenced bodies and groups to a non-ring-fenced structure;
(c) make provision in connection with the continuity of contractual arrangements and regulatory permissions.
(5) The Prudential Regulation Authority, the Financial Conduct Authority and the Bank of England must, as soon as reasonably practicable after the the day on which this Act is passed—
(a) review their rules, guidance and supervisory statements to identify any provisions relating to the ring-fencing regime;
(b) revoke or amend such provisions as necessary to give effect to subsection (1);
(c) publish a statement setting out how they will ensure an orderly transition away from the ring-fencing regime.
(6) The Treasury must lay before Parliament, within six months of the day on which this Act is passed, a report on the planning for the implementation off the repeal of the ring-fencing regime.
(7) Subsections (1) to (5) may not come into force until the Treasury is satisfied that adequate provision has been made to ensure an orderly transition
(8) In exercising their functions under this section, the Treasury, the Prudential Regulation Authority, the Financial Conduct Authority and the Bank of England must have regard to—
(a) the desirability of maintaining financial stability;
(b) the need to ensure continuity of core banking services;
(c) the objective of promoting the international competitiveness of the United Kingdom’s financial services sector.”

This amendment repeals the statutory ring fencing regime for banks and requires the Treasury and regulators to ensure its orderly removal while maintaining financial stability and continuity of core banking services.

172D

After Clause 47, insert the following new Clause—
“Review of regulatory causes of debanking
(1) Within 12 months of the day on which this Act is passed, the Treasury must lay before Parliament a report reviewing the extent to which individuals, businesses, charities and other organisations have been refused access to banking services, had banking services terminated, or had the use of banking services materially restricted as a result of regulatory requirements, regulatory uncertainty or risk aversion arising from the operation of the regulatory framework.
(2) A report under subsection (1) must consider, in particular—
(a) the scale and nature of debanking in the United Kingdom;
(b) the categories of individuals, businesses, charities and other organisations most affected by debanking;
(c) the sectors, industries or lawful activities most affected by debanking;
(d) the extent to which debanking decisions are attributable, wholly or partly, to—
(i) anti-money laundering requirements,
(ii) counter-terrorist financing requirements,
(iii) sanctions compliance,
(iv) financial crime prevention requirements,
(v) regulatory reporting, monitoring or due diligence obligations,
(vi) regulatory guidance or supervisory expectations,
(vii) fear of regulatory enforcement or supervisory criticism,
(viii) uncertainty or confusion as to the proper interpretation of regulatory requirements, or
(ix) the cumulative cost or burden of regulatory compliance.
(3) In preparing the report under subsection (1), the Treasury must seek evidence from, and consult—
(a) the Financial Conduct Authority;
(b) the Prudential Regulation Authority;
(c) the Financial Ombudsman;
(d) relevant financial institutions;
(e) persons who have been refused banking services, had banking services terminated, or had such services materially restricted;
(f) politically exposed persons, their family members and known close associates;
(g) persons appearing to the Treasury to represent the interests of politically exposed persons, their family members and known close associates;
(h) persons representing firms operating in the defence sector or sectors connected with national security;
(i) persons representing charities, voluntary organisations and civil society organisations;
(j) persons representing small and medium-sized enterprises, start-ups and new market entrants;
(k) persons with expertise in anti-money laundering, counter-terrorist financing, sanctions compliance and financial crime regulation;
(l) such other persons as the Treasury considers appropriate.
(4) The Treasury must publish the report.”

This new clause would require the Treasury to review whether debanking has occurred as a result of excessive regulation, regulatory uncertainty, confusion, supervisory expectations, enforcement risk or risk aversion arising from the operation of the regulatory framework. The review would identify the sectors and customer groups most affected, including politically exposed persons and their families, defence firms, charities, SMEs and other affected persons.

After Clause 22, insert the following new Clause— “Offices for regulatory evaluation (1) The Financial Services and Markets Act 2000 is amended as follows. (2) After section 1RB (requirements in connection with public consultations), insert— “FCA Office for Regulatory Evaluation 1RC FCA Office for Regulatory Evaluation (1) The FCA must establish and maintain an office for regulatory evaluation, to be known as the FCA Office for Regulatory Evaluation (“the Office”), to provide independent evaluation of the FCA’s regulatory actions. (2) The FCA must appoint a person as Director of the Office who will be responsible for the activities of the Office. (3) Treasury approval is required for the appointment or dismissal of the Director. (4) The FCA must provide the resources that are required by the Director to carry out the evaluation of the FCA’s regulatory actions. (5) The Director must draw up a statement of policy of how the evaluation of the FCA’s regulatory actions will be carried out. (6) The Director must report to the governing body of the FCA at least every six months on the work of the Office and the report must be— (a) published, (b) sent to the Treasury, and (c) sent to the Committees of Parliament referred to in paragraph 28(7) of Schedule 1ZA (the Financial Conduct Authority). (7) The Director must report to the chair of the FCA and be independent of the FCA’s board of directors and its executive management. (8) The chair of the FCA will be responsible for the remuneration of the Director and for settling any disputes about the resources allocated by the FCA to the work of the Office. (9) “Regulatory actions” means any actions carried out by the FCA in discharging its general functions under section 1B and supervision, monitoring and enforcement under section 1L.” (3) After section 2NB (requirements in connection with public consultations), insert— “Bank of England Office for Regulatory Evaluation 2NC Bank of England Office for Regulatory Evaluation (1) The Bank of England must establish and maintain an office for regulatory evaluation, to be known as the Bank of England Office for Regulatory Evaluation (“the Office”), to provide independent evaluation of the regulatory actions of the PRA and the Bank of England in respect of its financial market infrastructure (FMI) functions. (2) The Bank of England must appoint a person as Director of the Office who will be responsible for the activities of the Office. (3) Treasury approval is required for the appointment or dismissal of the Director. (4) The Bank of England must provide the resources that are required by the Director to carry out the evaluation of the regulatory actions of the PRA and the Bank of England in respect of its FMI functions. (5) The Director must draw up a statement of policy of how the evaluation of regulatory actions will be carried out. (6) The Director must report to the court of directors at least every six months on the work of the Office and the report must be— (a) published, (b) sent to the Treasury, and (c) sent to the Committees of Parliament referred to in paragraph 36(7) of Schedule 1ZB (the Prudential Regulation Authority). (7) The Director must report to the chair of the court of directors and be independent of the court of directors, the Prudential Regulation Committee, the Financial Markets Infrastructure Committee and the executive management associated with those Committees. (8) The chair of the court of directors will be responsible for the remuneration of the Director and for settling any disputes about the resources allocated by the Bank of England to the work of the Office. (9) “Regulatory actions” means any actions carried out by— (a) the PRA in discharging its functions under section 2AB and supervision of PRA-authorised persons under section 2K, and (b) the Bank of England in respect of its FMI functions under section 30D of the Bank of England Act 1998.””

164J

After Clause 46, insert the following new Clause— “Issuer Digitalisation Council (1) The Secretary of State must, within 12 months of the day on which this Act is passed, by regulations made by statutory instrument establish an Issuer Digitalisation Council (“the Council”) for the purpose of— (a) defining and publishing standards and guidance to enable traditional and digital issuers to operate in a digitised UK capital market; (b) publishing a cost-benefit framework for the adoption of tokenised issuance and associated digital infrastructure by issuers; (c) providing advice to the Treasury, the FCA and the PRA on matters relating to digital market infrastructure. (2) The Council must include within its scope— (a) onboarding processes for issuers entering a tokenised market; (b) token design standards and issuer obligations in respect of lifecycle events (including issuance, transfer, redemption, corporate actions, and maturity); (c) disclosure obligations applicable to tokenised securities and digital settlement assets; (d) analysis of the relative costs and benefits of adoption of tokens compared to traditional issuance models. (3) Regulations under subsection (1) must provide for— (a) the composition of the Council, which must include representatives of issuers, regulated intermediaries, the FCA, the PRA, the Bank of England and the Treasury; (b) a requirement to publish its work programme and outputs; (c) annual reporting to Parliament by the Secretary of State. (4) The Council is not a public body for the purposes of the Public Bodies Act 2011 unless the Secretary of State so provides by order. (5) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

164K

After Clause 46, insert the following new Clause— “Common token and data standards (1) The FCA may, having consulted the Bank of England, the PRA and the Council established under section (Issuer Digitalisation Council), make rules requiring regulated institutions to— (a) adopt and implement a unified token standard aligned with ISO 20022 and such other international best practice as the FCA may specify; (b) use a common data taxonomy for the representation and communication of tokenised assets, rights and obligations; (c) implement messaging standards compatible with such standards as will promote interoperability between regulated institutions and public sector payment and settlement systems. (2) The FCA must publish and maintain a digital assets taxonomy, which must— (a) define the categories of tokenised instrument, digital settlement asset and cryptoasset to which rules under subsection (1) apply; (b) be reviewed at least every two years; (c) be developed in consultation with the Council, the Bank of England, the Treasury and international standard-setting bodies. (3) Rules under subsection (1) may— (a) make provision applying to different categories of regulated institution, including authorised persons, recognised bodies, and participants in regulated payment systems; (b) provide for a transition period not exceeding three years from the date on which rules are made; (c) specify minimum technical requirements by reference to standards maintained by third parties, as those standards have effect from time to time. (4) For the purposes of this section, “regulated institution” means— (a) an authorised person, as defined in section 31 of the Financial Services and Markets Act 2000 (authorised persons); (b) a recognised body within the meaning of Part 18 of the Financial Services and Markets Act 2000 (recognised investment exchanges, clearing houses, CSDs and other parties); (c) a participant in a regulated payment system within the meaning of Part 8C of the Financial Services and Markets Act 2000 (inserted by Schedule 2 of this Act).”

164L

After Clause 46, insert the following new Clause— “FCA rules: model contracts (1) The FCA must, within 18 months of the day on which this Act is passed, make rules setting out model clauses for use in financial transactions involving tokenised securities, including provisions addressing— (a) transfer of title and settlement finality; (b) corporate action entitlements; (c) insolvency treatment of tokenised assets. (2) The rules may make different provision for different types of tokenised instrument or distributed ledger system.”

164M

After Clause 46, insert the following new Clause— “Payment rail neutral framework for digital assets (1) The Secretary of State may by regulations made by statutory instrument establish a framework for the use of digital settlement assets as payment and settlement instruments in wholesale and retail markets, covering— (a) tokenised bank deposits issued by authorised deposit takers; (b) regulated digital settlement tokens, being digital settlement assets backed on a one-to-one basis by fiat currency held in a segregated account; (c) synthetic models involving tokenised representations of commercial bank money; (d) fully-backed stablecoins issued by an authorised person as defined in section 31 of the Financial Services and Markets Act 2000 (authorised persons). (2) Regulations under subsection (1) must be made in accordance with the following principles— (a) payment rail neutrality, meaning that no single payment instrument or technology must be privileged over others without objective justification based on risk; (b) safety, meaning that each instrument type must be subject to requirements ensuring the safety of user funds, including capital, liquidity or collateral requirements calibrated to the risk profile of the instrument; (c) redeemability, meaning that holders of instruments within subsection (1)(b) and (d) must be able to redeem at par on demand or within a specified period; (d) transparency, meaning that issuers must publish regular disclosures covering reserve composition, redemption terms, and operational risks. (3) The FCA may make rules giving effect to a framework established by regulations under subsection (1), including rules specifying— (a) the authorisation requirements applicable to each instrument type; (b) prudential and conduct requirements; (c) the requirements for recognition of a digital settlement asset as a “digital settlement asset” for the purposes of Part 8C of the Financial Services and Markets Act 2000 (inserted by Schedule 2 of this Act). (4) In exercising functions under this section, the FCA and the Treasury must have regard to the objective of not creating regulatory asymmetries between instrument types that produce materially equivalent economic outcomes for users. (5) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

164N

After Clause 46, insert the following new Clause— “Custodial infrastructure: bridging traditional and token-native systems (1) The Secretary of State may by regulations made by statutory instrument designate the following as regulated activities for the purposes of the Financial Services and Markets Act 2000 (in addition to any activities already so treated)— (a) safeguarding and administering tokenised securities using a distributed ledger system; (b) operating infrastructure bridging a traditional central securities depository and a distributed ledger system (“bridge infrastructure”); (c) providing omnibus or segregated tokenised custody arrangements for retail or wholesale clients. (2) The FCA must make rules, within 24 months of any designation under subsection (1) taking effect, specifying— (a) the conditions for authorisation as a tokenised custodian in each category; (b) client asset protection requirements, including requirements for segregation of tokenised assets equivalent in outcome to the requirements applicable to traditional custody; (c) operational resilience requirements for bridge infrastructure; (d) disclosure obligations to clients regarding the technical and legal nature of their custodial arrangement. (3) Rules under subsection (2) must ensure that— (a) a custodian operating both traditional and tokenised custody is subject to requirements that are equivalent in outcome to those applicable to traditional custody under the Client Assets Sourcebook (CASS); (b) no competitive advantage is conferred on tokenised custodians relative to traditional custodians through differential treatment of materially equivalent risks. (4) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

164P

After Clause 46, insert the following new Clause— “Tokenised markets issuer pathway (1) The FCA must, within two years of the day on which this Act is passed, publish a tokenised markets issuer pathway, setting out— (a) the regulatory requirements applicable to issuers wishing to issue securities in tokenised form, across all stages of the issuance life cycle; (b) governance requirements for the operation and maintenance of tokenised securities programmes; (c) life cycle management standards, covering issuance, secondary market trading, corporate actions, redemption and maturity; (d) composability requirements: standards enabling tokenised securities to interact with decentralised finance protocols, digital payment rails, and cross-border settlement systems; (e) interoperability requirements consistent with the standards mandated under section (Common token and data standards); (f) disclosure standards for tokenised securities, including prospectus disclosure adaptations. (2) The pathway must be developed in consultation with— (a) the Council established under section (Issuer Digitalisation Council); (b) the Bank of England; (c) the Prudential Regulation Authority; (d) industry representatives nominated by the Treasury. (3) The pathway is not a binding instrument but the FCA must have regard to it when exercising its functions under the Financial Service and Markets Act 2000 in relation to tokenised securities.”

164Q

After Clause 46, insert the following new Clause— “Long-term payment rail innovation and neutrality (1) In exercising its functions under Part 8C of the Financial Services and Markets Act 2000 (payment systems) and under any regulations made under section (Payment rail neutral framework for digital assets), the FCA must have regard to the principles that— (a) no payment instrument, payment rail, or settlement mechanism should receive regulatory treatment that is materially more favourable than that received by other instruments, rails or mechanisms presenting materially equivalent risks, unless such differential treatment is objectively justified on grounds of systemic risk, consumer protection, or financial stability; (b) stablecoins, tokenised deposits, and alternative settlement assets should be capable of competing on a level regulatory playing field, as those markets evolve. (2) The FCA must publish, at intervals of not more than three years, a review of whether the existing regulatory framework for payment rails— (a) remains consistent with the principles in subsection (1); (b) provides a sufficiently flexible framework to accommodate innovations not foreseeable at the time of this Act; (c) creates any regulatory asymmetries that require correction. (3) Following a review under subsection (2), the Treasury may make amendments to regulations made under section (Payment rail neutral framework for digital assets) or to the payment systems framework in Part 8C of the Financial Services and Markets Act 2000 (payment systems) as appear to the Secretary of State to be necessary to maintain payment rail neutrality.”

135A

As an amendment to Amendment 135\n\nAfter subsection (1), insert—\n“(1A) The reports to be published under subsection (1) must include anonymised examples of how the regulations have been applied in individual cases.”

142D

After Clause 22, insert the following new Clause—\n“Litigation funding as a regulated activity\nAfter paragraph 24 of Schedule 2 to the Financial Services and Markets Act 2000 (regulated activities), insert—\n“Litigation funding agreements\n24ZA Rights under a litigation funding agreement.\n24ZB Entering into a litigation funding agreement as funder.\n24ZC Administering a litigation funding agreement.\n24ZD Arranging a litigation funding agreement.\n24ZE Advising on a litigation funding agreement.\n24ZF (1) For the purposes of this Schedule, a “litigation funding agreement” is an agreement under which—\n(a) a person (“the funder”)—\n(i) agrees to fund (in whole or in part) the provision of advocacy or litigation services (by someone other than the funder) to another person (“the litigant”), and\n(ii) the litigant agrees to pay a sum to the funder in specified circumstances, or\n(b) a person provides financial support to a firm of solicitors which is involved in contentious matters or to a claims management company.\n(2) The sum to be paid by the litigant may be—\n(a) an amount calculated by reference to a multiple (if any) of the amount of the funding provided by the funder,\n(b) an amount calculated by reference to a percentage (if any) of any specified financial benefit obtained by the litigant in connection with the matter in relation to which the funding is provided,\n(c) an amount calculated by reference to a rate of interest, or\n(d) such sum, or method of calculation, as is prescribed by the Treasury pursuant to sub-paragraph (3),\nprovided that in respect of the sum to be paid, howsoever calculated, it must not exceed such sum as may be prescribed by the Treasury pursuant to sub-paragraph (3).\n(3) The Treasury may by regulations make such consequential, supplementary, incidental, transitional or saving provision as it considers appropriate in connection with this paragraph.””

142E

After Clause 22, insert the following new Clause—\n“Building society governance standards\n(1) The Treasury must, within six months of the day on which this Act is passed, make regulations by statutory instrument requiring the Financial Conduct Authority to make rules establishing minimum governance standards for authorised building societies.\n(2) Regulations under subsection (1) must require the Financial Conduct Authority to make rules ensuring that—\n(a) elections of directors are conducted in accordance with minimum democratic standards, including—\n(i) equal treatment of candidates in election materials and communications;\n(ii) protection of candidates’ election addresses from alteration except with the candidate’s request or written consent or where alteration is required by law or for production purposes;\n(iii) minimum statutory duties and reporting requirements for independent scrutineers;\n(b) voting arrangements prohibit bundled voting instructions and require voting instructions to be determined separately in respect of each candidate and each resolution;\n(c) members approve, by ordinary resolution at intervals not exceeding three years, the remuneration policy for directors and senior executives;\n(d) every authorised building society whose total assets exceed £5 billion maintains not fewer than two board positions to be filled by member-nominated directors elected by Members;\n(e) every annual general meeting is held at a physical place whilst permitting additional participation by electronic means;\n(f) every question submitted by a member for an annual general meeting, together with the building society’s response or the reasons for not providing a response, is published following the meeting.\n(3) Before making rules under this section the Financial Conduct Authority must consult—\n(a) HM Treasury;\n(b) the Prudential Regulation Authority;\n(c) representatives of authorised building societies;\n(d) organisations appearing to represent the interests of members.\n(4) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

164D

After Clause 46, insert the following new Clause—\n“Cross-border cooperation frameworks\n(1) The Secretary of State must use reasonable endeavours, within 12 months of the day on which this Act is passed, to enter into Memoranda of Understanding with the relevant regulatory authorities in—\n(a) the United States of America,\n(b) the European Union,\n(c) Singapore,\n(d) Hong Kong,\n(e) Switzerland, and\n(f) the United Arab Emirates.\n(2) Each Memorandum of Understanding must address, so far as is reasonably practicable—\n(a) mutual recognition or equivalence arrangements for digital asset standards,\n(b) cross-border settlement interoperability, including atomic settlement and delivery-versus-payment models,\n(c) regulatory information sharing in relation to digital asset service providers,\n(d) coordination on composability standards for decentralised finance and programmable finance applications.\n(3) The FCA must, in exercising its functions relating to digital markets, actively participate in relevant international fora on—\n(a) cross-border settlement standards,\n(b) tokenisation interoperability, and\n(c) composability protocols for digital financial markets.\n(4) The Secretary of State must report annually to Parliament on progress towards alignment with the United States of America.”

164E

After Clause 46, insert the following new Clause—\n“Shared digital identity and compliance utilities\n(1) The Secretary of State must, within 18 months of the day on which this Act is passed, publish a specification for—\n(a) a shared digital identity utility (“the identity utility”), providing API-based identity verification services accessible to authorised persons and regulated institutions operating in both legacy and digital markets;\n(b) a shared anti-money laundering and know your customer compliance utility (“the compliance utility”), providing API-based access to customer due diligence data and screening services.\n(2) The specification must address—\n(a) governance arrangements, including whether the utilities are to be publicly owned, privately owned under public specification, or operated as industry utilities;\n(b) data standards and interoperability requirements;\n(c) access arrangements for legacy and digital ledger technology-based market participants;\n(d) privacy and data protection safeguards, including compliance with the UK GDPR;\n(e) the transition period during which legacy and digital know your customer processes will operate in parallel.\n(3) The FCA may make rules—\n(a) requiring regulated institutions to register with and use the identity utility or compliance utility once operational;\n(b) providing that compliance with compliance utility standards satisfies the customer due diligence requirements of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.\n(4) Use of the identity utility or compliance utility by a regulated institution does not, of itself, discharge that institution’s obligations under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 or under the FCA's financial crime rules.”

164F

After Clause 46, insert the following new Clause—\n“Prudential alignment of tokenised and traditional assets\n(1) The PRA and the FCA must, within 18 months of the day on which this Act is passed, jointly publish guidance ensuring consistent treatment of tokenised and traditional instruments in respect of—\n(a) capital requirements, ensuring that tokenised instruments that are economically equivalent to traditional instruments attract equivalent capital treatment,\n(b) liquidity requirements, ensuring that tokenised high-quality liquid assets are eligible for the same treatment as their traditional equivalents, subject to assessment of operational and settlement risk, and\n(c) collateral eligibility, ensuring that tokenised securities posted as collateral are recognised on terms at least as favourable as their traditional equivalents, subject to appropriate haircuts for settlement and custody risk.\n(2) The guidance must explain—\n(a) the methodology by which equivalence is assessed,\n(b) where differential treatment is applied, the basis for such differential treatment, and\n(c) the transitional arrangements applicable during the period before tokenised markets achieve full operational maturity.\n(3) The PRA must, in making rules in relation to the Capital Requirements Regulation (UK CRR), have regard to the principle that regulatory capital requirements should not, without objective justification based on demonstrably different risk, differentiate between tokenised and traditional instruments of equivalent economic substance.”

164G

After Clause 46, insert the following new Clause—\n“Interoperability sandbox and fast-lane authorisation\n(1) The FCA must establish and operate an additional Digital Financial Markets Sandbox (“the Sandbox”) for the purpose of enabling—\n(a) multi-institution pilots of composable digital workflows, including cross-network settlement, programmable collateral, and tokenised asset issuance;\n(b) testing of cross-border delivery-versus-payment models in partnership with foreign regulatory sandboxes;\n(c) interoperability testing between traditional market infrastructure and distributed ledger technology-based systems.\n(2) The Sandbox must operate on the basis of—\n(a) clear, published eligibility criteria, including the risk thresholds to be met by applicants;\n(b) modified or disapplied rules, subject to equivalent outcomes-based protections;\n(c) a maximum participation period of five years, after which participants must either exit or apply for full authorisation.\n(3) The FCA must establish a fast-lane authorisation track for digital market participants who—\n(a) have participated successfully in the Sandbox for a minimum of 12 months;\n(b) meet the risk thresholds published by the FCA for early-mover authorisation;\n(c) have demonstrated operational readiness across the standards specified in section (common token and data standards).\n(4) Applications for authorisation under the fast-lane track must be determined by the FCA within four months (and not the standard period applicable under section 55V of the Financial Services and Markets Act 2000 (determination of applications: Part 4A) as amended by section 21), unless the FCA notifies the applicant of exceptional circumstances.”

164H

After Clause 46, insert the following new Clause—\n“Digital financial markets education and use case library\n(1) The FCA must, within 12 months of the day on which this Act is passed, develop and publish a national digital financial markets education programme, covering—\n(a) an explanation of composability in financial markets, its benefits, and the operational, legal, and regulatory changes it requires,\n(b) educational materials targeted at regulated institutions, professional market participants, and retail investors, and\n(c) training resources for compliance, risk, and legal professionals at regulated institutions.\n(2) The FCA must publish and maintain a digital markets use case library, covering—\n(a) wholesale use cases, including—\n(i) programmable collateral management;\n(ii) tokenised fund structures and net asset value calculation;\n(iii) cross-border delivery-versus-payment settlement;\n(iv) on-chain corporate actions;\n(v) intraday repurchase agreements using tokenised assets;\n(b) retail use cases, including—\n(i) tokenised savings products;\n(ii) retail participation in tokenised bond markets;\n(iii) digital wallet-based payment and settlement;\n(c) in each case, the regulatory treatment applicable to each use case, cross-referenced to the relevant sections of the Financial Services and Markets Act 2000 and FCA rules.\n(3) The use case library must be designed to function across multiple payment rails and must not privilege any single payment instrument or settlement technology.\n(4) The FCA must review and update the use case library at least annually.”

142B

After Clause 22, insert the following new Clause—
“Facilitation of inheritance tax payment before probate
(1) The FCA must make rules to ensure that financial institutions facilitate the payment of inheritance tax by executors before probate is obtained through the Direct Payment Schemes for Inheritance Tax (IHT423) form.
(2) For the purposes of this section, “financial institutions” include banks, building societies and investment account providers that—
(a) are registered with the FCA;
(b) are regulated by the FCA.”

This amendment seeks to place the informal procedure of executors using the IHT423 scheme to pay inheritance tax before obtaining probate into legislation, and to require all financial institutions regulated by the FCA to facilitate that service. As things stand it is at the discretion of financial institutions to decide whether to facilitate the IHT423 scheme.

83B

Clause 17, page 21, line 34, at end insert— “(b) at the end of subsection (5)(b) insert “, including financial crime related to the proceeds of organised environmental crimes contributing to climate breakdown.””

86A

Clause 17, page 22, line 3, at end insert— “(b) after paragraph (h) insert— “(i) the need to consider climate risk and the laundering of criminal gains of global environmental harms.””

142C

After Clause 22, insert the following new Clause— “Definition of retail and wholesale clients (1) The Treasury must by regulations make provision— (a) defining “retail client” and “wholesale client” for the purposes of the functions of the Financial Conduct Authority and the Prudential Regulation Authority, and (b) requiring the Financial Conduct Authority and the Prudential Regulation Authority, in exercising their functions, to have regard to the desirability of avoiding the application of requirements designed for retail clients to wholesale clients except where such application is proportionate and appropriate. (2) Regulations under subsection (1) must provide that— (a) a “retail client” includes— (i) an individual acting for purposes outside their trade, business or profession, and (ii) a body corporate, partnership or other undertaking with an annual turnover not exceeding £6.5 million; (b) a “wholesale client” is a person who is not a retail client. (3) Regulations under this section are to be made by statutory instrument. (4) A statutory instrument containing regulations underthis section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

172B

After Clause 47, insert the following new Clause— “Review: claims management services (1) The Treasury must, within 12 months of the day on which this Act is passed, conduct and publish a review into the regulation of claims management services and litigation funding. (2) The review must consider— (a) the current regulatory landscape, (b) the impact of the definition of “claims management services” in section 419A of the Financial Services and Markets Act 2000 (claims management services), (c) whether action is needed to clarify the status of claims management firms and litigation funding agreements, and (d) any other matters the Treasury considers appropriate. (3) The review must be laid before both Houses of Parliament.”

172C

After Clause 47, insert the following new Clause— “Review of the City of London Corporation (1) The Secretary of State must, within 12 months of the day on which this Act is passed, appoint an independent person or panel to undertake a review of the functions of the City of London Corporation in relation to regulation of financial services and markets. (2) The review must consider— (a) the arrangements relating to engagement between the City of London Corporation and the FCA and PRA, and (b) the extent to which the City of London Corporation contributes to the regulation of financial services and markets. (3) The reviewer must publish a report setting out their findings and recommendations no later than 18 months after appointment. (4) The Secretary of State must lay the report before Parliament and, within six months of receiving it, publish a response setting out what steps the Government intends to take in response to the recommendations.”

After Clause 22, insert the following new Clause— “Facilitation of inheritance tax payment before probate (1) The FCA must make rules to ensure that financial institutions facilitate the payment of inheritance tax by executors before probate is obtained through the Direct Payment Schemes for Inheritance Tax (IHT423) form. (2) For the purposes of this section, “financial institutions” include banks, building societies and investment account providers that— (a) are registered with the FCA; (b) are regulated by the FCA.”

The above-named Lords give notice of their intention to oppose the Question that Clause 14 stand part of the Bill.

47A

Schedule 2, page 72, line 11, at end insert— “6A After section 1QA insert— “1QB The Payment Systems Panel (1) Arrangements under section 1M must include the establishment and maintenance of a panel of persons (to be known as “the Payments System Panel”) to represent the interests of— (a) participants in regulated payment systems, and (b) those who use, or are likely to use, services provided by regulated payment systems. (2) The FCA must appoint one of the members of the Payments System Panel to be its chair. (3) The Treasury's approval is required for the appointment or dismissal of the chair. (4) The FCA must appoint to the Payments System Panel such persons to represent interests and expertise relevant to the FCA’s payment systems objectives.””

55A

Schedule 2, page 77, line 40, at end insert— “(aa) the ease with which persons who may wish to use those services can do so;”

55B

Schedule 2, page 78, line 10, after “providers” insert “, or persons who wish to become infrastructure providers,”

55C

Schedule 2, page 78, line 12, after “providers” insert “, or persons who wish to become payment service providers,”

64A

Clause 14, page 16, line 35, at end insert— “(1C) Regulations made under subsection (1A) may make provision in relation to— (a) the Financial Conduct Authority, in respect of its functions under the Financial Services and Markets Act 2000; (b) the Financial Conduct Authority, in respect of its functions relating to payment services or electronic money; (c) Ofcom; (d) the National Crime Agency; (e) the National Economic Crime Centre; (f) law enforcement agencies.”

69A

After Clause 14, insert the following new Clause— “Anti-money laundering: supervision transition report (1) Before section 14 of this Act comes into force, the Treasury must lay before Parliament a report on the process for transferring anti-money laundering responsibilities from professional bodies to the Financial Conduct Authority (FCA). (2) A report under subsection (1) must set out— (a) the timetable and transition arrangements for the transfer of responsibilities from professional bodies to the FCA, (b) how financial and compliance burdens on the supervised population will be kept proportionate, (c) what support, education and guidance arrangements will be in place for the supervised population, and (d) a process for consulting with existing supervisory bodies and other affected groups on the regulations and transition materials for the transfer of responsibilities.”

69B

Clause 16, page 18, line 33, leave out “5” and insert “3”

73A

Clause 16, page 20, line 10, leave out “5” and insert “3”

83A

Clause 17, page 21, line 34, after “duties)” insert— “(a) in subsection (1), at end insert— “(c) ensures that any burden or restriction which is imposed on a person, or on the carrying on of an activity, is proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction; (d) recognises the differences in the size, nature and objectives of businesses carried on by different persons (including different kinds of person such as mutual societies and other kinds of business organisation).”; (b)”

84A

Clause 17, page 21, line 37, at end insert— “(3A) In section 2B(1) (the PRA’s general objective), at end insert— “(b) ensures that any burden or restriction which is imposed on a person, or on the carrying on of an activity, is proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction, and (c) recognises the differences in the size, nature and objectives of businesses carried on by different persons (including different kinds of person such as mutual societies and other kinds of business organisation).””

101A

Clause 20, page 25, line 11, after “1B(4A)” insert “and to its payment systems objectives, including the innovation objective and the competition objective”

104A

After Clause 20, insert the following new Clause— “Secondary objectives of the Bank of England in relation to payment systems and service providers After section 188 of the Banking Act 2009 (principles) insert— “188A Secondary objectives in relation to payment systems and service providers (1) In discharging its functions under this Part, the Bank of England must, so far as reasonably possible, act in a way that advances the following secondary objectives— (a) the competition objective, and (b) the competitiveness and growth objective. (2) The “competition objective” facilitates effective competition in the markets for services provided by authorised persons in carrying on regulated activities under this Part. (3) The “competitiveness and growth objective” facilitates, subject to aligning with relevant international standards— (a) the international competitiveness (including in particular of the financial services sector through the contribution of authorised persons), and (b) the medium and long-term growth of the economy of the United Kingdom.””

142A

After Clause 22, insert the following new Clause— “FCA: wholesale markets and firms division (1) The FCA must, within 12 months of the day on which this Act is passed— (a) establish and maintain a dedicated unit (a “Wholesale Markets and Firms Division”) within its organisation, and (b) appoint a Deputy Chief Executive to lead this division. (2) The FCA must ensure that its relevant functions in relation to wholesale markets and firms are exercised and discharged through a Wholesale Markets and Firms Division. (3) The FCA, in discharging its functions through a Wholesale Markets and Firms Division, must— (a) act in a way which advances the regulator’s operational objectives, (b) act, so far as reasonably possible, in a way which advances the regulator’s duties under section 1EB (competitiveness and growth objective) and section 3B (regulatory principles to be applied by both regulators) of the Financial Services and Markets Act 2000, and (c) have regard, in particular, to the desirability of— (i) reducing regulatory burdens on participants in wholesale markets, (ii) facilitating innovation in wholesale financial services, and (iii) promoting sustainable growth and international competitiveness of UK wholesale markets. (4) A Wholesale Markets and Firms Division must be responsible for— (a) the development, implementation and supervision of rules and policies relating to wholesale markets; (b) authorisation and supervision of wholesale markets and firms; (c) engagement with market participants active in wholesale markets, including international firms; (d) advising the regulator on the impact of its policies and rules on wholesale market activity, investment and competitiveness. (5) The FCA must, at least once in each calendar year, prepare and publish a report on the activities of its Wholesale Markets and Firms Division. (6) A report under subsection (5) must— (a) be provided to the Treasury, and (b) include an assessment of— (i) steps taken to reduce regulatory burdens in wholesale markets, (ii) progress in supporting innovation, (iii) the contribution of wholesale markets to investment and growth in the United Kingdom, and (iv) the extent to which the regulator has advanced its secondary competitiveness and growth objective in relation to wholesale markets. (7) In this section— “wholesale firms” means regulated firms whose customers, clients or counterparties are pre-dominantly not covered by the UK consumer duty; “wholesale markets” means such markets, activities or classes of regulated activity as may be specified for the purposes of this section by the Treasury by regulations, having regard to— (a) the nature of transactions undertaken primarily between market counterparties acting in a professional capacity; (b) existing distinctions within the FCA Handbook (including, but not limited to, provisions relating to wholesale market conduct, eligible counterparties, and professional clients); (c) the role of such markets in facilitating capital allocation, risk transfer and investment at scale. (8) A statutory instrument containing regulations under subsection (7) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

164A

After Clause 46, insert the following new Clause— “Digital Assets Industry Forum (1) The Financial Conduct Authority and the Prudential Regulation Authority (“the regulators”) must jointly establish and maintain a forum to be known as the Digital Assets Industry Forum (“the Forum”). (2) The purpose of the Forum is to provide a structured and representative mechanism for engagement between the regulators and persons with experience of digital asset activities, for the purpose of informing the development, implementation and operation of regulation relating to digital assets and related digital financial market infrastructure. (3) In carrying out the duty under subsection (1), the regulators must secure, so far as reasonably practicable, that the Forum includes representatives of— (a) firms carrying on, or seeking to carry on, digital asset activities in the United Kingdom, (b) recognised industry and trade bodies representing such firms, (c) firms and bodies operating in related areas of banking, payments, settlement, custody, market infrastructure and tokenisation, and (d) such other persons as the regulators consider appropriate. (4) The Forum must be co-chaired by— (a) a senior representative nominated jointly by the Financial Conduct Authority and the Prudential Regulation Authority, and (b) a senior person appointed from among the non-regulator members of the Forum in accordance with the statement of policy under subsection (6). (5) In exercising their functions in relation to digital assets and related digital financial market infrastructure, the regulators must have regard to the desirability of using the Forum to— (a) obtain views on the practical effect, clarity, consistency and proportionality of proposed rules, guidance and supervisory approaches, (b) consider emerging and new developments in technology, market structure and business models relevant to digital assets and the wider digital economy, and (c) identify areas in which further clarification, coordination or engagement may be required. (6) The regulators must publish and maintain a statement of policy setting out— (a) the membership, terms of reference and operating arrangements of the Forum, (b) the manner in which the Forum will be engaged in relation to consultations, discussion papers, guidance and other regulatory developments concerning digital assets, (c) the process for appointing the co-chair under subsection (4)(b), and (d) the steps the regulators will take to ensure that the Forum remains representative in light of changes in the digital assets sector. (7) The regulators must, at least once in each period of 12 months, publish a report summarising— (a) the activities of the Forum during that period, (b) the principal issues raised through the Forum, and (c) the extent to which those issues have informed the regulators’ approach to digital assets regulation. (8) The regulators must provide a copy of that report to the Treasury. (9) Where the Forum makes recommendations to the Treasury on matters relating to the regulation or development of digital assets and related digital financial market infrastructure, the Treasury must publish a response within 90 days of receiving those recommendations.”

164B

After Clause 46, insert the following new Clause— “Review of access to banking and payment services for digital asset firms: competition and market entry (1) Within 12 months of the day on which this Act is passed, the Treasury must lay before Parliament a report on— (a) the current and expected future operation of access to banking, payment and settlement services for firms carrying on, or seeking to carry on, digital asset activities in the United Kingdom, and (b) the effect of that access on competition, innovation and market entry in relation to digital assets and related digital financial market infrastructure. (2) A report under subsection (1) must consider— (a) the extent to which firms carrying on, or seeking to carry on, regulated or registrable digital asset activities in the United Kingdom are able to obtain and maintain appropriate access to banking, payment and settlement services, (b) the extent to which refusals, restrictions, suspensions or terminations of such services are attributable to legal or regulatory requirements, including anti-money laundering requirements, as opposed to firms’ own risk appetite, commercial judgments or operational capacity, (c) whether the current and proposed framework operates, or is likely to operate, in a manner that enables fair and equal competition between— (i) new entrants and incumbent firms, (ii) specialist digital asset firms and established financial services firms developing digital asset products or services, and (iii) smaller firms and larger firms, (d) whether any features of the current or proposed framework are likely to confer an advantage on incumbent firms, including by reason of existing banking relationships, scale, group structure, regulatory status or access to payment and settlement infrastructure, (e) whether the current and proposed framework is likely to support market entry and product innovation, or whether it creates barriers that may discourage innovation and market entry, (f) whether the approach taken by firms providing banking, payment or settlement services is sufficiently risk-based and proportionate, (g) how the Treasury intends the system to operate in future to support clear, proportionate and competitive market development in digital asset activities, and (h) any legislative, regulatory or supervisory changes which the Treasury considers may be required to promote clarity, proportionality, competition, innovation and fair access. (3) In preparing a report under subsection (1), the Treasury must consult— (a) the Bank of England; (b) the Prudential Regulation Authority; (c) the Financial Conduct Authority; (d) the Competition and Markets Authority; (e) representatives from industry forums; (f) such other persons as the Treasury considers appropriate. (4) The Treasury must publish the report.”

164C

After Clause 46, insert the following new Clause— “Review of consumer redress mechanisms in relation to digital assets (1) Within 12 months of the day on which this Act is passed, the Treasury must lay before Parliament a report on whether the consumer redress framework for financial services provides a clear, proportionate and internationally competitive basis for regulated digital asset activities and related digital financial market infrastructure in the United Kingdom. (2) A report under subsection (1) must consider— (a) the extent to which existing consumer redress mechanisms applying in relation to financial services, including complaints, ombudsman, compensation and other redress arrangements, are capable of operating effectively in relation to digital assets and related activities, (b) the extent to which the Financial Conduct Authority, the Prudential Regulation Authority, the Bank of England, the scheme operator of the ombudsman scheme and the Financial Services Compensation Scheme are prepared for the development of a regulated digital assets market in the United Kingdom, (c) whether the Government intends that consumer redress in relation to digital assets should be addressed principally through adaptation and clarification of existing regulatory and redress mechanisms, or through a comprehensive review of the framework, (d) the advantages and disadvantages of a gradual approach as compared with a comprehensive or system-wide approach, including the effect of each on clarity, proportionality, speed of implementation and international competitiveness, (e) whether the current and proposed frameworks are likely to provide outcomes that are fair, timely and comprehensible for consumers and market participants in relation to digital assets, (f) the extent to which consumers and firms are able to determine with reasonable clarity— (i) whether a digital asset activity is regulated, (ii) what redress mechanisms are available in relation to that activity, and (iii) the limits of any such mechanisms, (g) whether the current or proposed frameworks are likely to create complexity or uncertainty that may discourage innovation, market entry or the location of digital asset activities in the United Kingdom, (h) whether the framework is likely to operate in a manner that enables consumers to understand protections easily, while allowing the United Kingdom to remain an attractive and competitive jurisdiction for digital asset activity, and (i) whether any legislative, regulatory or supervisory changes are necessary to ensure that consumer redress in relation to digital assets is clear, coherent, proportionate, fair and supportive of innovation and competition. (3) In preparing a report under subsection (1), the Treasury must consult— (a) the Financial Conduct Authority; (b) the Prudential Regulation Authority; (c) the Bank of England; (d) the scheme operator of the ombudsman scheme; (e) the Financial Services Compensation Scheme; (f) representatives of relevant industry forum; (g) such other persons as the Treasury considers appropriate. (4) The Treasury must publish the report.”

172A

After Clause 47, insert the following new Clause— “Reform of financial services dispute resolution (1) The Treasury must, within the period of 12 months beginning with the day on which this Act is passed, publish draft legislation containing provision— (a) replacing the ombudsman scheme established under Part XVI of the Financial Services and Markets Act 2000 with a scheme to be known as the Financial Adjudication Service; (b) removing the requirement in section 228(2) of that Act that complaints be determined by reference to what is fair and reasonable in all the circumstances of the case; (c) requiring complaints within the compulsory jurisdiction of the Financial Adjudication Service to be determined by reference to such statutory requirements as may be specified. (d) providing free access to the Financial Adjudication Service for complainants; (e) providing that the expenses of the Financial Adjudication Service are met by levies or fees imposed on regulated persons; (f) providing that determinations of the Financial Adjudication Service are binding on both parties unless appealed as described in subsection (2); (g) making such amendments to Part XVI and Schedule 17 of the Financial Services and Markets Act 2000, and any other enactment, as the Treasury considers necessary for the purposes of that provision. (2) Draft legislation published under subsection (1) must propose the establishment of a chamber of the First-tier Tribunal to be known as the Financial Services Chamber to hear appeals against determinations by the Financial Adjudication Service and make decisions which are binding on the Financial Adjudication Service unless and until overturned on appeal.”

17A

Schedule 1, page 65, line 35, at end insert—\n“38A In section 140A (unfair relationships between creditors and debtors), after\nsubsection (4) insert—\n“(4A) An application under section 140B(2)(a) shall not be made, and no action\nfor an order under section 140B shall be brought, after the expiration of\nsix years from the date on which the relationship between the creditor\nand the debtor ends.””

30

After Clause 3, insert the following new Clause—
“Fiduciary duty owed to retail customers
After section 137B of the Financial Services and Markets Act 2000 (FCA general rules: clients’ money, right to rescind etc), insert—
“137BA Fiduciary duty owed to retail customers
(1) A firm carrying on a regulated activity owes a fiduciary duty to act in the best interests of its retail customers, including small businesses within the meaning of rules made by the FCA, in relation to any regulated activity carried on for or with them.
(2) The fiduciary duty in subsection (1) includes, but is not limited to—
(a) avoiding conduct, systems or practices that exploit unequal bargaining power,
(b) ensuring that products and services are suitable for the customer’s needs and circumstances,
(c) ensuring that terms, notices and requirements are fair, reasonable and capable of being complied with in practice,
(d) avoiding reliance on classifications, contractual terms or technical interpretations that defeat the reasonable expectations of the customer, and
(e) taking reasonable steps to prevent foreseeable harm.
(3) Nothing in this section prevents the FCA from making rules which impose higher standards or more specific obligations.””

31

Clause 6, page 5, line 10, leave out from the second “the” to end of line 16 and insert “end of the period of ten years beginning with the act or omission to which the complaint relates, determined in accordance with the rules (which may provide for different times in relation to different cases).
(1B) Among other things, rules made under sub-paragraph 13(1) must provide in specified circumstances for the applicable time limit to end at a later time where—
(a) in the opinion of the Financial Ombudsman, the failure to comply with that time limit was due to exceptional circumstances;
(b) the complainant only became aware (or ought reasonably to have become aware) of material facts or detriment to them relating to the act or omission complained of after the expiry of that time limit.”

This amendment amends Clause 6 to ensure that the ten-year longstop is the default position for Financial Ombudsman complaints, in line with the preferred option in the Impact Assessment and as opposed to the six-year provision in current FCA rules (DISP 2.8).

34

Clause 6, page 5, line 16, at end insert—
“(1C) The applicable time limit must not operate to bar a complaint where, in relation to the same act, omission, course of conduct or relationship, any of the following applies—
(a) the respondent firm would not be prevented by any applicable limitation period from enforcing rights arising from that act, omission, course of conduct or relationship;
(b) the respondent firm continues to rely on, assert, or seek to enforce any term, security, guarantee, classification, contractual right or other continuing obligation arising from that act, omission, course of conduct or relationship;
(c) the limitation period applicable to the respondent firm’s enforcement rights has been, or is capable of being, renewed, extended, revived, refreshed, postponed or otherwise affected by any acknowledgment, part-payment, agreement, variation, restructuring, standstill, forbearance or other relevant event.
(1D) For the purposes of subsection (1C), the Ombudsman may consider any continuing reliance on, assertion of, or attempt to enforce a term, security, guarantee, classification, contractual right or other continuing obligation as part of the complaint.”

Lord Davies of Brixton gives notice of his intention to oppose the Question that Clause 8 stand part of the Bill.

This probes the Government’s intentions for the proposed changes to the discretion of the Financial Ombudsman to decide complaints on the basis of what is “fair and reasonable” in all the circumstances of the case, and preserves the current position of the issues around the exercise of that discretion being dealt with in FCA approved rules and guidance.

81

Clause 17, page 21, line 34, leave out subsection (2) to (11) and insert—
“(2) In Section 3B(1) (regulatory principles to be applied by both regulators), in paragraph (b), for the words from “considered” to the end of that paragraph substitute “taking into consideration the nature of the service or product being delivered, the nature of risk to the consumer, whether the cost of implementation is proportionate to that level of risk and whether the burden or restriction enhances UK international competitiveness;””

This amendment seeks to amend the existing regulatory principle for the FCA and PRA and require that the nature of, and risk to, the consumer and the service or product being delivered must be considered when imposing a new burden or restriction.

91

Clause 18, page 23, line 15, leave out subsections (7) and (8)

This amendment seeks to remove proposed changes to the regulators’ duties to consult and the information provided within those consultations.

8

Schedule 1, page 61, line 41, leave paragraph 21

This amendment seeks to keep the relevant provisions in paragraph 21 of Schedule 1 within the Consumer Credit Act, with minor amendments made to some of these provisions which allow for the form and content requirements to be moved to FCA rules.

10

Schedule 1, page 62, line 4, at end insert—
“21A In section 86A(4) (FCA to prepare information sheets on arrears and defaults), for “Regulations” substitute “FCA rules”.”

The effect of this amendment is to allow the FCA to make rules in relation to the information to be included in arrears information sheets and default information sheets.

11

Schedule 1, page 62, line 4, at end insert—
“21A In section 86B(8) (notice of sums in arrears under fixed-sum credit agreements etc.), for “Regulations” substitute “FCA rules”.”

The effect of this amendment is to allow the FCA to make rules in relation to the form and content of the notices of sums in arrears under fixed term credit agreements.

12

Schedule 1, page 62, line 4, at end insert—
“21A In section 86C (notice of sums in arrears under running-account credit agreements)—
(a) in subsection (4), after “Act” insert “or FCA rules (where appropriate)”;
(b) in subsection (6), for “Regulations” substitute “FCA rules”.”

The effect of these amendments is to allow the FCA to make rules in relation to the form and content of notices of sums in arrears under running-account credit agreements and the way in which any such notices may be incorporated in a statement or other notice which a creditor gives the debtor in relation to the agreement, whether that’s by virtue of another provision of the Consumer Credit Act 1974 or FCA rules (where appropriate).

56

Schedule 2, page 78, line 27, leave out subsection (2)

This amendment would remove a subsection which duplicates section 131Z19 of the Financial Services and Markets Act 2000 (inserted by paragraph 18 of Schedule 2).

58

Schedule 2, page 80, line 15, at end insert—
“131Z12A Fraud prevention duties of payment service providers
(1) A payment system operator must take reasonable steps to—
(a) implement proportionate transaction monitoring systems capable of identifying and intervening in suspected fraudulent transactions in real time;
(b) provide consumers with clear warnings before executing transactions that exhibit indicators of authorised push payment fraud;
(c) participate in cross-industry fraud data sharing schemes designated by the FCA for the purpose of preventing fraud.
(2) The FCA must make rules specifying—
(a) minimum standards for transaction monitoring systems under subsection (1)(a);
(b) the circumstances in which a relevant person is liable to reimburse a consumer who suffers loss as a result of authorised push payment fraud, including where the relevant person failed to meet the standards in subsection (1);
(c) timeframes within which reimbursement decisions must be made.”

This amendment seeks to require the FCA to make rules in relation to financial fraud and payment service providers.

60

Schedule 2, page 83, line 5, leave out “131Z12, 131Z13 or 131Z14” and insert “131Z13, 131Z14 or 131Z15”

This amendment would correct a cross-reference.

61

Schedule 2, page 93, line 6, at end insert—
“(aa) in paragraph 2(3), omit
“, (ca)”
;”

This amendment would remove a cross-reference to the paragraph omitted by paragraph 58(a) of Schedule 2.

62

Schedule 2, page 93, line 7, leave out “2(3)” and insert “3(7)”

This amendment would correct a cross-reference.

63

Schedule 2, page 93, line 10, at end insert—
“(ca) in paragraph 5(a), for
“, (c) or (ca)”
substitute
“or (c)”
;”

This amendment would remove a cross-reference to the paragraph omitted by paragraph 58(a) of Schedule 2.

29

After subsection (4) insert—
“(4A) Where a relevant deposit taker receives a score or rating below a minimum threshold prescribed by rules made under this section, the Authority must require the deposit taker to take proportionate remedial action to improve its rating.
(4B) The Authority may—
(a) make such rules or issue such guidance applying to designated persons as appear to the Authority to be necessary or expedient, and
(b) give a direction under this section to a designated person if it considers that it is desirable to give the direction;
for the purpose mentioned in subsection (4A).”

This amendment to Baroness Kramer’s amendment gives the FCA a duty to ensure, through rules and guidance, that relevant banks and building societies which fall short of a minimum threshold performance in providing access to affordable credit are required to take proportionate steps to remedy the situation.

22

Clause 3, page 2, line 4, at end insert—
“(b) a clear definition of what constitutes an acceptable banking hub format for particular types of location and the minimum time between it becoming operational and the branch closure that triggers its requirement coming into effect,
(c) existing banking services provided under the Post Office Banking Framework.”

26

Clause 3, page 2, line 8, leave out paragraph (b)

This amendment probes the necessity for regulations under this clause to amend primary legislation.

65

After Clause 14, insert the following new Clause—
“Anti-money laundering: provision of support to professional services firms
(1) Within three months of the passing of this Act, the Treasury must publish an assessment of the arrangements that will be made to provide education, guidance and compliance support to professional services firms subject to supervision by the FCA.
(2) The assessment must include a comparison between—
(a) the education, guidance and compliance support currently provided by professional body supervisors, and
(b) the support that will be provided by the FCA.
(3) The Treasury must lay the assessment before Parliament.”

This amendment seeks to require the Government to explain how education, guidance and bespoke compliance support currently provided by professional body supervisors will be maintained following the transfer of anti-money laundering supervisory functions to the FCA.

66

After Clause 14, insert the following new Clause—
Anti-money laundering supervisory functions
(1) Within three months of the passing of this Act, the Treasury must publish a timetable for the implementation of the transfer of anti-money laundering supervisory functions to the FCA.
(2) The timetable must include—
(a) the expected date of publication of draft regulations,
(b) the anticipated commencement date of the new supervisory regime,
(c) key transition milestones, and
(d) arrangements for firms supervised under the existing regime during the transition period.
(3) The Treasury must lay the timetable before Parliament.”

This amendment seeks to require the Government to publish a clear implementation timetable for the transfer of anti-money laundering supervisory functions to the FCA.

67

After Clause 14, insert the following new Clause—
Professional expertise in anti-money laundering supervision
(1) In exercising anti-money laundering supervisory, the FCA must have regard to the desirability of ensuring that supervisory staff possess relevant professional expertise and experience of the sectors being supervised.
(2) This includes, in particular, expertise and experience relating to—
(a) taxation;
(b) accountancy;
(c) legal services;
(d) trust and company service provision.”

This amendment seeks to require the FCA to have regard to the desirability of employing staff with relevant professional expertise and experience in the sectors subject to anti-money laundering supervision.

68

After Clause 14, insert the following new Clause—
Anti-money laundering: assessment of supervisory costs
(1) Before assuming anti-money laundering supervisory functions, the FCA must publish an assessment of the likely impact of the transfer on supervisory fees payable by professional services firms.
(2) The assessment must include—
(a) estimated fee levels under the new regime,
(b) a comparison with fees payable under the existing supervisory arrangements, and
(c) measures proposed to ensure that costs remain proportionate, particularly for small firms.”

This amendment seeks to require publication of an assessment of the impact of the transfer on supervisory fees payable by professional services firms.

69

After Clause 14, insert the following new Clause—
Anti-money laundering: regional supervision
(1) Within six months of the passing of this Act, the FCA must publish a report on its capacity to undertake anti-money laundering supervisory activity across all parts of the United Kingdom.
(2) The report must include—
(a) the geographical distribution of relevant staff,
(b) plans for recruitment and deployment of staff outside existing FCA office locations, and
(c) arrangements for ensuring supervisory staff have knowledge of regional business practices and risk profiles.”

This amendment seeks to require the FCA to report on how it will maintain effective anti-money laundering supervision across all regions of the United Kingdom.

140

After Clause 22, insert the following new Clause—
“Requirement to make rules on climate transition plans
After section 137SB of the Financial Services and Markets Act 2000 (rules to recover debt advice expenses incurred by the devolved authorities), insert—
“137SC Rules to require climate transition plans
Within six months of the day on which section (Requirement to make rules on climate transition plans) of the Financial Services and Markets Act 2026 comes into force, both regulators must make rules requiring regulated persons to develop and implement transition plans that align with the 1.5°C goal of the Paris Agreement.””

This amendment seeks to implement the commitment of the Labour Party Manifesto 2024 to mandate UK-regulated financial institutions, including banks, asset managers, pension funds, and insurers, to develop and implement credible transition plans that align with the 1.5°C goal of the Paris Agreement.

23

Clause 3, page 2, line 4, at end insert— “(b) the need for in-person banking provision in village, district and town centres and the potential for funding such centres through a levy on banks.”

32

Clause 6, page 5, line 11, leave out “ten” and insert “six”

44

Clause 10, page 12, line 37, at end insert— “(b) after subsection (1) insert— “(1A) Rules under this section may not require the establishment or operation of a consumer redress scheme in respect of loss or damage where, by reason only of the lapse of time, no remedy or relief would be available in legal proceedings on the date on which the rules are made. (1B) Subsection (1A) does not apply where the Treasury or the FCA considers that an exception equivalent to that applying in legal proceedings in cases of deliberate concealment or fraud would apply.””

45

After Clause 12, insert the following new Clause— “Claims management services: Northern Ireland (1) The Treasury may by regulations made by statutory instrument make provision for claims management services provided in, from or into Northern Ireland to be regulated under the Financial Services and Markets Act 2000 on a basis equivalent to claims management services provided in, from or into Great Britain. (2) Regulations under this section may amend primary legislation, retained direct principal EU legislation or subordinate legislation, including— (a) the Financial Services and Markets Act 2000, (b) the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, and (c) Part 2 of the Financial Guidance and Claims Act 2018. (3) Regulations under this section may make consequential, supplementary, incidental, transitional, transitory or saving provision. (4) Before making regulations under this section, the Treasury must consult— (a) the Financial Conduct Authority, (b) the scheme operator of the ombudsman scheme under Part 16 of the Financial Services and Markets Act 2000, (c) the Department of Finance in Northern Ireland, and (d) such other persons as the Treasury considers appropriate. (5) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament. (6) In this section, “claims management services” has the meaning given by section 419A of the Financial Services and Markets Act 2000.”

82

Clause 17, page 21, line 34, leave out subsections (2) to (11) and insert— “(2) In section 3B(1) (regulatory principles to be applied by both regulators), after paragraph (h), insert— “(i) the need to consider financial inclusion.””

87

Clause 17, page 22, line 3, at end insert— “(5A) In section 3B (regulatory principles to be applied by both regulators)— (a) in paragraph (a), after “way” insert “, under which the regulators must— (i) seek to minimise compliance costs, (ii) avoid unnecessary regulatory overlap and ensure that the regulatory framework is internally consistent, and (iii) promote transparency and efficiency in regulatory processes;"; (b) in paragraph (d), after “decisions” insert “, under which— (i) in relation to retail consumers, regulators should focus on ensuring that products, services and market practices support good consumer outcomes and informed decision-making, (ii) in relation to professional consumers of wholesale markets, the regulators should have regard to their

95

Clause 18, page 24, line 3, at end insert— “(b) after paragraph (ic) (omitted by sub-paragraph (a) above), insert— “(id) how the discharge of its functions during the year has affected financial inclusion, including— (i) access to, and the affordability of, banking services, credit, insurance and savings products for individuals on low incomes or in vulnerable circumstances, (ii) the extent and effects of the poverty premium in financial services, and (iii) the steps the FCA has taken, or intends to take, to improve financial inclusion outcomes;””

97

Clause 18, page 24, line 3, at end insert— “(12A) After paragraph (11)(4) of Schedule 1ZA, insert— “(4A) The FCA must when engaging with the relevant Parliamentary committees, be prepared to demonstrate how it has had regard to financial inclusion in carrying out its general functions during the reporting period. (4B) In this paragraph, “financial inclusion” means ensuring that individuals, particularly those on low incomes or in vulnerable circumstances and those who are excluded from products and services, have access to useful and affordable financial products and services.””

101

Clause 20, page 25, line 7, at end insert— “(3A) A report prepared by a regulator under this section must be prepared and published in a manner which is clear, comparable with previous reports so far as reasonably practicable, and relevant to the practical experience of authorised persons and consumers. (3B) A report under this section must include, so far as reasonably practicable— (a) information on the regulator’s performance in determining applications for permission under Part 4A of this Act and applications for variation of permission, including average determination times and the use and duration of any process by which a statutory determination period is paused or extended, (b) sector-level information, where it can be provided without disproportionate burden, (c) an assessment of the cumulative cost and operational impact of new rules, guidance, supervisory initiatives and data requests made or issued by the regulator during the reporting period, (d) an explanation of how the regulator has applied proportionality, including in relation to small and medium-sized authorised firms, and (e) year-on-year comparisons against metrics used in previous reports, or an explanation of any material change in methodology.”

104

After Clause 20, insert the following new Clause— “Financial inclusion objective: reporting requirements After section 3RF of the Financial Services and Markets Act 2000 (inserted by section 20), insert— “Financial inclusion: reporting requirements 3RG Financial inclusion reporting (1) The FCA and PRA must prepare annual reports on the extent to which they have advanced the financial inclusion objective. (2) The report must include— (a) information on access to financial services, (b) analysis of outcomes for vulnerable, under-served and under-banked consumers, and (c) measures taken to increase financial inclusion. (3) The FCA and PRA must publish the first report within three months of the day on which the Financial Services and Markets Act 2026 is passed.””

141

After Clause 22, insert the following new Clause— “FCA rules: access to certain savings accounts for persons lacking capacity (1) The FCA must make rules requiring a relevant provider, where the conditions in subsection (3) are met, to enter into an agreement under which payments from a relevant account held by a person who lacks capacity to manage their own financial affairs (“the account holder”) are made to a person acting on the account holder’s behalf (“the recipient”) instead of to the account holder. (2) A “relevant account” means— (a) a Child Trust Fund within the meaning of the Child Trust Funds Act 2004; (b) a junior individual savings account within the meaning of regulations made under Chapter 3 (income from individual investment plans) of Part 6 (exempt income) of the Income Tax (Trading and Other Income) Act 2005; (c) an account of any other description specified by the FCA in rules made under this section. (3) The conditions are that— (a) there has been provided to the relevant provider either— (i) a document signed by a registered medical practitioner stating that the account holder lacks capacity to manage their own financial affairs, or (ii) a statement in writing by the recipient that they understand their duty to apply any money received in the best interests of the account holder, that they are aware that they may incur civil or criminal liability if they misapply the money, and that, so far as they are aware, no other person has authority to receive the money by virtue of a power of attorney or an order or appointment made by a court, and (b) the account holder has not informed the relevant provider that they do not wish such an agreement to be made. (4) Rules made under this section must— (a) secure that a relevant provider which makes a payment in accordance with such an agreement does not, by making it, incur any liability to the account holder, unless the provider has reasonable cause to believe that the recipient is likely to apply the money otherwise than in the account holder’s best interests, (b) require the recipient to apply any money received under the agreement in the best interests of the account holder, and (c) provide that the aggregate of the payments made under an agreement may not exceed £5,000 in any period of 12 months. (5) The purpose of rules made under this section is to enable access to be obtained to money held in a relevant account on behalf of an account holder who lacks capacity without the need for an order or appointment of the Court of Protection or any equivalent order of a court. (6) In this section “relevant provider” means an authorised person (within the meaning of the Financial Services and Markets Act 2000) who provides a relevant account.”

142

After Clause 22, insert the following new Clause— “Requirement to make rules on nature-related financial disclosures In the Financial Services and Markets Act 2000, after section 137SB (rules to recover debt advice expenses incurred by the devolved authorities), insert— “137SC Rules to require nature-related financial disclosures Within six months of the day on which section (Requirement to make rules on nature-related financial disclosures) of the Financial Services and Markets Act 2026 comes into force, both regulators must make rules requiring such regulated persons as they consider appropriate to disclose information relating to nature-related dependencies, impacts, risks and opportunities.””

151

After Clause 36, insert the following new Clause— “Review of expedited authorisation for firms with previously approved senior managers (1) Within 12 months of the day on which this Act is passed, the Treasury must lay before Parliament a report on whether a streamlined or expedited process should be introduced for determining certain applications for permission under Part 4A (permission to carry on regulated activities) of the Financial Services and Markets Act 2000. (2) A report under subsection (1) must consider, in particular— (a) whether a determination period shorter than that provided for by section 55V (determination of applications), including a period of 90 days, should apply where an applicant for Part 4A permission is directed or managed by one or more persons who— (i) have previously been approved by the FCA to perform a senior management function, or have held a senior management or controlled function for a substantial period, (ii) have no record of serious regulatory misconduct, and (iii) appear to the Treasury and the FCA to be in regulatory good standing, (b) how any such streamlined or expedited process could operate without reducing regulatory standards or weakening the threshold conditions for authorisation, (c) what criteria should apply in determining whether an applicant is eligible for any such process, (d) whether a shorter determination period would support market entry, competition, innovation and growth in the United Kingdom financial services sector, and (e) whether any legislative, regulatory or supervisory changes are necessary to give effect to such a process. (3) In preparing a report under subsection (1), the Treasury must consult— (a) the FCA, (b) the PRA, (c) the Bank of England, and (d) such other persons as the Treasury considers appropriate. (4) The Treasury must publish the report.”

155

Clause 40, page 47, line 30, leave out from beginning to line 2 on page 48 and insert— “(1) The appropriate regulator shall consider whether there is sufficient provision to ensure the effective provision to a ring-fenced body of services and facilities that it requires in relation to the carrying on of a core activity. (1A) Subject to subsection (1B), when considering whether there is sufficient provision for the purposes of subsection (1) concerning services and facilities that are provided to a ring-fenced body by another member of its group, the appropriate regulator shall take account of all relevant circumstances, including— (a) the appropriate regulator’s ability to assess and influence the terms on which such services and facilities are made available to a ring-fenced body, (b) the availability, continuity and sufficiency of such services and facilities, including in circumstances where the Bank of England would be entitled to exercise any of the stabilisation powers under the Banking Act 2009, and (c) any assessment that the Bank of England has made of a group of which the ring-fenced body is or proposes to become a member under a statement of policy that the Bank of England has issued pursuant to section 3B (safeguards relating to directions under section 3A) subsection (9) of the Banking Act 2009 and, where applicable, the absence of any such assessment. (1B) The appropriate regulator shall not consider that there is sufficient provision for the purposes of subsection (1) where a ring-fenced body is, or proposes to become, a member of a group for all or part of which the appropriate regulator is not responsible for consolidated supervision, and such services and facilities are provided to the ring-fenced body from outside the United Kingdom by a member of the group that is not in a part of the group that is subject to consolidated supervision by the appropriate regulator, unless the appropriate regulator has made rules to ensure that— (a) there is no less uncertainty concerning the availability, continuity and sufficiency of such services and facilities than there would be where they are provided to a ring-fenced body within a group that is subject as a whole to the consolidated supervision of the appropriate regulator, and (b) the ring-fenced body is not permitted to receive such services and facilities unless the provider of those services and facilities is adequately resourced and the arrangements under which those services and facilities are provided would facilitate the orderly exercise by the Bank of England of its stabilisation powers under the Banking Act 2009 in circumstances where the Bank of England would be entitled to exercise those powers. (1C) If, having regard to all the circumstances, including the matters referred to in subsection (1A), the appropriate regulator does not consider that there is sufficient provision for the purposes of subsection (1) or may not do so under subsection (1B), the appropriate regulator must exercise its power to make rules requiring a ring-fenced body to make arrangements to ensure the effective provision referred to in subsection (1). (1D) The appropriate regulator shall consider whether there is sufficient provision to achieve the group ring-fencing purposes. (1E) The appropriate regulator shall not consider that there is sufficient provision for the purposes of subsection (1D) where a ring-fenced body is or proposes to become a member of a group for all or part of which the appropriate regulator is not responsible for consolidated supervision, unless the appropriate regulator has made rules to ensure that there is no less uncertainty concerning the achievement of the group ring-fencing purposes in those circumstances than would be the case where the ring-fenced body is a member of a group that is subject as a whole to the consolidated supervision of the appropriate regulator. (1F) If the appropriate regulator does not consider that there is sufficient provision to achieve the group ring-fencing purposes, or may not do so under subsection (1E), the regulator must exercise its power to make rules for the group ring-fencing purposes that apply— (a) to ring-fenced bodies, or (b) to authorised persons who are members of a ring-fenced body’s group.”

156

Clause 40, page 48, line 7, after “rules,” insert “assessments,”

157

Clause 40, page 48, line 19, at end insert— “(za) in subsection (1), for “D” substitute “E”;”

158

Clause 40, page 48, line 21, at end insert— “(c) after subsection (5) insert— “(5A) Condition E is that, in the case of a ring-fenced body of the kind to which section 142H(1B) refers, the appropriate regulator does not consider that there is sufficient provision for the purposes of subsection (1) or (1D) of section 142H and considers that this is unlikely to be rectified by the appropriate regulator making, or taking steps to enforce, rules.””

160

After Clause 40, insert the following new Clause— “Ring-fencing rules etc (No. 2) In paragraph 19 of Schedule 1ZB (the Prudential Regulation Authority) of the Financial Services and Markets Act 2000— (a) after paragraph (1)(fb), insert— “(fc) a summary of the PRA’s opinion of whether— (i) under section 142H (ring-fencing rules) subsection (1), there is sufficient provision to ensure the effective provision to a ring-fenced body of services and facilities that it requires in relation to the carrying on of a core activity, and (ii) under section 142H (ring-fencing rules), there is sufficient provision to achieve the group ring-fencing purposes, and”; (b) at the end of paragraph (1A)(a) insert “and, where applicable, any differences in the extent of such compliance between ring-fenced bodies that have a parent undertaking incorporated outside the United Kingdom and ring-fenced bodies that do not have such a parent undertaking”.”

172

After Clause 47, insert the following new Clause— “Forest risk commodities (1) Within three months of the day on which this Act is passed, the Secretary of State must lay before Parliament draft regulations under Schedule 17 (use of forest risk commodities in commercial activity) of the Environment Act 2021. (2) When laying regulations under subsection (1), the Secretary of State must immediately commence the review required under section 79 (forest risk commodities: review) of the Financial Services and Markets Act 2023. (3) The regulations must include provision relating to— (a) due diligence requirements relating to forest risk commodities; (b) reporting obligations for regulated persons.”

106

Clause 21, page 26, line 4, at end insert “provided that any such regulations reduce, and do not increase, the period in question”.

107

Clause 21, page 26, line 4, at end insert—
“(12) Where, for two consecutive years, the regulators have complied with the applicable period for determination of applications under this section, the Treasury must make regulations under subsection (11).”

108

Clause 21, page 26, line 5, at end insert—
“(za) after subsection (2) insert—
“(2ZA) In determining the application, the regulator must—
(a) assign a new application to a case handler within 5 working days of the application being made,
(b) complete an initial application review within 10 working days of allocation to a case handler, and
(c) allow a period of no more than 15 working days from receiving the application, to make requests for additional information.
(2ZB) The regulators must publish monitoring data on an annual basis regarding the following—
(a) the proportion of cases which required escalation to sponsoring firms, including summary trend data on the reasons for escalation,
(b) the average time it takes to assign a case handler, and
(c) the average number of days it takes to complete an application in full.
(2ZC) A regulator may pause consideration of an application under this section for the purpose of requesting additional information on no more than one occasion.
(2ZD) Any request for additional information under subsection (2ZC) must be made within the period specified in subsection (2ZA)(c).””

This amendment would add to the regulators’ authorisation KPIs within the Financial Services and Markets Act 2000 and require them to publish monitoring data related to the determination of authorisations.

111

Clause 21, page 26, line 25, at end insert “provided that any such regulations reduce, and do not increase, the period in question.”

112

Clause 21, page 26, line 25, at end insert—
“(9) Where, for two consecutive years, the regulators have complied with the applicable period for determination of applications under this section, the Treasury must make regulations under subsection (8).”

115

Clause 21, page 26, line 36, after “consideration” insert “provided that any such regulations reduce, and do not increase, the period in question.”

116

Clause 21, page 26, line 36, at end insert—
“(7) Where, for two consecutive years, the regulators have complied with the applicable period for determination of applications under this section, the Treasury must exercise its powers under subsection (6).”

This amendment, and others in the name of Lord Holmes, seeks to require the Treasury when making regulations under this Clause to reduce the period for making a determination. It also seeks to require the Treasury to use this power if the regulators had met the latest authorisation timeframes in a two year period.

124

After Clause 22, insert the following new Clause—
“Financial inclusion objective
After section 1EB (competitiveness and growth objective) of the Financial Services and Markets Act 2000 insert—
“1EC Financial inclusion objective
(1) The FCA must, in discharging its general functions, act in a way which advances the financial inclusion objective.
(2) The financial inclusion objective is to secure, so far as reasonably possible—
(a) access by individuals and businesses to appropriate financial services,
(b) the affordability of such services, and
(c) fair outcomes for consumers, including those in vulnerable circumstances.
(3) The FCA must publish, and keep under review, metrics for measuring progress against the financial inclusion objective.””

This amendment would introduce a financial inclusion objective for the FCA.

125

After Clause 22, insert the following new Clause—
“Financial fraud prevention
After section 1EB (competitiveness and growth objective) of the Financial Services and Markets Act 2000 insert—
“1EC Financial fraud prevention
(1) The FCA must make rules for the purpose of preventing and detecting financial fraud.
(2) Rules under this section may, in particular—
(a) require authorised persons to participate in fraud data sharing arrangements,
(b) require reporting of suspected fraud in real time or near real time, and
(c) require the use of automated or technological systems for fraud detection.
(3) In making rules, the FCA must have regard to the prevalence of authorised push payment scams.””

This amendment gives the FCA the power to make rules for the increased prevention of financial fraud.

126

After Clause 22, insert the following new Clause—
“Open finance framework
(1) The FCA must establish and maintain a framework for open finance.
(2) The framework must provide for—
(a) secure and standardised data sharing interfaces,
(b) rights of customers to direct the sharing of their financial data, and
(c) interoperability between different categories of financial services providers, including digital asset providers.
(3) The FCA may make rules to give effect to this section.”

This amendment gives the FCA the power to make rules in relation to open finance.

127

After Clause 22, insert the following new Clause—
“FCA innovation unit
(1) The FCA must establish an independent unit to advise on—
(a) emerging technologies which have the potential to increase innovation in financial services,
(b) emerging technologies and products which have the potential to increase financial inclusion, and
(c) innovative and inclusive approaches to the regulation of payment systems and digital assets.
(2) The unit must include persons who are independent of the FCA.
(3) The FCA must publish a summary of the unit’s activities in the FCA’s normal reporting schedule to both Houses of Parliament.”

This amendment requires the FCA to establish an independent innovation unit.

128

After Clause 22, insert the following new Clause—
“FCA financial inclusion unit
(1) The FCA must establish and maintain a financial inclusion unit (the “Unit”) for the purposes of this section.
(2) The Unit must—
(a) exercise the functions transferred to the FCA by Schedule 2 to the Financial Services and Markets Act 2026 insofar as they relate to access and equity in payment systems;
(b) monitor and report on financial inclusion across payment systems, banking access, and consumer credit markets;
(c) make recommendations to the FCA board on rules and guidance necessary to advance financial inclusion.
(3) The Unit must have a chair and board appointed by the FCA board following a public appointments process.
(4) The chair and board must not be made up of employees or consultants of the FCA.
(5) The FCA must publish an annual report on the activities and findings of the Unit, which must be laid before both Houses of Parliament.
(6) The FCA must ensure that the Unit has sufficient resources, staff, and operational independence to discharge its functions under this section.”

This amendment requires the FCA to establish an independent financial inclusion unit.

129

After Clause 22, insert the following new Clause—
“Cost Benefit Analysis Panel reform
(1) The Financial Services and Markets Act 2000 is amended as follows.
(2) After section 138IA(4)(b) insert—
“(c) provide a quarterly impact assessment of the cumulative cost burden of regulation,
(d) keep under review any proposed changes in regulatory guidance or supervisory practices, and
(e) undertake a review of the methodologies underpinning cost-benefit analysis estimates.”
(3) After section 138IA(4) insert—
“(4A) The FCA Cost Benefit Analysis Panel must—
(a) be provided with any information or data that the Panel requires in order to fulfil its duties,
(b) make publicly available its recommendations in full, including, but not limited to, the evidence base and analysis it used to make its recommendations, the assessed costs and benefits of the FCA’s activities and the range of representations made by Panel members to those recommendations, and
(c) publish the agendas and minutes of meetings of the Panel.”
(4) After section 138JA(4)(b) insert—
“(c) provide a quarterly impact assessment of the cumulative cost burden of regulation,
(d) keep under review any proposed changes in regulatory guidance or supervisory practices, and
(e) undertake a review of the methodologies underpinning cost-benefit analysis estimates.”
(5) After section 138JA(4) insert—
“(4A) The PRA Cost Benefit Analysis Panel must—
(a) be provided with any information or data that the Panel requires in order to fulfil its duties,
(b) make publicly available its recommendations in full, including, but not limited to, the evidence base and analysis it used to make its recommendations, the assessed costs and benefits of the PRA’s activities and the range of representations made by Panel members to those recommendations, and
(c) publish the agendas and minutes of meetings of the Panel.””

This amendment seeks to require the FCA and PRA to ask their respective CBA Panels to undertake additional activities to assess the cost benefit analysis of regulation, as well as provide their respective CBA Panels with the necessary data and information to undertake their duties and ensure that the Panel recommendations are made publicly available.

130

After Clause 22, insert the following new Clause—
“Digital operational resilience of regulated firms
(1) The FCA and the PRA must each make rules requiring authorised persons to meet minimum standards of digital operational resilience, including standards relating to—
(a) ICT risk management frameworks appropriate to the nature, scale, and complexity of the authorised person's operations;
(b) classification, reporting, and remediation of major ICT-related incidents, including cyber attacks, within timeframes to be specified by the regulator;
(c) oversight and contractual requirements for third-party ICT service providers, including cloud service providers and critical technology suppliers;
(d) regular digital operational resilience testing, including advanced threat-led penetration testing for systemically significant firms.
(2) In making rules under subsection (1), the FCA and PRA must have regard to—
(a) the need for proportionality with respect to the size and systemic importance of authorised persons;
(b) international standards and frameworks, including those adopted by the European Union;
(c) the need to avoid duplication with existing regulatory requirements.
(3) The FCA must publish a consolidated digital operational resilience framework within 18 months of this Act coming into force, setting out how requirements under this section interact with existing obligations on authorised persons.
(4) The FCA and PRA must review rules made under this section no later than every 12 months.”

This amendment seeks to require the FCA to make rules in relation to the digital operational resilience of financial services firms.

131

After Clause 22, insert the following new Clause—
“AI governance in regulated activities
(1) The FCA must make rules requiring authorised persons who use artificial intelligence systems in carrying on regulated activities to comply with standards relating to—
(a) transparency of AI-driven decisions affecting consumers, including credit decisioning, insurance underwriting, and fraud detection;
(b) regular auditing of AI systems for bias, discrimination, and disproportionate impact on persons sharing protected characteristics within the meaning of the Equality Act 2010;
(c) human oversight requirements for high-impact AI decisions, including minimum standards for human review and intervention;
(d) consumer redress mechanisms where AI-driven decisions cause demonstrable harm.
(2) In making rules under subsection (1), the FCA must have regard to—
(a) the need to promote fair treatment of consumers, consider any protected characteristics;
(b) international standards and regulatory frameworks relating to AI governance in financial services;
(c) the need to support responsible innovation while managing systemic and consumer risk.
(3) Rules under this section must be reviewed by the FCA no later than every 12 months.”

This amendment seeks to require the FCA to make rules in relation to AI in financial services.

143

Clause 27, page 32, line 38, leave out sub-paragraph (ii)

This amendment, and my other amendment to this clause, would ensure that both clauses 27 and 36 can be commenced to amend one list in section 66A of the Financial Services and Markets Act 2000 while preserving the final “or”.

144

Clause 27, page 33, line 1, after “sub-paragraph (iii)” insert “(but before any “or” already inserted by section 36(3)(b) of this Act)”

See the explanatory statement to my first amendment to this clause.

145

Clause 29, page 34, line 32, leave out “is in force” and insert “has effect”

This amendment would make section 55AA(4) of the Financial Services and Markets Act 2000 consistent with section 55A(3) of that Act (as amended by this clause).

147

Clause 33, page 38, line 28, at end insert—
“(2A) In section 61 (determination of applications), in subsection (3ZA)—
(a) the words from “granting it” to the end become paragraph (a);
(b) after that paragraph insert
“, or
(b) in the case of a permitted conditional application (as defined in section 60A(5)), granting it subject only to conditions, or for a limited period, requested in the application (or both).””

This amendment would keep section 61 of the Financial Services and Markets Act 2000 in step with other amendments to the Part, which treat a decision to grant an application on the terms requested like an approval of the application.

148

Clause 33, page 38, line 32, at end insert—
“(aa) after subsection (1) insert—
“(1A) If the regulator to which a permitted conditional application is made under section 60 decides to grant the application subject only to conditions, or for a limited period, requested in the application (or both), it must give written notice of its decision to each of the interested parties.”;”

This amendment would require the regulator to give written notice of a decision to grant a permitted conditional application to interested parties.

149

Clause 33, page 39, line 17, at end insert—
“(5A) In section 309L (determining applications: period for approval), in subsection (1), in paragraph (a)—
(a) the words from
“without imposing”
to the end become sub-paragraph (i);
(b) after that sub-paragraph insert—
“(ii) in the case of a permitted conditional application (as defined in section 309J(2B)), subject only to conditions, or for a limited period, requested in the application (or both), or”.”

This amendment would keep section 309L of the Financial Services and Markets Act 2000 in step with other amendments to the Part, which treat a decision to grant an application on the terms requested like an approval of the application.

150

Clause 33, page 39, line 18, after “recognised bodies)” insert—
“(a) after subsection (1) insert—
“(1A) If the appropriate regulator decides to grant a permitted conditional application under section 309I subject only to conditions, or for a limited period, requested in the application (or both), it must give written notice of its decision to each of the interested parties.”;”

This amendment would require the regulator to give written notice of a decision to grant a permitted conditional application to interested parties.

154

Clause 37, page 45, line 2, at end insert—
“(7) If the Treasury are satisfied that regulations under section 408A or 408B of the Financial Services and Markets Act 2000 (as inserted by subsection (3)) would, if made, have substantially the same effect as existing overseas recognition provision—
(a) sections 408A to 408C of that Act (as inserted by subsection (3)) apply in relation to the regulations as if—
(i) section 408A(2) were omitted,
(ii) in section 408B(1), the words from “if the Treasury” to the end were omitted,
(iii) section 408B(2), (4) and (5) were omitted, and
(iv) section 408C(1) to (4) were omitted, and
(b) section 429 of that Act applies in relation to the regulations as if, in subsection (2), “408A” (as inserted by subsection (5)) were omitted.
(8) In considering whether regulations would have substantially the same effect as existing overseas recognition provision, the Treasury must—
(a) treat the power in section 408B to designate a country or territory for the purposes of the regulations as forming part of the regulations, and
(b) disregard any difference between that power and any power to make designations under the existing overseas recognition provision.
(9) In subsections (7) and (8), “existing overseas recognition provision” means—
(a) provision contained in an instrument containing provision listed in the Schedule to the Financial Services (Overseas Recognition Regime Designations) Regulations 2025 (as it has effect from time to time), or
(b) a designation made under such an instrument.”

This amendment would allow the Treasury to consolidate existing provision relating to overseas recognition under the umbrella of the new overseas recognition regime, so long as their doing so would not substantially change the effect of the existing law.

161

Clause 41, page 49, line 29, at end insert—
“(12) The regulations may extend the scope of the commercial credit data sharing scheme to include, with the consent of the data subject—
(a) rental payment history held by landlords or letting agents;
(b) utility payment data held by licensed energy or water suppliers;
(c) income and tax data held by His Majesty's Revenue and Customs;
(d) such other alternative data sources as the Secretary of State considers appropriate for the purpose of enabling creditworthiness assessments for persons with limited conventional credit histories.
(13) Regulations under subsection (12) must include provision for—
(a) explicit consumer consent on an opt in basis and data protection safeguards;
(b) standardised data formats to enable interoperability between lenders and designated credit reference agencies;
(c) rights of consumers to access, correct, and withdraw consent in relation to data shared under the scheme.
(14) Regulations under this section are subject to the affirmative procedure.”

This amendment gives the Secretary of State powers to extend provisions of the Act to increase financial inclusion, interoperability and open finance.

168

After Clause 47, insert the following new Clause—
“Designated artificial intelligence officer
(1) The Secretary of State must by regulations provide that companies operating in the financial services sector who use artificial intelligence (“AI”) must have a designated AI officer.
(2) The AI officer under subsection (1) has responsibility for ensuring that the use of AI is—
(a) safe,
(b) ethical,
(c) unbiased, and
(d) non-discriminatory use of AI.
(3) The AI officer under subsection (1) is also responsible for ensuring that data used in any AI technology is unbiased.
(4) Any regulations under this section are to be made by statutory instrument.
(5) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

This amendment seeks to require firms in the financial services sector to have a designated AI officer.

169

After Clause 47, insert the following new Clause—
“Know Your Customer regulations review
Within six months of the day on which this Act is passed, the Treasury must commission a review of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692) insofar as they apply to customers of financial services, with the aim of—
(a) enabling greater inclusion,
(b) enabling greater efficiency, and
(c) removing outdated measures.”

This amendment seeks to require a review of Know Your Customer requirements to ensure they are up to date and take into account new technologies.

170

After Clause 47, insert the following new Clause—
“National financial education strategy
(1) The FCA must, in coordination with the Money and Pensions Service, prepare and publish a national financial education strategy (the “Strategy”) within 18 months of this section coming into force.
(2) The Strategy must—
(a) identify gaps in financial literacy among adults and young people across the United Kingdom, with particular regard to underserved and financially excluded communities;
(b) set out a plan for improving consumer understanding of digital and emerging financial products, including—
(i) cryptoassets,
(ii) digital assets,
(iii) stable coins,
(iv) AI-driven financial services, and embedded finance,
(c) establish measurable outcomes and milestones for improving financial literacy over a five year period;
(d) specify how the Strategy will be coordinated with the FCA's strategy under section 1JZA of the Financial Services and Markets Act 2000.
(3) The Strategy must be reviewed and updated every three years.
(4) The Secretary of State must lay the Strategy by the FCA, and each updated version of it, before both Houses of Parliament.
(5) The Secretary of State may by directions require the FCA to include in the Strategy provision relating to specified financial products or specified groups of consumers.”

This amendment requires the FCA, in consultation with the Money and Pensions Service, to prepare and publish a national financial education strategy.

171

After Clause 47, insert the following new Clause—
“Small and medium-enterprises enterprises right of action for breaches of FCA handbook
(1) The Secretary of State must by regulations make provision to allow small and medium-sized enterprises right of action for breaches of the FCA handbook.
(2) The Secretary of State must lay draft regulations before each House of Parliament for the purposes of subsection (1) within the period of three months beginning with the day on which this Act is passed.
(3) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

This amendment seeks to create a right of action for SMEs for breaches of the FCA handbook which is currently not available to them.

Lord Vaux of Harrowden gives notice of his intention to oppose the Question that Clause 3 stand part of the Bill.

This is to probe the Government's intentions in relation to access to banking services and how they intend to narrow the breadth of the power to regulate.

38

Clause 8, page 11, line 4, at end insert “and the FCA”

This amendment, and another to Clause 8 in the name of Lord Roborough, seeks to require the FCA to provide a view on the fair and reasonable test as well as the FOS.

39

Clause 8, page 11, line 9, leave out from “omission,” to end of line 11

This amendment, and another to Clause 8 in the name of Lord Roborough, seeks to limit the FOS to only make decisions based on FCA rules, rather than applying a fair and reasonable test.

40

Clause 8, page 11, line 32, leave out from beginning to end of line 6 on page 12

This amendment, and another to Clause 8 in the name of Lord Roborough, seeks to limit the FOS to only make decisions based on FCA rules, rather than applying a fair and reasonable test.

41

Clause 8, page 11, line 34, after “Ombudsman” insert “and the FCA”

This amendment, and another to Clause 8 in the name of Lord Roborough, seeks to require the FCA to provide a view on the fair and reasonable test as well as the FOS.

47

After Clause 13, insert the following new Clause—
“Review of the mandatory authorised push payment fraud reimbursement requirement
No later than six months after 7 October 2027, the FCA must carry out and publish a review of the impact of the authorised push payment fraud reimbursement requirement (“the requirement”). The review should include such matters as the FCA considers appropriate, but must include—
(a) an assessment of the effectiveness of the requirement in protecting consumers from fraud,
(b) an assessment of the appropriateness of the existing consumer standard of caution,
(c) an assessment of the extent to which the requirement has incentivised the payments industry to invest in fraud prevention,
(d) an assessment of the appropriateness of the required split of reimbursement between payment service providers receiving and sending fraudulent payments,
(e) an assessment of whether additional payment systems should be included within the requirement,
(f) an assessment of the limits that apply to the requirement,
(g) an assessment of any behavioural changes of either consumers or payment service providers that have resulted from the requirement, and
(h) proposals for any amendments that the FCA considers should be made to the requirement.”

This amendment seeks to require the FCA to carry out a review of the impact of the APP fraud reimbursement requirement after three years of its operation.

71

Clause 16, page 19, line 15, at end insert—
“(4A) In preparing or revising a strategy, the FCA must consult persons it considers would be affected by the strategy including persons it regulates.”

This amendment would require the FCA to consult regulated firms and others affected by its strategy.

74

Clause 16, page 20, line 26, at end insert—
“(4A) In preparing or revising a strategy, the PRA must consult persons it considers would be affected by the strategy including persons it regulates.”

This amendment would require the PRA to consult regulated firms and others affected by its strategy.

132

After Clause 22, insert the following new Clause—
“Cost benefit analysis: guidance and supervisory practices
(1) The Financial Services and Markets Act 2000 is amended as follows.
(2) In section 138IA (FCA Cost Benefit Analysis Panel), after subsection (4) insert—
“(4A) The duties under this section, including the preparation and publication of a cost benefit analysis and the consideration of representations by the Cost Benefit Analysis Panel, apply also (subject to subsection (4B)) where the FCA—
(a) issues or revises general guidance which is likely to have a material effect on persons carrying on regulated activities, or
(b) adopts or materially revises any general supervisory practice or policy intended to guide the exercise of its functions.
(4B) Subsection (4A) does not apply if the FCA considers that—
(a) the effect of the guidance or supervisory practice is minor or technical in nature, or
(b) the delay involved in complying would be prejudicial to the interests of consumers or the integrity of the financial system.
(4C) the FCA must notify the Cost Benefit Analysis Panel before determining whether the proposal is likely to have a material effect on persons carrying on regulated activities.
(4D) The Cost Benefit Analysis Panel may, within such reasonable period as the FCA may specify, provide an opinion as to whether the proposal is likely to have such a material effect.
(4E) Where the Cost Benefit Analysis Panel considers that a proposal is likely to have a material effect, it may request that the FCA carry out and publish a cost benefit analysis.
(4F) Where—
(a) the Cost Benefit Analysis Panel has provided an opinion that a proposal is likely to have a material effect, and
(b) the FCA determines that a cost benefit analysis is not required,
the FCA must publish a statement setting out the reasons for its determination and the opinion of the Cost Benefit Analysis Panel.
(4G) The Cost Benefit Analysis Panel may publish its own opinion where it considers that a proposal is likely to have a material effect and that its opinion has not been adequately reflected by the FCA.
(4H) The Cost Benefit Analysis Panel must keep under review and provide representations on the cumulative impact of guidance and supervisory practices as well as rules.”
(3) In section 138JA (PRA Cost Benefit Analysis Panel), after subsection (4) insert—
“(4A) The duties under this section, including the preparation and publication of a cost benefit analysis and the consideration of representations by the Cost Benefit Analysis Panel, apply also (subject to subsection (4B)) where the PRA—
(a) issues or revises general guidance which is likely to have a material effect on persons carrying on regulated activities, or
(b) adopts or materially revises any general supervisory practice or policy intended to guide the exercise of its functions.
(4B) Subsection (4A) does not apply if the PRA considers that—
(a) the effect of the guidance or supervisory practice is minor or technical in nature, or
(b) the delay involved in complying would be prejudicial to the safety and soundness of PRA-authorised persons or the stability of the financial system.
(4C) The PRA must notify the Cost Benefit Analysis Panel before determining whether the proposal is likely to have a material effect on persons carrying on regulated activities.
(4D) The Cost Benefit Analysis Panel may, within such reasonable period as the PRA may specify, provide an opinion as to whether the proposal is likely to have such a material effect.
(4E) Where the Cost Benefit Analysis Panel considers that a proposal is likely to have a material effect, it may request that the PRA carry out and publish a cost benefit analysis.
(4F) Where—
(a) the Cost Benefit Analysis Panel has provided an opinion that a proposal is likely to have a material effect, and
(b) the PRA determines that a cost benefit analysis is not required,
the PRA must publish a statement setting out the reasons for its determination and the opinion of the Cost Benefit Analysis Panel.
(4G) The Cost Benefit Analysis Panel may publish its own opinion where it considers that a proposal is likely to have a material effect and that its opinion has not been adequately reflected by the PRA.
(4H) The Cost Benefit Analysis Panel must keep under review and provide representations on the cumulative impact of guidance and supervisory practices as well as rules.””

This amendment would extend the existing cost benefit analysis and consultation requirements so that they apply to guidance and supervisory practices, as well as rules, where these are likely to have a material effect. It would require early notification of proposals to the Cost Benefit Analysis Panel, enable the Panel to give an opinion on materiality and request a cost benefit analysis, and ensure transparency where the regulator determines that such analysis is not required despite the Panel’s view, while also providing for oversight of the cumulative impact of regulatory measures.

133

After Clause 22, insert the following new Clause—
“Office for Financial Regulatory Accountability
Creation of an Office for Financial Regulatory Accountability
(1) The Treasury must, as soon as practicable after the end of the period of 12 months beginning with the day on which this Act is passed, by regulations make provision to create a body corporate called the Office for Financial Regulatory Accountability.
(2) It is the duty of the Office to examine and report on the performance of the FCA and the PRA.
(3) The Office must perform its duty objectively, transparently and impartially.
(4) The functions of the Office are to be exercised on behalf of the Crown.
(5) Any regulations under this section are to be made by statutory instrument.
(6) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.”

This amendment, and others in the name of Lord Bridges, would require the Treasury to create an Office for Financial Regulatory Accountability, with duties to provide independent and impartial analysis to Parliament and the public of the financial regulators’ performance against their statutory objectives and regulatory principles.

134

After Clause 22, insert the following new Clause—
“Charter for Financial Regulatory Accountability
(1) The Treasury must prepare a document, to be known as the Charter for Financial Regulatory Accountability, relating to the formulation and implementation of financial services regulation.
(2) The Charter must in particular set out—
(a) the Treasury’s objectives in relation to financial regulation, and
(b) the means by which the Treasury’s objectives in relation to financial services regulation will be attained.
(3) The Charter may contain such other material as the Treasury considers appropriate.
(4) The Treasury must lay the Charter before Parliament.”

This amendment seeks to require the Treasury to create a Charter for Financial Regulatory Accountability.

135

After Clause 22, insert the following new Clause—
“Main duties of the Office
(1) The main duties of the Office created under section (Creation of an Office for Financial Regulatory Accountability) are to prepare and publish reports which—
(a) assess both financial regulators’ overall performance in terms of meeting their statutory objectives and regulatory principles under Financial Services and Markets Act 2000, and
(b) provide analysis of the impact assessments of specific pieces of financial regulation, so as to determine how those regulations are contributing to meeting the regulators’ objectives under Financial Services and Markets Act 2000.
(2) In discharging its duties under subsection (1)(b) the Office must prioritise analysing regulations that, in its opinion—
(a) restrict domestic competition,
(b) reduce the international competitiveness of financial services in the United Kingdom,
(c) create new compliance costs, or
(d) have a significant impact on business, individuals or the economy of the United Kingdom.
(3) The Office has complete discretion in the performance of its duties.”

This amendment, and others in the name of Lord Bridges, would require the Treasury to create an Office for Financial Regulatory Accountability, with duties to provide independent and impartial analysis to Parliament and the public of the financial regulators’ performance against their statutory objectives and regulatory principles.

136

After Clause 22, insert the following new Clause—
“Reports of the Office
(1) The Office created under section (Creation of an Office for Financial Regulatory Accountability) must—
(a) publish each of its reports,
(b) lay it before Parliament, and
(c) send a copy of it to the Treasury.
(2) The FCA and the PRA must publish their respective responses to the reports of the Office within 60 days, including a statement of actions they will take as a result.”

This amendment, and others in the name of Lord Bridges, would require the Treasury to create an Office for Financial Regulatory Accountability, with duties to provide independent and impartial analysis to Parliament and the public of the financial regulators’ performance against their statutory objectives and regulatory principles.

137

After Clause 22, insert the following new Clause—
“Right to information and data
(1) The Office created under section (Creation of an Office for Financial Regulatory Accountability) has a right of access (at any reasonable time) to all regulatory information which it may reasonably require for the purpose of the performance of its duties.
(2) The Office is entitled to require from any person holding or accountable for any regulatory information any assistance or explanation which the Office reasonably thinks necessary for that purpose.
(3) “Regulatory information” means information held by the FCA, the PRA, the Bank of England or any Minister of the Crown or Government department.”

This amendment, and others in the name of Lord Bridges, would require the Treasury to create an Office for Financial Regulatory Accountability, with duties to provide independent and impartial analysis to Parliament and the public of the financial regulators’ performance against their statutory objectives and regulatory principles.

138

After Clause 22, insert the following new Clause—
“Membership of the Office
(1) The Office created under section (Creation of an Office for Financial Regulatory Accountability) is to consist of—
(a) a member to chair it, appointed by the Chancellor of the Exchequer with the consent of the Treasury Committee of the House of Commons, and
(b) two other members appointed by the Chancellor of the Exchequer after consultation with the member appointed under paragraph (a) and with the consent of that Committee.
(2) A person may be appointed under subsection (1) only if the person has knowledge or experience likely to be relevant to the performance of the Office’s duty.
(3) An appointment under subsection (1) is to be for a period of five years.
(4) The Office may employ staff.”

This amendment, and others in the name of Lord Bridges, would require the Treasury to create an Office for Financial Regulatory Accountability, with duties to provide independent and impartial analysis to Parliament and the public of the financial regulators’ performance against their statutory objectives and regulatory principles.

139

After Clause 22, insert the following new Clause—
“Financial arrangements of the Office
(1) The Chancellor of the Exchequer must ensure that the FCA and the PRA provide funding to enable the Office created under section (Creation of an Office for Financial Regulatory Accountability) to meet its expenses.
(2) The Office must aim to carry out its functions efficiently and cost-effectively.”

This amendment, and others in the name of Lord Bridges, would require the Treasury to create an Office for Financial Regulatory Accountability, with duties to provide independent and impartial analysis to Parliament and the public of the financial regulators’ performance against their statutory objectives and regulatory principles.

164

After Clause 46, insert the following new Clause—
“Digital assets strategy
(1) Within 12 months of the day on which this Act is passed, the Treasury must prepare, publish and consult on a strategy for the regulation and development of digital assets and related digital financial market infrastructure in the United Kingdom.
(2) A strategy under subsection (1) must consider, in particular—
(a) the Government’s approach to the regulation of digital assets, including cryptoassets, qualifying stablecoins, Central Bank Digital Currencies, tokenised securities and other digital and tokenised financial assets;
(b) the practical operation of digital asset businesses and activities under current legal, regulatory and market conditions in the United Kingdom;
(c) the extent to which firms carrying on, or seeking to carry on, digital asset activities in the United Kingdom are able to obtain and maintain appropriate access to banking, payment and settlement services;
(d) the risks to competition, innovation and lawful market participation arising from the withdrawal or denial of such services, including where this is done on a blanket or insufficiently risk-sensitive basis;
(e) developments in the law, regulation and supervisory practice of other jurisdictions so far as relevant to the safe regulation of new asset classes and digital financial market infrastructure, including digital currency exchanges;
(f) the interaction between the regulation of digital assets and the development of related regimes and initiatives, including in relation to tokenisation, stablecoins, digital settlement assets and other digital payment or settlement arrangements relevant to financial markets;
(g) the implications of the current and proposed framework for consumer protection, market integrity, financial stability and the international competitiveness of the United Kingdom;
(h) any legislative or regulatory changes which the Treasury considers may be required.
(3) In preparing a strategy under subsection (1), the Treasury must consult—
(a) the Bank of England,
(b) the Prudential Regulation Authority,
(c) the Financial Conduct Authority,
(d) representatives from industry forums, and
(e) such other persons as the Treasury considers appropriate.”

This probing amendment seeks to require the Treasury to prepare and consult on a strategy for digital assets, including regulation, tokenisation, practical operating conditions, access to banking and payment services, and international regulatory developments.

13

Schedule 1, page 62, line 4, at end insert—
“21A In section 86E (notice of default sums)—
(a) in subsection (3), after “Act” insert “or FCA rules (where appropriate)”;
(b) in subsection (7), leave out subsection (b) and insert—
“(7A) FCA rules may make provision about the form and content of notices under this section.””

This amendment, and another in the name of Baroness Bowles, seeks to allow the FCA to make rules in relation to the form and content of notices of default sums and the way in which any such notice may be incorporated in a statement or other notice which a creditor gives the debtor in relation to the agreement, whether that is by virtue of another provision of Consumer Credit Act 1974 or FCA rules (where appropriate).

14

Schedule 1, page 62, line 4, at end insert—
“21A In section 88 (contents and effect of default notice)—
(a) in subsection (1), for “be in the prescribed form” substitute “contain information as required by FCA rules”;
(b) in subsection (4), omit from “in” to end and insert “as required by FCA rules”.”

This amendment, and another in the name of Baroness Bowles, seeks to provide that a default notice must contain information as required by FCA rules.

49

Schedule 2, page 73, leave out lines 27 and 28

This amendment probes why payment systems that do not include arrangements using digital settlement assets should not be included in the definition of “payment systems”.

50

Schedule 2, page 75, line 26, leave out “may” and insert “must”

This amendment seeks to make it a requirement, rather than an option, that a payment system must be designated if it is likely to create serious consequences for users in the event of deficiency or disruption.

51

Schedule 2, page 75, line 27, leave out “only”

This amendment seeks to make it a requirement, rather than an option, that a payment system must be designated if it is likely to create serious consequences for users in the event of deficiency or disruption.

52

Schedule 2, page 76, leave out lines 21 and 22

This amendment seeks to ensure that the Treasury may only withdraw a designation if the grounds for designation are no longer met.

53

Schedule 2, page 76, line 24, leave out from “are” to “met” in line 25 and insert “satisfied that the grounds for designation in section 131Z5(2) are no longer”

This amendment seeks to ensure that the Treasury may only withdraw a designation if the grounds for designation are no longer met.

55

Schedule 2, page 77, line 22, at end insert—
“(5) For the avoidance of doubt, the FCA’s strategic objective, operational objectives and secondary objective apply equally to its regulation of payment systems.”

This amendment probes whether the FCA’s wider objectives, including its secondary growth and competition objective, apply to the regulation of payment systems.

59

Schedule 2, page 80, line 15, at end insert—
“131Z12A Authorised push payment fraud: reporting duties of the FCA
(1) The FCA must prepare and publish a report at least annually, within three months of the end of the relevant annual period, covering payment system providers’ authorised push payment (APP) fraud performance.
(2) The annual report must include, at a minimum, the information provided in the 2024 “APP scam performance data” report published by the Payment Systems Regulator in February 2026, together with such other data the FCA considers would be helpful in enabling consumers to make informed decisions regarding the use of a payment system provider.
(3) To the extent the data is reasonably obtainable, the annual report must include an assessment, including the name of the relevant service and the total for each service of the relevant fraud in the period, of the extent to which the fraud reported on under subsection (2) was initiated on—
(a) a user-to-user service or search service as defined in section 3 of the Online Safety Act 2023,
(b) an electronic communications service, or
(c) any other online service by means of which an authorised push payment fraud may be initiated.”

This amendment seeks to ensure that the FCA continues to report on scam prevention and reimbursement performance at least to the extent that was previously reported by the Payment Systems Regulator, and provide data on where such scams arise.

64

Schedule 2, page 109, line 4, leave out sub-paragraph (10)

This amendment probes whether the existing mandatory APP fraud reimbursement regulations of the PSR will be continued by the FSA, including the ability to vary the regulations under section 72(9) of FSMA 2023.

Clause 3, page 2, line 4, at end insert— “(b) a clear definition of what constitutes an acceptable banking hub format for particular types of location and the minimum time between it becoming operational and the branch closure that triggers its requirement coming into effect, (c) existing banking services provided under the Post Office Banking Framework.”

Clause 3, page 2, line 8, leave out paragraph (b)

After Clause 14, insert the following new Clause— “Anti-money laundering: provision of support to professional services firms (1) Within three months of the passing of this Act, the Treasury must publish an assessment of the arrangements that will be made to provide education, guidance and compliance support to professional services firms subject to supervision by the FCA. (2) The assessment must include a comparison between— (a) the education, guidance and compliance support currently provided by professional body supervisors, and (b) the support that will be provided by the FCA. (3) The Treasury must lay the assessment before Parliament.”

After Clause 14, insert the following new Clause— Anti-money laundering supervisory functions (1) Within three months of the passing of this Act, the Treasury must publish a timetable for the implementation of the transfer of anti-money laundering supervisory functions to the FCA. (2) The timetable must include— (a) the expected date of publication of draft regulations, (b) the anticipated commencement date of the new supervisory regime, (c) key transition milestones, and (d) arrangements for firms supervised under the existing regime during the transition period. (3) The Treasury must lay the timetable before Parliament.”

After Clause 14, insert the following new Clause— Professional expertise in anti-money laundering supervision (1) In exercising anti-money laundering supervisory, the FCA must have regard to the desirability of ensuring that supervisory staff possess relevant professional expertise and experience of the sectors being supervised. (2) This includes, in particular, expertise and experience relating to— (a) taxation; (b) accountancy; (c) legal services; (d) trust and company service provision.”

After Clause 14, insert the following new Clause— Anti-money laundering: assessment of supervisory costs (1) Before assuming anti-money laundering supervisory functions, the FCA must publish an assessment of the likely impact of the transfer on supervisory fees payable by professional services firms. (2) The assessment must include— (a) estimated fee levels under the new regime, (b) a comparison with fees payable under the existing supervisory arrangements, and (c) measures proposed to ensure that costs remain proportionate, particularly for small firms.”

After Clause 14, insert the following new Clause— Anti-money laundering: regional supervision (1) Within six months of the passing of this Act, the FCA must publish a report on its capacity to undertake anti-money laundering supervisory activity across all parts of the United Kingdom. (2) The report must include— (a) the geographical distribution of relevant staff, (b) plans for recruitment and deployment of staff outside existing FCA office locations, and (c) arrangements for ensuring supervisory staff have knowledge of regional business practices and risk profiles.”

BARONESS HAYMAN

After Clause 22, insert the following new Clause— “Requirement to make rules on climate transition plans After section 137SB of the Financial Services and Markets Act 2000 (rules to recover debt advice expenses incurred by the devolved authorities), insert— “137SC Rules to require climate transition plans Within six months of the day on which section (Requirement to make rules on climate transition plans) of the Financial Services and Markets Act 2026 comes into force, both regulators must make rules requiring regulated persons to develop and implement transition plans that align with the 1.5°C goal of the Paris Agreement.””

1

Clause 1, page 1, line 4, leave out subsection (1)

This probing amendment, along with another in the name of Baroness Neville-Rolfe, seeks to allow for a debate on the Government’s intentions around a new regime to be laid down in the regulatory rule book in place of that established by the Consumer Credit Act and associated legislation.

2

After Clause 1, insert the following new Clause—
“Interaction with FCA Rules
(1) Nothing in this Act prevents the Financial Conduct Authority from making rules relating to consumer credit.
(2) FCA rules made under subsection (1) may supplement, but may not diminish, any right or remedy contained in the Consumer Credit Act 1974.
(3) In determining any question arising under the Consumer Credit Act 1974, a court may have regard to any relevant rules made by the Financial Conduct Authority for the purpose of promoting clarity or transparency, but such rules may not be treated as limiting or reducing any statutory right or remedy.”

Baroness Bowles of Berkhamsted gives notice of her intention to oppose the Question that Clause 1 stand part of the Bill.

This opposition to Clause 1, together with my opposition to Schedule 1, would remove the changes to the Consumer Credit Act 1974.

18

Clause 3, page 1, line 21, at end insert—
“(1A) Before making regulations under this section the Treasury must consult persons which provide banking services and such other persons as the Treasury consider may be affected by the regulations.”

This amendment requires the Treasury to consult banks and others who might be affected by regulations on access to banking services.

19

Clause 3, page 1, line 21, at end insert—
“(1A) Before making regulations under this section the Treasury must be satisfied that the banking services included in the regulations will not be provided on a voluntary basis.”

This amendment ensures that regulations imposing banking service requirements can be made only if they will not be provided on a voluntary basis.

20

Clause 3, page 2, line 1, leave out “regulations” and insert “the first regulations under this section”

This amendment, together with another in the name of Baroness Noakes, requires an independent review before further regulations are made in respect of the provision of banking services.

21

Clause 3, page 2, line 4, at end insert—
“(b) published evidence that there is material consumer detriment arising from inadequate access to essential in-person banking services,
(c) whether the cost to banks and other forms of providing such services is reasonable,
(d) the likely commercial and operational impact of the regulations on banks and other firms, and
(e) the need for any provision made by the regulations to be proportionate.
(2A) Before making regulations under subsection (1), the Treasury must consult—
(a) such persons appearing to the Treasury to represent banks, building societies and other providers of banking services as the Treasury considers appropriate, and
(b) such other persons as the Treasury considers appropriate.
(2B) When laying a draft of regulations under this section before Parliament, the Treasury must publish a statement summarising—
(a) the evidence considered under subsection (2)(b),
(b) the likely costs and commercial impacts considered under subsection (2)(c) and (d), and
(c) the consultation undertaken under subsection (2A).”

The purpose of this amendment is to ensure that any intervention in relation to in-person banking services is evidence-based, proportionate, and balanced, taking account not only of consumer interests but also of the legitimate commercial considerations which may lead firms to reduce in-person provision.

24

Clause 3, page 2, line 4, at end insert—
“(2A) Regulations may only make provision arising directly from the review carried out under subsection (2).”

This amendment would restrict the scope of the regulations so that they may only implement matters that have been reviewed and consulted upon. It seeks to prevent the power from being used more broadly than Parliament intended.

25

Clause 3, page 2, line 4, at end insert—
“(2A) Before making any other regulations under this section, other than for matters considered by the Treasury to be minor, the Treasury must commission an independent review into whether any further regulations in respect of the provision of banking services are required.”

This amendment, together with another in the name of Baroness Noakes, requires an independent review before further regulations are made in respect of the provision of banking services.

27

Clause 3, page 2, line 10, leave out “from time to time” and insert “on the date the regulations are made”

This amendment would prevent the automatic updating of primary legislation when FCA rules change, so that any change to the law requires an active Parliamentary decision rather than occurring silently through regulatory updates.

28

After Clause 3, insert the following new Clause—
“Access to affordable credit
(1) The Financial Conduct Authority must—
(a) within 12 months of the passing of this Act, establish, publish and maintain a framework for assessing and rating the performance of relevant deposit takers in providing access to affordable credit, and
(b) annually publish updated ratings and scores produced by the Authority under the framework.
(2) The framework must—
(a) assess the extent to which relevant deposit takers serve the credit needs of individuals, households and small businesses, including those who are underserved by mainstream financial services, and
(b) enable comparisons to be made between relevant deposit takers.
(3) In developing the framework, the Authority must have regard to—
(a) the distribution of lending across income groups, geographic areas and customer characteristics,
(b) the availability of affordable credit to consumers who may otherwise be at risk of financial exclusion,
(c) the provision of affordable credit to small and medium-sized enterprises, and social enterprises,
(d) the extent to which a bank supports access to affordable credit through partnerships, referral arrangements and funding agreements, with credit unions, Community Development Finance Institutions or other community-based lenders, and
(e) such other matters as the Authority considers relevant to the objective of promoting access to affordable credit.
(4) For the purposes of subsection (2), the Authority may—
(a) make use of regulatory data already collected by it, including product sales data,
(b) require relevant deposit takers to provide such information as it reasonably considers necessary for the purposes of the framework, and
(c) make different and proportionate provision for different sizes of business.
(5) For the purposes of this section, “relevant deposit takers” are—
(a) banks, within the meaning given of section 2 of the Banking Act 2009;
(b) building societies, with the meaning of section 119 of the Building Societies Act 1986;
which meet an Authority-set threshold for the total volume of personal and small and medium business lending.”

This amendment requires the FCA to establish a framework assessing banks’ and building societies’ provision of affordable credit, including via partnerships with credit unions and CDFIs. It uses existing regulatory data where possible, with proportionate requirements for firms of different sizes.

33

Clause 6, page 5, leave out lines 15 and 16 and insert—
“(1B) The Secretary of State may, by regulations, give the FCA powers to rule on specified circumstances in which the applicable time limit may be a later time.
(1C) The regulations under sub-paragraph (1B) must justify what constitutes a specified circumstance.”

Currently, the Bill gives powers to the FCA to determine where the applicable time limit may be a later time. This amendment, and another in the name of Lord Sharkey, moves that to being a power that the Secretary of State may only give to the FCA through an affirmative statutory instrument, which must include definition as what situations would allow the FCA to change to the time limit.

35

Clause 6, page 5, line 22, at end insert—
“(6) In section 429(2) of the Financial Services and Markets Act 2000, after “Schedule 2A” insert “or paragraph 13(1B) of Schedule 17”.”

Currently, the Bill gives powers to the FCA to determine where the applicable time limit may be a later time. This amendment, and another in the name of Lord Sharkey, moves that to being a power that the Secretary of State may only give to the FCA through an affirmative statutory instrument, which must include definition as what situations would allow the FCA to change to the time limit.

36

Clause 7, page 9, line 38, at end insert—
“(4) Regulations under this section must provide that—
(a) the FCA must give any opinion requested by the Financial Ombudsman within 30 days, except in exceptional circumstances specified in the regulations,
(b) where an interim response is given, the FCA must state the reasons why a final opinion cannot yet be given and the date by which it expects to provide one, and
(c) the FCA and the scheme operator must publish annually information on—
(i) the number of referrals made,
(ii) the average time taken to respond, and
(iii) the number of complaints delayed for more than 30 days by reason of referral.”

This amendment would require regulations governing referrals from the Financial Ombudsman to the FCA to include a 30-day time limit for FCA opinions (subject to specified exceptional circumstances), require reasons and an expected date for any interim response, and provide for annual publication of data on referrals and delays.

Lord Sharkey gives notice of his intention to oppose the Question that Clause 7 stand part of the Bill.

This is to facilitate discussion of consumer protection.

37

Clause 8, page 11, line 3, leave out from beginning to end of line 6 on page 12 and insert—
“(2) A complaint is to be determined by reference to what is, in the opinion of the Financial Ombudsman, fair and reasonable in all the circumstances of the case.
(2A) In considering what is fair and reasonable in all the circumstances of the case, to the extent relevant—
(a) the Financial Ombudsman must take into account—
(i) the FCA rules,
(ii) law and regulations; and
(iii) codes of practice or any other guidelines that must be taken into account by a court or tribunal;
(b) the Financial Ombudsman may (among other things) take into account—
(i) anything published by the FCA or other regulators (including guidance or standards), and
(ii) any voluntary industry codes of practice.”

This amendment, and others in the name of Lord Sharkey to clause 8, seeks to replace provisions in clause 8 to preserve the jurisdiction of the FOS and updates the factors that the FOS must or may take into account in the exercise of its discretion.

42

Clause 8, page 12, line 7, leave out “in paragraph 14(2), omit paragraph (a)” and insert “for sub-paragraph 14(2)(a) substitute—
(a) specify matters which are to be taken into account in assessing the relevance or significance of an act or omission relevant to the complaint under investigation, consideration and determination under section 228;”

This amendment, and others in the name of Lord Sharkey to clause 8, seeks to replace provisions in clause 8 to preserve the jurisdiction of the FOS and updates the factors that the FOS must or may take into account in the exercise of its discretion.

43

Clause 8, page 12, leave out lines 9 to 13

This amendment, and others in the name of Lord Sharkey to clause 8, seeks to replace provisions in clause 8 to preserve the jurisdiction of the FOS and updates the factors that the FOS must or may take into account in the exercise of its discretion.

46

After Clause 13, insert the following new Clause—
“Reimbursement of fraud: liability of technology companies
(1) The FCA must make rules providing that, where a person is to be reimbursed in respect of losses arising from an authorised push payment fraud, the cost of that reimbursement is to be borne, in whole or in part, by any relevant technology company on whose service the fraud was initiated, facilitated or communicated.
(2) Rules under subsection (1) must provide for—
(a) the apportionment of the cost of reimbursement between relevant technology companies and payment service providers, by reference to the extent to which each contributed to the fraud occurring,
(b) a process by which a payment service provider that has reimbursed a victim may recover the apportioned cost from a relevant technology company, and
(c) the information that a relevant technology company must provide to the FCA and to payment service providers for the purposes of the rules.
(3) In making rules under this section, the FCA must have regard to the principle that the cost of reimbursing victims of fraud should fall, so far as is reasonable, on the persons best able to prevent the fraud.
(4) In this section—
“authorised push payment fraud” means a transfer of funds executed by a payment service provider on the instruction of a payer, where the payer was deceived into giving that instruction;
“relevant technology company” means a person who provides—
(a) a user-to-user service or a search service within the meaning of the Online Safety Act 2023,
(b) an electronic communications service, or
(c) any other online service by means of which an authorised push payment fraud may be initiated, facilitated or communicated.”

This new Clause would require the FCA to make rules placing liability for the cost of reimbursing victims of authorised push payment fraud, in whole or in part, on the technology companies on whose platforms the fraud originates, rather than solely on payment service providers, and to apportion that cost according to who is best able to prevent the fraud.

70

Clause 16, page 18, line 38, at end insert—
“(ba) its secondary objective,”

This amendment requires the FCA to include its secondary competitiveness and growth objective in its long term strategy.

72

Clause 16, page 19, line 17, at end insert—
“(5A) A strategy must include a review of all regulations with the specific aim of identifying outdated or otherwise unnecessary regulatory requirements and set out how the FCA will eliminate unnecessary regulations to the extent that such action is appropriate.”

This amendment requires the FCA to, as part of their long-term strategies, periodically review their rulebooks and detail how they intend to consolidate them where appropriate.

73

Clause 16, page 19, line 29, leave out subsection (4)

This amendment probes why the Treasury’s power to make recommendations to the FCA should be restricted to its long-term strategy.

75

Clause 16, page 20, line 28, at end insert—
“(5A) A strategy must include a review of all regulations with the specific aim of identifying outdated or otherwise unnecessary regulatory requirements and set how the PRA will eliminate unnecessary regulations to the extent that such action is appropriate.”

This amendment requires the PRA to, as part of their long-term strategies, periodically review their rulebooks and detail how they intend to consolidate them where appropriate.

76

Clause 16, page 21, line 13, leave out subsection (8)

This amendment probes why the Treasury’s power to make recommendations to the PRA should be restricted to its long-term strategy.

77

After Clause 16, insert the following new Clause—
“Review of regulatory principles
(1) Within 12 months of this Act coming into force, the Treasury must carry out a review of the regulatory principles in section 3B(1) of the Financial Services and Markets Act 2000.
(2) The review must in particular consider whether—
(a) the regulatory principles duplicate other requirements in the Financial Services and Markets Act 2000 or elsewhere, or
(b) are no longer required.
(3) The review may make recommendations as to whether section 3B(1) needs to be amended or whether there are other mechanisms which can achieve the same result.
(4) The review must be laid before each House of Parliament.”

This amendment calls for a review of the regulatory principles in section 3B(1) of FSMA.

Baroness Bowles of Berkhamsted gives notice of her intention to oppose the Question that Clause 16 stand part of the Bill.

This is intended to challenge the Government’s reasoning behind introducing the provisions of Clause 16.

78

Clause 17, page 21, line 34, leave out subsections (2) to (11) and insert—
“(2) In section 3B (regulatory principles to be applied by both regulators), in subsection (1), at the end insert—
“(i) the need to consider—
(i) the interconnections between private credit vehicles and PRA-authorised banks, insurance companies and pension fund, and
(ii) the limitations of the FCA’s regulatory perimeter in managing the interconnection between private credit vehicles and non-regulated financial organisations.””

This probing amendment would replace the removal of the regulatory-principles duties in Clause 17 with a new “have regard” to risks to financial stability arising from the interconnection of private credit markets with banks, insurers and pension funds, as well as with non-regulated institutions.

79

Clause 17, page 21, line 34, leave out subsections (2) to (11) and insert—
“(2) In section 3B (regulatory principles to be applied by both regulators), in subsection (1), at the end insert—
“(i) the need to assess the impact on the taxpayer of any provision of backstop arrangements by the Bank of England to private stablecoin.””

This probing amendment would replace the removal of the regulatory-principles duties in Clause 17 with a new “have regard” to the risks to taxpayers should the Bank of England provide a liquidity backstop to private stablecoin.

80

Clause 17, page 21, line 34, leave out subsections (2) to (11) and insert—
“(2) In section 3B (regulatory principles to be applied to both regulators), insert—
“(i) the need to consider climate risk;
(j) the desirability of sustainable growth in the economy of the United Kingdom in the medium or long term.””

83

Clause 17, page 21, line 34, after “duties)” insert—
“(a) In subsection (1) at end insert—
“(c) ensures that any burden or restriction which is imposed on a person, or on the carrying on of an activity, is proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction.”;”

This amendment places proportionality (currently a regulatory principle) in the general duties of the FCA.

84

Clause 17, page 21, line 37, at end, insert—
“(3A) In section 2B(1) (the PRA’s general objective), at end insert “and ensures that any burden or restriction which is imposed on a person, or on the carrying on of an activity, is proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction.””

This amendment places proportionality (currently a regulatory principle) into the PRA’s general objective.

85

Clause 17, page 22, line 3, at end insert “and omit subsection (1)(b).”

This amendment removes proportionality from the regulatory principles. Proportionality has been placed into the FCA’s general duties and the PRA’s general objective by other amendments in the name of Baroness Noakes.

86

Clause 17, page 22, line 3 at end, insert “and after subsection (1)(h) insert—
(j) the regulatory principles in section 21(2) of the Legislative and Regulatory Reform Act 2006.”

This amendment places the regulatory principles of the Legislative and Regulatory Reform Act 2006 into FSMA in order that they cannot be repealed by secondary legislation.

88

After Clause 17, insert the following new Clause—
“Treasury statement of concern
(1) Where the Treasury considers that rules or guidance made by the Financial Conduct Authority or the Prudential Regulation Authority are inconsistent with primary legislation or statutory objectives, the Treasury may publish a statement of concern.
(2) Where a statement of concern is published under subsection (1), the Financial Conduct Authority or the Prudential Regulation Authority must, within 60 days, publish a response explaining—
(a) whether it agrees with the concern, and
(b) what action it proposes to take.
(3) The Treasury must lay before Parliament any statement of concern published under this section, together with any response received from the Financial Conduct Authority or the Prudential Regulation Authority.”

This new Clause would enable the Treasury to publish a statement of concern where regulator rules or guidance appear inconsistent with primary legislation or statutory objectives, requiring a published response and Parliamentary transparency.

The above-named Lords give notice of their intention to oppose the Question that Clause 17 stand part of the Bill.

This probes the Government’s reasoning behind introducing the provisions of Clause 17.

89

Clause 18, page 22, line 32, leave out subsections (2) and (3)

This amendment, together with another in the name of Baroness Noakes, ensures that the FCA and the PRA continue to give guidance about how they intend to advance their objectives.

90

Clause 18, page 23, line 15, leave out subsection (7)

This probing amendment seeks to question the Government on who determines whether a rule change would have no or minimal cost impact – a determination which would mean that the FCA or PRA will not need to do a Cost Benefit Analysis.

92

Clause 18, page 23, line 29, leave out subsection (8)

This amendment, together with another in the name of Baroness Noakes, ensures that the the FCA and the PRA continue to give guidance about how they intend to advance their objectives.

93

Clause 18, p
age 23, line 38, leave out subsection (11) and insert—
“(11) Omit section 339B (duty to meet auditors of certain institutions).”

This amendment deletes all requirements on the regulators to meet the auditors of PRA authorised persons instead of only the FCA.

94

Clause 18, page 23, line 39, at end insert—
“(11A) In section 340 (appointment), in subsection (3A)(a) for “must” substitute “may””

This amendment enables but does not require the PRA to impose certain rules on auditors of PRA authorised persons.

96

Clause 18, page 24, line 3, at end insert—
“(12A) In paragraph 28 of Schedule 1ZA (relevant consultation)—
(a) for sub-paragraph (7)(b) substitute—
“(b) the Financial Services Regulation Committee of the House of Lords, and”;
(b) for sub-paragraphs (8) and (9) substitute—
“(8) A reference to a committee in sub-paragraph (7)—
(a) if the name of that committee is changed, is to be treated as a reference to that committee by its new name, and
(b) if the functions of that committee (or substantially corresponding functions) become functions of a different committee, is to be treated as a reference to the committee by which those functions are exercisable.
(9) Any question arising under sub-paragraph (8) is to be determined by—
(a) the Speaker of the House of Commons, in relation to committees of the House of Commons, and
(b) the Chairman of Committees of the House of Lords, in relation to committees of the House of Lords.””

This amendment, and another in the name of Baroness Noakes, reflect the fact that since these paragraphs were inserted into Schedules 1ZA and 1ZB by the Financial Services and Markets Act 2023 the House of Lords has set up the Financial Services Regulation Committee. This amendment mirrors the provisions of section 3 of the Bank Resolution (Recapitalisation) Act 2025.

98

Clause 18, page 24, line 8, at end insert—
“(c) in paragraph 36 (relevant consultation)—
(i) for sub-paragraph (7)(b) substitute—
“(b) the Financial Services Regulation Committee of the House of Lords, and”;
(ii) for sub-paragraphs (8) and (9) substitute—
“(8) A reference to a committee in sub-paragraph (7)—
(a) if the name of that committee is changed, is to be treated as a reference to that committee by its new name, and
(b) if the functions of that committee (or substantially corresponding functions) become functions of a different committee, is to be treated as a reference to the committee by which those functions are exercisable.
(9) Any question arising under sub-paragraph (8) is to be determined by—
(a) the Speaker of the House of Commons, in relation to committees of the House of Commons, and
(b) the Chairman of Committees of the House of Lords, in relation to committees of the House of Lords.””

This amendment, and another in the name of Baroness Noakes, reflect the fact that since these paragraphs were inserted into Schedules 1ZA and 1ZB by the Financial Services and Markets Act 2023 the House of Lords has set up the Financial Services Regulation Committee. This amendment mirrors the provisions of section 3 of the Bank Resolution (Recapitalisation) Act 2025.

Baroness Bowles of Berkhamsted gives notice of her intention to oppose the Question that Clause 18 stand part of the Bill.

This is probing to challenge the Government’s reasoning behind introducing the provisions of Clause 18.

99

After Clause 19, insert the following new Clause—
“FCA and PRA secondary competitiveness and growth objectives
The Financial Services and Markets Act 2000 is amended as follows—
(a) in section 1EB (competitiveness and growth objective) for “consideration of” substitute “aligning with”;
(b) in section 2H (secondary objectives and duty to have regard to regulatory principles), in subsection (1B) substitute “aligning with” with “consideration of”.”

This amendment modifies the secondary competitiveness and growth objectives of the FCA and the PRA by requiring international standards to be considered rather than aligned with.

100

Clause 20, page 25, line 7, at end insert—
“(3A) The Treasury must lay a copy of each report prepared under this section before Parliament.”

This amendment requires the Treasury to lay a copy of reports by the FCA and the PRA in respect of their competitiveness and growth objectives before Parliament, as was the case for the reports required under section 26 of the Financial Services and Markets Act 2023.

102

After Clause 20, insert the following new Clause—
“Competitiveness and growth objective: Financial Markets Infrastructure functions
In section 30D (exercise of functions relating to CCPs and CSDs) of the Bank of England Act 1998, for subsection (2) substitute—
“(2) In exercising its FMI functions in a way that advances the Financial Stability Objective the Bank must, so far as reasonably possible, act in a way which advances its secondary objectives.
(2A) Its secondary objectives are—
(a) to facilitate innovation in the provision of FMI services (including the infrastructure used for that purpose) with a view to improving the quality, efficiency and economy of the services, and
(b) to facilitate the international competitiveness of the economy of the United Kingdom (including in particular the financial services sector) and its growth in the medium to long term.””

This amendment creates an additional secondary objective dealing with international competitiveness and growth for the FMI Committee of the Bank of England.

103

After Clause 20, insert the following new Clause—
“Climate risk and environment principle: reporting requirements
After section 3RE of the Financial Services and Markets Act 2000 (power of Treasury to require making of rules by regulations) insert—
“Climate risk and environment principles: reporting requirements
3RG Annual reports to the Treasury
(1) At least once a year, each regulator must make a report to the Treasury on how it has upheld its climate risk and environment principles.
(2) The reports prepared by each regulator under subsection (1) must in particular explain—
(a) the action taken by the regulator to ensure that the climate risk and environment principles are embedded in its operations, processes and decision-making, and
(b) how any rules and guidance that the regulator has made advance those principles.
(3) Each regulator must publish its reports prepared under this section in such manner as it thinks fit.
(4) In this section, references to the climate risk and environment principles, are references to the principles laid out under section (3B)(1)(c).
(5) A report under this section may not be combined in a single document with any other report.””

This amendment would require both the FCA and PRA to publish annual reports on how it is upholding its principles surrounding climate risk and the. environment, mimicking the model set out in Clause 20.

105

Clause 21, page 26, line 3, leave out “changing” and insert “reducing”

These amendments ensure that the Treasury has the power to reduce various time limits for regulatory approvals, but not to increase them.

109

Clause 21, page 26, line 22, at end insert—
“(aa) after subsection (4) insert—
“(4A) In the case of an application made to the FCA under section 60, subsection (4) may be relied upon on no more than one occasion in relation to that application.
(4B) A requirement imposed by the FCA for the purposes of subsection (4) must, so far as reasonably practicable, specify all the information which the FCA requires from the applicant at the time the requirement is imposed.
(4C) Subsection (4A) does not prevent the FCA from requesting further information after the occasion mentioned in that subsection, but the period for consideration may not stop running by reason of any subsequent request.””

This probing amendment would limit the FCA to one formal use of its stop-the-clock power per senior manager application, while allowing it still to request further information.

110

Clause 21, page 26, line 25, leave out “changing” and insert “reducing”

These amendments ensure that the Treasury has the power to reduce various time limits for regulatory approvals, but not to increase them.

113

Clause 21, page 26, line 31, leave out “changing” and insert “reducing”

These amendments ensure that the Treasury has the power to reduce various time limits for regulatory approvals, but not to increase them.

114

Clause 21, page 26, line 36, leave out “changing” and insert “reducing”

These amendments ensure that the Treasury has the power to reduce various time limits for regulatory approvals, but not to increase them.

117

After Clause 22, insert the following new Clause—
“Section 166 reviews: threshold and proportionality requirements
(1) Section 166 of the Financial Services and Markets Act 2000 (reports by skilled persons) is amended as follows.
(2) After subsection (1) insert—
“(1A) The regulator may not require a person to provide a report under this section unless it is satisfied that—
(a) there is a material risk of serious detriment to regulatory outcomes, and
(b) the use of a skilled person is a proportionate response, having regard to—
(i) the scale and nature of the suspected issue,
(ii) the expected burden on the firm, and
(iii) whether the matter could reasonably be addressed through the regulator’s existing supervisory tools.”
(3) After subsection (4) insert—
“(4A) The regulator must publish, at least annually—
(a) the number of reports commissioned under this section,
(b) the sectors to which they relate, and
(c) the aggregate cost to firms of such reports.”
(4) In subsection (5), after “may” insert “, subject to subsections (1A) and (4A),”.”

This new Clause would introduce a statutory threshold for the use of section 166 skilled persons reviews, requiring the regulator to demonstrate a material risk of serious detriment and to consider proportionality, and would require annual publication of the number, sectoral distribution and aggregate cost of such reviews.

118

After Clause 22, insert the following new Clause—
“Reports by skilled persons
In section 166 of the Financial Services and Markets Act 2000 (reports by skilled persons), in subsection (1) at end insert
“and the conditions in subsection (1A) are met.
(1A) The conditions are that the regulator considers that—
(a) it is likely that there has been a significant contravention of a relevant requirement by an authorised person (A), and
(b) the information or documents could not reasonably be obtained without a report under this section.
(1B) For the purposes of this subsection, “relevant requirement” has the meaning given in section 204A.””

This amendment restricts the use of section 166 reports to serious potential regulatory breaches.

119

After Clause 22, insert the following new Clause—
“Cost benefit panels
(1) The Financial Services and Markets Act 2000 is amended as follows.
(2) In subsection (4) of section 138IA, insert after paragraph (a)—
“(aa) keep under review the cumulative impact of rules issued by the FCA including those covered by subsection (3); and”
(3) In subsection (4) of section 138JA insert after paragraph (a)—
“(aa) keep under review the cumulative impact of rules issued by the PRA including those covered by subsection (3); and”
(4) In subsection (5) of section 139A, omit “(e)”.”

This amendment allows the Cost Benefit Panels of the FCA and the PRA to keep the cumulative impact of regulation, including those rules which are not consulted on, under review. It also requires the FCA to prepare cost benefit analysis for guidance and for the Cost Benefit Panel to review it.

120

After Clause 22, insert the following new Clause—
“Review of bank capital requirements
(1) Within 12 months of the day on which this Act is passed, the Treasury must lay before Parliament a report reviewing the effect of prudential capital requirements applicable to PRA-authorised banks and building societies, with particular reference to on lending capacity, borrowing costs, competition and economic growth, while also considering financial stability.
(2) In preparing a report under subsection (1), the Treasury must consult—
(a) the Bank of England,
(b) the Prudential Regulation Authority,
(c) the Financial Conduct Authority, and
(d) such other persons as the Treasury considers appropriate.
(3) The Treasury must published the report.”

This probing amendment would require a review of the effect of prudential capital requirements on lending capacity, borrowing costs, competition and economic growth, while also considering financial stability.

121

After Clause 22, insert the following new Clause—
“Periodic independent review of financial regulators
After section 1S of the Financial Services and Markets Act 2000 (reviews) insert—
“1SA Periodic independent review of financial regulators
(1) The Treasury must appoint a panel of at least three independent persons (“the Review Panel”) to conduct a periodic general review of the effectiveness of—
(a) the Financial Conduct Authority,
(b) the Prudential Regulation Authority, and
(c) the Bank of England in respect of its functions under Parts 1 and 5 of the Banking Act 2009 and Part 2 of the Financial Services Act 2012.
(2) A person may be appointed to the Review Panel only if—
(a) the Treasury has proposed the appointment, and
(b) the appointment has been approved by a resolution of the House of Commons and a resolution of the House of Lords.
(3) A person is not eligible for appointment if, within the previous three years, they have held senior office in the Treasury, the FCA, the PRA, the Bank of England, the Payment Systems Regulator, the Financial Ombudsman Service, or in any firm or body materially affected by the review, unless the nature of the interest has been fully disclosed and the appointment has been expressly approved by both Houses.
(4) A general review must take place at intervals of every two to three years and must include a review of—
(a) internal operations and controls,
(b) systems for responding to whistleblowers, parliamentary correspondence and reports, and public interest concerns,
(c) regulatory perimeters and customer classifications,
(d) the effectiveness of relevant legislation and rules and the regulatory burden,
(e) whether statutory and public policy objectives have been met,
(f) the operation and effectiveness of engagement practices before and during rule making,
(g) the skills base of staff,
(h) follow up from previous reviews,
(i) access to redress and effective remedies,
(j) the operation of the FCA/FOS relationship and systemic complaint escalation,
(k) evidence handling, audit trails and responses to parliamentary, whistleblower and public interest concerns,
(l) whether statutory rights and remedies transferred into regulator rules remain effective in practice,
(m) redress shortfalls, repeat misconduct and deterrence,
(n) any other matter the Review Panel considers relevant, and
(o) any matter requested by a relevant Committee of the House of Commons or House of Lords.
(5) The Review Panel must not determine the merits of any individual complaint, regulatory decision or enforcement case, but may consider individual cases, whether anonymised or otherwise, for the purpose of identifying systemic, procedural, evidential, perimeter, redress or accountability issues.
(6) On completion of a review, the Review Panel must make a written report to the Treasury—
(a) setting out the results of the review, and
(b) making such recommendations as the Panel considers appropriate.
(7) A copy of the report must be—
(a) laid before Parliament within 30 days of receipt, and
(b) published in such manner as the Treasury considers appropriate,
subject only to necessary redactions for confidentiality, privilege or enforcement sensitivity.
(8) The Treasury must publish a response to the report within 60 days of its publication.
(9) The FCA, PRA and the Bank of England must each publish a response to the report within 60 days of its publication, including a statement of actions they will take as a result.
(10) The Review Panel has a right of access (at any reasonable time) to all information which it may reasonably require for the purpose of performing its functions under this section.
(11) The Review Panel is entitled to require from any person holding or accountable for such information any assistance or explanation which the Panel reasonably considers necessary for that purpose.
(12) “Information” includes any document, record, data, correspondence, internal report, or other material held by the FCA, the PRA or the Bank of England.””

122

After Clause 22, insert the following new Clause—
“Reducing regulator duplication
In section 3R of the Financial Services and Markets Act 2000 (arrangements for provision of services), after subsection (3), insert—
“(3A) In exercising functions in relation to—
(a) a PRA-authorised person within the meaning of section 2B, or
(b) a person performing a senior management function in relation to such person,
the FCA may rely on analysis, findings, information, or judgments of the PRA, so far as it is reasonable to do so.
(3B) In exercising functions in relation to a person falling within subsection (3A), the PRA may rely on analysis, findings, information, or judgments of the FCA, so far as it is reasonable to do so.
(3C) Subsections (3A) and (3B) apply in particular in relation to—
(a) rule-making,
(b) supervisory activity,
(c) investigatory functions, and
(d) enforcement decisions.
(3D) Where a regulator relies on the other regulator under this section, it must have regard to—
(a) the need to ensure that its statutory objectives are advanced, and
(b) the desirability of avoiding unnecessary duplication of work or inconsistent outcomes.
(3E) Nothing in this section prevents either regulator from undertaking its own analysis or reaching its own conclusions where it considers it appropriate to do so.
(3F) For the purposes of this section “a senior management function” has the same meaning as Section 59ZA.””

123

After Clause 22, insert the following new Clause—
“Safeguards on regulatory information collecting
In section 165 of the Financial Services and Markets Act 2000 (regulators powers to require information authorised persons etc), for subsection (4) substitute—
“(4) A requirement imposed under this section may only require the provision of information or documents which are reasonably necessary for the purposes of—
(a) the investigation, supervisory activity, or exercise of functions to which the requirement relates, or
(b) advancing one or more of the regulator’s statutory objectives.
(5) In deciding whether to impose a requirement under this section, the regulator must have regard to—
(a) the proportionality of the burden imposed on the person to whom the requirement is addressed,
(b) the relevance of the information or documents sought to the purpose identified in subsection (4)(a), and
(c) the availability of the information from alternative sources.
(6) A notice issued under subsection (1) must include a statement—
(a) specifying the purpose for which the information or documents are required, and
(b) explaining why the regulator considers the requirement to satisfy subsection (4A).
(7) The regulator must not require the provision of information or documents which are—
(a) duplicative of information already provided to the regulator, unless it is reasonable to require it again, or
(b) of a description which is wider than is reasonably necessary to meet the purpose specified under subsection (4B)(a).
(8) In this section, “statutory objectives” means—
(a) in the case of the FCA, its strategic and operational objectives under section 1B, and
(b) in the case of the PRA, its general objective under section 2B and its insurance objective under section 2C.””

146

After Clause 31, insert the following new Clause—
“Review of notification arrangements for previously approved senior managers
(1) Within 12 months of the day on which this Act is passed, the Treasury must lay before Parliament a report on whether the new notification framework for senior manager appointments could be used in cases where an individual has already been approved for the same or a similar function, including within the same group.
(2) In preparing a report under subsection (1), the Treasury must consult—
(a) the Financial Conduct Authority,
(b) the Prudential Regulation Authority, and
(c) such other persons as the Treasury considers appropriate.
(3) The Treasury must publish the report.”

This probing amendment would require a review of whether the new notification framework for senior manager appointments could be used in cases where an individual has already been approved for the same or a similar function, including within the same group.

152

Clause 37, page 43, line 10, leave out “section 408A” and insert “sections 408A or 408B”

This amendment requires the Treasury to consult the regulators about regulations which designate countries or territories for recognition.

153

Clause 37, page 43, line 40, at end insert—
“(7A) When the Treasury lay regulations under section 408A or 408B before Parliament they must publish any information or advice received from the regulators.”

This amendment requires the Treasury to publish information or advice received from the regulators in connection with overseas recognition regulations or overseas jurisdiction recognition regulations.

Baroness Noakes gives notice of her intention to oppose the Question that Clause 37 stand part of the Bill.

159

After Clause 40, insert the following new Clause—
“Ring-fencing consultation
Before section 39 and 40 of this Act come into force, the Treasury must—
(a) undertake a consultation on the expected effects of sections 39 and 40 of this Act on financial stability, competition, lending and customer outcomes,
(b) publish an assessment based on that consultation, and
(c) lay before Parliament a statement summarising that consultation and assessment.”

This amendment would require the Treasury, before the changes to the ring-fencing regime in clauses 39 and 40 come into force, to consult on and publish an assessment of the likely effects on financial stability, competition, lending and customer outcomes, and lay before Parliament a statement summarising that consultation and assessment.

162

Clause 44, page 51, line 21, at end insert—
“(5) After section 284A insert—
“284AA Tax treatment of risk transformation arrangements
(1) The Treasury must, after consultation with the Commissioners for His Majesty’s Revenue and Customs, publish guidance concerning the tax treatment of investments issued in connection with risk transformation arrangements within the meaning of section 284A.
(2) Guidance under this section must include the circumstances in which a risk transformation arrangement is to be regarded as having been entered into for genuine insurance risk-transfer and capital markets purposes.
(3) In exercising functions relating to the assessment, collection and management of taxes, the Commissioners for His Majesty’s Revenue and Customs must ensure that arrangements falling within a description specified by guidance under subsection (2) are treated in a consistent and certain manner.
(4) Where—
(a) a risk transformation arrangement falls within a description specified in guidance under subsection (2), and
(b) the arrangement complies with applicable requirements relating to authorisation and supervision,
the arrangement is to be treated for all tax purposes as a commercial arrangement entered into for bona fide insurance risk-transfer and capital markets purposes, and not as having as its main purpose, or one of its main purposes, the obtaining of a tax advantage.
(5) The treatment in subsection (4) applies without any requirement to consider the purpose of the arrangement other than by reference to the conditions in that subsection.
(6) Subsection (4) does not apply only where the Commissioners can demonstrate that—
(a) one or more of the conditions in subsection (4) is not met, or
(b) there has been fraud, deliberate misrepresentation, or material non-disclosure of relevant facts.
(7) The Treasury must review guidance published under this section at intervals not exceeding three years.””

The amendment requires HM Treasury to produce guidance in consultation with HMRC to confirm the tax status of Insurance-Linked Securities vehicles.

163

After Clause 46, insert the following new Clause—
“Review of tokenisation in UK wholesale financial markets
(1) Within 12 months of the day on which this Act is passed, the Treasury must lay before Parliament a report on the development of tokenisation in UK wholesale financial markets.
(2) A report under subsection (1) must consider, in particular—
(a) the extent to which the existing legal and regulatory framework supports the safe adoption of tokenisation in UK wholesale financial markets;
(b) the extent to which current arrangements provide sufficient legal certainty in relation to the issuance, holding, transfer and settlement of tokenised financial assets;
(c) the prudential treatment of tokenised assets and the extent to which such treatment is consistent with equivalent non-tokenised assets, where the underlying risks are equivalent;
(d) the availability and suitability of settlement arrangements for tokenised financial market transactions;
(e) the progress of the Digital Securities Sandbox and the extent to which it is expected to support the development of any permanent regulatory framework;
(f) barriers to interoperability between tokenised and non-tokenised market infrastructure, and between different tokenised market infrastructure arrangements;
(g) the effect of the current framework on innovation, investment and the international competitiveness of UK financial markets;
(h) any further legislative or regulatory changes which the Treasury considers may be required.
(3) In preparing a report under subsection (1), the Treasury must consult—
(a) the Bank of England;
(b) the Prudential Regulation Authority;
(c) the Financial Conduct Authority;
(d) such other persons as the Treasury considers appropriate.
(4) The Treasury must publish the report.”

This probing amendment would require the Treasury to review the framework for tokenisation in UK wholesale financial markets, including legal certainty, prudential treatment, settlement arrangements and barriers to innovation and competitiveness.

165

After Clause 47, insert the following new Clause—
“FCA operational readiness report
(1) Before any provision of this Act conferring a significant new regulatory function on the FCA comes into force, the Treasury must lay before Parliament a report on the FCA’s operational readiness to exercise that function.
(2) A report under subsection (1) must include an assessment of—
(a) staffing and resourcing,
(b) systems capability,
(c) expected impacts on authorisations, supervision and enforcement timeliness,
(d) expected impacts on service standards for firms and consumers, and
(e) such mitigation measures as the Treasury and the FCA consider necessary.”

This amendment would require the Treasury to report to Parliament on the FCA’s operational readiness before significant new functions conferred by the Act are commenced, including staffing, systems and expected impacts on timeliness and service standards.

166

After Clause 47, insert the following new Clause—
“Duty to have regard to net regulatory burden
(1) In exercising any power under or arising from this Act to make regulations, rules or other requirements, the Treasury, the FCA and the PRA must have regard to the desirability of minimising the overall regulatory burden imposed on persons subject to regulation.
(2) For the purposes of subsection (1), “regulatory burden” includes—
(a) direct compliance costs;
(b) administrative and reporting requirements;
(c) delay costs arising from regulatory processes;
(d) costs falling disproportionately on smaller firms and new entrants.
(3) Where the Treasury, the FCA or the PRA considers that an increase in burden is necessary, it must publish a statement—
(a) explaining why the increase is necessary and proportionate, and
(b) setting out the expected effect on growth, competition, innovation and market entry.”

This amendment would require the Treasury, the FCA and the PRA, when exercising powers under the Act, to have regard to minimising the overall regulatory burden on regulated persons, including disproportionate burdens on smaller firms and new entrants, and to publish reasons and an assessment of the effects on growth, competition, innovation and market entry where an increase in burden is considered necessary.

167

After Clause 47, insert the following new Clause—
“Duty to promote public understanding of financial services and financial capability
The FCA must take such steps as it considers appropriate to promote public understanding of—
(a) financial services and markets,
(b) personal financial management,
(c) saving, borrowing and long-term financial resilience,
(d) financial decision-making and financial risk, and
(e) pensions.”

This amendment would give the FCA a statutory duty to promote public understanding of financial services and financial capability, and to report annually on the steps it has taken, the groups most at risk of poor financial literacy or exclusion, and the contribution of improved financial capability to consumer resilience, competition and economic growth.

173

Clause 52, page 55, line 30, at end insert—
“(A1) Subsections (1) to (5) have effect subject to the publication of the report as set out in section (FCA operational readiness report).”

This amendment is consequential on another in the name of Baroness Neville-Rolfe.

174

Clause 52, page 55, line 36, at end insert—
(ba) section (Ring-fencing consultation)”

This amendment would require the Treasury, before the changes to the ring-fencing regime in clauses 39 and 40 come into force, to consult publicly, publish an assessment of the likely effects on financial stability, competition, lending and customer outcomes, and lay before Parliament a statement summarising that consultation and assessment.

3

Schedule 1, page 57, line 6, leave out paragraphs 1 to 51

This probing amendment, along with another in the name of Baroness Neville-Rolfe, seeks to allow for a debate on the Government’s intentions around a new regime to be laid down in the regulatory rule book in place of that established by the Consumer Credit Act and associated legislation.

4

Schedule 1, page 57, line 20, leave out sub-paragraph (c)

5

Schedule 1, page 58, line 1, leave out sub-paragraph (b)

6

Schedule 1, page 58, line 3, leave out paragraphs 9 to 17

7

Schedule 1, page 61, line 24, leave out sub-paragraph (a)

9

Schedule 1, page 62, line 1, leave out sub-paragraphs (b) and (c)

15

Schedule 1, page 62, line 10, leave out sub-paragraph (c)

16

Schedule 1, page 64, line 30, leave out paragraph 33

17

Schedule 1, page 64, line 32, leave out paragraphs 34 to 38

Baroness Bowles of Berkhamsted gives notice of her intention to oppose the Question that Schedule 1 be the First Schedule to the Bill.

This is consequential on my opposition to Clause 1 and removes the detailed amendments to the Consumer Credit Act 1974.

48

Schedule 2, page 72, line 14, at end insert—
“(aa) after subsection (3), insert—
“(3A) The relevant regulator must ensure that any public consultation to which this section applies remains open for a period that complies with paragraphs (a) or (b)—
(a) where the proposals relate to minor or general changes, the consultation period must be no less than 4 weeks and no more than 6 weeks;
(b) where the proposals relate to material rule changes, the consultation period must be no less than 6 weeks and no more than 8 weeks.
(3B) In determining whether proposals constitute minor or general changes or material rule changes, the regulator must have regard to—
(a) the likely impact of the proposals on regulated persons,
(b) the complexity of the proposals, and
(c) the extent to which respondees would reasonably require time to consider and respond.
(3C) The regulator may depart from the requirements in subsections (3A) and (3B) only where it considers that there are exceptional circumstances, in which case it must publish a statement setting out—
(a) the reasons for the departure, and
(b) the period of consultation adopted.””

54

Schedule 2, page 77, line 12, at end insert—
“(2A) The service-user objective includes the interests of consumers using the payment system, including—
(a) that the payment system is inclusive,
(b) that the payment system offers a clear approach to consumer redress,
(c) that the payment system promotes access to cash, and
(d) that the payment system promotes choice and interoperability with other recognised payment systems.”

This amendment would expand the FCA’s service-user objective in new section 131Z7(2) so that it takes account of inclusion, consumer redress, access to cash, and choice and interoperability between payment systems.

57

Schedule 2, page 80, line 15, at end insert—
“(d) imposing a levy on participants across all recognised payment systems to support financial inclusion.”

This amendment would enable a levy to be imposed on all participants in recognised payment systems, including technology firms moving into the payments space, to support financial inclusion.

Schedule 1, page 61, line 41, leave paragraph 21

Schedule 1, page 62, line 4, at end insert— “21A In section 86A(4) (FCA to prepare information sheets on arrears and defaults), for “Regulations” substitute “FCA rules”.”

Schedule 1, page 62, line 4, at end insert— “21A In section 86B(8) (notice of sums in arrears under fixed-sum credit agreements etc.), for “Regulations” substitute “FCA rules”.”

Schedule 1, page 62, line 4, at end insert— “21A In section 86C (notice of sums in arrears under running-account credit agreements)— (a) in subsection (4), after “Act” insert “or FCA rules (where appropriate)”; (b) in subsection (6), for “Regulations” substitute “FCA rules”.”

After subsection (4) insert— “(4A) Where a relevant deposit taker receives a score or rating below a minimum threshold prescribed by rules made under this section, the Authority must require the deposit taker to take proportionate remedial action to improve its rating. (4B) The Authority may— (a) make such rules or issue such guidance applying to designated persons as appear to the Authority to be necessary or expedient, and (b) give a direction under this section to a designated person if it considers that it is desirable to give the direction; for the purpose mentioned in subsection (4A).”

After Clause 3, insert the following new Clause— “Fiduciary duty owed to retail customers After section 137B of the Financial Services and Markets Act 2000 (FCA general rules: clients’ money, right to rescind etc), insert— “137BA Fiduciary duty owed to retail customers (1) A firm carrying on a regulated activity owes a fiduciary duty to act in the best interests of its retail customers, including small businesses within the meaning of rules made by the FCA, in relation to any regulated activity carried on for or with them. (2) The fiduciary duty in subsection (1) includes, but is not limited to— (a) avoiding conduct, systems or practices that exploit unequal bargaining power, (b) ensuring that products and services are suitable for the customer’s needs and circumstances, (c) ensuring that terms, notices and requirements are fair, reasonable and capable of being complied with in practice, (d) avoiding reliance on classifications, contractual terms or technical interpretations that defeat the reasonable expectations of the customer, and (e) taking reasonable steps to prevent foreseeable harm. (3) Nothing in this section prevents the FCA from making rules which impose higher standards or more specific obligations.””

Clause 6, page 5, line 10, leave out from the second “the” to end of line 16 and insert “end of the period of ten years beginning with the act or omission to which the complaint relates, determined in accordance with the rules (which may provide for different times in relation to different cases). (1B) Among other things, rules made under sub-paragraph 13(1) must provide in specified circumstances for the applicable time limit to end at a later time where— (a) in the opinion of the Financial Ombudsman, the failure to comply with that time limit was due to exceptional circumstances; (b) the complainant only became aware (or ought reasonably to have become aware) of material facts or detriment to them relating to the act or omission complained of after the expiry of that time limit.”

Clause 6, page 5, line 16, at end insert— “(1C) The applicable time limit must not operate to bar a complaint where, in relation to the same act, omission, course of conduct or relationship, any of the following applies— (a) the respondent firm would not be prevented by any applicable limitation period from enforcing rights arising from that act, omission, course of conduct or relationship; (b) the respondent firm continues to rely on, assert, or seek to enforce any term, security, guarantee, classification, contractual right or other continuing obligation arising from that act, omission, course of conduct or relationship; (c) the limitation period applicable to the respondent firm’s enforcement rights has been, or is capable of being, renewed, extended, revived, refreshed, postponed or otherwise affected by any acknowledgment, part-payment, agreement, variation, restructuring, standstill, forbearance or other relevant event. (1D) For the purposes of subsection (1C), the Ombudsman may consider any continuing reliance on, assertion of, or attempt to enforce a term, security, guarantee, classification, contractual right or other continuing obligation as part of the complaint.”

Lord Davies of Brixton gives notice of his intention to oppose the Question that Clause 8 stand part of the Bill.

Schedule 2, page 78, line 27, leave out subsection (2)

Schedule 2, page 80, line 15, at end insert— “131Z12A Fraud prevention duties of payment service providers (1) A payment system operator must take reasonable steps to— (a) implement proportionate transaction monitoring systems capable of identifying and intervening in suspected fraudulent transactions in real time; (b) provide consumers with clear warnings before executing transactions that exhibit indicators of authorised push payment fraud; (c) participate in cross-industry fraud data sharing schemes designated by the FCA for the purpose of preventing fraud. (2) The FCA must make rules specifying— (a) minimum standards for transaction monitoring systems under subsection (1)(a); (b) the circumstances in which a relevant person is liable to reimburse a consumer who suffers loss as a result of authorised push payment fraud, including where the relevant person failed to meet the standards in subsection (1); (c) timeframes within which reimbursement decisions must be made.”

Schedule 2, page 83, line 5, leave out “131Z12, 131Z13 or 131Z14” and insert “131Z13, 131Z14 or 131Z15”

Schedule 2, page 93, line 6, at end insert— “(aa) in paragraph 2(3), omit “, (ca)”;”

Schedule 2, page 93, line 7, leave out “2(3)” and insert “3(7)”

Schedule 2, page 93, line 10, at end insert— “(ca) in paragraph 5(a), for “, (c) or (ca)” substitute “or (c)”;”

Clause 17, page 21, line 34, leave out subsection (2) to (11) and insert— “(2) In Section 3B(1) (regulatory principles to be applied by both regulators), in paragraph (b), for the words from “considered” to the end of that paragraph substitute “taking into consideration the nature of the service or product being delivered, the nature of risk to the consumer, whether the cost of implementation is proportionate to that level of risk and whether the burden or restriction enhances UK international competitiveness;””

Clause 18, page 23, line 15, leave out subsections (7) and (8)

Clause 21, page 26, line 4, at end insert “provided that any such regulations reduce, and do not increase, the period in question”.

Clause 21, page 26, line 4, at end insert— “(12) Where, for two consecutive years, the regulators have complied with the applicable period for determination of applications under this section, the Treasury must make regulations under subsection (11).”

Clause 21, page 26, line 5, at end insert— “(za) after subsection (2) insert— “(2ZA) In determining the application, the regulator must— (a) assign a new application to a case handler within 5 working days of the application being made, (b) complete an initial application review within 10 working days of allocation to a case handler, and (c) allow a period of no more than 15 working days from receiving the application, to make requests for additional information. (2ZB) The regulators must publish monitoring data on an annual basis regarding the following— (a) the proportion of cases which required escalation to sponsoring firms, including summary trend data on the reasons for escalation, (b) the average time it takes to assign a case handler, and (c) the average number of days it takes to complete an application in full. (2ZC) A regulator may pause consideration of an application under this section for the purpose of requesting additional information on no more than one occasion. (2ZD) Any request for additional information under subsection (2ZC) must be made within the period specified in subsection (2ZA)(c).””

Clause 21, page 26, line 25, at end insert “provided that any such regulations reduce, and do not increase, the period in question.”

Clause 21, page 26, line 25, at end insert— “(9) Where, for two consecutive years, the regulators have complied with the applicable period for determination of applications under this section, the Treasury must make regulations under subsection (8).”

Clause 21, page 26, line 36, after “consideration” insert “provided that any such regulations reduce, and do not increase, the period in question.”

Clause 21, page 26, line 36, at end insert— “(7) Where, for two consecutive years, the regulators have complied with the applicable period for determination of applications under this section, the Treasury must exercise its powers under subsection (6).”

Clause 21, page 26, line 25, at end insert “provided that any such regulations reduce, and do not increase, the period in question.”

Clause 21, page 26, line 25, at end insert— “(9) Where, for two consecutive years, the regulators have complied with the applicable period for determination of applications under this section, the Treasury must make regulations under subsection (8).”

Clause 21, page 26, line 36, after “consideration” insert “provided that any such regulations reduce, and do not increase, the period in question.”

Clause 21, page 26, line 36, at end insert— “(7) Where, for two consecutive years, the regulators have complied with the applicable period for determination of applications under this section, the Treasury must exercise its powers under subsection (6).”

After Clause 22, insert the following new Clause— “Financial inclusion objective After section 1EB (competitiveness and growth objective) of the Financial Services and Markets Act 2000 insert— “1EC Financial inclusion objective (1) The FCA must, in discharging its general functions, act in a way which advances the financial inclusion objective. (2) The financial inclusion objective is to secure, so far as reasonably possible— (a) access by individuals and businesses to appropriate financial services, (b) the affordability of such services, and (c) fair outcomes for consumers, including those in vulnerable circumstances. (3) The FCA must publish, and keep under review, metrics for measuring progress against the financial inclusion objective.””

After Clause 22, insert the following new Clause— “Financial fraud prevention After section 1EB (competitiveness and growth objective) of the Financial Services and Markets Act 2000 insert— “1EC Financial fraud prevention (1) The FCA must make rules for the purpose of preventing and detecting financial fraud. (2) Rules under this section may, in particular— (a) require authorised persons to participate in fraud data sharing arrangements, (b) require reporting of suspected fraud in real time or near real time, and (c) require the use of automated or technological systems for fraud detection. (3) In making rules, the FCA must have regard to the prevalence of authorised push payment scams.””

After Clause 22, insert the following new Clause— “Open finance framework (1) The FCA must establish and maintain a framework for open finance. (2) The framework must provide for— (a) secure and standardised data sharing interfaces, (b) rights of customers to direct the sharing of their financial data, and (c) interoperability between different categories of financial services providers, including digital asset providers. (3) The FCA may make rules to give effect to this section.”

After Clause 22, insert the following new Clause— “FCA innovation unit (1) The FCA must establish an independent unit to advise on— (a) emerging technologies which have the potential to increase innovation in financial services, (b) emerging technologies and products which have the potential to increase financial inclusion, and (c) innovative and inclusive approaches to the regulation of payment systems and digital assets. (2) The unit must include persons who are independent of the FCA. (3) The FCA must publish a summary of the unit’s activities in the FCA’s normal reporting schedule to both Houses of Parliament.”

After Clause 22, insert the following new Clause— “FCA financial inclusion unit (1) The FCA must establish and maintain a financial inclusion unit (the “Unit”) for the purposes of this section. (2) The Unit must— (a) exercise the functions transferred to the FCA by Schedule 2 to the Financial Services and Markets Act 2026 insofar as they relate to access and equity in payment systems; (b) monitor and report on financial inclusion across payment systems, banking access, and consumer credit markets; (c) make recommendations to the FCA board on rules and guidance necessary to advance financial inclusion. (3) The Unit must have a chair and board appointed by the FCA board following a public appointments process. (4) The chair and board must not be made up of employees or consultants of the FCA. (5) The FCA must publish an annual report on the activities and findings of the Unit, which must be laid before both Houses of Parliament. (6) The FCA must ensure that the Unit has sufficient resources, staff, and operational independence to discharge its functions under this section.”

After Clause 22, insert the following new Clause— “Cost Benefit Analysis Panel reform (1) The Financial Services and Markets Act 2000 is amended as follows. (2) After section 138IA(4)(b) insert— “(c) provide a quarterly impact assessment of the cumulative cost burden of regulation, (d) keep under review any proposed changes in regulatory guidance or supervisory practices, and (e) undertake a review of the methodologies underpinning cost-benefit analysis estimates.” (3) After section 138IA(4) insert— “(4A) The FCA Cost Benefit Analysis Panel must— (a) be provided with any information or data that the Panel requires in order to fulfil its duties, (b) make publicly available its recommendations in full, including, but not limited to, the evidence base and analysis it used to make its recommendations, the assessed costs and benefits of the FCA’s activities and the range of representations made by Panel members to those recommendations, and (c) publish the agendas and minutes of meetings of the Panel.” (4) After section 138JA(4)(b) insert— “(c) provide a quarterly impact assessment of the cumulative cost burden of regulation, (d) keep under review any proposed changes in regulatory guidance or supervisory practices, and (e) undertake a review of the methodologies underpinning cost-benefit analysis estimates.” (5) After section 138JA(4) insert— “(4A) The PRA Cost Benefit Analysis Panel must— (a) be provided with any information or data that the Panel requires in order to fulfil its duties, (b) make publicly available its recommendations in full, including, but not limited to, the evidence base and analysis it used to make its recommendations, the assessed costs and benefits of the PRA’s activities and the range of representations made by Panel members to those recommendations, and (c) publish the agendas and minutes of meetings of the Panel.””

After Clause 22, insert the following new Clause— “Digital operational resilience of regulated firms (1) The FCA and the PRA must each make rules requiring authorised persons to meet minimum standards of digital operational resilience, including standards relating to— (a) ICT risk management frameworks appropriate to the nature, scale, and complexity of the authorised person's operations; (b) classification, reporting, and remediation of major ICT-related incidents, including cyber attacks, within timeframes to be specified by the regulator; (c) oversight and contractual requirements for third-party ICT service providers, including cloud service providers and critical technology suppliers; (d) regular digital operational resilience testing, including advanced threat-led penetration testing for systemically significant firms. (2) In making rules under subsection (1), the FCA and PRA must have regard to— (a) the need for proportionality with respect to the size and systemic importance of authorised persons; (b) international standards and frameworks, including those adopted by the European Union; (c) the need to avoid duplication with existing regulatory requirements. (3) The FCA must publish a consolidated digital operational resilience framework within 18 months of this Act coming into force, setting out how requirements under this section interact with existing obligations on authorised persons. (4) The FCA and PRA must review rules made under this section no later than every 12 months.”

After Clause 22, insert the following new Clause— “AI governance in regulated activities (1) The FCA must make rules requiring authorised persons who use artificial intelligence systems in carrying on regulated activities to comply with standards relating to— (a) transparency of AI-driven decisions affecting consumers, including credit decisioning, insurance underwriting, and fraud detection; (b) regular auditing of AI systems for bias, discrimination, and disproportionate impact on persons sharing protected characteristics within the meaning of the Equality Act 2010; (c) human oversight requirements for high-impact AI decisions, including minimum standards for human review and intervention; (d) consumer redress mechanisms where AI-driven decisions cause demonstrable harm. (2) In making rules under subsection (1), the FCA must have regard to— (a) the need to promote fair treatment of consumers, consider any protected characteristics; (b) international standards and regulatory frameworks relating to AI governance in financial services; (c) the need to support responsible innovation while managing systemic and consumer risk. (3) Rules under this section must be reviewed by the FCA no later than every 12 months.”

Clause 27, page 32, line 38, leave out sub-paragraph (ii)

Clause 27, page 33, line 1, after “sub-paragraph (iii)” insert “(but before any “or” already inserted by section 36(3)(b) of this Act)”

Clause 29, page 34, line 32, leave out “is in force” and insert “has effect”

Clause 33, page 38, line 28, at end insert— “(2A) In section 61 (determination of applications), in subsection (3ZA)— (a) the words from “granting it” to the end become paragraph (a); (b) after that paragraph insert “, or (b) in the case of a permitted conditional application (as defined in section 60A(5)), granting it subject only to conditions, or for a limited period, requested in the application (or both).””

Clause 33, page 38, line 32, at end insert— “(aa) after subsection (1) insert— “(1A) If the regulator to which a permitted conditional application is made under section 60 decides to grant the application subject only to conditions, or for a limited period, requested in the application (or both), it must give written notice of its decision to each of the interested parties.”;”

Clause 33, page 39, line 17, at end insert— “(5A) In section 309L (determining applications: period for approval), in subsection (1), in paragraph (a)— (a) the words from “without imposing” to the end become sub-paragraph (i); (b) after that sub-paragraph insert— “(ii) in the case of a permitted conditional application (as defined in section 309J(2B)), subject only to conditions, or for a limited period, requested in the application (or both), or”.”

Clause 33, page 39, line 18, after “recognised bodies)” insert— “(a) after subsection (1) insert— “(1A) If the appropriate regulator decides to grant a permitted conditional application under section 309I subject only to conditions, or for a limited period, requested in the application (or both), it must give written notice of its decision to each of the interested parties.”;”

Clause 37, page 45, line 2, at end insert— “(7) If the Treasury are satisfied that regulations under section 408A or 408B of the Financial Services and Markets Act 2000 (as inserted by subsection (3)) would, if made, have substantially the same effect as existing overseas recognition provision— (a) sections 408A to 408C of that Act (as inserted by subsection (3)) apply in relation to the regulations as if— (i) section 408A(2) were omitted, (ii) in section 408B(1), the words from “if the Treasury” to the end were omitted, (iii) section 408B(2), (4) and (5) were omitted, and (iv) section 408C(1) to (4) were omitted, and (b) section 429 of that Act applies in relation to the regulations as if, in subsection (2), “408A” (as inserted by subsection (5)) were omitted. (8) In considering whether regulations would have substantially the same effect as existing overseas recognition provision, the Treasury must— (a) treat the power in section 408B to designate a country or territory for the purposes of the regulations as forming part of the regulations, and (b) disregard any difference between that power and any power to make designations under the existing overseas recognition provision. (9) In subsections (7) and (8), “existing overseas recognition provision” means— (a) provision contained in an instrument containing provision listed in the Schedule to the Financial Services (Overseas Recognition Regime Designations) Regulations 2025 (as it has effect from time to time), or (b) a designation made under such an instrument.”

Clause 41, page 49, line 29, at end insert— “(12) The regulations may extend the scope of the commercial credit data sharing scheme to include, with the consent of the data subject— (a) rental payment history held by landlords or letting agents; (b) utility payment data held by licensed energy or water suppliers; (c) income and tax data held by His Majesty's Revenue and Customs; (d) such other alternative data sources as the Secretary of State considers appropriate for the purpose of enabling creditworthiness assessments for persons with limited conventional credit histories. (13) Regulations under subsection (12) must include provision for— (a) explicit consumer consent on an opt in basis and data protection safeguards; (b) standardised data formats to enable interoperability between lenders and designated credit reference agencies; (c) rights of consumers to access, correct, and withdraw consent in relation to data shared under the scheme. (14) Regulations under this section are subject to the affirmative procedure.”

After Clause 47, insert the following new Clause— “Designated artificial intelligence officer (1) The Secretary of State must by regulations provide that companies operating in the financial services sector who use artificial intelligence (“AI”) must have a designated AI officer. (2) The AI officer under subsection (1) has responsibility for ensuring that the use of AI is— (a) safe, (b) ethical, (c) unbiased, (d) non-discriminatory use of AI. (3) The AI officer under subsection (1) is also responsible for ensuring that data used in any AI technology is unbiased. (4) Any regulations under this section are to be made by statutory instrument. (5) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

After Clause 47, insert the following new Clause— “Know Your Customer regulations review Within six months of the day on which this Act is passed, the Treasury must commission a review of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692) insofar as they apply to customers of financial services, with the aim of— (a) enabling greater inclusion, (b) enabling greater efficiency, and (c) removing outdated measures.”

After Clause 47, insert the following new Clause— “National financial education strategy (1) The FCA must, in coordination with the Money and Pensions Service, prepare and publish a national financial education strategy (the “Strategy”) within 18 months of this section coming into force. (2) The Strategy must— (a) identify gaps in financial literacy among adults and young people across the United Kingdom, with particular regard to underserved and financially excluded communities; (b) set out a plan for improving consumer understanding of digital and emerging financial products, including— (i) cryptoassets, (ii) digital assets, (iii) stable coins, (iv) AI-driven financial services, and embedded finance, (c) establish measurable outcomes and milestones for improving financial literacy over a five year period; (d) specify how the Strategy will be coordinated with the FCA's strategy under section 1JZA of the Financial Services and Markets Act 2000. (3) The Strategy must be reviewed and updated every three years. (4) The Secretary of State must lay the Strategy by the FCA, and each updated version of it, before both Houses of Parliament. (5) The Secretary of State may by directions require the FCA to include in the Strategy provision relating to specified financial products or specified groups of consumers.”

After Clause 47, insert the following new Clause— “Small and medium-enterprises enterprises right of action for breaches of FCA handbook (1) The Secretary of State must by regulations make provision to allow small and medium-sized enterprises right of action for breaches of the FCA handbook. (2) The Secretary of State must lay draft regulations before each House of Parliament for the purposes of subsection (1) within the period of three months beginning with the day on which this Act is passed. (3) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.”

After Clause 1, insert the following new Clause— “Interaction with FCA Rules (1) Nothing in this Act prevents the Financial Conduct Authority from making rules relating to consumer credit. (2) FCA rules made under subsection (1) may supplement, but may not diminish, any right or remedy contained in the Consumer Credit Act 1974. (3) In determining any question arising under the Consumer Credit Act 1974, a court may have regard to any relevant rules made by the Financial Conduct Authority for the purpose of promoting clarity or transparency, but such rules may not be treated as limiting or reducing any statutory right or remedy.”

Schedule 1, page 57, line 20, leave out sub-paragraph (c)

Schedule 1, page 58, line 1, leave out sub-paragraph (b)

Schedule 1, page 58, line 3, leave out paragraphs 9 to 17

Schedule 1, page 61, line 24, leave out sub-paragraph (a)

Schedule 1, page 62, line 1, leave out sub-paragraphs (b) and (c)

Schedule 1, page 62, line 10, leave out sub-paragraph (c)

Schedule 1, page 64, line 30, leave out paragraph 33

Schedule 1, page 64, line 32, leave out paragraphs 34 to 38

Schedule 2, page 72, line 14, at end insert— “(aa) after subsection (3), insert— “(3A) The relevant regulator must ensure that any public consultation to which this section applies remains open for a period that complies with paragraphs (a) or (b)— (a) where the proposals relate to minor or general changes, the consultation period must be no less than 4 weeks and no more than 6 weeks; (b) where the proposals relate to material rule changes, the consultation period must be no less than 6 weeks and no more than 8 weeks. (3B) In determining whether proposals constitute minor or general changes or material rule changes, the regulator must have regard to— (a) the likely impact of the proposals on regulated persons, (b) the complexity of the proposals, and (c) the extent to which respondees would reasonably require time to consider and respond. (3C) The regulator may depart from the requirements in subsections (3A) and (3B) only where it considers that there are exceptional circumstances, in which case it must publish a statement setting out— (a) the reasons for the departure, and (b) the period of consultation adopted.””

After Clause 22, insert the following new Clause— “Periodic independent review of financial regulators (1) The Financial Services and Markets Act 2000 is amended as follows. (2) After section 1S (reviews) insert— “1SA Periodic independent review of financial regulators (1) The Treasury must appoint a panel of at least three independent persons (“the Review Panel”) to conduct a periodic general review of the effectiveness of— (a) the Financial Conduct Authority, (b) the Prudential Regulation Authority, and (c) the Bank of England in respect of its functions under Parts 1 and 5 of the Banking Act 2009 and Part 2 of the Financial Services Act 2012. (2) A person may be appointed to the Review Panel only if— (a) the Treasury has proposed the appointment, and (b) the appointment has been approved by a resolution of the House of Commons and a resolution of the House of Lords. (3) A person is not eligible for appointment if, within the previous three years, they have held senior office in the Treasury, the FCA, the PRA, the Bank of England, the Payment Systems Regulator, the Financial Ombudsman Service, or in any firm or body materially affected by the review, unless the nature of the interest has been fully disclosed and the appointment has been expressly approved by both Houses. (4) A general review must take place at intervals of every two to three years and must include a review of— (a) internal operations and controls, (b) systems for responding to whistleblowers, parliamentary correspondence and reports, and public interest concerns, (c) regulatory perimeters and customer classifications, (d) the effectiveness of relevant legislation and rules and the regulatory burden, (e) whether statutory and public policy objectives have been met, (f) the operation and effectiveness of engagement practices before and during rule making, (g) the skills base of staff, (h) follow up from previous reviews, (i) access to redress and effective remedies, (j) the operation of the FCA/FOS relationship and systemic complaint escalation, (k) evidence handling, audit trails and responses to parliamentary, whistleblower and public interest concerns, (l) whether statutory rights and remedies transferred into regulator rules remain effective in practice, (m) redress shortfalls, repeat misconduct and deterrence, (n) any other matter the Review Panel considers relevant, and (o) any matter requested by a relevant Committee of the House of Commons or House of Lords. (5) The Review Panel must not determine the merits of any individual complaint, regulatory decision or enforcement case, but may consider individual cases, whether anonymised or otherwise, for the purpose of identifying systemic, procedural, evidential, perimeter, redress or accountability issues. (6) On completion of a review, the Review Panel must make a written report to the Treasury— (a) setting out the results of the review, and (b) making such recommendations as the Panel considers appropriate. (7) A copy of the report must be— (a) laid before Parliament within 30 days of receipt, and (b) published in such manner as the Treasury considers appropriate, subject only to necessary redactions for confidentiality, privilege or enforcement sensitivity. (8) The Treasury must publish a response to the report within 60 days of its publication. (9) The FCA, PRA and the Bank of England must each publish a response to the report within 60 days of its publication, including a statement of actions they will take as a result. (10) The Review Panel has a right of access (at any reasonable time) to all information which it may reasonably require for the purpose of performing its functions under this section. (11) The Review Panel is entitled to require from any person holding or accountable for such information any assistance or explanation which the Panel reasonably considers necessary for that purpose. (12) “Information” includes any document, record, data, correspondence, internal report, or other material held by the FCA, the PRA or the Bank of England.””

After Clause 22, insert the following new Clause— “Reducing regulator duplication In section 3R of the Financial Services and Markets Act 2000 (arrangements for provision of services), after subsection (3), insert— “(3A) In exercising functions in relation to— (a) a PRA-authorised person within the meaning of section 2B, or (b) a person performing a senior management function in relation to such person, the FCA may rely on analysis, findings, information, or judgments of the PRA, so far as it is reasonable to do so. (3B) In exercising functions in relation to a person falling within subsection (3A), the PRA may rely on analysis, findings, information, or judgments of the FCA, so far as it is reasonable to do so. (3C) Subsections (3A) and (3B) apply in particular in relation to— (a) rule-making, (b) supervisory activity, (c) investigatory functions, and (d) enforcement decisions. (3D) Where a regulator relies on the other regulator under this section, it must have regard to— (a) the need to ensure that its statutory objectives are advanced, and (b) the desirability of avoiding unnecessary duplication of work or inconsistent outcomes. (3E) Nothing in this section prevents either regulator from undertaking its own analysis or reaching its own conclusions where it considers it appropriate to do so. (3F) For the purposes of this section “a senior management function” has the same meaning as Section 59ZA.””

After Clause 22, insert the following new Clause— “Safeguards on regulatory information collecting (1) Section 165 of the Financial Services and Markets Act 2000 (regulators power to require information: authorised persons etc) is amended as follows. (2) For subsection (4), substitute— “(4) A requirement imposed under this section may only require the provision of information or documents which are reasonably necessary for the purposes of— (a) the investigation, supervisory activity, or exercise of functions to which the requirement relates, or (b) advancing one or more of the regulator’s statutory objectives. (5) In deciding whether to impose a requirement under this section, the regulator must have regard to— (a) the proportionality of the burden imposed on the person to whom the requirement is addressed, (b) the relevance of the information or documents sought to the purpose identified in subsection (4)(a), and (c) the availability of the information from alternative sources. (6) A notice issued under subsection (1) must include a statement— (a) specifying the purpose for which the information or documents are required, and (b) explaining why the regulator considers the requirement to satisfy subsection (4A). (7) The regulator must not require the provision of information or documents which are— (a) duplicative of information already provided to the regulator, unless it is reasonable to require it again, or (b) of a description which is wider than is reasonably necessary to meet the purpose specified under subsection (4B)(a). (8) In this section, “statutory objectives” means— (a) in the case of the FCA, its strategic and operational objectives under section 1B, and (b) in the case of the PRA, its general objective under section 2B and its insurance objective under section 2C.””

Clause 44, page 51, line 21, at end insert— “(5) After section 284A insert— “284AA Tax treatment of risk transformation arrangements (1) The Treasury must, after consultation with the Commissioners for His Majesty’s Revenue and Customs, publish guidance concerning the tax treatment of investments issued in connection with risk transformation arrangements within the meaning of section 284A. (2) Guidance under this section must include the circumstances in which a risk transformation arrangement is to be regarded as having been entered into for genuine insurance risk-transfer and capital markets purposes. (3) In exercising functions relating to the assessment, collection and management of taxes, the Commissioners for His Majesty’s Revenue and Customs must ensure that arrangements falling within a description specified by guidance under subsection (2) are treated in a consistent and certain manner. (4) Where— (a) a risk transformation arrangement falls within a description specified in guidance under subsection (2), (b) the arrangement complies with applicable requirements relating to authorisation and supervision, the arrangement is to be treated for all tax purposes as a commercial arrangement entered into for bona fide insurance risk-transfer and capital markets purposes, and not as having as its main purpose, or one of its main purposes, the obtaining of a tax advantage. (5) The treatment in subsection (4) applies without any requirement to consider the purpose of the arrangement other than by reference to the conditions in that subsection. (6) Subsection (4) does not apply only where the Commissioners can demonstrate that— (a) one or more of the conditions in subsection (4) is not met, or (b) there has been fraud, deliberate misrepresentation, or material non-disclosure of relevant facts. (7) The Treasury must review guidance published under this section at intervals not exceeding three years.””

Clause 3, page 2, line 10, leave out “from time to time” and insert “on the date the regulations are made”