Overview of the Leeds Reforms

First Edinburgh, now Leeds. The Government is pushing on with efforts to modernise the financial framework, and the latest set of reforms was published in July 2025. They are part of the Financial Services Growth and Competitiveness Strategy, which the government hopes will speed up growth, productivity and investment across the UK.

A key goal is streamlining regulation, which – it is hoped – will “drive investment and create a more pro-growth operating environment.” A noble aim, so how will it work in practice?

Consultation Paper CP25/22 sets out how the FCA and Financial Ombudsman Service propose to modernise the redress framework, which should “give firms greater certainty to invest and innovate.” Changes include:

• Amending the fair and reasonable test in FSMA

• Changing the requirement for the FOS to publish all individual ombudsman decisions

• Introducing a referral mechanism to support the FOS when applying FCA rules to issues

• Introducing a 10-year time limit for referring complaints

• Tools to allow the FCA to better manage Mass Redress Events

Of real interest to financial services firms is how the reforms introduce changes to SM&CR. Together with the FCA and the PRA, HMT has been reviewing the scope and proportionality of the Senior Managers and Certification Regime, and the proposals suggest that there could be a 50% reduction in regulatory burden if they go ahead.

The first of two phases of upcoming FCA changes will see:

• streamlined annual fit and proper checks via guidance

• firms given more time and flexibility to submit applications for approving new senior managers when there has been an unexpected or temporary change

• removed duplication where the same individuals are certified for separate functions – tipped to reduce the number of certification roles by 15%

• additional time for firms to report updates to senior manager responsibilities

• extended validity periods for criminal records checks

• more guidance around the definition of certain senior management function roles

• more time to update the FCA’s directory.

Phase 2 will aim to replace the certification regime with a more proportionate regime – what this will look like in practice is yet to be revealed.

So what do firms need to do now? The FCA’s proposals are set out in a consultation that closes on 7 October, with the Policy Statement expected in mid-2026. The first step is a gap analysis to highlight how the firm might benefit from the proposed changes and be in the best position to be able to quickly implement those changes once the timeline is confirmed.

Join our webinar with Rob Bell and PeopleClear’s Andrew Pullman on 25^th September at 1pm. This one-hour webinar will comprehensively explain what the Leeds Reforms mean for firms.