Theme 2: Policy and regulatory impact

What the metric values tell us 

In 2025/26, the cumulative equivalent annualised net direct cost to business (EANDCB) [RI-M01] increased to £426.3m, from £51.2m in 2024/25 and £73.8m in 2023/24 (in the prices of each year). 

The main drivers of this were new rules set out in a policy statement (PS26/1) on the regulation of deferred payment credit (DPC, also known as unregulated Buy Now Pay Later), where we supported government policy, and the motor finance redress scheme (PS26/3). 

These rule changes have an EANDCB of £319m and £68m respectively.

The EANDCB value changes each year based on the new policies introduced. In 2025/26, we published 28 policy statements. Of these,18 included Cost Benefit Analyses (CBAs) with quantifiable estimates. This compares with 19 policy statements in 2024/25, where 16 included CBAs and 14 contained quantifiable estimates, and 18 policy statements in 2023/24, of which 12 included CBAs. 

We introduced 5 rules in 2025/26 with an EANDCB exceeding £10m. This is an increase on 2024/25, where only 2 rule changes had an associated EANDCB above this threshold.

We estimate the annual benefits from our rule changes [RI-M02] of at least £5.6bn in 2025/26. This is equivalent to £7.2 for every £1 spent running the FCA. This is a decrease compared to last year’s annual benefits of £6bn, or £7.9 for every £1 spent. 

The values decreased in 2025/26 because the new rules we introduced had lower quantified benefits than those that fell out of scope of the reporting period. This is mainly because few rules published in 2025/26 came into force that year. 

Major rule changes with significant benefits, including PS25/19 (Supporting consumers’ pensions and investment decisions: rules for targeted support), PS26/1 (Regulation of deferred payment credit) and PS26/3 (Motor finance consumer redress scheme) take effect in 2026/27. These are not included in this year’s metric and will be reflected from next year.

The proportion of wholesale firms confident we meet our objective of protecting and enhancing the integrity of the UK financial system remains high at 92%. This is an increase from 88% in 2025 and 89% in 2023/24 [RI-M04]. 

Consumer confidence in the UK financial services increased to 49% in 2025, up from 39% in 2024 and 43% in 2023 [RI-M03]. 

Metric RI-M05 shows the latest rankings for London, Edinburgh and Glasgow in Z/Yen’s Global Financial Centres Index (GFCI 39[2], published March 2026). London remains second overall, with a rating of 766, up 4 points from GFCI 37[3] (March 2025). This is 1 point behind New York (767) and 1 point ahead of Hong Kong (765). 

Edinburgh ranks 28^th with a rating of 721, up 1 place since GFCI 37. Glasgow is 43^rd with a rating of 706, down 11 places.

London ranks first globally for Infrastructure. It is also in the top 4 across all 5 areas of competitiveness: business environment (2^nd), human capital (3^rd), financial sector development (2^nd), and reputational and general (4^th).

It performs strongly across all industry sectors, ranking in the top 5 for banking (3^rd), investment management (3^rd), insurance (4^th), professional services (3^rd), government and regulatory (2^nd), finance (3^rd), fintech (3^rd), and trading (5^th).

In the standalone fintech index within GFCI 39, London fell 3 places to 5^th, with a rating of 746 (down 2 points from GFCI 37). Hong Kong and Shenzhen moved into first and second place, ahead of New York and London. New York fell from first to third position, while Singapore entered the top five, replacing San Francisco. 

These changes show increasing global competition in fintech. Asian financial centres are strengthening their relative position in the index. Shenzhen, for example, has become a major fintech centre, closely aligned with the Shenzhen–Hong Kong–Guangzhou innovation cluster. The scale and integration of this ecosystem, including its payment systems and access to talent, makes these centres strong competitors to established centres such as London and New York.

Our December 2025 letter to the Prime Minister and our Annual Report and Accounts 2025/26[4] set out the progress we have made on our secondary objective. This builds on work over the past 3 years. 

This includes improving access to capital, liquidity and market data, accelerating digital innovation and productivity through safe testing routes, and making regulation simpler and more proportionate. We have also introduced measures to help firms to start up, scale and grow, and strengthened international engagement, supporting exports and inward investment. 

Perceptions of our effectiveness (RI-M06) have improved overall. Among flexible firms, 76% rated us as ‘highly effective’ (7-10 out of 10) as a regulator, up from 69% in 2025 and 70% in 2023/24. Among fixed firms, around 7 in 10 rated us as ‘highly effective’ as a regulator, largely unchanged at 69% in 2026 and 68% in 2025. This remains below the 84% recorded in 2023/24.

This is consistent with increases in the proportion of firms that believe we enhance the reputation of the UK as a financial centre. Among fixed firms, this rose from 58% in 2025 to 89% in 2026. Among flexible firms, it increased from 67% to 71%. 

The proportion of fixed firms that said they understand our secondary objective well also increased, from 49% in 2025 to 76% in 2026. This is higher than the 2023/24 figure of 64%. The equivalent figure for flexible firms remained largely unchanged at 47% in 2026.

Flexible firms make up the most survey responses, with 4,765 responses compared with 45 from fixed firms. As a result, findings for fixed firms are more sensitive to small changes in responses. Some differences may be driven only by a small number of firms.

For Metric RI-M07, although the number of issuers of equity-related securities has continued to decline, the rate of reduction has slowed. Overall market capitalisation of Main Market issuers has risen to £4.9tn by the end of 2025 (LSEG data[5]). 

Feedback from industry stakeholders such as the Listing Authority Advisory Panel, the Markets Practitioner Panel  and UK Finance has been positive about our listings and prospectus reforms. These have reduced regulatory barriers to listing and capital raising, making the UK more competitive as a listing venue.

Initial public offering (IPO) activity increased in Q4 2025 compared with earlier in the year and for the same period in 2024. This included notable debuts by Shawbrook and Princes (see Peel Hunt[6]) and capital raising on listed Markets with further issuances in 2025 of £5.6bn (LSEG data[5]). 

Global IPO activity has reduced since the start of 2026 due to geopolitical factors, but the UK pipeline remains strong. As the data shows, the market for further issuance also remains strong, with our changes to prospectus rules meaning that some capital raises can go ahead without issuers being required to publish a prospectus. 

A significant number of firms have moved from AIM to the Official Listing, showing a clear pathway to growth in UK markets. For listed firms pursuing mergers and acquisitions, feedback from advisors indicates that regulatory reforms have reduced friction.  

We have been clear through the Primary Markets Effectiveness review, that regulation is only one factor of many decisions to list. Other factors, such as depth of capital markets, or companies making decisions based on operational and strategic factors linked to their future growth or existing business to other jurisdictions, also impact listings.