UK Chancellor Rachel Reeves unveiled the government’s Leeds Reforms this week, with the aim to make the UK the “number one destination for financial services companies by 2035”, according to a government statement.
The government states that the reforms will “tear down the barriers to attracting investment in the finance sector by reintroducing informed risk-taking into the system, cutting unnecessary red tape, driving more finance into public markets and actively helping international companies to set up in the UK”.
The government has also set a target to double the growth rate in UK net exports of financial services over the next decade.
To bolster the UK’s fintech ambitions, the government says it will provide “intensive support” to start-ups, including a single regulatory point of contact during critical early phases. The British Business Bank’s lending capacity has been expanded to £25.6 billion, while a new global talent taskforce will work to attract international expertise with funding for 50 PhD students through the £187 million TechFirst programme.
To attract international businesses, the government says “unnecessary financial red tape that stalls inward investment and slows growth will be drastically cut under the plans”. A new concierge service within the Office for Investment will actively pursue international financial services companies, while regulations, including the Senior Managers and Certification Regime and the Financial Conduct Authority’s (FCA) Consumer Duty, will be eased to promote innovation.
In addition, the changes include significant updates to banking regulations aimed at freeing capital for domestic investment. The government is supporting calls from the Bank of England to raise the MREL (Minimum Requirement for Own Funds and Eligible Liabilities) threshold to £25-40 billion and reforming the ring-fencing regime that separates retail and investment banking activities.
The reforms are part of the government’s Plan for Change, which also encompasses AI development and payment initiatives. The plans include additional support for first-time homebuyers and expanded opportunities for UK citizens to access information about stock investments.
Starting April 2026, the FCA will permit banks to inform customers about specific investment opportunities. Long-term asset funds will also become eligible for stocks and shares ISAs next year, which the government predicts will enable individual investors to support innovative businesses and infrastructure projects.
Innovate Finance CEO Janine Hirt has welcomed the reforms, particularly highlighting increased capital availability, regulatory support for fintechs, and the strategy to digitalise UK capital markets.
Hirt says that “other countries are quickly gaining pace, so it is critical that the government, regulators, and industry urgently work together to increase support for this thriving sector of our economy”.
Source: https://www.fintechfutures.com/
