UK: FCA and PRA freed from certain consultation requirements

Why should I read this?

In May 2026, HM Treasury published its consultation response on cross-cutting reforms to the UK financial services regulatory environment. The reforms form part of the Financial Services Growth and Competitiveness Strategy.

The government has confirmed that it will legislate to remove mandatory consultation obligations on the FCA and PRA for guidance and minor rule changes. It will also shorten statutory deadlines for the processing of regulatory applications, require the regulators to produce long-term strategies, and strip away other procedural requirements.

The changes affect all FCA and PRA regulated firms. Firms will need to monitor regulatory developments more closely because there will be fewer formal consultation opportunities.

What do I need to do/know about the regulatory reforms?

Regulated firms should take the following practical steps:

• Review your horizon-scanning processes
  The FCA and PRA will no longer be required to consult on guidance or minor rule changes. Your firm will need to identify methods, and have sufficient resource, to track changes which are not consulted on.
• Engage with trade bodies and industry groups
  These will become an even more important channel for advance sight of regulatory change.
• Monitor the regulators’ long-term strategies
  The FCA and PRA must publish these at least every five years. These will set out strategic priorities, including for supervision and growth. 

The statutory deadline by which regulators need to have determined various types of regulatory applications have been amended, as set out in the table below.

What else do I need to know about the reforms?

Consulting on guidance

The government describes the reforms as removing “a small but impactful number of prescriptive reporting and other procedural requirements on the regulators”. The stated rationale is that obligations such as consulting on guidance “can prevent the regulators from making changes at pace when necessary”.

The government says that removing these requirements will not prevent the regulators from consulting voluntarily.

Timothy Fosh, Financial Services Partner, comments:

“While the regulators will have the option to consult on guidance and ‘minor’ rule changes, it remains to be seen whether, and in what circumstances, they do so. We would hope that guidance is still consulted on in all but the most urgent of situations.”

“Have regards”

The reforms also remove the obligation for the FCA and PRA to consider each “have regard” principle individually when making day-to-day decisions. Instead, the regulators must consider these principles when producing their long-term strategies. The government says this will reduce administrative burden while maintaining accountability through “a smaller number of more strategic, higher-value publications”.

Procedural changes

Other procedural changes include removing requirements from the regulators’ annual reports, altering governance procedures for Bank committees and the FCA board, and removing obligations to publish certain bank resolution information in newspapers. A full list of changes is set out in Annex A of the consultation response.

Implications

Without mandatory consultation on guidance and minor rule changes, firms may in the future have less time to prepare for new requirements. The definition of ‘minor’ rule changes is not set out in the consultation response; it will be for the regulators to determine whether a rule change is ‘minor’ and it is not clear what criteria will apply. It is not clear when, if ever, the regulators will consult on guidance.

Next steps

The reforms require primary legislation. The government will bring this forward when parliamentary time allows. In the meantime, the FCA and PRA have already started reporting against new voluntary performance targets for application processing.

How Eversheds Sutherland can help

Eversheds Sutherland advises regulated firms on the impact of UK regulatory change. We help investment fund managers, private wealth advisers and real estate fund operators prepare for new requirements, engage with the FCA and PRA, and respond to consultations. We can help you assess what these reforms mean for your business and update your regulatory monitoring arrangements.