UK Financial Services Bill folds PSR into FCA

The UK government introduced the Financial Services and Markets Bill to Parliament this week. The bill aims to update rules on consumer credit, complaints, cryptocurrencies and payment services and to transfer oversight of payment systems from the Payment Systems Regulator (PSR) to the Financial Conduct Authority (FCA).

Ministers say the legislation will simplify the regulatory landscape by consolidating oversight under the FCA and by updating regulatory powers across consumer and market issues. The government says the changes are intended to reduce overlap between regulators.

Key provisions would change consumer credit rules and procedures for handling consumer complaints. The bill would also revise the regulatory framework for cryptocurrencies and payment services to reflect recent market developments.

Under the proposal, responsibility for supervising payment systems would move from the PSR into the FCA. The transfer would centralize supervisory responsibilities that are currently split across agencies.

Ministers argue centralizing oversight will remove duplication between regulators and create a single supervisory body with broader powers to respond to market changes. Officials say placing payment system oversight within the FCA will enable a more consistent approach to competition, resilience and consumer protection.

Rachel Blake, economic secretary to the Treasury, provided a statement: “This Bill will unlock even more growth in the sector, making red tape less burdensome to business and boosting protections for consumers – part of our plan to build a stronger and fairer economy.”

The bill will enter committee scrutiny and could face amendments in both Houses of Parliament before any measures take effect. If approved, the reorganization would require operational work to transfer functions and staff from the PSR to the FCA and to align rules and supervisory approaches.

The government says the proposals form part of wider efforts to modernize the UK’s financial services regime and support industry growth while maintaining consumer safeguards. The bill’s progress through Parliament will determine the final scope and timing of the changes.