FCA Regulatory Round-up: March 2026

FCA Regulatory Update

Here is our March regulatory update, bringing you up to speed with what's going on in the world of the FCA and ICO.

Credit Information Market Study

The FCA are consulting on proposals to improve how consumer credit information is shared. If the proposals go ahead, firms that share information with one Designated Consumer Credit Reference Agency (DCCRA) will need to share the information with other DCCRAs to ensure that more comprehensive and better-quality credit information is available to more firms. The changes would see improved access to credit through reductions in the numbers of ‘thin files’ and ‘credit invisibles’ and credit would be better allocated, including a reduction in unaffordable lending.

The absolute requirement to share information set out in the Final Report will be amended as it was felt that this would be disproportionate for smaller firms. The new proposals mean that firms that already share information with a DCCRA will need to share “all available credit information” with the others. At present, the FCA is proposing to ‘designate’ three credit reference agencies – Equifax, Experian and TransUnion – but may add more in future.

The consultation also proposes to introduce a new term – ‘consumer credit information’ to identify the types of information that the framework applies to. The FCA will set “clear, high-level expectations for the types of consumer credit information that must be shared.”

The Consultation closes on 1 May 2026. Views can be sent to the FCA via their CP26/7 online response form.

Motor Finance Compensation Scheme

The FCA are now considering over 1000 responses to their proposed scheme, and have made clear that they’re likely to make changes to the draft scheme based on feedback.

If the scheme does go ahead, final rules should be published in late March, the timing will be outside market hours, and the FCA will confirm the date in advance.

Although final decisions haven’t yet been made, the FCA have published some details to help firms prepare for the likely final rules.

• They are likely to introduce an implementation period of three months, with up to five months for older agreements.

• People who complain before the scheme starts would not be asked if they wish to opt out. Instead, within 3 months of the end of the implementation period, their lender would tell them whether they’re owed compensation, and how much.

• Those receiving a redress offer would be able to accept it immediately, rather than waiting for a final determination.

• Firms would not be required to write to customers via recorded delivery, and would be allowed to use a range of channels as long as appropriate safeguards are in place to prevent fraud.

Details of any scheme will likely be published within two weeks.

Financial Ombudsman Service Reforms

The UK Government’s review of the Financial Ombudsman Service has been published, noting that the FOS plays an important role but that changes are needed to prevent it from acting as a quasi-regulator, and to provide “greater regulatory coherence with the Financial Conduct Authority.”

HMG said that responses were supportive of the proposed reforms, which will see the FOS return to its original role. The intention is to introduce legislation that will adapt the ‘fair and reasonable’ test to determine cases and introduce a referral mechanism between the FOS and the FCA to require the FOS to seek FCA views where it thinks there may be ambiguities in what the rules require. It will also introduce a limit of 10 years for consumers to bring complaints.

The FCA have published a consultation to finalise proposals set out in FG26/2 to seek views on further changes in light of HMG’s review. The consultation is open until 11 May 2026.

The hope is that the reforms will see the FOS resolving complaints more quickly and informally, leading to faster and more consistent resolutions, reduced delays and improved outcomes for all parties.

If the proposals go ahead, the changes would see amendments to DISP 3 for the FOS to ensure that only evidenced complaints are progressed through its process, amendments to the FOS’ dismissal grounds, and amendments to factors taken into account as part of the fair and reasonable test in DISP 3.

Consumer Duty Board Reports

The reports continue to get a lot of attention, firm's should now be preparing for the next set of reports, typically due in July. To find out how to prepare your report in line with FCA expectations we are hosting a webinar, find out more: https://www.eventbrite.co.uk/e/1980463431436?aff=oddtdtcreator

Regulatory Priorities: Consumer Finance

Replacing the Portfolio Letters, the FCA have been publishing their ‘regulatory priorities reports’ as a redesigned way to communicate important matters to firms. The FCA says they should “act as a guide for firms’ boards and chief executives.”

The Consumer Finance report notes that data indicates sustained growth of around 8% in consumer credit lending across 2025, and although “interest rates have slightly eased, household budgets remain stretched, reinforcing the need for responsible lending and early and appropriate support for those in financial difficulty.”

Consumer Priorities for the next year are:

• Consumers can access credit that meets their needs 

  • The FCA expect firms to “continue to offer well-designed credit products that are fair value and meet consumers’ needs and consider how to help currently excluded consumers.

• Firms support consumers who struggle with debt

  • Firms should make sure consumers can access support without unnecessary barriers, proactively helping those in financial difficulties.

  • Communications should be designed and timed to help consumers make well-informed decisions.

• Consumers can complaint when things go wrong and get appropriate redress

  • The FCA expect firms to handle complaints properly – identifying and dealing with them accurately and promptly.

Other areas of focus include Deferred Payment Credit (regulation day is 15 July 2026), and monitoring strategic harms through data.

The FCA will be monitoring the highest risk principal firms and their Appointed Representatives to ensure that principals have strong oversight of their ARs, in line with their Duty obligations.

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