The most striking element of the Leeds Reforms and the Growth Strategy is the scale of the UK government's ambition in this area. Although not every element in the announcements is new, the breadth of the overall set of policy initiatives is still vast, emphasising the size and depth of the UK financial services industry and the importance of the sector to delivering on the government's wider growth objectives.
The level of ambition is encouraging, as is the willingness of the government and regulators to reconsider areas where there were previously some fairly entrenched views (for example, in relation to research unbundling rules or the scope of the Senior Managers and Certification Regime). Some commentators have been talking about the current regulatory and political environment as a once-in-a-generation opportunity to reshape the UK's financial regulatory framework; in light of the flurry of announcements preceding the Mansion House speech, that view is looking increasingly plausible and underscores the importance of industry associations engaging with the government and regulators to further shape the future of regulation in a proportionate and effective way.
The UK government has set a target of making the UK the number one destination for financial services businesses by 2035, which is both brave (in terms of the sheer scale of regulatory changes that would need to be implemented within the next decade) and encouraging as a clear yardstick by which to measure success in this area.
There is no single policy announcement in the mix that stands out as being a "game-changer" by itself. Instead, the Chancellor's aim appears to be to adopt a holistic and incremental approach, identifying areas for a targeted reduction in burdens without an uncontrolled bonfire of regulation. The government's view appears to be that the overall cumulative effect of these changes will bring about the necessary gains in efficiency and competitiveness. While that may be disappointing for some advocates of a second "Big Bang", the careful and considered repeal of rules that impose unnecessary burdens may be more manageable from an implementation perspective and a more credible overall strategy.
That being said, there are clear risks around the ability of the government and regulators to deliver the advertised reforms. The announcements consistently refer to the need for the government to legislate to create the correct statutory framework to support various changes. In turn, that raises potential questions as to whether there will be sufficient parliamentary time to pass the relevant legislation and whether the government can count on the support of backbench MPs to ensure the smooth passage of bills. The ability to sell the changes as being proportionate and technocratic in nature might avoid some of the ideological arguments that might otherwise erupt under a more aggressive deregulatory approach. However, recent developments in relation to cryptoassets show that financial services legislation can easily be delayed by complexity and broader policy debates.
The Chancellor's proposals compare favourably to the EU's equivalent review of financial regulatory burdens currently being undertaken through the EU Savings and Investments Union initiative. The UK's approach involves concrete proposals and appears more advanced than the wide-ranging but currently amorphous exercise led by the European Commission, the output of which remains uncertain. Nonetheless, both the UK and the EU look unable to compete with the fast-paced slashing of regulation in the US being undertaken by the Trump administration, largely facilitated by broad executive orders.
There will need to be consultations before many of the proposed UK changes can be made. Experience suggests that this can lead to substantial amendments to the original proposals, as well as protracted delays and uncertainty over implementation timelines. Given the range of changes that firms may need to implement if they are to realise the full advantages of the various proposals, clarity over the timing and expected content of final rules will be critical.
Nonetheless, we have detected a genuine change in attitude among UK regulators recently, with a more committed focus on international competitiveness and burden reduction, so there are plenty of reasons to be hopeful in this regard.
Fundamentally, though, it may be what is not in the Leeds Reforms or Growth Strategy that could ultimately derail the dream of sustained growth in the UK financial services sector. While the regulatory environment is clearly a critical piece of the larger puzzle, the aim of attracting inward foreign investment and drawing talent to the UK is inherently sensitive to the UK tax regime. Given continuing concerns about the tax treatment of non-domiciled individuals, there is a persistent question mark about whether highly paid senior or up-and-coming financial services professionals will find the UK to be an attractive and competitive jurisdiction in which to base themselves. In addition, increased employment- related taxes may continue to act as a drag on establishing substantial UK operations. Headline tax-related changes, such as the abolition of stamp duty on transfers of UK shares, might have a more important signalling effect but it seems that we will have to wait to see whether this will follow.
In a similar vein, we note that while the government has set out laudable broad ambitions for the UK asset management industry, the proposals do not include any suggestion that restrictive remuneration regimes under MIFIDPRU and AIFMD will be reformed or that the FCA will look again at the implementation of the Investment Firms Prudential Regime (IFPR) to reduce the substantial burden it imposes on UK MiFID investment firms. Given analogous moves to reduce the equivalent obligations on UK banks, we hope that these points will receive a more sympathetic hearing in the new environment and would strongly advocate for this. That being said, the recent FCA prudential proposals for cryptoasset firms seem to point towards extending an IFPR-like regime to other sectors. In light of the apparent longer term aim of a single overarching prudential rulebook for FCA regulated firms, the regulatory appetite for broader reform here remains unclear.
Of course, the Chancellor's speech was not intended to be a comprehensive list of every change that may be planned for the UK regulatory regime. Alongside the carefully coordinated set of policy announcements on the day of the speech, the UK regulators have other ongoing workstreams which may result in further improvements. For example, on 10 July 2025, the FCA published an encouraging announcement that it was reviewing its client classification rules with a view to unlocking more opportunities for wealthy investors. Depending on the approach that is eventually adopted, these sorts of initiatives may widen access to alternative investments and reduce some of the current difficulties that firms have in marketing and providing their products and services to particular customer segments, supplementing the set piece proposals within the Leeds Reforms.
Our overall sense is that the Leeds Reforms and the Growth Strategy are a very encouraging start, but the scale of the task facing the UK government and regulators is daunting. Legislators, regulators and the industry will need to remain in close dialogue over the next few years to realise the full benefits of these reforms and to ensure that the UK financial markets are fit for the coming decades. Nonetheless, given the UK's deep financial services expertise and track record of innovation, we are optimistic that the industry will seize this latest opportunity.
