The UK Chancellor, Rachel Reeves, delivered her second Mansion House speech on July 15. The focus was, again, on the competitiveness and growth of the UK financial services sector and how the government might reduce the regulatory burden on firms and make the UK a more attractive place to do business.

The Chancellor’s speech was accompanied by a raft of publications from HM Treasury, PRA and FCA. We have sought to draw together the issues that will be of particular interest to the insurance sector, including:

1. Financial Services Growth and Competitiveness Strategy and Cross-Cutting reforms.
2. HM Treasury consultation paper on changes to the insurance risk transformation regime.
3. HM Treasury consultation response document on captive insurance regulatory framework.
4. Changes to the Senior Manager and Certification regime.
5. Fundamental reform of the Financial Ombudsman Service.
6. Faster authorizations and senior manager approvals.
7. Targeted support.

You may also like to refer to our earlier article which discussed the points of interest for the insurance sector in the Chancellor’s first Mansion House speech in November 2024.

Seven key issues

1. Financial services growth and competitiveness strategy and cross-cutting reforms

On July 15, HM Treasury published its Financial Services Growth and Competitiveness Strategy alongside a consultation on cross-cutting reforms to the regulatory environment. The government’s strategy sets out a bold new vision for kickstarting growth in the financial services sector over the next 10 years. The ambition is that, by 2035, the UK will once again be the global location of choice for financial services firms to invest, innovate, grow and sell their services throughout the UK and to the world. The government’s consultation on cross-cutting reforms closes to comments on September 9.

One of government’s objectives is to make the UK the location of choice for insurance and reinsurance, specifically complex and speciality insurance. The government wants to streamline the regulatory burdens insurers face. It intends to enhance the UK’s global leadership in insurance for large, emerging specialized risks by:

• Consulting on a more flexible risk transformation regime: Including reforming the UK’s Insurance Linked Securities (ILS) offer to ensure that insurance for evolving risk – such as climate and cyber risks – can access funding through capital markets. See section 2 below for more information.
• Delivering a new tailored regime for captive insurance: Making this method of self-insurance and risk management easier and more attractive to do in the UK, including through protected cell companies. See section 3 below for more information.
• Championing the insurance industry: In the autumn the government, alongside Lloyd’s, will deliver an international event that showcases the London market’s strength and expertise in complex risks, alongside promoting the growth and export potential of innovative and reinsurance markets.

The government says that it supports the action the regulators are already taking to reduce friction and costs in insurance-specific regulation and to ensure regulation is proportionate for large risks and innovative lines, including by:

• Streamlining the product governance and fair value requirements for insurance firms and reforming conduct requirement for commercial and bespoke insurance business. See FCA consultation. These rule changes will come into force immediately upon publication of the policy statement so that firms can use the added flexibilities being proposed as soon as possible. The FCA is expected to publish its policy statement by the end of 2025.
• Introducing a streamlined regulatory approval process for Lloyd’s of London managing agents. The PRA and FCA have agreed to work with the Society of Lloyd’s to reduce the timeframe for authorization. Under the changes, the PRA and FCA will make increased use of the assessment work already carried out by Lloyd’s. See Bank of England press release.

The government has set out a large number of financial services strategies and reforms. The ones relevant to insurance include:

• Radically streamlining the SM&CR, with an ambition to reduce the overall burden on firms by 50% and allow significant reductions for insurers of around 40% in the number of roles that are subject to regulator pre-approval. See section 4 below for more detail.
• Delivering the most significant reform of the FOS since its inception, ending its present quasi-regulator role. See section 5 below for more detail.
• Setting new, shorter deadlines for determining regulatory applications, to make it quicker and easier to do business in the UK. See section 6 below for more detail. 
• Addressing concerns about the application of the Consumer Duty to provide more certainty on its scope and application to wholesale firms. The government has asked the FCA to report back on this by September 30.
• Supporting faster and more efficient authorization for new firms by working with the regulators to support a new streamlined authorization regime for innovative start-ups (for example, giving provisional licences or “L-Plates”). This will allow relevant firms to conduct limited regulated activities with streamlined conditions. The government intends to consult on this proposal in the Autumn.
• Making the UK the best place in the world to invest in AI. To help position the UK as a global leader in AI adoption and innovation in financial services, the government will work to identify the best opportunities to increase AI R&D funding into financial services and appoint an AI Champion in financial services. One of the Champion’s focus areas will be insurance and re-insurance. The Champion will be focused on how AI can drive growth in financial services, including by improving consumer outcomes. The Regulatory Innovation Office will help firms better navigate digital regulation by developing a new one-stop shop to access all the guidance they need in one place. The government will commission the Financial Services Skills Council (FSSC) to produce a report on AI skills needs, training and innovation in financial services.
• Enabling financial services firms to innovate in the UK. The government will take a proactive approach to removing the barriers to investment that financial services firms face in the UK by launching a Scale-Up Unit to support early-stage innovative firms.
• Support the development of a sector skills compact for financial services. The FSSC will develop a sector-led compact that will accelerate progress and ensure the financial services sector will have the skills to thrive in the future.
• Breaking down barriers to growth in the financial services clusters in the UK. The new Office for Investment: Financial Services (a concierge service to help international investors looking to establish or grow a presence in the UK financial services sector) will promote all UK nations and regions as locations for financial services business, building on existing regional strengths and skills. The service will support international firms in establishing and growing their financial services presence across the UK.

2. Changes to the insurance risk transformation regime

HM Treasury has published a consultation paper on changes to the insurance risk transformation regime. This consultation builds on the options to deliver a wider range of risk transfer options created by the Risk Transformation Regulations 2017 (RTR). The global insurance linked securities market has grown significantly in recent years. In particular, global life reinsurers have made extensive use of Bermuda captives and cellular structures and Lloyd’s has developed London Bridge 1 and 2 as a channel to bring investor capital into the London insurance market.

As the market develops, it is expanding beyond its origins in property risks into other areas. The government has received feedback that the existing framework for risk transformation activity is holding back UK deals. In the consultation paper, it considers how the regime can be adapted to encourage innovation and dynamism within the UK’s risk transformation market and better suit the balance between the regulators’ rulebooks and legislation.

Among other things, HM Treasury is considering:

• Clarifying funding requirements. To reflect market changes, HM Treasury plans to make any legislative changes required to give the PRA more flexibility on how transformer vehicles’ funding requirements are met. This would include how assets are valued and the extent to which all funding must be fully paid in up front.
• Opening the market to non-insurers. HM Treasury proposes to bring the assumption of risks from non-insurers within the scope of the insurance risk transformation regulated activity in article 13A of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. This would expand the risk mitigation options available to non-insurers, allowing them to engage directly with a transformer vehicle that carries out the article 13A regulated activity.
• Increasing flexibility at authorization. HM Treasury is concerned the PRA’s approach to authorizing transformer vehicles excessively restricts innovation within the risk transformation sector. It proposes removing the requirement on the PRA to incorporate a limitation on the scope of regulated activities carried on by transformer vehicles in all cases. The PRA would retain the power under FSMA to introduce limitations.
• Extending the uses of cells in protected cell companies (PCCs). The PRA has introduced rule changes that allow transformer vehicles to enter into more than one contractual arrangement. However, these changes do not extend to the cells of PCCs because the RTR limits a cell to a single contractual arrangement from a single counterparty. HM Treasury intends to remove this restriction.
• Enabling PCCs to operate as insurers. PCCs are bodies corporate which provide for the strict segregation of assets and liabilities within a single company. Segregation is achieved by a core with linked cells, each having assets and liabilities segregated from the others. The core can create new cells without the need for additional regulatory approvals. This saves time and expense. Were PCCs able to operate as insurance undertakings, each cell could operate as a separate undertaking with segregated assets and liabilities, but with a single legal personality to facilitate authorisations. This could reduce the speed and costs of non-insurance businesses setting up captive insurers.
  
  The RTR prohibits PCCs from undertaking any activity which is not risk transformation or directly related to risk transformation. The government proposes removing this prohibition in part to allow PCCs to effect and carry out contracts of insurance. It would remain the case that PCCs could not be established to undertake other financial services or wider activity. The result would be that PCCs could be established to operate as insurance undertakings or as risk transformers. This would expand the range of risk management options available to businesses, particularly supporting those that lack the resources or appetite to set up a standalone captive insurer.

Comments can be made on the proposals until October 8, 2025.

3. Captive insurance regulatory framework

HM Treasury also published its consultation response document on introducing a new regulatory framework on captive insurance. The response document follows its November 2024 consultation paper which proposed various changes aiming to make the UK a more attractive destination for captive insurance business. The proposals intend to introduce a proportionate authorization and regulatory regime for captives, reflecting the lower risk they pose. The government hopes that the new captive insurance framework will help cement the UK’s position as a leading international jurisdiction for insurance and risk management business.

How has the government decided to proceed with its consultation proposals?

• Types of captive: The UK’s framework will initially differentiate between two types of captive, direct-writing and reinsurance. The PRA and FCA will design and implement the detailed rules and processes for the application of this framework. This will include considering the appropriate capital, reporting and other regulatory requirements for these different models of captive. This was the consultation proposal.
• Exclusions and limitations: The consultation set out the government’s view that regulated firms dealing with financial services and pensions (for example, insurers, banking groups, pension funds, and superfunds) should be excluded from establishing (and passing risk to) their own captives.  This was intended to avoid regulatory arbitrage and minimize the potential for financial stability risks. 
  
  Having carefully considered the consultation responses, the government agrees that there is in fact a case for allowing financial services to establish their own captives for specific, limited purposes (for example, to manage first party only risks, such as a building owned by a firm). The PRA and FCA will need to establish which risks are not suitable for financial services firms to place into a captive.
• Life insurance: The consultation explained the government’s view that UK-domiciled captives should not be able to write life insurance policies.  These policies generally have long-term liabilities to third parties and require insurers to comply with strong regulatory regime in order to be able to meet future claims. Having considered the consultation feedback, the government acknowledges that certain life insurance products, such as group life fixed-term policies, may not have the same long-term liabilities (and associated risks) as other life insurance products, and agrees there is a case for permitting these to be written by captives.
  
  In order to allow specific, limited types of life insurance product to be covered by a captive insurer, the regulators will consider an appropriate scope for those captives, including particular risks that should be included in a revised regulatory framework. This makes it unlikely that the regime will compete with Bermuda life captives and cellular regime.
• Compulsory lines:The consultation set out the government’s view that captives should not be able to write compulsory lines of insurance (for example, employer’s liability or motor insurance). This was intended to protect third parties and preserve the integrity of the UK’s compulsory insurance requirements. It was also to avoid a scenario where a new, bespoke framework for captives in the UK needed stricter regulatory oversight than might otherwise be the case.
  
  The government remains of this view, but acknowledges that captives writing these lines on a reinsurance basis offers an additional level of protection, and agrees that this could be permitted. The need for any specific rules and requirements for captives writing compulsory lines of insurance on a reinsurance basis will be considered by the PRA and FCA.
• Captive managers: The consultation set out two possible alternatives for the regulation of captive managers.  The first option was to utilize the existing regulatory regime for insurance intermediaries, as is the current approach for broking firms whose activities extend to captive management. The second was to introduce a separate regulatory approach to captive managers.
  
  Having considered the feedback, the government believes the establishment of a new regulated activity is not necessary and the FCA is considering the application of the existing insurance intermediary regime for the authorization and regulation of captive managers. It is anticipated that this will be implemented primarily through regulatory rules.
• Protected cell companies: The government sought views on whether any new UK approach to captive insurance should also allow captives to operate through protected cell companies (PCCs). The government was also interested in understanding whether this could provide a more viable route for smaller companies to access captive insurance, where they might otherwise be unable or unwilling to create a full captive insurer.
  
  Following feedback, the government acknowledges the significant support for the inclusion of some form of captive insurance within the UK PCC regime and notes in particular the potential benefit that allowing ‘captive cells’ within the PCC regime might bring for smaller businesses. This may enable more businesses to utilize the UK’s captive insurance market. 
  
  The government has been considering possible wider reforms to the PCC framework as part of its work on improving the UK’s insurance linked securities offer and we discuss these in the ‘Insurance risk transformation regime’ section above. The insurance linked securities consultation discusses the future role of PCCs and how they can be established to facilitate captive insurance business instead of risk transformation.  The government expects that legislative changes will be necessary for this.  
• Tax incentives: In the consultation, the government set out its view that tax incentives are not a necessary component of introducing a modern and competitive captive framework. Respondents were of the view that tax reform would be a crucial area for the UK if it were to maintain international competitiveness. However, the government says it remains of the view that tax reforms are not necessary. This is unhelpful relative to the offshore tax regimes.

When will the new regime be implemented?

HM Treasury is determined to proceed quickly. The PRA and FCA are already developing their policy proposals. The PRA intends to consult on new rules in summer 2026, with a view to implementing the new framework in mid-2027. The FCA’s proposals will be developed in parallel.

FCA and PRA joint statement

Alongside HMT’s paper, the PRA and the FCA published a joint statement. The regulators welcome HM Treasury’s plans to support growth of the UK’s captive insurance market, particularly the commitment to introduce legislation to enable captives to be established within protected cell companies (PCCs).

The regulators note that use of PCCs can widen access to the benefits of captives by providing a more affordable route for smaller businesses. It can also serve as a pilot option for larger corporates taking their first steps towards establishing standalone captives. The regulators believe this is an important step in the development of a competitive UK captives sector.

The regulators are committed to playing their part by developing a proportionate authorization and regulatory regime for captives, reflecting the lower risk they pose. They will work with HM Treasury and a wide range of stakeholders, including users of captives as well as firms, to deliver the regime. The PRA, in co-operation with the FCA, will set up subject expert groups with these stakeholders as soon as practicable, to gather feedback for policy development and technical matters.

4. Senior Managers & Certification Regime

The Senior Managers & Certification Regime (SM&CR) was introduced in 2016 to increase individual accountability following the financial crisis in 2008. The regime has been expanded over time and now covers almost all firms regulated by the FCA and the PRA. In March 2023, the government published a Call for Evidence into the effectiveness of the regime. This was accompanied by a Discussion Paper by the PRA and FCA.

Feedback received was positive towards the accountability framework introduced by the SM&CR, but negative towards the burden it imposed on firms. The FCA and PRA have now separately published consultations that seek to address comments made in response to their Discussion Paper. However, the regulators’ proposals are limited by their need to comply with the existing legislative framework (which can only be changed by the government).  Therefore HM Treasury has also published a Consultation Paper setting out future changes could be made to the legislative framework to enable more fundamental and far-reaching changes to the SM&CR to be made by the regulators in the future.

The SM&CR changes are expected to occur in two phases. Phase 1 will involve changes the regulators can make to their rules without legislative change and these proposals are set out in the consultation papers published on July 15. Phase 2 will include future FCA and PRA consultations on proposals which will take advantage of any additional flexibility arising from HM Treasury’s legislative changes and may include a redesigned certification regime which minimises burden and complexity while ensuring fitness and propriety of individuals.

HM Treasury’s consultation

There are three parts to the SM&CR: (1) The Senior Managers Regime which requires firms to seek regulatory approval to appoint individuals into senior manager roles; (2) The Certification Regime which requires firms to assess annually that employees in ‘significant-harm functions’ are ‘fit and proper’; and (3) The Conduct Rules which set a basic standard of conduct that applies to individuals working in financial services firms covered by the SM&CR.

Removal of Certification Regime from FSMA and possible new regime to be established by the regulators

In her November 2024 Mansion House speech, the Chancellor committed to consult on removing the current Certification Regime and replacing it with more proportionate arrangements.

The Certification Regime is established in the Financial Services & Markets Act 2000 (FSMA). This primary legislation can only be amended by government (and not by the regulators). The government is proposing to remove the certification regime from FSMA which will allow the FCA and PRA to use their rule-making powers to develop a more flexible and proportionate regime that can better reflects the risk posed by different roles and by different firms and can more easily adapt to changes over time.

Reforming the approach to regulator pre-approval under the Senior Managers Regime

HM Treasury is proposing a package of measures to enable the Senior Managers Regime to be radically streamlined. These include:

1. Reducing the overall number of senior managers in the regime by providing greater flexibility for the regulators in specifying the list of Senior Management Functions of which regulatory pre-approval is required.
2. Allowing firms to appoint certain senior managers without pre-approval by the regulators. This would enable the regulators, via rules, to develop different mechanisms to manage senior manager appointments. Some senior managers would continue to require the pre-approval of regulators, as is currently the case, but there would also be the ability for regulators to specify certain senior manager roles for which pre-approval is no longer required. For these senior manager roles, firms would be required to ensure that individuals meet fitness and propriety standards and would then be required to notify the relevant regulator of these appointments, thereby enabling the regulator to maintain oversight. 
   
   In addition, the regulators would be able to introduce proportionate systems and controls to vary the process if necessary and monitor firm’s processes and compliance. This change is intended to reduce friction and administrative burdens for firms, allowing them to appoint senior managers more efficiently while maintaining high standard and clear accountability.

Statement of Responsibilities

The government proposes to remove prescriptive legislative requirements relating to the provision, maintenance and updating of Statement of Responsibilities with the aim of allowing regulators to adopt a more proportionate approach. It is asking for feedback on which types of change for which an update to the Statement of Responsibilities is currently required, that firms consider to be disproportionate.

Conduct Rules

FSMA enables the regulators to make Conduct Rules which set out minimum standards of conduct for individuals. FSMA also includes prescriptive requirements which cover, for example, training about the Conduct Rules, and where breaches of the rules must be reported to the regulators. The government wants to know which legislative requirements firms consider create a disproportionate burden.

HM Treasury’s consultation closes to comments on October 7, 2025.

FCA and PRA consultations

The FCA and PRA consultations, which have been informed by responses to the regulators’ 2023 Discussion Paper, include proposals in Phase 1 to:

• give firms more time and flexibility to submit applications for approving new senior managers when there has been an unexpected or temporary change;
• strip out duplication where the same individuals are certified for separate functions, which would reduce the number of certification roles by 15%;
• provide guidance on how to streamline the annual checks firms need to undertake to certify individuals are ‘fit and proper’ to do their role;
• allow more time for firms to report updates to senior manager responsibilities;
• increase how long criminal record checks for senior manager applications are valid for, prior to application submission;
• help firms to better understand the definition of certain SMF roles;
• give firms more time to update the directory, which lists certified staff. 

In Phase 2, the regulators intend to explore further reform making use of the additional flexibilities that any legislative amendments provide. In particular, they will explore what should replace the certification regime, which senior managers should be subject to approval, whether some SMF roles might be removed from the requirement to seek regulator pre-approval prior to appointment and expanding the 12-week rule for interim SMFs.

FCA and PRA consultations close to comments on October 7, 2025. Policy statements are expected by mid-2026.

5. Reform of the Financial Ombudsman Service

The Financial Ombudsman Service (FOS) was established 25 years ago as an impartial service for resolving financial services complaints. Concerns around the operation of the FOS have been mounting over recent years, particularly in connection with its perceived role as a quasi-regulator and its lack of interaction with the FCA on important matters.

In November 2024, the Chancellor used her Mansion House speech to signal the need for reform on how consumer disputes are handled. A joint call for input from the FOS and the FCA was published shortly afterwards and HM Treasury announced a formal review. More recently, the FOS has published a consultation on the interest rate applied to compensation awards. Now, HMT has published a consultation paper, the FCA and FOS have published a joint consultation paper, and the FOS has published its policy statement on interest on compensation awards. 

The FOS reforms are being heralded as a once-in-a generation transformation of the FOS. It is an attempt to return the FOS back to its beginnings as a simple impartial dispute resolution service that quickly deals with complaints from individuals.

FCA and FOS joint consultation paper

The proposals set out in CP25/22 aim to provide greater certainty, consistency and predictability for markets overall to ensure that consumers get appropriate redress when things go wrong.

The paper seeks comments on the following:

• Good practice examples for identifying and monitoring redress issues and clarifying the FCA’s expectations for firms carrying out proactive redress exercises.
• Amendments to guidance in SUP 15, clarifying when firms should report the identification of issues causing foreseeable harm or systemic issues to the FCA.
• Criteria to help assess if an issue is a mass redress event or has wider implications.
• A new registration stage for complaints and changes to the delegated authority of determinations at the FOS, to improve the quality, consistency and efficiency of case handling and achieve quicker outcomes for consumers.
• Stronger collaboration between the FCA and the FOS, through a new lead complaint process and a referral mechanism to improve consistency in interpretating regulatory requirements.
• Other amendments to the DISP and COMP sourcebooks to improve the operational efficiency of the FOS and the Financial Services Compensation Scheme (FSCS) respectively, for the benefit of consumers and Financial Ombudsman and FSCS levy payers.

The deadline for responses to the proposals is October 8, 2025.

The proposals in CP25/22 are consistent with, and should be read alongside, the government’s proposed reforms which we discuss immediately below.

HM Treasury Consultation Paper

On July 15, 2025, HM Treasury published a consultation paper on the review of the Financial Ombudsman Service (FOS).

The paper sets out the conclusions of the government’s review of the redress framework. The review, announced in March 2025, focused on whether the framework, including the FOS and the related legislation, continues to fulfil its intended purpose in an effective way. Feedback includes responses to the FCA and FOS’s March 2024 call for input.

The feedback highlighted that, in most cases, the FOS is fulfilling its intended role. However, it identified that, in a small but impactful minority of FOS cases, the role of the FOS has expanded beyond its original remit and there is not always coherence between the regulatory approach set by the FCA and the approach used by the FOS to settle complaints, leading to the FOS acting as a quasi-regulator.  This can leave firms acting in an uncertain regulatory environment.

HM Treasury’s consultation paper presents an updated redress framework and sets out proposals to reform the legislative framework within which the FOS operates to ensure it no longer acts as a quasi-regulator.

The government will introduce legislation, when time allows, to deliver the following reforms:

• An adapted “fair and reasonable” test: The FOS will be required to find that a firm’s conduct is fair and reasonable where it has complied with relevant FCA rules, in accordance with the FCA’s intent for those rules. The government intends this to operate so that there can be no retrospective application by the FOS of contemporary FCA rules and result in more consistent and predictable resolution of complaints for consumers and firms.
• A framework which formalizes the roles of the FOS and the FCA in providing regulatory certainty: Where there is ambiguity in how the FCA rules apply, the FOS will be required to seek a view from the FCA and the FCA will be obliged to respond.  Where appropriate, a party to a complaint will be able to request that the FOS seeks the FCA’s view on interpretation of the rules.
• A framework that provides clarity on the roles of the FCA and the FOS in relation to wider implications issues and mass redress events: The FOS will be obliged to refer potential wider implications issues or mass redress events to the FCA and the FCA will be obliged to consider those issues. Parties to a complaint will also be able to request the FOS refer such an issue to the FCA. It will be for the FCA to decide how those issues should be addressed.
• A more flexible mass redress event framework: The FCA will be able to investigate and respond to mass redress events more easily, ensuring that, when needed, mass redress events can be considered and dealt with quickly and effectively, providing consistent outcomes for consumers and avoiding disruption to markets.
• An absolute time limit of bringing complaints to the FOS: Consistent with the aim of providing a simple, impartial dispute resolution service which deals quickly and effectively with complaints, an absolute time limit in legislation will require complaints to be brought within 10 years of the conduct complained of. This will avoid the risk of the FOS having to deal with a high number of historic cases, which can be challenging to resolve quickly and effectively.

The deadline for responses to the government’s proposals is October 8, 2025.

FOS interest rate award change

Also published on July 15 was the FOS’s policy statement setting out its revised position on interest applied to compensation awards. The interest rate will change from 8% simple interest to a time-weighted average of the Bank of England base rate plus 1%. This change is expected to take effect for all complaints referred to the FOS on or after 1 January 2026.

6. Faster regulatory approvals

The government wants to make it quicker and easier to do business in the UK. It is therefore proposing to set new, shorter deadlines for determining regulatory applications and the regulators will be expected to action applications faster than these new statutory deadlines wherever possible. The PRA and FCA will have to determine:

• new firm authorizations and variation of permissions within four months (instead of six months) for complete applications and 10 months (instead of 12 months) for incomplete applications;
• senior manager approvals within two months (instead of three months).

In response, the PRA’s letter to the Chancellor says that:

• For new firm authorizations, it will target approval times of:
  • three months for complete applications from insurance firms that qualify for the wholesale insurance accelerated authorisation pathway;
  • six weeks for complete applications from insurance special purpose vehicles (ISPVs); and
  • 10 working days for complete applications from ISPVs that qualify for an accelerated pathway (as set out in its November 2024 consultation paper on proposed changes to the UK ISPV regulatory framework CP15/24).
• For senior manager regime applications, it will target completing at least 50% of cases within 45 days.

 The FCA’s letter to the Chancellor, says that:

• For variations of permission, it will target completing cases within three months for complete applications and six months for incomplete applications for adjacent business models.
• For senior manager regime applications, it will target completing at least 50% of cases within 35 days.
• For applications for authorization, the FCA will align with the government’s proposed amended statutory deadline of 4 months for complete and 10 months for incomplete applications.

7. Targeted support

The FCA published a consultation paper at the end of June outlining its proposals for ‘targeted support’.  These proposals build on several FCA investigations and consultations carried out as part of the Advice Guidance Boundary Review (AGBR). The FCA’s consultation paper consults on an additional tier of help for consumers who might otherwise fail to access advice.

We discuss the FCA’s consultation proposals in our earlier article. The new targeted support rules only apply to a limited subset of products which includes investment-based life insurance products. Life insurance products without any investment element are not in scope, nor are general insurance products.

On July 15, HM Treasury published a policy note on the necessary legislative changes for the targeted support regime. HM Treasury has proposed amendments to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO) which will create a specified activity of targeted support in new article 55A of the RAO. 

A person will provide targeted support when they make a recommendation to an individual that is based on an assessment of information about the individual. This recommendation will not be specific to the individual’s circumstances. The recommendation will be suitable for the individual and others who share similar characteristics and, or, circumstances. Crucially, when a person is providing targeted support, they will not be undertaking the regulated activity of advising on investments. 

HM Treasury intends to legislate in 2025, subject to feedback on the draft Order and when Parliamentary time allows.