Lords Resume Scrutiny of Financial Services Bill

Key Points

• On Monday 7 September the House of Lords started report stage discussions on the Financial Services and Markets Bill.
• The Bill would make reforms to the Financial Ombudsman Service (FOS), remove the Payment Systems Regulator, introduce a new “provisional licences” authorisation regime and amend the bank ring-fencing regime in the UK.
• To date, two days of report stage have been booked: Monday 7 September and Wednesday 9 September, but this may be supplemented with further sitting days.
• The amendments tabled for Day-one include measures relating to consumer credit protections, provision of affordable credit, what constitutes a fair and reasonable outcome for consumers to the Financial Ombudsman and the appointment of an independent reviewer of the memorandum of understanding between the Financial Conduct Authority (FCA) and the FOS.
• The Bill had been through committee stage from Monday 22 June to Wednesday 8 July and the second reading was held on Monday 8 June.
• The public may watch the proceedings live on Parliament TV and a full transcript of each day’s debate is printed in Lords Hansard about three hours later.
• A House of Lords Library briefing provides more background on the provisions of the Bill.

London (Britain Today News) September 04, 2026 — Members of the House of Lords have begun a fresh round of detailed scrutiny of the Financial Services and Markets Bill, entering report stage on Monday 7 September, as peers examine proposed amendments touching on consumer credit protections, the powers of the Financial Ombudsman Service, and the future of the Payment Systems Regulator.

According to information published on the House of Lords website, the Bill is intended to reform several areas of financial regulation, including changes to the Financial Ombudsman Service, the abolition of the Payment Systems Regulator, the introduction of a “provisional licences” authorisation scheme, and reforms to the UK’s bank ring-fencing regime.

What Is the Financial Services and Markets Bill?

The Financial Services and Markets Bill is a piece of legislation moving through the UK Parliament that aims to update and reshape how financial services are regulated in Britain. Per details set out on the House of Lords website, the Bill covers four broad areas: reform of the Financial Ombudsman Service, abolition of the Payment Systems Regulator, creation of a “provisional licences” scheme for firms seeking authorisation, and changes to the ring-fencing rules that separate retail banking from riskier investment banking activities. The Bill sits within the government’s ongoing programme of post-Brexit financial services reform, though the House of Lords website does not itself detail the Bill’s wider policy origins beyond its stated scope.

When Does Report Stage in the House of Lords Take Place?

Report stage got underway on Monday 7 September, with a second day currently pencilled in for Wednesday 9 September. As the House of Lords website makes clear, this schedule is

“subject to change and additional days may be required”

— meaning peers could return to the Bill on further dates if the volume of amendments or the complexity of debate demands it. For readers tracking the Bill’s progress, this caveat is significant: report stage is not always concluded within the days initially set aside, particularly for legislation as technical and wide-ranging as this one.

What Happens During Report Stage, and Why Does It Matter?

Report stage gives members of the House of Lords an additional opportunity to closely scrutinise elements of the Bill and to propose changes before it moves further through the parliamentary process. Unlike committee stage, where amendments are debated in more granular, line-by-line detail, report stage allows the whole House to revisit specific provisions, test arguments made earlier in the Bill’s passage, and vote on amendments that could reshape its final form. For a Bill covering financial ombudsman powers, payment regulation and bank structure, report stage is often where the most contested or high-profile amendments are pressed to a vote.

What Changes Could the Financial Ombudsman Service See Under the Bill?

Reform of the Financial Ombudsman Service (FOS) is one of the Bill’s central strands. Amendments tabled for day one of report stage include proposals on

“matters to be taken into account by the Financial Ombudsman when determining whether an outcome is fair and reasonable,”

according to the amendment list published alongside the Bill. This wording — “fair and reasonable” — is the actual statutory test the Ombudsman applies when resolving disputes between consumers and financial firms, and any amendment altering how that test is interpreted could have direct consequences for how complaints are settled. A further amendment proposes the appointment of an independent reviewer for the memorandum of understanding between the FCA and the FOS, a mechanism intended to formalise how the two bodies work together.

Why Is the Government Planning to Abolish the Payment Systems Regulator?

The Bill’s stated aims include abolishing the Payment Systems Regulator, though the House of Lords website summary does not set out the government’s detailed reasoning for this change. The Payment Systems Regulator currently oversees the systems that allow money to move between banks and other payment providers in the UK. Its proposed abolition, as one of the four headline reforms listed for the Bill, is likely to remain a point of discussion as report stage progresses, particularly given the regulator’s role in matters such as fraud reimbursement and access to cash.

What Is the New “Provisional Licences” Authorisation Scheme?

Among the Bill’s other headline measures is the introduction of a “provisional licences” authorisation scheme, as described on the House of Lords website. While the underlying summary does not elaborate further on how such a scheme would operate in practice, the phrase suggests a mechanism allowing firms to begin operating, or to progress towards full authorisation, before a complete licence is granted — a model already used in some other regulatory regimes. Further detail is expected to emerge as peers debate the relevant clauses during report stage.

How Will the Bill Reform the UK’s Bank Ring-Fencing Regime?

The fourth headline reform area concerns the UK’s bank ring-fencing regime, which requires large banks to separate their retail banking operations from investment banking activities to protect everyday customers’ deposits from riskier trading. The Bill proposes changes to this regime, according to the House of Lords website, though the precise nature of those changes was not detailed in the published summary. Ring-fencing has been a recurring subject of debate among UK lawmakers and regulators since it was introduced following the 2008 financial crisis, with periodic reviews examining whether the rules remain proportionate for the banking sector as it stands today.

What Amendments Have Been Proposed So Far?

According to the amendment paper published for day one of the report stage, members have put forward proposals covering:

• Preventing the removal or reduction of consumer credit protections.
• Improving access to affordable credit.
• The matters the Financial Ombudsman must take into account when determining whether an outcome is “fair and reasonable.”
• The appointment of an independent reviewer for the memorandum of understanding between the FCA and the FOS.

These amendments indicate that consumer protection — particularly around credit — is likely to be a significant theme of the debate, alongside the ombudsman-related changes discussed above.

How Can the Public Follow the Debate?

Members of the public wishing to follow proceedings can watch the debate live on Parliament TV. For those who prefer a written record, a full transcript is published in Lords Hansard approximately three hours after each day’s debate concludes. Both routes are provided directly by the UK Parliament and offer an unedited account of what is said and voted upon during report stage.

What Happened During Earlier Stages of the Bill?

Report stage is only the latest step in a process that has been underway for several months. The Bill underwent line-by-line examination during committee stage between Monday 22 June and Wednesday 8 July, the stage at which peers typically raise detailed questions and probe the government’s intentions clause by clause. Before that, the Bill’s core principles were debated in full during second reading on Monday 8 June, the stage at which the House considers whether a Bill should proceed at all. Having passed both stages, the Bill has now reached the more targeted scrutiny of report stage.
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Where Can Readers Find More Information About the Bill?

Those wanting a fuller account of the Bill’s background and provisions can consult the House of Lords Library briefing prepared ahead of report stage. Library briefings are produced by parliamentary staff to give members and the public an impartial overview of a Bill’s content, its passage so far, and the issues likely to arise in debate. This briefing sits alongside the official amendment papers and Hansard transcripts as the primary published sources for anyone following the Bill’s progress.

What Happens Next for the Financial Services and Markets Bill?

With one day of report stage complete and a second scheduled for Wednesday 9 September, attention will turn to which of the tabled amendments are pressed to a vote and whether the government accepts, resists, or offers concessions on any of them. Should additional days be required, as the House of Lords website notes is possible, the Bill’s timetable could shift further. Following report stage, the Bill would typically proceed to a third reading, its final stage in the House of Lords, before any amendments are reconciled with the House of Commons.