On 9 July 2026, the House of Lords Financial Services Regulation Committee (the Committee) published correspondence from the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) providing a one-year update in relation to the FCA’s and PRA’s secondary competitiveness and growth objective.
The FCA highlighted the following it its letter to the Committee:
- Policy changes in pursuit of economic growth: The FCA has implemented major capital markets reforms, including changes to listing and prospectus rules, bond market transparency, and retail access to corporate bonds. It has introduced innovations such as PISCES and plans further reforms, including an equities consolidated tape, T+1 settlement and securitisation changes. Consumer-focused measures include mortgage affordability reforms, greater flexibility for lenders, changes to contactless payment limits, and proposals to broaden pension investment opportunities while maintaining consumer protections.
- Supporting innovation and firms seeking to grow: The FCA has expanded innovation initiatives, including its AI-focused Supercharged Sandbox and AI Live Testing services. Support for firms has been enhanced through the Pre-application Support
Services (PASS), the Scale Up Unit and increased Early and High Growth Oversight (EHGO) capacity. The FCA is also promoting UK financial services exports and inward investment through international engagement and an expanded overseas presence.
- Supervision and proportionality: The FCA has streamlined supervision to focus on fewer, higher-impact priorities and improved communication through Regulatory Priorities Reports. Automation has reduced processing times for lower-value cases. Proportionality initiatives include reducing certification roles under the Senior Manager and Certification Regime (SM&CR) and easing certain application requirements. The FCA has also reviewed Consumer Duty requirements for wholesale firms and committed to reforms, while emphasising responsiveness to market feedback when developing regulatory rules.
- Being a smarter regulator: The FCA is using technology and data to improve efficiency while keeping headcount flat. Reporting reforms have reduced industry costs by over £16 million annually, with further savings expected from transaction reporting changes. The FCA has simplified regulatory interactions and improved compliance. Authorisation processes have become faster, with most applications meeting target timelines. The FCA is also using AI and tech sprints to improve decision-making and investing in staff skills to meet future technological challenges.
- Savings and investment: The FCA is promoting savings and investment through reforms arising from the Advice Guidance Boundary Review, including simplified advice and targeted support that could benefit millions of consumers. It is supporting the mutuals sector through dedicated development initiatives and faster registration processes. The FCA also aims to facilitate defence-related investment by clarifying sustainability rules, engaging industry stakeholders and prioritising the authorisation of defence-focused investment funds.
- Future plans and prioritisation: The FCA’s 2026/27 programme focuses on growth, investment, pensions reform, Open Banking, Open Finance and tokenised funds. While maintaining market integrity and addressing risks such as consumer vulnerability, volatility and financial crime, it intends to keep headcount flat and fee increases low. The FCA emphasises that growth requires coordinated action across government and regulators, and supports ongoing dialogue on how regulatory and legislative frameworks can adapt to future economic and technological change.
The PRA highlighted the following in its letter to the Committee:
- Final rules implementing our Strong and Simple capital framework: This will apply to smaller, domestic-focused lenders from the start of 2027. The PRA sets out that the new rules are intended to radically simplify the regime for these firms. This will cut costs for Small Domestic Deposit Takers (SDDTs), facilitate competition and support lending to UK households and businesses. The PRA have also made progress in delivering significant simplifications for a wider population of firms addressing some key areas of concern for mid-tier firms including through the finalisation of Basel 3.1 standards and changes relating to the minimum requirements for own funds and eligible liabilities (MREL) framework. The PRA also published a discussion paper which sets out its exploratory thinking on the design of a potential simplified internal ratings-based approach (IRB) for residential mortgages for medium-sized firms.
- Insurance Matching Adjustment Investment Accelerator (MAIA): This is intended to support growth by enabling insurers to seize investment opportunities and recognise a capital benefit from their investments more quickly. This should help the insurance industry deliver on the pledge it made to the Government, in the context of the introduction of the Solvency UK regime, in relation to investment in UK assets.
- Reporting requirements for banks: These reductions are being introduced through the Future Banking Data (FBD) programme. The first stage of the reporting reductions, which were implemented with effect from 31 December 2025, should cut costs by around £26 million annually. The PRA are now engaging closely with industry to develop this work further, including through its recent discussion paper DP1/26.
- Financial Policy Committee’s updated assessment of bank capital requirements: Following the updated FPC assessment, the PRA are taking forward work to ensure the capital framework supports growth and competitiveness, while maintaining resilience. This includes work on the UK’s approach to regulatory buffers, leverage ratio requirements and the interaction of elements of the capital framework which attach mainly to domestic exposures.