Theme 2: Policy and regulatory impact

What the metric values tell us 

In the financial year 2024/25, the cumulative EANDCB (RI-M01) fell to £51.2m. The EANDCB value changes each year based on the new policies introduced. In 2024/25, we published 19 Policy Statements, 16 of which included Cost Benefit Analyses (CBAs), with 14 containing quantifiable estimates. This compares to 18 Policy Statements in 2023/24, with 12 featuring CBAs. We only introduced 2 rules with an EANDCB over £10m, whereas in previous years this was about one-third of the rules for which we produce CBAs.

We estimate the annual benefits from our rule changes (RI-M02) in 2024/25 was at least £5.99bn, equivalent to £7.9 for every pound spent running the FCA. Using our updated methodology, the comparable estimates from 2023/24 would have been £6.25bn benefits, equivalent to £8.8 for every pound spent running the FCA. The values fell in 2024/25 because the new rules we introduced in 2024/25 were mostly smaller-scale interventions than in previous years, with lower quantified benefits (and lower costs to business) than those that fell out of scope of the reporting period.

Metric RI-M05 shows the latest rankings for London, Edinburgh and Glasgow on Z/Yen’s Global Financial Centres Index. London maintains its position in second place, and has narrowed the gap with the current leader, New York. London ranks second globally for Business Environment and Reputational & General areas, and third for Human Capital, Infrastructure and Financial Sector Development. It also ranks first worldwide in the Banking sector, second in the Government & Regulatory and FinTech sectors, and third in Investment Management, Insurance, Professional Services, Finance, and Trading sectors. London continues to lead as the top financial centre in Western Europe.

The percentage of wholesale firms confident the FCA meets its objective of ‘Protecting and enhancing the integrity of the UK financial system’ remains high at 88% (RI-M04). Consumer confidence in UK financial services industry declined slightly between 2022 and 2024 (RI-M03). This decline may reflect recent economic fluctuations affecting savings, mortgage rates and insurance premiums.

Flexible firms have maintained their view of the FCA’s effectiveness at 70%, with 68% of fixed firms also agreeing we are an effective regulator. This represents a marked decrease for fixed firms alongside a notable decrease in the number who think we enhance the reputation of the UK as a financial centre. Similarly, there has been a notable decrease in the number of fixed firms that responded they understand what we are trying to achieve through the secondary objective, down from 64% to 44%, bringing the result this year closer to those of flexible firms at 46%, which represents a small increase from last year. Flexible firms make up the largest portion of our firms surveyed, with over 5,300 flexible firms responding compared with 42 fixed firms.

Across both fixed and flexible firms there have been small decreases regarding views we act proportionally in terms of cost/benefit or that firms are confident our oversight of the industry delivers on this objective (RI-M06). Verbatim comments from the survey reveal almost half of fixed firms commented on the need for greater proportionality, predictability and coordination in the FCA’s work, both internally and with other regulators such as the PRA. A smaller number of fixed firms wanted to see concrete actions taken regarding the SICGO. 

London retained its first position in the City of London’s analysis of UK Financial Services international competitiveness[2] across a number of dimensions, specifically it retained second place in relation to the regulatory environment, scoring well in metrics related to market access and ease of doing business. 

Our second SICGO report sets out the significant amount of work done to advance the secondary objective since last year. Work on the SICGO will continue to require a sustained collaborative approach across industry, consumer groups, parliamentarians and Government. We announced our new 5-year Strategy on 25 March 2025, which commits to supporting growth as one of four key themes and we have continued to make substantial progress around our commitments in response to the Prime Minister’s (PM) letter to regulators to promote the competitiveness of the UK economy. The publication of our strategy and a large number of actions relating to our commitments may not have had time to be fully reflected in the findings due to the timing of the research.

We continue to deliver meaningful work to reduce the burden on firms and improve our interactions and communications with them. For example, we will set our supervisory priorities more predictably and will stop using CEO letters so regularly, instead moving to an approach where we set out our priorities in a smaller number of annual market reports. We are developing a supervisory model where firms will have more direct contact points with us, and we intend to less intensively supervise firms that are demonstrably seeking to do the right thing. Additionally, we continue to digitise and simplify our authorisations process, making it quicker and easier to apply, so that information is better quality. 

For Metric RI-M07, the number of listings has fallen steadily every 6 months. We have been reducing the Listing Categories and moving to a more disclosure-based approach. Initial public offering pipelines and planning usually occur 18 months or more before a potential listing date. Since our reforms have been in place for less than 12 months, it is too early to assess their overall impact. Feedback suggests some positive sentiment and a 'levelling' of the playing field for the UK as a listing destination due to our reforms. Throughout the Primary Markets Effectiveness review, we were clear that regulation is only one factor of many decisions to list. Some aspects, 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 the US, can't be influenced by regulation.