This issue was first publicly raised in September 2020.

We made policy and supervisory changes in 2022 to strengthen the regime. However, some risks within the regime require legislative change to address. These include:

• Our limited ability to scrutinise a firm’s suitability to act as a principal, which means the FCA cannot effectively manage the risk that an authorised firm may appoint representatives which pose an unacceptable risk of harm once allowed into the perimeter.
• Different standards of conduct, fitness and accountability apply to ARs compared to directly authorised firms.
• Some ARs consumers face a disadvantage as they do not have access to the Financial Ombudsman in some circumstances.

The Treasury consulted on reforms in February 2026, aiming to strengthen principal suitability (adding a permission requirement for new principals), improve consistency (applying Senior Managers & Certification Regime processes to ARs) and strengthen consumer protections (extending Financial Ombudsman coverage to AR harms where principals are not liable). While continuing supervisory attention is required to protect consumers and guide firms on appropriate AR use, we support these proposed legislative changes as they strengthen, streamline and improve the AR regime.

This issue was first publicly raised in December 2025[3] - but raised in this Perimeter report for the first time.

Consumers are increasingly asking ‘general-purpose’ large language model (LLM) platforms, such as ChatGPT or Claude, for help making financial decisions. These tools can respond to a variety of prompts and topics but aren’t set up to help consumers with financial advice, research, or decision making.

While these tools can be useful, consumers using general-purpose LLMs aren’t receiving regulated advice and do not currently have Financial Ombudsman or FSCS protections. LLMs can be misleading and can provide outdated or inaccurate information.

This differs from an LLM deployed specifically to provide financial advice, which likely falls within the perimeter.

It is important the boundary of our perimeter is understood, especially by consumers who may wrongly assume they have certain protections when using a general-purpose LLM. We recently published an article outlining the risks and benefits of consumers choosing to use AI for investment research.

With increasing use of AI, the boundaries of our perimeter are becoming increasingly complex. Our focus is therefore on consumer understanding - seeking to be clear on what is regulated, and what is not.

This issue was first publicly raised in March 2020.

The increasing range of digital banking services and payment options can make life easier for many consumers, but being able to withdraw and deposit cash is still vital for others. We introduced new access to cash rules in 2024.

We have been undertaking exploratory work to understand the impact of reduced access to banking services. We welcome the Government’s commitment to the roll out of at least 350 banking hubs by the end of this Parliament. Parliament has given us powers over consumers’ access to cash specifically, rather than wider in-person banking services.

This issue was first publicly raised in June 2022.

In 2025, most of the UK’s 5.7 million private sector businesses were SMEs. We recognise their role in driving growth and the need for accessible finance. We view technology and innovation as central to improving SME access to financial services. Our November 2025 - February 2026 Open Finance Techsprint explored and developed practical solutions to leveraging data to address challenges around how SMEs access financial products.

Our regulatory perimeter extends to business lending where the borrowing is under £25,000 and the SME is a sole trader, small partnership (2 or 3 partners) or an unincorporated body of persons. Lending to limited companies, Limited Liability Partnerships (LLPs), and partnerships with more than 3 partners sits outside the scope of regulation. The former self-regulatory body the Lending Standards Board identified that its closure would leave a gap in SME protection with the loss of oversight of unregulated SME lending.

We recognise the scope of our regulation is determined by Government and Parliament, and Government policy over time has been that commercial lending should remain largely unregulated. We will continue working with Government, including on the review of the Consumer Credit Act, to ensure SMEs receive appropriate protections where our perimeter applies, while enabling growth and innovation in the market.

This issue was first publicly raised in February 2024.

1 in 10 people have no cash savings and some employers want to provide regular savings schemes for their staff. Current legal requirements can create friction for opt-in workplace saving schemes and prevent the provision of opt-out schemes.

Widespread adoption of workplace savings by consumers who do not normally save would help to strengthen financial resilience and aligns with the Government’s financial inclusion strategy. In August 2025, we published a statement giving employers clarity and reassurance about offering these schemes under the existing regulatory framework. We welcome the Government’s commitment to progress workplace savings, including through its national coalition of employers. We have made full use of the regulatory tools available to us under the current framework to support the uptake of workplace savings. We would continue to work collaboratively with the Government on any future initiatives aimed at supporting wider roll out of workplace savings schemes.

This issue was first publicly raised in September 2024.

Schemes that fall within the definition of an occupational pension scheme (OPS) fall within The Pension Regulator's remit, and expressly outside the FCA's remit. As the market continues to evolve and innovate, including in response to the measures proposed in the Pension Schemes Bill, we are seeking to work with the Government to ensure that the legislative definitions are clear enough to help stakeholders understand how the regulatory perimeter applies.

This issue was first publicly raised in December 2018.

Investment consultants provide unregulated services that can significantly influence the investment strategies of asset owners and asset managers. In 2017 we referred these sectors to the CMA for a detailed investigation after we identified and raised serious concerns about competition in investment consultancy and fiduciary management. In 2018 the CMA published remedies including recommending that investment consultancy services should be brought within our supervisory remit.

Due to prioritisation of other legislative issues, the Government announced in May 2025 it no longer intends to take forward legislation to bring investment consultants into FCA regulation. While this area of the market has evolved over the last 10 years, investment consultants continue to play a significant role in influencing the investment strategies of institutional investors, and we therefore continue to support these services being brought into our perimeter.

This issue was first publicly raised in November 2024.

Captive insurance provides an alternative to conventional insurance by enabling an organisation to instead retain certain risks via an ‘in-house’ insurance vehicle. Although it is a fast-growing global market, most captives are not currently established in the UK. We are considering changes to provide for a regulatory framework that supports the development of the UK as an internationally competitive marketplace for captive insurance. We welcome the Government's July 2025 response to its consultation on a revised framework, and its commitment to amend legislation to extend the use of protected cell company structures to captive insurance, potentially creating a more viable route for smaller companies. This might enable the UK to attract a wider share of the global captive insurance market.

This issue was first publicly raised in September 2020.

Where many firms, or even one significant firm, rely on the same third party to deliver their services, such as cloud service providers, the potential harm increases if the third party, or its services, fail or are disrupted. The Critical Third Parties (CTP) oversight regime is designed to address systemic risk to UK FS sector posed by third parties firms and Financial Market Infrastructures (FMIs) rely on heavily.

The greater the share of the UK financial system relying on a third party, the greater the risk to the UK financial system in the event of failure or disruption. Over the recent past we have seen that incidents originating from third parties was firms’ top root cause. While the CTP regime is a complement to firms' management of third party risk, it is important to help address systemic third party risk.

FSMA 2023 gave the regulators powers to oversee third parties critical to the UK financial system. In November 2024, the regulators published their policy and rules setting out our regulatory regime for CTPs. The Treasury is responsible for designating CTPs and is required to consult the financial regulators, which generally includes consideration of the regulators’ recommendations. The Treasury expects to begin designating CTPs in the next 12 months, and the regulators stand ready to start overseeing CTPs once any designations have been made.

This issue was first publicly raised in October 2021.

We consider financial spread betting falls within our regulatory perimeter. However, we believe that sports spread betting could be better served by a distinct framework designed specifically to address the risks from gambling activity and ensure appropriate consumer protections.

Financial spread bets may be placed for investment purposes and can fall within MiFID regulation. By contrast, sports spread bets involve sporting or political outcomes and cannot be treated as MiFID instruments. Our regulatory framework is designed for investment‑related risks and does not fully address the risks posed by non‑financial betting markets.

Consumers should not assume that sports or other non‑financial betting products are covered by financial compensation schemes or other financial regulatory safeguards. With new products entering the market, clarity from the Treasury on the appropriate regulatory boundary and responsibilities would help ensure consumers receive suitable protections.

This issue was first publicly raised in October 2021.

The Overseas Persons Exclusion (OPE) exempts persons carrying on certain regulated activities from outside the UK from having to be authorised, subject to certain criteria and limitations. We generally do not have visibility or oversight of these firms, which creates risks especially where the OPE is being used by an overseas firm that focuses a core proportion of its business on the UK. Greater information requirements and powers would help to reduce risks through providing greater visibility of these firms.

This issue was first publicly raised in this perimeter report in March 2026.

CMCs carrying on claims management activities in Northern Ireland are outside the FCA's regulatory perimeter. As a result we do not have data on the number of CMCs operating in NI or their activities. Some in the insurance industry have raised concerns about the impact CMC activity in NI is having on motor insurance premiums and the cost of litigation. In March 2025, the Government answered a question in Parliament saying that is has no plans to extend the FCA's claims management perimeter to NI, but that it continues to keep the territorial scope of our powers under review.

This issue was first publicly raised in December 2024.

Trustees who are acting as part of meeting their general obligations as trustee are excluded from our regulatory remit. Regulatory protections such as access to the Financial Ombudsman and FSCS are unlikely to apply. We have seen examples of consumers losing money when they have been encouraged to invest in high-risk investments that are held in trust structures. We would encourage the Government to consider how to tighten the regime on when trustees need to be authorised and the obligations that come with the role (such as increased requirements to report to beneficiaries of trusts in a clear, transparent and timely manner). This would provide greater certainty, transparency and safety for consumer funds. It would also reduce opportunities for financial crime.

This issue was first publicly raised in January 2025.

The Economic Crime and Corporate Transparency Act (2023) (ECCTA) enables firms to share information either directly with each other or through a third-party intermediary to help prevent, detect and investigate economic crime, including criminal market abuse. We welcome this and believe it will improve firms' ability to counter market abuse. However, a gap in the Act means that the civil liability protections do not cover information sharing relating to criminal insider dealing, though they do apply to information sharing about criminal market manipulation. Addressing this legislative gap would increase firms' ability to counter insider dealing, strengthening the integrity of the UK financial system to support competitiveness and growth. We would like to see the list of 'economic crimes' in the ECCTA updated to reflect this.

This issue was first publicly raised in May 2021[5] – but raised in this perimeter report for the first time.

Firms including lenders, safe custody providers, money brokers and financial leasing companies, when undertaking certain lending activities outside our remit, need to register with us under the Money Laundering Regulations. These are known as Annex 1 firms.

Our regulatory remit is set by legislation and Parliament. We only have the power to look at how these firms are meeting their AML obligations. Our conduct rules, consumer protections, SM&CR and other powers do not apply.

When dealing with Annex 1 firms, regulated firms must seek direct confirmation from the firm of their registration status, conduct independent checks, and understand and manage risks.