King’s Speech 2026: what does it mean for financial services regulation?

The King’s Speech set out the programme of legislation that the UK Government intends to pursue in the forthcoming parliamentary session. The package of bills announced includes an Enhancing Financial Services Bill (FS Bill) and several other measures relevant to financial services (FS) firms.

At a glance:

• For FS firms, the King’s Speech mainly signals how the Government intends to legislate to deliver reforms already trailed and there were no surprises.
• A new FS Bill will implement several discrete reforms. These include planned changes to the Senior Managers & Certification Regime (SMCR) alongside structural and operational changes affecting the Financial Ombudsman Service (FOS) and the Payment Systems Regulator (PSR). But implementation of those changes will still take time. Firms are unlikely to feel any impact until 2028 at the earliest, but will need to respond to consultations in the run-up to that period.
• The FS Bill will also take forward reforms to the bank ring-fencing regime, but the scope and substance remain unclear, with a Government consultation overdue.
• The King’s Speech also signalled wider cross-cutting issues for FS firms to track, including AI, digital identity, and cyber resilience.
• Although not mentioned, there also remains a busy pipeline of FS regulatory change underway. Government reforms including for Open Banking, digital assets, targeted support and alternative investment fund managers will continue to progress through its existing law-making powers.
• The Government indicated that it will provide further detail on the FS Bill over the coming week, but it is unclear whether that will include publication of the draft Bill. Looking further ahead, the next key marker is the Chancellor’s Mansion House speech in July, one year on from the Leeds Reforms package and the FS Growth and Competitiveness Strategy. We will publish further analysis as details emerge – see the Deloitte EMEA Centre for Regulatory Strategy website for updates.
• For firms, there is now clarity around where there is likely to be legislative progress and what needs to be captured as part of horizon scanning, but there is very little that demands immediate action. No new legislation has been tabled. 

This note sets out our view on the key signals for FS policy and regulation resulting from the King’s Speech, and what to watch out for in the coming months.

What did the King’s Speech signal for FS policy and regulation?

As widely expected, the Speech confirmed the Government’s intent to table an FS Bill, advancing its growth and competitiveness agenda by taking forward a range of measures announced over the last two years, including [non-exhaustive]:

• Reforming SMCR: While reiterating that SMCR is a core pillar of UK regulation, policymakers are reviewing its practical application. The Government is seeking to reduce the regime’s regulatory burden by 50%, split across two phases. Initial SMCR reforms focused on improving approval processes. The FS Bill enables a more substantive second phase. This includes removing the Certification Regime from primary legislation, allowing the regulators to develop a more flexible framework, and exploring ways to reduce the number of Senior Management Function roles. However, considering the FCA/PRA consultations that will follow legislation, implementation is likely to run into 2028.
• Reforming the FOS: Aimed at reducing future market disruption and promoting regulatory predictability. Tensions and grey areas between the roles of the FCA and FOS in consumer redress mechanisms – highlighted by the motor finance cases – are a key driver. The Bill would progress the more fundamental FOS reforms announced last summer and confirmed in March, including giving the FCA final decision-making responsibility for mass redress events and issues that may have wider consumer or firm implications.
• Abolishing the PSR: Announced in March 2025, the PSR's functions will merge into the FCA, in a move designed to reduce regulatory complexity and foster growth. This consolidation aims to cut regulatory overlaps, streamline supervision, promote clearer accountability and support faster decision-making. However, the actual benefits will hinge on how, in practice, the FCA will exercise its new powers and responsibilities. Key factors include its approach to balancing competition and innovation with consumer protection and market integrity, the supervisory intensity applied to firms, and how it will take forward live workstreams on issues such as card fees, authorised push payment fraud, and Open Banking. This, together with FOS reforms, will only affect firms once the operational changes have been implemented.
• Bank ring-fencing: The Government has committed to update the ring-fencing regime, to help unlock more financing for UK businesses. However, compared with other measures, the detail and timing of any reforms remain unclear. A Government consultation on the reforms – due in early 2026 – has not yet been published.
• Cross-cutting changes to how the FCA and PRA operate: Earlier this week, the Government signalled that it will legislate to implement a package of already announced operational reforms. This includes new, shorter statutory deadlines for certain FCA/PRA approvals, including new firm and SMCR approvals, which should speed up regulatory decisions for firms. The Government also plans to scale back the role of the statutory “have regards” principles, so they guide FCA/PRA long-term strategy-setting but carry less weight in their day-to-day decision-making. It is too soon to judge the practical impact, but this could lead to more nimble supervisory decision-making and policymaking.

Beyond the FS Bill, what other Bills should FS firms be watching?

Wider cross-cutting initiatives could still shape the FS operating environment – particularly on AI, data and identity.

• Regulating for Growth Bill: This Bill builds on the 2025 Regulation Action Plan to modernise regulation to support growth and innovation. It will introduce two main measures. First, it will create cross-economy legal “sandboxing powers”, allowing rules to be temporarily relaxed under strict oversight so firms can test new products and technologies – such as AI. Where trials prove successful, the Bill will permit temporary rule changes to be promptly incorporated into permanent legislation. A key question is whether, and how, this will interact with the FCA’s existing sandbox and its rulemaking remit. Second, the Bill will establish a statutory Growth Duty for leading regulators, supported by a new ministerial power to set strategic direction. The PRA and FCA already have growth and competitiveness objectives. However, following the House of Lords Financial Services Regulation Committee’s “Growing pains: clarity and culture change required” report, we will need to see how the Government now exercises its further influence over how the regulators practically deliver on these objectives.
• Cyber Security and Resilience Bill: Originally introduced during the previous parliamentary session, it expands the remit of the existing cybersecurity regime to encompass – among others – data centres and managed service providers. Given the maturity of the operational resilience and cyber regimes already applied to FS firms, the sector is unlikely to be directly in scope. However, FS firms may benefit indirectly where key suppliers are subject to stricter cyber resilience requirements, such as the duty to promptly notify affected customers in case of significant cyber incidents. It also remains to be seen whether recent shifts in the cyber threat landscape will lead the Government to revisit the substance of the Bill.
• European Partnership Bill: This Bill is aimed at improving the UK-EU trade relationship, including giving the Government powers to align UK standards with EU rules over time, where new sector-specific agreements are reached. There is no specific mention of FS. However, the Bill will include powers for the Government to extend the Bill to apply to new EU treaties.
• Digital Access to Services Bill: To establish a voluntary digital identity scheme, enabling citizens to prove their identity when accessing public services.

What else is on the Government’s FS policy to-do list?

Although not mentioned in the King’s Speech, there also remains a busy pipeline of FS regulatory change underway. Crucially, not everything depends on the FS Bill becoming law. The Government can advance a range of already announced or in-flight initiatives using existing powers (including to table secondary legislation). Key areas include [non-exhaustive]:

• Open Banking: Later this year, the Government is expected to grant the FCA new powers to set Open Banking rules, enabling the FCA to create a long-term regulatory framework.
• Payments and digital assets: By the end of June, the Government will start work to modernise UK payments regulation, including to clarify rules for stablecoin-based payments. This is a multi year initiative, running into 2027/28.
• Asset management: Reforms to the alternative investment fund managers regime are still pending. The FCA indicated that these will aim to reduce “obligations on smaller funds, while requiring what is needed from larger ones – proportionate to their size and impact.”
• Targeted support: The Government has some unfinished business to remove some lingering regulatory uncertainties and fully enable new offerings. In particular, updating the Privacy and Electronic Communications Regulations to enable workplace pension providers to proactively offer targeted support to customers who have not opted out from receiving marketing communications.

What happens next?

The Speech is an important marker, but not the end of the story. The Government indicated that it will provide further detail on the FS Bill over the coming week, but it is unclear whether that will include publication of the draft Bill. Looking further ahead, the next key milestone is the Chancellor’s next Mansion House speech, anticipated in July.

The real test now is pace and delivery. Of the FS Bill measures announced, reforms affecting the FOS are most likely to prove controversial because of the perception by some stakeholders that the reforms reduce consumer protections. Any delay in progressing FOS reforms could slow progress on the FS Bill as a whole, meaning a straightforward passage into law is far from certain.