UK Slashes Benchmark Rules, Cuts 90% of Providers in Regulatory Overhaul

The UK just tore up the rulebook on financial benchmarks. In a sweeping deregulation move, authorities are axing most benchmark rules and cutting a staggering 90% of providers from the oversight regime.

What's Actually Changing

Forget minor tweaks—this is a wholesale dismantling. The complex web of compliance that once governed how key financial rates are set is being largely scrapped. The goal? To unshackle markets and let London compete more aggressively post-Brexit.

The 90% Purge

The real headline is the sheer scale of the provider purge. Nine out of ten firms that were previously regulated under the benchmark regime will now operate outside it. That's not trimming the fat—that's a radical slimming down of the regulatory state. It means fewer forms to fill, less red tape, and theoretically, more innovation. Or, as cynics in finance might mutter, more ways to creatively calculate a number until it says what you want.

Why This Matters Now

This isn't happening in a vacuum. With global competition for capital fiercer than ever, the UK is betting that lighter-touch regulation will attract business. It's a high-stakes gamble: boost competitiveness by taking a chainsaw to rules originally designed to prevent another Libor-style scandal.

The move signals a decisive pivot towards a post-Brexit 'Singapore-on-Thames' model. Whether it fuels a race to the top for efficiency or a race to the bottom for standards is the trillion-pound question. One thing's clear: in the City of London, the rulemakers are now the rule-breakers.

Treasury limits the number of companies under rules

The UK currently has around 45 authorized benchmark providers, including LSEG, S&P Global, JPMorgan Chase, and Bloomberg.

Under the new approach, only those offering widely used benchmarks will stay under the Financial Conduct Authority. The rest will fall outside the formal regime.

The Treasury says it wants feedback before locking in the changes, framing them as another step toward cutting down red tape in London while the government looks for ways to revive growth during President Donald Trump’s second term in the WHITE House.

The announcement lands at the same time the EU is signing off on its own reforms. Lawmakers have approved a package meant to push more everyday people in the bloc to invest in stocks and bonds instead of keeping most of their money in low-return bank accounts.

One of the lead negotiators, Stéphanie Yon-Courtin, said the new rules would “move the savings and investment union from theory to reality,” and that the work focused on preventing abuse while keeping advice open to regular investors.

EU increases pressure on advisers to show value

The retail plan is part of the EU’s Capital Markets Union, which has been running for a decade. Its goal is to make capital MOVE more easily across the bloc and to help companies access funding.

The effort responds to long-running concerns from officials who say households keep too much of their wealth in deposits. Last year, households put 41 percent of their financial assets in bank accounts and only 20.6 percent in funds and listed shares.

Under the new rules, advisers and investment platforms must give clear details on costs and charges tied to investment products and must show that the products offer value for money. Two regulators, the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority, will create benchmarks for insurance-based products so investors can compare costs and performance.

Companies selling other investment products must also compare their pricing and returns with similar options.

The package also brings in a new inducement test. Advisers can still receive inducements for things like research, but they must show they act in the best interests of clients and make those inducements clear enough for customers to separate them from other fees.

Advisers must also judge whether clients understand the investments they buy, including their ability to handle partial or total losses.

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