Research and analysis

RPC opinion: impact of Financial Services and Markets Bill

Published 4 June 2026

Lead department: HM Treasury

Summary of proposal: The proposal is to simplify regulation of the UK financial sector, reducing burdens for businesses, and modernising consumer protections.

Submission type: Impact assessment – 24 March 2026

Legislation type: Primary legislation

Implementation date: 2026

RPC reference: RPC-HMT-26150-IA-(1)

Date of issue: 27 May 2026

RPC opinion

Fit for purpose:

• the bill sufficiently evidences the problem under consideration and now identifies a range of longlisted and shortlisted options, justifying the preferred way forward within each individual impact assessment
• the bill also provides sufficient explanation of the methodology underpinning the analysis

RPC summary

Rationale: Green

The impact assessment (IA) sufficiently outlines the problem under consideration for each individual regulatory provision and uses a wide range of evidence to support these existing problems. The IA sets out the argument for intervention, outlining regulatory inflexibility in the existing legislative framework. The IAs discuss several objectives, which sufficiently meet the SMART framework.

Identification of options: Green

The IAs present a range of different longlist options for each individual regulatory provision, including options that vary based on scope and the powers available to regulators. Most IAs would benefit from using the HM Treasury Green Book options framework filter when considering the longlist. The majority of the IAs reference critical success factors to justify the selection of the shortlisted options, although some could improve their application of the critical success factors. The IAs provide a sufficient small and micro business assessment.

Justification for preferred way forward: Green

The department has identified and monetised the impact of the bill on the financial services sector, providing a net present social value (NPSV) estimate for the majority of individual measures included in the bill. The IAs could benefit from explaining further the methodology and assumptions that underpin the assessments. The IAs explain qualitatively the trade-offs that have been made between the shortlisted options to support the selection of the preferred option in each individual IA.

Regulatory scorecard: Satisfactory

The IAs provide a satisfactory scorecard, summarising the impacts of the proposal on business, household, total welfare and government priorities. All scorecards should detail the full impacts that are expected, including those when the policies will be enacted via secondary legislation.

Monitoring and evaluation: Weak

Although a small number of the IAs provide a good discussion on the data sources that will be used in their reviews, many of the plans are generally lacking in detail, including specific data sources to be used and questions to be asked.

Response to initial review

As originally submitted, the IA was not fit for purpose for a number of reasons:

1. Not demonstrating sufficiently how a long list of options had been narrowed down to produce the shortlist. This included IAs where there was insufficient generation of longlist options and only the do-nothing and preferred options were subject to shortlist appraisal, and IAs where a longlist of options had been generated but there was insufficient justification for how the shortlist had been generated from this.

2. Insufficient assessment of impacts from the shortlisted options preventing adequate justification of the preferred way forward. For some IAs, this was due to a lack of alternative options in the shortlist and for others this related to insufficient assessment of shortlisted options.

The department has now:

1. Provided a sufficient explanation of why the longlisted options have been discounted to produce the shortlist. The majority of IAs reference critical success factors to justify the selection of the shortlisted options.

2. Identified impacts (even if non-monetised) of all shortlisted options for the majority of IAs within the bill.

Summary of proposal

The bill aims to simplify how the sector is regulated, directly reduce burdens for businesses, and make many consumer protections fit for the digital age – all while maintaining high standards of regulation and oversight.

To do this, the bill will:

• streamline the regulatory framework to reduce duplication and improve the speed and effectiveness of the regulators and the regulatory environment

• ensure that the administrative burden on firms is proportionate without compromising on core consumer, prudential and market protections

• support lending and investment in the real economy

• update consumer protections and redress arrangements to reflect modern markets and maintain confidence

The RPC focuses its scrutiny on the regulatory provisions, so these measures form the basis of the opinion below. These measures are:

a. consolidate the Payment Systems Regulator (PSR) inside the Financial Conduct Authority (FCA)

b. Financial Ombudsman Service (FOS) Reform

c. improve the operational effectiveness of the FCA and Prudential Regulation Authority (PRA)

d. reforming the Senior Managers and Certification Regime (SM&CR)

e. reform the Ring-Fencing Regime

f. reform of the Consumer Credit Act 1974 (CCA)

g. improve the confidence in the Appointed Representatives Regime (ARR)

h. reform the Risk Transformation regulations

i. create overseas recognition regimes

j. expand the size and makeup of the Credit Union Common Bond

k. enhance the Commercial Credit Data Sharing Scheme

l. minor reforms to the Bank of England Financial Policy Committee

m. amend Access to Banking

The final measure (m) has been added since the department’s original submission and initial review notice.

The overall positive monetised impact is estimated to have a Net Present Social Value (NPSV) of £1,635 million. Of this, £1,087.5 million is due to administrative-based savings for firms, whilst £547.6 million is due to wider positive impacts, including the ability to raise finance in ways which would not be possible or practical without these legislative changes.

Rationale

Problem under consideration

The IAs sufficiently outline the problem under consideration for each individual regulatory provision and reference a range of evidence to support these existing problems, including StepChange’s Mixed Messages Report, FCA data on customer complaints, data from post-implementation reviews (PIRs) of existing regimes and British Bank data.

The IAs also draws on a number of calls for evidence, consultations and roundtables conducted by the department to evidence the problem under consideration, including the responses to the financial services growth and competitiveness strategy call for evidence and the department’s 2025 Review of the ring-fencing framework. However, some IAs could benefit from extracting the relevant evidence from these sources to support the problem statement, such as the use of Treasury feedback on the congested regulatory environment in a) and the reference to evidence from the Treasury’s review of FOS in b).

However, overall, the IAs have provided evidence proportionate to the potential impact of the individual measures and explain and justify any evidence gaps. The comments for individual IAs are set out in detail at Annex A.

Argument for intervention

The IAs set out their arguments for intervention, largely focused on the regulatory inflexibility in the existing legislative framework. The current regulatory framework is disproportionate, and in the absence of these reforms, would remain fixed whilst market structures continue to evolve. The IAs could benefit from providing supporting evidence and analysis to strengthen this argument.

Some IAs also focus on market failures to form their arguments for intervention. For instance, (f) forms an argument based on information failures for consumers and (i) references market integrity and the protection of consumers.

IA (c) also focuses on international comparisons to form its argument for intervention, explaining how other jurisdictions can authorise firms more quickly. However, this IA could provide further detail on these international comparisons to form the argument for intervention. For other measures included in the IA information on international comparisons would have been helpful where appropriate.

IAs (b) and (m) could benefit from setting out a specific argument for government intervention.

Objectives and theory of change

The IAs discuss several objectives which are consolidated in the summary IA, some of which meet the SMART framework, for example IAs (b), (c) and (j). However, the remaining IAs could still benefit from applying more fully the SMART objectives framework when forming the objectives. For example, IA (f) should detail the measurable timeframe for its implementation, and the objectives in IAs (e), (i) and (k) are high-level and do not fully meet all aspects of the SMART framework.

The IAs would benefit from including theory of change diagrams to illustrate the process by which the outcomes of the intervention are expected to be achieved. This could be in the summary IA or the individual IAs.

Identification of options

Identification of the ‘longlist’ of options 

The department presents a range of different longlist options for each individual IA, including options that vary based on scope and the powers available to regulators. The department details these options in the individual IAs, qualitatively describing what the different options would involve and their associated risks.

All IAs, except (b) and (i) could benefit from using the Green Book’s options framework-filter (OFF) when considering the longlist options to show how they have been constructed at an early stage alongside stakeholder engagement. In particular, IA (b) has done well to explain how the OFF has been used to generate different scope for the time limit aspect of the preferred option.

Consideration of alternatives to regulation 

The department has also considered alternative non-regulatory options throughout the majority of the individual IAs. These non-regulatory options include introducing measures to encourage voluntary action and regulators making use of their existing powers to streamline processes or clarify guidance. Whilst these individual IAs justify why non-regulatory options are not preferred to regulatory change, the discussion of non-legislative options is high-level and the IA could further demonstrate why non-regulatory alternatives have been rejected.

IAs (a) and (m) do not include a non-regulatory alternative option and would be improved by considering alternatives to regulation within their longlist.

Justification for the shortlisted options 

The department details the shortlist options for each individual measure and provides sufficient justification for the process of reaching the shortlist from the longlist. Most IAs reference critical success factors (CSFs) to justify the selection of the shortlisted options.

However, the application of the CSFs are not fully explained or applied consistently across all IAs and the Bill could be improved by presenting a more systematic process for discarding longlist options, such as using RAG ratings against the CSFs. This would help provide a clear argument for why certain options were discounted.

The bill should ensure all IAs include their do-nothing option in the shortlist, in line with Green Book guidance. Although the IAs justify why the do-nothing options do not deliver the policy objectives, this should be stated explicitly in the shortlist for comparison with the policy options.

Small and micro business assessment (SaMBA) and medium-sized business (MSB) assessment 

The IAs provide a sufficient SaMBA. The majority of proposals in the IAs are either likely to be beneficial to small and micro businesses (SMBs) by reducing their administrative requirements - IAs (a) – (d), (h) and (k), or are deregulatory (j). This provides sufficient justification against exempting SMBs from the bill. However, the IAs would be improved by further clarifying the number of potential SMBs on which the proposals have an impact and providing some evidence of the firm size distributions to support this argument.

The bill identifies that IA (f) may also present some potential disproportionate costs for SMBs, as well as benefits, as they have limited resources. The IA could provide some evidence to illustrate these opposite effects. Similarly, the bill argues that IA (e) presents no new impacts to SMBs but could benefit from evidencing this and considering whether there will be any downstream impacts on SMBs. The bill could also consider any appropriate mitigations for SMBs.

Justification for preferred way forward

The department has identified and monetised the impact of the IAs on the financial services sector, providing an NPSV estimate for the majority of individual measures included in the bill, which is summarised out in the summary IA. IAs (a), (e), (f) and (i) have not estimated an NPSV figure but instead provide a good high-level indicative assessment of the impacts from the shortlist options.

IAs (c), (f) and (g), whilst providing some quantitative estimates, would be improved by further indicating the scale of impacts considered. IA (m) would benefit from qualitatively setting out the costs and benefits that might occur once the policy is enacted via secondary legislation.

The IAs have calculated the NSPV in accordance with Green Book guidance, providing a brief explanation of the data and assumptions used to model the impacts. The IAs could benefit from more detailed explanation of the methodology and assumptions that underpin the assessments. In particular, IA (d) could provide some further explanation on the assumptions underpinning its cost-benefit analysis.

The IAs acknowledge a degree of uncertainty surrounding their NPSV estimates, and a number of IAs account for this by applying a high and low range to the estimate, based on adjusting the value of uncertain inputs. The IAs would be improved by the inclusion of full sensitivity analysis for all individual measures, testing the impact of a wider variety of variables on the value for money of the proposals. The IA also could have reflected these ranges in the aggregate estimates, as point estimates of the EANDCB and NSPV give a spurious impression of accuracy.

The IAs explain qualitatively the trade-offs that have been made between the shortlisted options to support the selection of the preferred option in each individual IA. Some IAs, for example (e) and (h) also use CSFs and SMART objectives to justify the selection of the preferred way forward.

Overall, the department justifies the selection of the preferred options in the bill by referencing the net positive impact created by cost savings for regulated businesses. This is discussed further in the individual IAs, where the preferred option is justified as delivering the greatest reduction in administrative burdens compared to the other shortlist options which only likely deliver incremental improvements.

Regulatory scorecard

Part A

Impact on total welfare

The bill is expected to have a positive impact on total welfare, with the department presenting a positive NPSV of £1,635 million. This estimate largely consists of reduced compliance and administrative burdens for business across the different measures. The department explains the methodology underpinning this NSPV estimate.

There are also a number of non-monetised impacts, such as the indirect benefits for consumers from updated consumer credit protections, broader access to some financial services, and potential price and/or quality improvements driven by competition and innovation. Furthermore, IA (a) has not monetised the reduced compliance costs and (c) discusses a range of non-monetised benefits including clearer insights for businesses and greater regulatory agility.

The regulatory scorecards should provide a summary of the total expected impacts from both the primary and secondary legislation across all IAs, in line with RPC guidance on assessment of impacts in primary legislation. In particular, IAs (d), (e) and (m) should detail the impacts that are expected when the policies will be enacted via secondary legislation. For (d), this is the additional impacts once regulators have updated their rulebooks on the back of these legislative reforms, including familiarisation costs. For (e), the IA should provide a summary of the total expected impacts, despite its conclusion that the reforms are enabling only.

Impacts on business

The bill is expected to have a net-positive impact on businesses largely due to reduced compliance and regulatory costs for firms. The department presents a total EANDCB of -£126.9 million. However, a number of IAs do not present an EANDCB metric - IAs (a), (e), (f), (h), (i), (j) , (l) and (m). In particular, IA (f) could present an early EANDCB metric based on the estimated familiarisation costs and (j) could include the impacts from such a permissive regulation in the EANDCB, in accordance with RPC guidance.

The IA should also clarify the EANDCB estimate, as the department presents the EANDCB as both £1,268.95 million and £126.9 million throughout the IA. These estimates are an order of magnitude apart and the IA should refine this estimate.

Some IAs would be improved by providing a more detailed discussion of business impacts more generally. For instance, IA (l) could have provided more detail on the business impact of changes to the Countercyclical Capital Buffer (CCyB) cycle and (h) could have discussed whether the estimated business impacts are direct or indirect. IAs (b) and (d) could benefit from including familiarisation costs.

Impacts on households, individuals or consumers

The only IA which explicitly has a quantifiable impact on households is (b), which presents an EANDCH of £0.6 million. This is due to an introduction of an absolute time limit for FOS complaints, which will result in some households without redress. IA (f) may also result in households forging cash redress.

Part B

The department considers the impact of the proposals on wider government priorities, indicating that the Bill will support the business environment by removing outdated business requirements, reducing business costs and improving investment and productivity. This will also support international considerations, by increasing international investment.

IAs (b) and (g) could be improved by detailing the positive business environment impacts in their regulatory scorecards. Furthermore, the summary IA could benefit from discussing the impact of the bill on business barriers to entry, as most of the IAs reduce burdens on the financial sector, making it easier for new businesses to operate in these markets.

The summary IA rates the impact of the bill on natural capital and decarbonisation as neutral, as there are no direct or indirect impacts expected.

Monitoring and evaluation

The RPC’s assessment for monitoring and evaluation can be found in Annex A. The government intends to review the policy in the bill within 5 years of implementation, allowing time for legislative changes.

Although some of the IAs provide a good discussion on the data sources that will be used in their reviews, some of the plans are generally lacking in detail, particularly in setting out, at least initially, the questions the review will aim to address and the possible metrics that will be gathered in the data collection.

Annex A: Individual measures

Measure (a) - Consolidate the PSR inside the FCA

The proposal would consolidate the PSR within the FCA to create a streamlined regulatory framework, by reducing the number of public authorities that regulate payment systems.

No NPSV or EANDCB figures have been provided at this stage, but the measure is expected to have a net-positive impact on businesses largely due to reduced compliance and regulatory costs.

Rationale: Green

The IA explains how the regulatory landscape for payment systems is overly complex. It explains the roles of the Bank of England, the Payment Systems Regulator (PSR), the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) and sets out why simplification and streamlining are needed to reduce duplication and improve coordination.

However, the IA could provide some evidence to demonstrate the extent of these problems being addressed. For instance, the IA references Treasury feedback on the congested regulatory environment as well as feedback from the financial services sector on sub-optimal coordination but should extract these responses to evidence the problem statement.

The IA sets out its objectives, but should detail the measurable timeframe for their implementation, to ensure the objectives meet the time bound aspect of the SMART framework. The IA could benefit from including a theory of change diagram.

Identification of options: Green

The IA sets out the do-nothing option, an alternative option involving splitting the PSR’s functions across public authorities, and the preferred option of consolidating functions entirely within the FCA. The IA explains why the alternative option was discounted, as it does not meet all the SMART objectives and critical success factors (CSFs).

The IA could provide more detail on how the CSFs were applied, as the assessment appears to focus wholly on the SMART objectives. The IA could also consider a non-regulatory option. The IA provides a sufficient SaMBA, as the measure is expected to benefit all businesses, including reducing disproportionate burdens for SMBs by reducing compliance costs. It is therefore not appropriate to exempt SMBs.

Justification for preferred way forward: Green

The IA has identified the key impacts from the shortlist options and provides a high-level indicative assessment. The IA could be improved by scaling up the familiarisation costs to estimate the total direct impact to business, using a constant staff number estimate for all sizes of business to overcome the business size evidence gap. The department also illustrates how a reduction in the regulatory fees paid by businesses would result in a benefit for business.

Overall, the IA justifies the selection of the preferred option, referencing the net positive impact created by cost savings for regulated businesses through reduced compliance due to a simpler and more streamlined regulatory framework.

Regulatory scorecard:  Satisfactory

The IA summarises the impacts of the measure on total welfare, business and households. The department explains that the measure is expected to have a net-positive impact on businesses largely due to reduced compliance and regulatory costs. The reduced compliance costs are non-monetised.

The IA provides a good summary of the impact on the wider government priorities, explaining how the measure supports the business environment by encouraging business investment and innovation, whilst also preserving regulation that is focused on promoting competition and innovation. The IA could give examples of these preserved regulations.

Monitoring and evaluation: Weak

The IA identifies that collated feedback from the FCA and regulated businesses will be used to monitor the impact of the measure but could provide further detail on how this will take place. The IA could also identify which existing data sources could be used.

Measure (b) - Financial Ombudsman Service Reform

The proposal is to reform the legislation establishing and governing the operation of the Financial Ombudsman Service to stop it acting as a quasi-regulator and return it to its original role as a simple, impartial dispute resolution service. This includes establishing an adapted fair and reasonable test, a framework which formalises the roles of the FOS and FCA, a more effective mass redress event framework, and an absolute time limit for bringing complaints to the FOS.

The monetised NPSV of this measure is estimated to be £150.5 million. The EANDCB is -£18.1 million. The main monetised impact is from the reduction in case fees and redress fees paid from the introduction of a 10-year absolute time limit.

Rationale: Green

The IA sets out the current problems within the Financial Ombudsman Service (FOS); it acts as a quasi-regulator by enforcing standards rather than resolving disputes, its unpredictable decisions impact confidence in the redress framework and reduces investment in UK financial services.

The IA states that these issues have been identified through the Treasury’s review of the FOS, alongside anecdotal evidence from firms, but could benefit from including this evidence to support the rationale. The IA could also set out a specific argument for government intervention. The IA provides good SMART objectives but could include a theory of change diagram.

Identification of options: Green

The IA has generated three longlist options, the do-nothing option, a do-minimum option (for the FCA and FOS to make minor changes), and the preferred option (to deliver a package of reforms to prevent the FOS from acting as a quasi-regulator).

The IA explains how the options framework-filter (OFF) has been used to generate different scope for the time limit aspect of the preferred option. The IA also states that the OFF was used to narrow down the longlist to the shortlist, although could provide some clarity on this process as all options remain the same between these.

Nonetheless, the IA provides sufficient justification for its shortlist, explaining how the do-minimum option would go some way to achieve the SMART objectives, but present a less radical transformation. The IA also assesses these options against CSFs, concluding that the do-minimum option was ranked as amber in the OFF.

The IA provides a brief SaMBA, justifying against SMB exemption due to the positive benefits they will receive as either a small or micro financial services firm or an SMB reporting to the FOS.

Justification for preferred way forward: Green

The IA has identified and monetised the key impacts of the preferred option, presenting an NPSV of £150.5 million. This largely consists of the reduction in case fees and redress fees paid by businesses from the introduction of a 10-year time limit.

The IA fully explains the methodology for calculating this cost but could benefit from applying sensitivity analysis. There are also a number of non-monetised impacts, including the benefit from improved regulatory certainty, and the impact on consumers from reduced redress timelines.

Given that there is also a non-monetised impact faced by consumers missing out on redress payments due to the time limit, the IA could provide further detail on this impact and the trade-offs for consumers. Whilst the IA qualitatively justifies the preferred option, the IA could be improved by including a more thorough assessment of the other shortlist option (do minimum) for comparison.

Regulatory scorecard: Satisfactory

The scorecard provides a satisfactory summary of the expected impacts, setting out the positive NPSV and the net neutral welfare impact from the preferred option due to a reduction in firm costs (fees and redress costs) associated with representing cases. The scorecard presents an EANDCB of -£18.1 million, based on the reduction of cases from the introduction of the time limit. The IA could benefit from including familiarisation costs. The scorecard also presents the impacts on households from a reduction in redress awarded through the FOS . The IA could include further detail on how the measure might increase previously stifled investment and innovation in the financial sector.

Monitoring and evaluation: Weak

The IA explains that it will use feedback from stakeholders to monitor how the FOS is operating and evaluate an improvement in the consistency of FOS determinations. Whilst these appear to be reasonable indicators of success, the IA could expand on how it will collect stakeholder feedback, and the stakeholders involved. The IA could also set out some examples of unintended consequences from the policy.

Measure (c) - Improve the operational effectiveness of the FCA and PRA

The proposal was to streamline the regulatory environment of the FCA and PRA, who authorise firms and senior managers as fit and proper. This includes reducing their statutory deadlines for determining key regulatory applications, requiring the FCA and PRA to produce long-term strategies and establishing a provisional licence scheme.

The NPSV is £265.9 million and the EANDCB is -£30.9 million. This consists of the benefits from senior manager statutory application deadlines reducing from 3 months to 2 months.

Rationale: Green

The IA sets out the current problems with financial services regulators; their regulatory environment is uncompetitive, and they do not always act strategically, with their determination of applications taking too long.

The IA explains that these problems have been highlighted by responses in the financial services growth and competitiveness strategy call for evidence and regulatory environment consultation but could benefit from including the evidence from these to support the rationale. The IA references that other jurisdictions can authorise firms more quickly but could provide further detail on these international comparisons to form the argument for intervention.

The IA could also detail the existing market failures to form a specific argument for intervention. The IA provides good SMART objectives but could include a theory of change diagram.

Identification of options: Green

The IA has generated four longlist options, the do-nothing option, a do-minimum option (to have voluntary application deadline targets, require regulators to produce long term strategies with the ‘have regards’ measure and remove lower value reporting requirements), a more ambitious option and the preferred option to implement the do-minimum option in addition to further measures to reduce statutory deadlines and introducing a provision licence regime.

The IA could benefit from using the OFF to present the longlist in greater detail whilst retaining a clear and concise structure. The Department has used CSFs to generate the shortlist and justify discarding the more ambitious option at longlist stage. However, this assessment is focused on the SMART objectives CSF, and the IA could provide a more systematic assessment of the longlist options against all CSFs set out, using RAG ratings so they could be clearly compared.

The IA should also include the do-nothing option in the shortlist, in line with Green Book guidance. The IA provides a sufficient SaMBA, justifying against SMB exemption due to the positive benefits they will receive from streamlining the regulatory environment.

Justification for preferred way forward: Green

The IA considers the impacts that will occur from the shortlist options, concluding that the ‘have regards’, strategies, reducing regulatory burdens and provisional licences measures cannot be monetised. Whilst these measures do not directly place any new requirements on firms, as they relate to the responsibilities of the regulators, the IA could still benefit from setting out what the expected impacts might be on the regulators and how this compares between the two shortlist options to help justify the preferred way forward.

The IA monetises the benefit estimate for the statutory application measure in the preferred option, clarifying that this would not occur under the do-minimum option. Whilst the IA does not provide a comparative quantitative assessment for the do-minimum option, the department sufficiently justifies the preferred way forward by qualitatively comparing the shortlist options, explaining that the do-minimum option would have less direct, measurable benefit on authorised firms.

Regulatory scorecard: Weak

The scorecard provides a brief summary of the expected impacts, setting out the net positive welfare impact from the preferred option due to a significant improved regulatory environment from a number of non-monetised benefits. The IA also presents positive NPSV, which is equivalent to the cost savings for business of £30. 9 million per year. However, the IA should explain how this has been calculated. There are no impacts on households.

Monitoring and evaluation: Weak

The IA should detail the data sets it plans to use in its evaluation and the metrics it expects to capture through this. This should link to the measurement metrics briefly mentioned in the SMART objectives.

Measure (d) - Reforming the Senior Managers and Certification Regime (SM&CR)

The senior managers regime was created in response to the financial crisis to create personal accountability for senior managers. The proposal is to remove or update inflexible requirements while maintaining the broader purpose of the SM&CR framework, which includes individual accountability, fitness and propriety standards, and conduct standards.

The monetised NPSV of this measure is estimated to be £597.1 million. The EANDCB is -£70.2 million. This reflects the value of regulatory burdens that will reduce by 50% under the preferred option.

Rationale: Green

The IA sets out the current problems with the senior managers and certification regime (SM&CR); its rigidity delays senior hiring and leads to excessive, disproportionate administrative burdens.

The IA explains these problems, stating that they have been evidenced by the department’s call for evidence, consultation and supplementary roundtables. However, the IA could benefit from extracting the relevant evidence from these sources to support the problem statement.

The IA identifies that the argument for intervention is regulatory inflexibility, as some of the statutory requirements are no longer delivering additional value. The IA provides good SMART objectives but could include a theory of change diagram.

Identification of options: Green

The IA has generated four longlist options, including an option for a full repeal of SM&CR and an option for regulator only reform, which included non-regulatory mechanisms such as clarifying guidance within the current SM&CR framework. The full repeal option is not carried through to the shortlist, and the IA justifies this, explaining that it would be disproportionate relative to the policy objectives.

However, the IA could provide some further justification for the shortlist options, for instance assessing the longlist options against CSFs and explaining how the OFF has been used. The IA provides a sufficient SaMBA, justifying against SMB exemption due to the positive benefits they will receive from reduced administrative requirements, which may have been fixed costs regardless of their size.

Justification for preferred way forward: Green

The IA has identified and monetised the key impacts from the shortlist options. Whilst the impacts from Option 3 remain non-monetised, the IA provides a good qualitative discussion. The department has then monetised the impacts from the preferred option (Option 4), using a range of data from an FCA cost-benefit analysis, ONS and consultation feedback to estimate the administrative costs associated with the regimes which will be streamlined under the preferred option.

The IA assumes these regulatory burdens will reduce by 50% under the preferred option, with a high and low scenario of 25% and 75% respectively. Whilst the department explains the methodology underpinning these calculations, it could provide clarity on some of the assumptions or data sources. For instance, the origin of the assumption on 18 hours spent per application for the certification regime is not clear.

The IA also considers some non-monetised costs from the preferred option. Overall, the IA justifies why Option 4 is preferred, as it delivers the greatest reduction in administrative burdens, compared to Option 3 which would only likely deliver incremental improvements.

Regulatory scorecard: Satisfactory

The scorecard provides a summary of the expected impacts, setting out the net positive welfare impact from the preferred option due to reduced administrative and compliance burdens on business. This results in a central NPSV estimate of £591.1 million and an EANDCB of -£70.2 million.

The IA should ensure this aligns with the EANDCB presented in the summary IA (-£69.4 million). The scorecard also summarises some non-monetised impacts, such as improved internal resource allocation within firms. The IA explains that there may be some additional impacts once regulators have updated their rulebooks on the back of these legislative reforms, including familiarisation costs. The scorecard could be improved by detailing these potential impacts from future secondary legislation.

Monitoring and evaluation: Weak

The IA explains that it will use regulator engagement, feedback from firms and industry bodies, and data on senior management pre-approvals to assess whether the reforms have reduced unnecessary administrative burdens. Whilst this appears to be reasonable indicator of success, the IA could expand on how it will collect stakeholder feedback, and the stakeholders involved. The IA could also set out some examples of unintended consequences from the policy.

Measure (e) - Reform the Ring-Fencing Regime

The proposal is to reform the ringfencing framework, which ensures core retail banking services are protected from risks in other parts of large banking groups. This reform includes allowing the PRA to calibrate ring-fencing requirements, updating operational and technical provisions and aligning ring-fencing rules with broader prudential standards.

No NPSV or EANDCB figures have been provided at this stage, but the measure is expected to provide structural benefits by enabling a more flexible, proportionate and coherent ringfencing framework.

Rationale: Green

The IA sets out three problems with the existing ring-fence regime; the statutory rigidity in rule-making, technical detail located at the wrong level and statutory purposes based on an outdated failure scenario. The IA references findings from the government’s 2025 review and focused engagement with banks but could further draw on these data sources to evidence the problems under consideration.

The IA identifies that the argument for intervention is regulatory inflexibility, as in the absence of these reforms, the framework would remain fixed whilst market structures continue to evolve. The IA provides objectives but could ensure they meet all aspects of the SMART framework. The IA could include a theory of change diagram.

Identification of options: Green

The IA presents a longlist of five options, in addition to the preferred option which itself is split into a further three sub-options. The IA could benefit from using the OFF to build up the longlist options, clearly demonstrating how they vary based on scope. This would be particularly helpful as there are only incremental differences between the preferred option and the rejected longlist options.

The department explains why the other longlist options have been discarded but could improve this by assessing the longlist options against CSFs. The IA could also benefit from splitting the preferred option into its three components, as these are essentially three options that are carried into the shortlist and then selected together as the preferred option.

The IA explains that SMBs will not be impacted by the reform as they do not undertake ringfencing activities and will not be impacted by the legislation. However, the IA could consider whether there will be any downstream impacts on SMBs, such as SMBs who are customers of large banking groups.

Justification for preferred way forward: Green

The IA uses CSFs to assess the shortlist options and justify the preferred way forward, explaining how the preferred option will be highly effective in addressing the statutory rigidity whilst making only the necessary changes to resolve the structural problems. The IA also sets out the non-monetised impacts from the preferred option, such as its benefits to firms from increased flexibility.

The IA concludes that there are no monetised impacts at this stage, as the legislative measure in this bill is enabling only, and monetised impacts will only occur once specific policy changes are implemented through secondary legislation.

However, the IA would be improved by detailing these potential impacts from future secondary legislation, with monetisation where possible. This indicative analysis could be evidenced through the responses from the government’s 2025 review and focused engagement with banks.

Regulatory scorecard: Weak

The IA concludes that as the reforms are enabling only, there will be no direct impact on social welfare, business or households until the statutory improvements are made through secondary legislation. However, the regulatory scorecard should provide a summary of its assessment of the total expected impacts from both the primary and future secondary legislation. The IA provides a sufficient assessment of the preferred option on wider government priorities.

Monitoring and evaluation: Very weak

The IA should set out a clear monitoring and evaluation plan; with expected data sources and the metrics it expects to capture.

Measure (f) - Reform of the Consumer Credit Act 1974 (CCA)

The proposal is to modernise and simplify the UK consumer credit regime.  This can be achieved by repealing all of the information provisions in the CCA and accompanying regulations and for these to be recast where appropriate into the FCA Handbook, repealing some punitive sanctions and repealing or recasting conduct consumer credit requirements (to the FCA where appropriate).

No NPSV or EANDCB figures have been provided at this stage, but the measure is expected to result in positive innovation impacts, ongoing compliance savings from digital first disclosures and reduced remediation costs where little to no demonstratable harm occurs. There will also be be transitional costs to implement new Financial Conduct Authority (FCA) requirements.

Rationale: Green

The IA clearly sets out the problems with the CAA; its prescriptive nature confuses customers, it contains inflexible legislation, which overlaps across FCA rules and includes some disproportionate sanctions for breaches. The IA provides some evidence to illustrate these problems, referencing the growth in the credit market since the CCA was first enacted and negative responses to a StepChange survey on customer information.

However, the IA could provide further evidence to demonstrate directly the problems under consideration, drawing more on the department’s consultations on the reforms. The argument for intervention is focused on information failures for consumers and a disproportionate regulatory regime.

The IA provides good objectives which follow the SMART framework, although could include more detail on their time-bound nature. The IA could include a theory of change diagram.

Identification of options: Green

The IA has generated four longlist options, the do-nothing option, an option for a complete repeal of the CCA, the preferred option for a targeted repeal of CCA provisions that can be moved while ensuring robust consumer protection and a non-legislative alternative option for FCA-led improvements within existing powers.

The IA could benefit from using the OFF to present the longlist in greater detail whilst retaining a clear and concise structure. The department has used CSFs to generate the shortlist and justify discarding the non-legislative alternative option at longlist stage. The IA provides a good description of how the CSFs are related to the policy and qualitatively assesses the longlist options against them.

Whilst the department references the use of scores involved in this assessment, the IA could provide more detail on this to form a more systematic assessment. The IA should also include the do-nothing option in the shortlist, in line with Green Book guidance. The IA explains why exempting SMBs from the proposal is not appropriate, as this would undermine consumer outcomes and create uneven playing fields.

The department also considers whether SMBs will face disproportionate burdens from the proposal, concluding that whilst some costs may be disproportionately high for SMBs with limited resources, they may also receive disproportionate benefits from the proposal streamlining their requirements. The IA could provide some evidence to illustrate these opposite effects. The IA should detail any mitigation measures for SMBs as part of its SaMBA.

Justification for preferred way forward: Green

The IA explains that it has not been possible to conduct a full cost-benefit analysis of the CCA reform, as these impacts will depend on the FCA’s rules and guidance which will be developed under its rule-making process. In light of this, the IA has provided a qualitative assessment of all impacts, including the potential savings from reduced administrative burdens and clearer customer communications.

The IA has also provided indicative figures where possible and has estimated familiarisation costs for firms, law firms and debt advice providers. Whilst the IA states that Option 2 would receive similar impacts to those outlined for the preferred option, it could be improved by providing a similar assessment for the expected impacts of Option 2. This would help the department to more accurately compare the two shortlist options to help justify the preferred way forward.

Regulatory scorecard: Satisfactory

The scorecard provides a summary of the expected impacts, including the loss of redress for consumers in the household section. The IA could present an early EANDCB metric based on the estimated familiarisation costs.

Monitoring and evaluation: Very Weak

The IA should set out a clear monitoring and evaluation plan; with expected data sources and the metrics it expects to capture.

Measure (g) - Improve the confidence in the Appointed Representatives Regime (ARR)

The proposal is to ensure the FCA is better equipped to prevent misconduct involving appointed representatives (ARs) and to improve consumer protection when things go wrong involving an AR.

The monetised NPSV of this measure is estimated to be £108.1 million The EANDCB is -£12.6 million. This estimates an additional cost to principal firms of complying with a new Senior Management Function (SMF) for ARs, offset by a saving to ARs from no longer needing to apply for FCA approval of individuals performing controlled functions.

Rationale: Green

The IA clearly sets out the problems with the existing appointed representative (AR) regime; there is an increased risk to consumers who deal with ARs, as well as a reduce ability to resolve disputes involving ARs and poor oversight of ARs by some principal firms. The IA provides some evidence to illustrate these problems, referencing FCA data on complaints generated by principal firms, compared to those that don’t use ARs.

The IA could provide more detail on these complaints and could clarify whether they directly concern ARs to confirm whether this evidence directly relates to the problems set out. The IA could also provide further evidence to directly demonstrate the problems under consideration, drawing more on the responses to the department’s 2020 Call for Evidence and the views of consumers.

The argument for intervention is focused on regulatory gaps and deficiencies in the existing legislative framework.  The IA provides good objectives which follow the SMART framework, although could include more detail on the data sources that will be used to measure the success. The IA could include a theory of change diagram.

Identification of options: Green

The IA has generated six longlist options against the do-nothing option for each measure. These include the option to introduce principal permission from the FCA, to bring ARs in scope of SM&CR and an extension of FOS jurisdiction to ARs. The IA could benefit from using the OFF to present the longlist in greater detail. This would be particularly helpful to demonstrate how the policy has been split into the different measures. 

The IA carries all longlist options (except the do-nothing options) through to the shortlist, justifying this by assessing each option against SMART objectives and the government’s principles for regulation. The IA could benefit from assessing the options against the other CSFs. The IA should also include the do-nothing option in the shortlist, in line with Green Book guidance.

The IA provides a sufficient SaMBA, explaining that ARs are disproportionately SMBs and they will receive positive benefits from reduced administrative burdens. The costs of the proposal will fall on principal firms who are not SMBs. However, the IA could provide some evidence of these firm size distributions to support the SaMBA, and could consider any relevant mitigation measures for SMBs.

Justification for preferred way forward: Green

The IA monetises the impact of the preferred option bringing ARs within scope of the SM&CR. The IA fully explains the methodology used to estimate this benefit, explaining how the cost for firms applying for FCA approval will now be reduced by 50% as part of the SM&CR reform and will only apply to a smaller number of principal firms.

However, the IA does not assess the other measures within the preferred option. For instance, the IA could provide some indicative analysis for the impact of firms seeking principal permission from the FCA, as this may have a small time cost. There are also a number of non-monetised impacts which are not detailed in the assessment, such as improved consumer confidence.

Furthermore, whilst the IA assesses the alternative options against SMART objectives, it should provide a more thorough assessment for the expected impacts of this option. This could include clearly setting out the expected impacts and an indication of their scale. This would help the department to compare more accurately the two shortlist options to help justify the preferred way forward.

Regulatory scorecard: Satisfactory

The scorecard provides a summary of the expected impacts, explaining how the proposal is expected to have an overall positive impact on social welfare, due to the net direct savings to firms as a result of bring ARs within scope of SM&CR. These result in an NPSV of £108.1 million (central estimate), and savings to firms of £13.0 million per annum. The IA could also include the impact on innovation in the business environment section of the regulatory scorecard.

Monitoring and evaluation: Weak

The IA explains that it will use FCA complaints data to assess whether the proposal has been successful. The IA could provide further detail on this data. The IA also states that industry and stakeholder feedback will be used, but could expand on how it will collect this feedback, and the stakeholders involved.

Measure (h) - Reform the Risk Transformation regulations

Risk transformation enables parties to cede risk to a transformer vehicle. These vehicles can issue securities tied to these specific risks, such as bonds that trigger payment on severe weather events to cover the cost of damage. The proposal is to amend the funding requirements, to reduce costs and improve flexibility of transformer vehicles, including removing the restriction on PCCs only operating as risk transformation vehicles and enabling them to issue contracts of insurance.

The monetised NPSV of this measure is estimated to be £374.2 million, reflecting the return on investment of new transformer vehicles being set up in the UK. There is no EANDCB estimate.

Rationale: Green

The IA argues that the current regime set out in primary legislation requiring transformer vehicles to be ‘fully funded’ is expensive and inflexible, with the UK authorising fewer transformer vehicles between 2017 and 2022 than Singapore and Bermuda which have more flexible funding regimes.

In order to attract capital and increase the number of transformer vehicles in the UK, the department proposes to amend primary legislation to give the PRA more flexibility to define the funding requirements. The department also proposes a second reform allowing Protected Cell Companies to be set up to carry out contracts of insurance with the aim of increasing the types of insurance structures available.

The IA states that further IAs will be produced for this measure as the regulations are drafted; however, this measure would appear to be a regulatory provision under the BRF and the IA supporting primary legislation must provide more detail on this as well as some assessment of the options and potential impacts of both the primary and secondary legislation.

Identification of options: Green

The IA identifies three options for the transformer vehicles reform – do-nothing, amend primary legislation in a specific way (less preferred), and amend primary legislation to give the PRA greater flexibility to define funding requirements (preferred).

The less preferred option is not taken forward as it would be less flexible in terms of adapting the rules over time and is inconsistent with a regulatory framework of delegating rule-making to independent regulators. The IA provides a sufficient SaMBA that argues small and micro businesses are likely to gain from access to transformer vehicles and face no disproportionate costs.

Justification for preferred way forward: Green

The preferred option is justified as performing best against the SMART objectives. Although the IA notes that the impacts of the preferred option will depend on subsequent decisions by the PRA, it provides an indicative estimate that an additional 5 vehicles are set up per year over a 10 year period. Applying a 9% yield to the typical deal size of £100m gives a present value benefit of £374m (with a range of £150m to £748m). The costs, including familiarisation, are expected to be minimal.

Regulatory scorecard: Satisfactory

The scorecard clearly states that the impacts of the reforms will not be generated until future regulations are made, but does helpfully include the initial NPSV estimate of £374m which is based on the return on investment of new transformer vehicles.

No estimate for the EANDCB is presented and the IA would be improved by discussing whether the estimated business impacts are direct or indirect; this should be addressed in subsequent IAs or analysis of the impacts of the reforms. The scorecard reports no distributional or household impacts, but states some positive impacts on the business environment and international investment.

Monitoring and evaluation: Satisfactory.

The department intends to conduct a PIR within 5 years of the reforms taking effect. Monitoring will involve engagement with the PRA, data on the growth of the risk transformation market (noting there may be some data limitations) and qualitative feedback from market participants. The M&E plan also highlights some external factors that affect the success of the reforms, but would be improved by providing more detail on how all the information will be gathered to directly address the key evaluation questions.

Measure (i) - Create overseas recognition regimes

The proposal is to ensure that HM Treasury’s ability to create Overseas Recognition Regimes (ORRs) is not limited to financial services activities covered by assimilated EU law. There are no monetised impacts but there will be positive benefits to UK consumers and business, as ORRs can support the growth and competitiveness of the UK financial services sector.

Rationale: Green

The IA states that being able to recognise the regulatory frameworks of overseas jurisdictions is important for supporting cross-border financial services while safeguarding financial stability, market integrity and protecting consumers. Without intervention, HMT would not be able to create ORRs for activities not covered by assimilated or formerly assimilated EU law.

The proposal is to create a framework enabling ORRs to be created through further regulations. Given the technical nature of the proposals, the IA would benefit from including SMART objectives and a theory of change diagram.

Identification of options: Green

3 longlist options are identified – do-nothing (use primary legislation every time to create bespoke recognition regimes), do-minimum (use existing powers to allow firms to be exempted from requirements for authorisation to carry on particular activities) and the preferred option (create framework to enable future ORRs).

The IA uses the options framework filter to generate the options and provides an assessment against critical success factors to explain how only the preferred option is carried forward for further appraisal. A sufficient SaMBA is included, noting that small and micro financial services providers could disproportionately benefit when an ORR lowers compliance costs.

Justification for preferred way forward: Green

The IA does not monetise the impacts at this stage, arguing that the impacts cannot be estimated until a future ORR is designed and will be included in future impact assessments. However, the IA does note there will be familiarisation and consultation costs from the creation and use of the ORR, which are expected to be outweighed by the benefits. 

Regulatory scorecard: Satisfactory

The scorecard provides a satisfactory summary of the expected impacts of the proposal and future ORRs including a description of impacts on business and the benefits arising from the growth and competitiveness of the UK financial services sector. The measure is anticipated to support the business environment and international trade.

Monitoring and evaluation: Weak

The IA explains that the measure itself will not be evaluated; however there is an approach to reviewing designations through engagement with the financial services sectors, and individual ORRs are subject to review through a Memorandum of Understanding. The M&E plan would be improved by including more details on the process for conducting such reviews.

Measure (j) - Expand the size and makeup of the Credit Union Common Bond

The proposal is to expand the size and makeup of the credit union common bond, by giving credit unions the option to increase the potential membership cap, change the same-household requirement, expand membership to the locality bond to students and allowing retirees and pensions recipients to be eligible as fully qualifying members.

The monetised NPSV of this measure is estimated to be £173.3 million, consisting of benefits due to an estimation of the sector’s ability to expand as a result of the change in regulations. The costs include legal and familiarisation costs. There is no EANDCB estimate.

Rationale: Green

The IA explains how members of a credit union share a characteristic (a ‘common bond’) to ensure credit unions remain community-focused and member-driven. There are four types of common bond relating to geography, occupation, employer and association (e.g. trade union member).

The IA draws on responses to a call for evidence and specific examples to argue the current common bond requirements may be limiting growth in the sector, for example, the locality bond limits the number of potential members to 3 million or fewer, which may be a particular constraint when two credit unions merge.

The IA also identifies constraints arising from relatives in the same household of an existing credit union member also being eligible to join, and retirees from an occupation becoming non qualifying members upon retirement. The IA helpfully sets out SMART objectives and describes the alignment with government objectives to double the size of the mutual sector.

Identification of options: Green

The IA  identifies 6 options – do nothing, a preferred option consisting of a package of primary and secondary legislative changes developed in response to the call for evidence and stakeholder engagement and alternative options relating to variations in the locality cap and extending membership to those resigning from an occupation rather than those retiring.

The IA provides justification for discarding options but would benefit from presenting a more systematic process for doing so, for example, through use of critical success factors.  A sufficient SaMBA is included given that all credit unions are small or micro businesses and the reforms are deregulatory in nature.

Justification for preferred way forward: Green

2 options are taken forward for shortlist appraisal with the do-nothing – the preferred package and the region-based system for the locality bond (rather than a numerical cap). The IA provides an assessment of the costs and benefits of the preferred option, with a NPSV of £173m presented. The region-based system for the locality bond is expected to have higher costs and lower benefits than the preferred package.

Regulatory scorecard: Weak

The department does well to provide quantified estimates of the costs and benefits to credit unions, clearly setting out the assumptions and workings. The presentation of the scorecard would be improved by including more of the detail on expected impacts set out in later sections of the IA.

The impacts against the baseline are clearly set out, noting there is expected to be growth in credit union membership in the do-nothing. The IA correctly asserts that the reforms are permissive in nature, with credit unions only incurring the costs associated with change if they expect to benefit.

However, the expected additional profit/surplus to credit unions would appear to be a more suitable estimate of benefit, rather than the change in Assets Under Management (AUM) presented in the IA and NPSV. In accordance with RPC guidance, both the costs and benefits from such permissive regulation would typically be included within the EANDCB.

Monitoring and evaluation: Satisfactory

The IA identifies monitoring data that will be collected to analyse the impact of the reforms including credit union membership, AUM and the number of mergers. External factors such as macroeconomic conditions are also highlighted as having a potential effect on the impact. The M&E plan would be improved by providing more detail on the methodology and timings, including whether a PIR will be conducted for the membership cap reform which requires secondary legislation.

Measure (k) - Commercial Credit Data Sharing Scheme

The proposal is to update the CCDS regime (which is a framework designed to improve SMEs access to finance by reducing information asymmetries between lenders) to make it possible to designate major firms (not just banks) relevant to the provision of finance to SMEs. This will improve the quality of information through the CCDS scheme, in turn, better supporting SMEs’ access to finance.

The monetised NPSV of this measure is estimated to be -£23.4 million. The EANDCB is £2.7 million. These both largely consist of compliance costs, costs associated with the mandatory sharing of credit information and familiarisation costs.

Rationale: Green

The IA draws on the PIR of the current CCDS regime, consultation responses and British Bank data to support changes to make it possible to designate major firms (other than just banks in the current regime) relevant to the provision of SME finance, reflecting changes in the market over the decade, and ensure that voluntary participants in the scheme share credit information with all Credit Reference Agencies. The IA would benefit from establishing SMART objectives and including a theory of change to show how the proposed changes deliver improved outcomes for SMEs.

Identification of options: Green

The IA identifies 3 options – do-nothing, do minimum (non-regulatory consisting of designating more banks and voluntary initiatives to improve data quality) and the preferred option. All options are progressed to the shortlist with arguments presented for why do-nothing and do-minimum are not preferred.

The IA would be improved by presenting a more systematic process for identifying an initial longlist of options and an assessment against critical success factors. A sufficient SaMBA is included with the requirements expected to fall on larger businesses, and SMBs that voluntarily participate in the scheme would be expected to benefit, as well as SMEs seeking access to finance.

Justification for the preferred way forward: Green

The IA provides indicative NPSV estimates of the preferred option, which would need to be refined as part of secondary legislation, based on the costs associated with 9 firms becoming newly designated, the costs of sharing credit information and familiarisation costs. This analysis combined with the qualitative assessment of the other shortlist options is sufficient to justify the preferred option.

Regulatory scorecard: Satisfactory

The presentation of the scorecard would be improved by including only a summary of the impacts, with the detailed analysis presented in other parts of the IA. However, overall the IA includes a relatively comprehensive assessment of the impacts on business, households and society, with a range of non-monetised impacts (improved SMR credit scoring, more efficient allocation of credit, lower barriers to entry for new lenders) expected to lead a positive NPSV. The scorecard should include the estimated EANDCB.

Monitoring and evaluation: Satisfactory

The IA notes that the CCDS Regulations already include a review clause and that the proposed changes will be included within the next PIR. More detail on the evidence to inform the next review is expected to be included as part of the secondary legislation, but the IA highlights some themes that will be evaluated based on a range of data sources and feedback from stakeholders.

Measure (l) - Minor reforms to the Bank of England Financial Policy Committee

This measure will reduce the statutory minimum number of FPC meetings from at least four per calendar year to at least three. It also makes consequential amendments to the arrangements for setting the countercyclical capital buffer (CCyB) to align with the revised meeting schedule. These changes are intended to improve the efficiency of the FPC’s operations and reduce the resource burden on the Bank of England and HM Treasury. There are no monetised impacts but there will be positive public sector benefits.

Rationale: Green

The IA outlines how the FPC is required to meet at least four times in a calendar year with its work organised into quarterly rounds where formal policy decisions are agreed and communicated, including the setting of the Countercyclical Capital Buffer (CCyB) rate which determines the amount of capital held by banks. The IA argues the pattern of four rounds is resource intensive for the FPC, Bank of England and HM Treasury but would be improved by providing some estimate of the resource costs involved. Moving to meetings being held at least three times a year is expected to generate efficiencies without changing the FPC’s remit or powers.

Identification of options: Green

The IA identifies do-nothing, do-minimum (non-legislative operational changes with the Bank of England to reduce resource requirements of the four-round cycle), and preferred (amend legislation to reduce FPC’s minimum meeting frequency) options. All options are carried forward to the shortlist. The includes a brief SaMBA noting that no direct impacts on SMBs are expected as the measure imposes no new requirements.

Justification for preferred way forward: Green

The IA provides a relatively high-level assessment of the options against the SMART objectives and other factors including the scale of impacts, transparency and financial/operational considerations of the public sector. The preferred option to legislate to reduce the number of FPC meetings is justified as providing greater efficiency savings although the impact is not quantified. Overall the approach seems proportionate for the nature of the measure.

Regulatory scorecard: Weak

The IA does not provide any monetised impacts in the form of a NPSV or EANDCB, arguing that the measure is a procedural change to the frequency of FPC meetings with no change in its remit. However, the IA notes there may be impacts to business from fewer updates on the UK’s risk environment and one fewer CCyB decision which are stated to be negligible. However, the IA could have provided more detail on the business impact of changes to the CCyB cycle since this is the part of the proposed measures that relates most to the regulation of business activity.

Monitoring and evaluation: Weak

The IA outlines how the measure will be monitored by HMT on an informal basis through existing governance and engagement arrangements. The SMART objectives will be used to assess success; however the IA could include more detail on the frequency of such monitoring and how improvements in efficiency will be measured.

Measure (m) - Access to banking

This measure establishes provisions that allow the government to take further action in respect to banking services and make regulations relating to access to banking services, should this be necessary. There are no monetised impacts but there will be positive public sector benefits.

Rationale: Green

The IA clearly sets out the problems with consumer access banking; there is a risk that reductions in physical provision that may result in detriment for those who continue to rely on face-to-face services. The IA provides evidence on the reduction in those using branches for routine banking but could benefit from providing further evidence to directly demonstrate the problem under consideration.

The IA states that it has not been possible to identify an appropriate set of SMART objectives as the review is still gathering evidence on the detriment. Nonetheless, the department should include SMART objectives, alongside a theory of change diagram. The IA should also set out a specific argument for intervention.

Identification of options: Green

The IA identifies a do-nothing option and a more ambitious option (to introduce a clause in the Bill to take action on access to banking), in addition to the preferred option (to establish provisions that allow the government to take further action in respect to banking services and make regulations relating to access to banking services, should this be necessary).

The IA could benefit from using the OFF to present the longlist in greater detail whilst retaining a clear and concise structure. All options are carried forward to the shortlist. The includes a brief SaMBA noting that the measure is not expected to have a direct impact on SMBs, and any future impacts are expected to be positive overall.

Justification for preferred way forward: Green

The IA provides a high-level assessment of the options, identifying the potential groups that will be impacted by any future legislation. The IA states no monetised impacts are presented at this stage, as any substantive impact would arise only if the powers are used.

However, in line with RPC guidance for assessing primary stage legislation, the IA should provide a more thorough discussion of the impacts expected at secondary stage. This could just involve a more detailed non-monetised narrative of the possible costs and benefits.

However, overall, the preferred option is justified as it avoids premature, potentially unnecessary, regulation by not committing to any fixed requirements until there is clear evidence of what, if any, intervention is warranted.

Regulatory scorecard: Weak

The IA does not provide any monetised impacts in the form of a NPSV or EANDCB, as any substantive impact would arise only if the powers are used. However, the IA identifies potential business and household groups who may be impacted by the measure. Despite this, the IA could provide a more thorough discussion of the impacts expected at secondary stage. The IA also references a small familiarisation cost and could benefit from including this in an early EANDCB estimate.

Monitoring and evaluation: Very weak

The IA should set out a clear monitoring and evaluation plan; with expected data sources and the metrics it expects to capture. In particular, the IA could explain how it plans to use the independent review in its evaluation.