UK Bill Would Fold Payment Systems Regulator Into FCA

The Treasury has placed the Financial Services and Markets Bill before Parliament. The bill would merge the independent Payment Systems Regulator (PSR) into the Financial Conduct Authority (FCA) and change rules on consumer credit, consumer complaints, cryptoassets and payment services.

The legislation is presented as the opening stage of a broader update to the UK’s financial regulatory framework and aims to reduce overlaps between agencies. The transfer would move responsibility for oversight of payment systems from the PSR to the FCA, placing payment-system supervision alongside the FCA’s existing conduct and consumer-protection duties.

Ministers argue the consolidation will simplify the regulatory landscape so firms spend less on duplicated compliance and can redirect resources toward growth and customer service. The bill also proposes reforms to consumer credit rules, complaint handling and the regulation of cryptoassets and payment services to reflect recent market and technology changes.

The Treasury placed the bill before Parliament and it will now proceed through the standard legislative stages, where Members of Parliament and peers can scrutinize and amend its provisions. If enacted, the FCA would absorb the PSR’s statutory functions and take on responsibility for overseeing the UK’s payment systems alongside banks, insurers and investment firms.

Consumer-focused provisions aim to strengthen protections and improve the complaints process. Proposals on cryptoassets and payments are written to bring regulatory requirements closer to current market practices and new technologies.

Rachel Blake, economic secretary to the Treasury, described the bill as part of a plan to build a stronger and fairer economy and argued it would reduce regulatory burdens on businesses while boosting protections for consumers.

The FCA is the UK’s principal conduct regulator for financial services. The PSR presently oversees the operation and competition of payment systems. The government maintains that concentrating supervision of market conduct, consumer protection and payment infrastructure in one authority will reduce complexity and improve regulatory consistency across the sector.