UK Government Plans to Ease Rules for Financial Market Benchmarks

The UK government has announced proposals to loosen regulation for financial benchmark providers, aiming to cut red tape and strengthen the City of London’s global competitiveness.

London — The UK government has set out plans to significantly reduce regulatory requirements for financial benchmark providers, in a move designed to simplify oversight and attract more market activity to the UK.

Under the proposals, the majority of benchmark administrators would no longer require formal regulatory approval before their indices can be used by asset managers and financial institutions. Officials said the changes are intended to modernise the regulatory framework and bring it closer in line with international competitors.

Scope of regulatory changes

The reforms would remove mandatory authorisation for most benchmark providers, retaining stricter oversight only for those considered systemically important. The government also plans to drop previously proposed limits on the use of overseas benchmarks in UK markets.

Ministers argued that the current regime is overly complex and places unnecessary costs on firms, particularly smaller providers, without delivering clear benefits for market stability.

Industry and regulatory response

Market participants broadly welcomed the move, saying lighter regulation could improve innovation and reduce compliance costs. However, some regulators and industry groups cautioned that benchmarks play a critical role in pricing trillions of pounds of assets and warned against weakening governance standards too far.

Officials said safeguards would remain in place to ensure accuracy, transparency and accountability for benchmarks that are widely used across financial markets.

Impact on the City of London

The proposed changes form part of a wider push to enhance the UK’s appeal as a global financial centre following its departure from the European Union. The government said the reforms could encourage more benchmark activity to be based in the UK and support growth in financial services.

A public consultation on the proposals has been launched, with final rules expected to be set out next year.

Source & Editorial Transparency:

This article is based on publicly available information, including reporting from multiple reputable news organisations and official sources.

It has been rewritten, contextualised, and editorially reviewed by the AI News UK Editorial Desk.