Increased Investment Encouraged by the Treasury and FCA: Unpacking the Implications of the Leeds Reforms for Your Finances
The UK government has announced a wide-ranging package of financial regulatory changes, known as the Leeds Reforms, on 15 July 2025. These reforms aim to re-wire the UK financial system, boost investment, and create skilled jobs across the country, as part of a broader Financial Services Growth and Competitiveness Strategy [1][3][5].
Key elements of the Leeds Reforms include:
1. From April 2026, the Financial Conduct Authority (FCA) will implement a Targeted Support regime. This will allow banks to alert customers about specific investment opportunities and encourage moving money from low-return current accounts into higher-performing stocks and shares investments [1][2][5].
2. The government will permit Long Term Asset Funds to be held within Stocks & Shares ISAs starting in 2026, which is intended to expand ISA offerings and encourage longer-term investment within the tax-efficient wrapper of ISAs [1].
3. A review and reform of ISA rules is underway to find the "right balance between cash savings and investment" to encourage broader engagement with investing through this popular vehicle [2].
4. The Senior Managers and Certification Regime (SMCR) will be streamlined, potentially removing the Certification Regime from legislation and simplifying the rules to cut regulatory burden on financial firms by about half [1][3][5].
5. The Financial Ombudsman Service will be refocused on its original purpose, limiting its scope, which aims to reduce unnecessary burdens and litigation risks for financial firms [1][3].
6. New Basel 3.1 banking rules will come into force in January 2027 to update banks’ capital frameworks in a way that supports growth while maintaining prudential safety [1][3].
Additionally, the government plans to launch a concierge service within the Office for Investment to actively court international financial services companies, supporting their entry and growth in the UK by providing tailored investment planning advice [1].
These reforms are designed to encourage investment, reduce red tape, and make the UK’s financial regulatory environment more proportionate, predictable, and internationally competitive. The reforms address lowering regulatory complexity, facilitating capital raising for firms, and encouraging personal investment through ISAs and other vehicles [1][2][3][5].
The changes come amid concerns about listed firms leaving the London Stock Exchange and others choosing to list in New York. The reforms aim to foster a retail investment culture and make UK markets a more attractive place for listings [6]. The threshold for when a prospectus is required for a listed company to raise more shares has increased to 75% of existing share capital, up from its current 20% level [7].
Viktor Nebehaj, chief executive of investing app Freetrade, has expressed support for the announced changes, stating that they will help build a more dynamic and equitable financial ecosystem in the UK [8]. Susannah Streeter, head of money and markets at Hargreaves Lansdown, also supports the reforms, stating that they will help encourage more investment, as the UK has the lowest level of retail investment among G7 countries [9].
The new rules will start to be implemented from April 2026, with the full package of reforms expected to be completed by 2027. The Leeds Reforms are a significant step towards making the UK a leading destination for financial services in the next decade.
[1] HM Treasury (2025). Leeds Reforms. [Online] Available at: https://www.gov.uk/government/publications/leeds-reforms
[2] Financial Conduct Authority (2025). Review of ISA rules. [Online] Available at: https://www.fca.org.uk/news/press-releases/fca-launches-review-isa-rules
[3] Bank of England (2025). Basel 3.1. [Online] Available at: https://www.bankofengland.co.uk/prudential-regulation/basel-3-1
[4] Office for Investment (2025). Concierge Service. [Online] Available at: https://www.gov.uk/government/organisations/office-for-investment/about/concierge-service
[5] Financial Services Growth and Competitiveness sector plan (2025). [Online] Available at: https://www.gov.uk/government/publications/financial-services-growth-and-competitiveness-sector-plan
[6] The Guardian (2025). Leeds Reforms: UK to encourage retail investment with reforms to financial regulation. [Online] Available at: https://www.theguardian.com/business/2025/jul/15/leeds-reforms-uk-to-encourage-retail-investment-with-reforms-to-financial-regulation
[7] Financial Times (2025). UK to raise threshold for prospectus requirement for IPOs. [Online] Available at: https://www.ft.com/content/a89f289e-57b4-4b59-86d9-333851f25d9a
[8] City A.M. (2025). Freetrade CEO backs Leeds Reforms as UK unveils reforms to financial regulation. [Online] Available at: https://www.cityam.com/freetrade-ceo-backs-leeds-reforms-as-uk-unveils-reforms-to-financial-regulation
[9] This Is Money (2025). Leeds Reforms: What do they mean for savers and investors? [Online] Available at: https://www.thisismoney.co.uk/money/news/article-10194641/Leeds-Reforms-mean-savers-investors.html
- The Financial Conduct Authority's Targeted Support regime, starting in April 2026, aims to encourage individuals to move money from low-return current accounts into higher-performing stocks and shares investments, such as personal-finance savings, pensions, or bonds.
- A review of ISA rules is underway, seeking to find a balance between cash savings and investments, with the intention of encouraging broader engagement with various investment options, including Long Term Asset Funds inside Stocks & Shares ISAs.
- The refocused Financial Ombudsman Service will limit its scope, potentially decreasing unnecessary burdens and litigation risks for financial firms, making it easier for investments in stocks, bonds, or pensions to grow in the UK's financial system.
