top of page

King's Speech 2026: The Financial Services Bill Puts the PSR Inside the FCA and Signals a Leaner Regulatory Landscape for UK Finance

  • Writer: Shawn Jhanji
    Shawn Jhanji
  • 5 days ago
  • 3 min read
The bill has been anticipated for months. It will fold the Payment Systems Regulator into the Financial Conduct Authority, overhaul the Financial Ombudsman Service, and ease certain requirements for senior managers inside regulated firms. For the fintech and digital assets sectors, it marks the next step in the government's effort to reduce regulatory complexity and position the UK as a competitive jurisdiction for financial services innovation.

The UK government confirmed today that a Financial Services Bill will form part of the 2026 to 2027 parliamentary programme, following the King's Speech delivered this morning.


The bill has been anticipated for months. It will fold the Payment Systems Regulator into the Financial Conduct Authority, overhaul the Financial Ombudsman Service, and ease certain requirements for senior managers inside regulated firms. For the fintech and digital assets sectors, it marks the next step in the government's effort to reduce regulatory complexity and position the UK as a competitive jurisdiction for financial services innovation.


What the Financial Services Bill Contains

The Payment Systems Regulator was established in 2014 as a standalone regulator for UK payment systems, sitting alongside but independent of the FCA. The bill will formally merge the two bodies, a move that has been in preparation since staff began transitioning to FCA email addresses over the past eighteen months. Open banking and broader payments infrastructure work, including the ongoing challenge to card scheme pricing, will come under a single roof.


The bill also covers the Financial Ombudsman Service. The FOS has been a point of sustained industry criticism, with complaints about unpredictability and the burden of mandatory participation on smaller firms. The proposed reforms are expected to address both the scope of the FOS's jurisdiction and the mechanics of how it handles consumer complaints.


Reforms to the Senior Managers and Certification Regime are also included, with changes designed to reduce compliance overhead for firms while maintaining accountability at the top of regulated businesses.


What It Means for Digital Assets

The bill does not contain direct provisions on digital assets or cryptoassets, but it arrives in the context of a regulatory environment that has been shifting rapidly. The Property (Digital Assets etc) Bill received Royal Assent in December 2025, giving digital holdings including cryptocurrencies and NFTs formal property status under English law for the first time. The FCA published its final fund tokenisation rules in PS26/7 on 30 April 2026, enabling authorised fund managers to maintain fund registers on distributed ledger technology with the on-chain record treated as the primary books and records.


The FCA has also approved the first PISCES platforms for trading private company shares, with JP Jenkins and the London Stock Exchange both operating under the framework. The PISCES regime and the Digital Securities Sandbox both continue within existing FCA rules and are not directly affected by the Financial Services Bill.


What the bill does is simplify the regulatory landscape into which all of these innovations fit. A merged FCA absorbing payments regulation is a larger, more influential body. Whether that produces faster or slower movement on digital assets and fintech will depend on how the FCA's leadership approaches the combined mandate.


Why It Matters for Founders

The regulatory environment shapes the cost and speed of building regulated financial technology in the UK. Consolidation of the PSR into the FCA reduces the number of regulatory relationships that payments fintechs and digital asset firms need to manage.


The FOS reforms could reduce the compliance cost for early-stage regulated businesses, which currently face a high barrier to FOS participation.


The Digital Identity Bill, also trailed for the 2026 to 2027 session, has significant implications for know-your-customer processes that affect every UK fintech, including tokenisation platforms seeking to onboard investors efficiently. If the government introduces a functional digital identity framework without displacing existing commercial providers, the cost of onboarding and verification for founders building in regulated finance could fall materially.


The picture is of a government using the King's Speech to rationalise regulatory structure rather than introduce new market infrastructure. For founders in digital assets and fintech, the direction is towards a leaner, more consolidated regulatory environment.


Key Takeaways

  • The UK government's 2026 to 2027 King's Speech confirmed a Financial Services Bill that will merge the Payment Systems Regulator into the FCA.

  • The bill also includes reforms to the Financial Ombudsman Service and the Senior Managers and Certification Regime.

  • The bill arrives in a period of active regulatory change for digital assets, including the recent FCA fund tokenisation rules and the Digital Securities Sandbox.

  • A Digital Identity Bill is also expected in the new session, with implications for onboarding costs across fintech and tokenisation platforms.

  • The overall direction is towards regulatory consolidation, which reduces complexity for established firms and lowers the long-term compliance burden for founders building in regulated finance.


Sources

Comments

bottom of page