FCA perimeter report

Corporate documents First published:

26/03/2026

Last updated: 26/03/2026 Linkedin Twitter
Our perimeter sets out what we do and don’t regulate. This update sets out the current issues we see around the perimeter and actions needed in response.

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The regulatory perimeter defines our remit. Within our perimeter, we have powers and tools we can use to protect consumers, support market integrity, promote competition, and facilitate the UK’s international competitiveness and economic growth. What is inside our perimeter is set by Government and Parliament.

In an era of increasing technological change and AI adoption, defining what is inside and outside our perimeter is ever more complex. It is important that consumers and other stakeholders understand what is regulated, and what is not. Our perimeter report seeks to explain both the areas where we believe the perimeter should change, and the areas where there is often misunderstanding about the boundaries of our current perimeter.

This report sets out the most significant issues at the edge of our remit. These include areas where legislative change may be needed to:

• Address emerging risks.
• Close gaps that could expose consumers or markets to harm.
• Unlock opportunities to support sustainable economic growth.

Contents

• Recent steps to strengthen our perimeter
• Our commitment
• Perimeter report issues
• What we do and don’t regulate

Recent steps to strengthen our perimeter

Our perimeter report enables us to recommend to Government and Parliament where legislative action can make our remit stronger or adapt it.

We welcome the progress made in addressing some of the issues raised in our December 2024 report. Deferred Payment Credit (Buy Now Pay Later) products will soon come under our oversight. The creation of new regulated activities will strengthen regulation for cryptoasset firms.

Enabled by legislation, we have also designed a regulatory regime for targeted support. Unlike individual, often expensive, regulated advice, this allows firms to provide suggestions for groups of consumers with common characteristics. This could help many more consumers make important decisions about their pensions and investments. It comes into effect from April.

The Government has legislated to bring ESG ratings into our perimeter and we have consulted on a future regulatory regime for ESG ratings providers. The regime will go live in June 2028.

As members of the Digital Regulation Cooperation Forum, we are working with other regulators to coordinate effectively across digital markets where perimeter issues can arise.

Find out more about what we do and don't regulate

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Helping consumers

Gaps in the perimeter can make consumers vulnerable to financial activities that aren’t regulated. Clarity and appropriate legislative change can help ensure consumers understand the regulatory protections they do and don’t have.

Occupational pension schemes fall within the Pension Regulator’s remit, but new types of these schemes may emerge in the market that test the definition and regulatory remit. 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.

We are committed to our work on financial inclusion, including working with a range of stakeholders to deliver on the interventions set out in the Government’s Financial Inclusion Strategy. While Parliament has previously given us powers to ensure access to cash, and we have new rules in place for this, we do not have powers to ensure other banking services are provided. While stakeholders regularly ask us to act beyond our remit in this area, the limit of our powers, and the conclusion that Parliament reached having widely debated the issue, means that we are unable to act.

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Supporting growth

A clear and proportionate perimeter gives clarity on where and which protections for consumers apply and what we expect from firms. This builds the trust necessary for consumers and businesses to invest and take financial decisions with confidence. Well-regulated markets, where regulation is predictable and well-understood, attract overseas business and investment into the UK. We want to foster innovation through the development of open banking, and reduce the regulatory burden through reform of the Senior Managers and Certification Regime. These initiatives directly influence our growth ambitions for the UK and will require effective legislation to reach their full potential.

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Fighting financial crime

Fraudsters and bad actors can exploit gaps in the perimeter. Strengthening the perimeter through legislative reform would increase market integrity and support broader system‑wide efforts to tackle fraud.

The Online Safety Act is an important area where Government, Ofcom and the FCA need to work closely together as the regime develops. The growth of AI-generated content and financial promotions online, including influencer-driven content, creates potential issues of overlap between regulators and highlights the importance of continued information-sharing, collaboration and coordination.

Consumers often suffer harm if they wrongly believe they are dealing with an authorised firm. Our Firm Checker tool aims to give consumers the knowledge to help prevent them falling victim to scams.

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Operating as a smarter regulator

A well-defined perimeter allows us to target our resources where they have the greatest impact and respond quickly to emerging technologies and market developments. We have discussed with Government and Parliament how to set and define the UK risk appetite, and would welcome clarity on Government’s tolerance for risk in the system and the impact on consumers and market integrity.

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Our commitment

We remain committed to working with Government, Parliament and other regulators to ensure the perimeter keeps pace with the market, protects consumers and supports a dynamic and competitive financial system. In January 2026, we wrote to the Treasury Select Committee setting out our priorities for legislative change, including priorities for updating the perimeter. We will continue to provide expert analysis, highlight emerging issues and support the development of a regulatory framework that works for the whole of the UK.

We set out more details on individual issues in the table below.

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Please note

The current perimeter report is made up of a total of 29 entries. To view all entries please expand the view using the drop-down options in ‘Show’ and select 50.

You can interact with the report by searching for keywords (for example by type of issue, strategic theme or sector) using the search bar above the table.

Issues that impact a number of sectors within financial services have been captured under ‘Cross-sector’.

| Strategic objective most aligned to | Type of issue | Sector | Item | Summary of issue |
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| Helping Consumers Navigate Their Financial Lives | Changes needed to our perimeter | Cross-sector | Appointed Representatives (ARs) | 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. | | Helping Consumers Navigate Their Financial Lives | Changes needed to our perimeter | Retail investments and pensions | Exemptions in the Financial Promotion Order | This issue was first publicly raised in September 2020.

The Financial Promotion Order exemptions exempt certain communications, including communications to ‘high net worth’ and ‘sophisticated’ investors, from the financial promotion restriction. They allow certain investments (including high risk investments) to be marketed to ‘high net worth’ or ‘sophisticated’ investors without being subject to FCA rules. This includes the requirement to be clear, fair and not misleading. The UK thresholds for certification are far lower than in comparable jurisdictions and evidence shows consumers frequently over certify themselves. We believe self-certification should be removed and high net worth thresholds raised, with firms responsible for verifying eligibility. We set out in our Discussion Paper (DP25/3) our belief that, without legislative change to the FPO exemptions, there will remain a gap in our ability to effectively protect consumers from misleading promotions. Our DP also sought views on whether there are other interventions we can make to protect consumers from harm caused by unauthorised financial promotions. |
| Helping Consumers Navigate Their Financial Lives | Other issues outside our perimeter | Cross-sector | AI - general-purpose LLMs | This issue was first publicly raised in December 2025 - 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. |
| Helping Consumers Navigate Their Financial Lives | Other issues outside our perimeter | Banking, credit and lending | Deposit aggregators | This issue was first publicly raised in April 2021.

Deposit aggregators (also known as savings platforms or savings marketplaces) provide intermediary services to retail consumers who want their money placed with savings providers. Deposit aggregation is a growing market and can support competition but is not a regulated activity in itself (although the way it is delivered could involve regulated activities). There is potential for consumer harm, for example if consumers unknowingly exceed the FSCS limit where they have a direct account with a savings provider and hold money with the same provider through a deposit aggregator. There are potential liquidity risks to banks and building societies accepting deposits from deposit aggregators, where deposits are concentrated and could be moved together. If there was concern about the risk of consumer harm, deposit aggregation may need to be brought into our perimeter. |
| Helping Consumers Navigate Their Financial Lives | Other issues outside our perimeter | Banking, credit and lending | Access to cash and banking services | 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. |
| Helping Consumers Navigate Their Financial Lives | Other issues outside our perimeter | Cross-sector | Economic abuse | This issue was publicly raised in the Government’s Financial Inclusion Strategy, published in November 2025.

All parties to a joint mortgage are jointly and severally liable for the full debt. As a result, key decisions, such as changing mortgage terms or selling the property, typically require the agreement of all parties. Perpetrators of economic abuse can exploit this by withholding consent or refusing to pay their share, causing significant financial and emotional harm to victim survivors.

We have explored this issue in our recent work, engaging with Government and the charity Surviving Economic Abuse, and listening directly to victim survivors.

Legislative change may be required to materially improve outcomes for victim-survivors. We therefore welcome the Treasury’s commitment to explore how joint mortgages are used as a tool of abuse and how victim-survivors can be better supported in its Financial Inclusion Strategy. We will continue to engage with Government and other stakeholders to achieve meaningful change for those suffering economic abuse - and should the Government wish to introduce legislative solutions to deal with the legal issues around changing the terms of joint contracts, we would support any associated regulatory change. |
| Helping Consumers Navigate Their Financial Lives | Other issues outside our perimeter | Banking, credit and lending | SME lending | 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. |
| Helping Consumers Navigate Their Financial Lives | Other issues outside our perimeter | Banking, credit and lending | Unregulated debt advice lead generators | This issue was first publicly raised in September 2020.

Unregulated debt advice lead generators are a major point of entry to the individual voluntary arrangements (IVA) and Protected Trust Deed (PTD) market. These firms pass consumers to authorised commercial firms that provide debt advice services but do not provide debt solutions themselves (‘debt packagers’), and also to Insolvency Practitioners. Insolvency Practitioners can give debt advice without being FCA-regulated in certain circumstances. Where parts of this process occur outside the perimeter our ability to intervene to prevent harm is highly limited. The Insolvency Service (IS) is continuing a major review of the personal insolvency landscape, and we will continue to work with the IS and the Government. |
| Helping Consumers Navigate Their Financial Lives | Other issues outside our perimeter | Banking, credit and lending | Workplace savings | 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. |
| Helping Consumers Navigate Their Financial Lives | Other issues outside our perimeter | Insurance | General insurance | This issue was first publicly raised in June 2019.

Legislation does not currently provide a complete definition of insurance. So court decisions on whether particular contracts amount to insurance help determine where our remit applies. We have seen a range of insurance arrangements where we believe currently unauthorised participants should need FSMA authorisation. These include insurers based outside the UK who may need authorisation due to activities being done for them or on their behalf by UK based persons.

There has sometimes been uncertainty about whether certain contracts should be classed as insurance. We have identified previous instances of products being promoted as warranties or service contracts which we consider should properly be classed as insurance contracts.

These situations may risk retail and commercial customers not receiving all regulatory protections and increases the likelihood of unregulated firms undertaking activities without the necessary authorisation. Although not a regulatory priority for this year, we keep these risks under review, including the need to consult on guidance setting out the FCA’s approach in this area (in addition to our existing PERG 6 guidance). |
| Helping Consumers Navigate Their Financial Lives | Other issues outside our perimeter | Retail investments and pensions | Occupational pension schemes (OPS) | 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. |
| Sustained Economic Growth | Changes needed to our perimeter | Wholesale financial markets | Benchmarks Regulation | This issue was first publicly raised in July 2025.

Benchmarks are used in a wide range of markets, including in helping to set prices and measure performance. We are working with the Government to reform the existing onshored EU regulatory framework so that it becomes proportionate and tailored to UK markets. We welcome the Government’s December 2025 consultation which proposes to only regulate specific, designated benchmarks or benchmark administrators, based on their importance to the integrity of UK financial markets. The new regime would be reducing the overall regulatory burden including eliminating regulation entirely for most firms, while also maintaining users’ access to a wide variety of financial benchmarks from both UK and overseas administrators. We will consult on the regulatory requirements in due course. |
| Sustained Economic Growth | Changes needed to our perimeter | Wholesale financial markets | Investment consultants | 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. |
| Sustained Economic Growth | Changes needed to our perimeter | Payments and cryptoassets | Open Banking, Open Finance and Smart Data | This issue was first publicly raised in September 2017.

Secure data sharing services can help people manage money better, access innovative products, get better deals, and make payments directly from their bank accounts. Open banking provides a secure, regulated way for consumers and businesses to share access to payments data with trusted apps and services. Open finance extends these principles to a wider range of products - including credit and mortgages - giving consumers greater control over their financial data.

Open finance will transform the UK’s financial services sector, enabling financial firms to use data in smarter and more efficient ways. It will support wider economic growth by improving productivity, competition, and international competitiveness within financial services - analysis published by McKinsey has estimated that delivering open finance across financial services could increase UK GDP by up to 1 to 1.5% by 2030.

We developed a clear vision for the next phase of open banking and are testing real world applications of open finance through our Smart Data Accelerator. To progress further, we are working with the Treasury as it prepares legislation under the Data Use and Access Act 2025 to establish the regulatory framework for open banking. We will also collaborate with other regulators and the Government to ensure the development of open finance is joined up with smart data schemes across sectors. |
| Sustained Economic Growth | Changes needed to our perimeter | Insurance | Captive insurance | 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. |
| Sustained Economic Growth | Other issues outside our perimeter | Banking, credit and lending | Universal right to bank account for companies | This issue was first publicly raised in July 2023.

In the UK, companies and organisations do not have a legal right to a bank account. While SMEs require banking services to operate and support growth, our 2024 Provision of Banking Services report found that some businesses and charities can face difficulties accessing accounts. Stakeholders report access problems are more frequent for SMEs operating in sectors where banks may have reduced risk appetite, such as defence or cryptoassets.

Although we cannot require firms to offer bank accounts to business customers, we are working with firms and other stakeholders to seek to improve access to bank accounts for businesses. In 2026 we will review banks’ response to access to banking challenges and where improvements can be made for SMEs in key sectors. This includes the defence sector which is critical to our national security and market integrity.

Determining whether to introduce a legal right to a payment account is a matter for the Government and Parliament. |
| Be a Smarter Regulator | Changes needed to our perimeter | Cross-sector | Outsourcing | 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. |
| Be a Smarter Regulator | Changes needed to our perimeter | Wholesale financial markets | Senior Managers & Certification Regime | This issue was first publicly raised in October 2021.

The Senior Managers & Certification Regime (SM&CR) embeds individual accountability within firms and minimum standards of behaviour of most financial services employees. However, the Appointment Representative (AR) model, Recognised Investment Exchanges (RIEs), Credit Ratings Agencies (CRAs), Payments and e-money firms are not currently subject to the SM&CR. We consider extending the regime to them would deliver greater accountability and improve oversight of functions that promote good conduct and market integrity. We welcome the Treasury's consultation on bringing the AR model into scope. Our view is that RIEs, CRAs, Payments and e-money firms should also be brought into scope. |
| Be a Smarter Regulator | Changes needed to our perimeter | Wholesale financial markets | Sports and non-financial spread betting | This issue was first publicly raised in September 2020.

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. |
| Be a Smarter Regulator | Changes needed to our perimeter | Payments and cryptoassets | Cryptoassets | This issue was first publicly raised in June 2019.

Most cryptoassets and cryptoasset‑related activities currently fall outside the FCA’s regulatory perimeter. The Treasury’s Crypto RAO Statutory Instrument, made on 4 February 2026, introduces 7 regulated cryptoasset activities we will oversee. However, further legislative development on Resolution would help ensure a comprehensive, coherent regime that both protects consumers and enables responsible growth in the cryptoasset market. |
| Be a Smarter Regulator | Changes needed to our perimeter | Wholesale financial markets | Overseas Persons Exclusion (OPE) | 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. |
| Be a Smarter Regulator | Changes needed to our perimeter | Payments and cryptoassets | Payments | This issue was first publicly raised in August 2017.

We are working with The Treasury to modernise and future-proof the framework for regulating payment services and e-money. We want to deliver a more agile and responsive regulatory environment that promotes innovation in the UK payments sector. As part of this work, we are considering new market developments and innovations, such as tokenised payments including stablecoin, and agentic payments. |
| Be a Smarter Regulator | Other issues outside our perimeter | Cross-sector | Claims management companies | 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. |
| Be a Smarter Regulator | Other issues outside our perimeter | Retail investments and Pensions | Prediction markets | This issue was first publicly raised in March 2026.

Prediction market products (PMPs - also referred to as event, forecast or horizon contracts) are speculative products that allow consumers to take binary ‘yes’ / ‘no’ positions on the outcome of future events. These products have expanded rapidly overseas (particularly in the US).

PMPs linked to non-financial events (such as sporting or political outcomes) fall under the Gambling Commission’s remit. Where PMPs reference financial or certain climatic events, they fall within our regulatory perimeter. Our current view is that the financial PMPs we have seen are binary options. As such they remain subject to the FCA’s permanent ban on the sale of binary options to retail consumers, which we consider appropriate given the speculative, gambling-like nature of these contracts and the high risk of consumer harm.

Further to our DP on Consumer Access to Investments, we will consider whether we want to do further work on access to these products, and/or clarify the perimeter. |
| Fighting Financial Crime | Changes needed to our perimeter | Cross-sector | Trustees exclusion | 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. |
| Fighting Financial Crime | Changes needed to our perimeter | Cross-sector | Online Safety | This issue was first publicly raised in June 2019.

Scammers are increasingly using social media platforms and search engines to commit fraud. The Online Safety Act (OSA) 2023 is a key tool that places obligations on tech firms to combat fraud.

However, we continue to see large quantities of easily identifiable illegal content on online platforms. It is too easy for bad actors to evade blocks, such as by ‘phoenixing’ or ‘lifeboating’ to new accounts. All social media platforms need to step up and improve their controls.

We would like to see the OSA strengthened by eliminating a loophole which results in User Generated content, such as sponsored adverts by influencers, not being captured by the Fraudulent Advertising duties in the Act. Reforms to the OSA could also make it easier to share information between regulatory and other partners to fight fraud. |
| Fighting Financial Crime | Changes needed to our perimeter | Wholesale financial markets | Economic crime - information sharing | 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. |
| Fighting Financial Crime | Other issues outside our perimeter | Retail investments and pensions | Financial Promotions - social media | This issue was first publicly raised in October 2021.

As firms increasingly use social media for financial promotions and to generate business, influencer driven content has grown. Influencers often lack knowledge of financial promotion rules. This may lead to illegal or unlawful promotions being made that mislead consumers - including vulnerable consumers less able to absorb losses - into high risk ‘get rich quick’ schemes. While we continue taking action against unlawful promotions, we also want to work with legitimate finfluencers providing helpful information for consumers so that they better understand our rules and their obligations. |
| Fighting Financial Crime | Other issues outside our perimeter | Cross-sector | Annex 1 firms | This issue was first publicly raised in May 2021 – 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. |

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What we do and don’t regulate

What we regulate

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Our remit is set by Government and Parliament

The activities we regulate are mainly set out in the Financial Services and Markets Act 2000 (Regulated Activities) Order (the RAO). Firms and individuals must have our authorisation to carry out these regulated activities.

Firms we authorise can also carry out unregulated activities. Some but not all of our powers and requirements apply to these activities. Our powers over unauthorised firms and individuals are more limited.

Unregulated activities are not usually covered by the Financial Services Compensation Scheme (FSCS) or the Financial Ombudsman Service (Financial Ombudsman).

The Financial Services and Markets Act 2023 (FSMA 2023) created the Designated Activities Regime (DAR), which sits alongside the RAO. The DAR framework enables the Treasury to ‘designate’ activities, and to confer rule-making, supervisory and enforcement powers on us over these activities.

Other UK and onshored EU legislation also defines our perimeter

We have powers and responsibilities beyond supervising regulated activities.

• We act as the UK’s listing authority. The listing regime applies to firms whether or not they are authorised under the Financial Services and Markets Act 2000 (FSMA).
• The market abuse regime applies to anyone’s behaviour, whether or not they are authorised by us.
• The Payment Services Regulations and Electric Money Regulations set out authorisation regimes for payment institutions and e-money institutions. They give us specific responsibilities and powers for these providers.
• The Money Laundering Regulations 2017 (MLRs) gives us additional  responsibilities beyond those for authorised firms carrying out regulated activities.
• We share competition powers with the Competition and Markets Authority (CMA) and other regulators.
• Some provisions in the Consumer Credit Act 1974 (CCA) can apply to unauthorised individuals and firms that do not carry out regulated activities.
• We can use our powers under general consumer protection legislation for both regulated and unregulated activities.
• We supervise and enforce the financial services requirements in assimilated law and can make technical standards under that law. Our powers and responsibilities under these laws can often differ from those for regulated activities set out in the RAO. This means our ability to act when we see harm depends on which legal regime applies to a firm or activity.

This is a simplified description of the regulatory perimeter. It does not cover the full range of exclusions and exemptions.

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Harm linked to the perimeter

It can be complex to decide whether an activity falls within our regulatory perimeter. This is especially true when new products or services emerge, or when existing ones are used in new ways that were not anticipated when the legislation was written.

We cannot prevent all consumer harm and we do not always have the power to act. We focus our resources where we can have the greatest impact. As our remit continues to grow, we must make difficult choices about what we monitor or where we intervene.

Our Firm Checker tool allows consumers to check whether a firm is authorised by us and allowed to provide the services they need.

Our general approach to the perimeter

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Identifying and reducing harms

We take steps to help reduce harm linked to our regulatory perimeter. This includes harm from firms or individuals carrying out regulated activities without authorisation or the correct permissions, and by confusion about where the perimeter sits and what it means. For example, we:

• Monitor and assess the potential for harm linked to the perimeter as part of our day-to-day regulatory work, in line with our operational objectives.
• Support discussion with government and other stakeholders, and highlight gaps in legislation where we see potential harm.
• Take action to reduce harm outside our perimeter where we can.
• Share our insights and information with partner agencies.
• Issue warnings, run targeted campaigns, and help consumers make informed financial decisions.
• Analyse data and intelligence, and take action against firms or individuals who illegally carry out regulated activities Consumers may still suffer loses, whether or not they are dealing with an authorised firm or individual or a regulated activity. This can be because of the way the market performs and the risks consumers have taken, or because of dishonesty or misconduct by authorised or unauthorised firms or individuals.

Our powers to act against unregulated activities

In general, we do not have powers to act against unauthorised firms carrying out activities that do not require our authorisation.

We can make rules and impose requirements on FCA-authorised firms. This can include unregulated activities where they are relevant to our statutory objectives. For example, the Consumer Duty sets requirements  on how firms design products and services for retail customers and how they support them. These ancillary activities are not regulated activities in themselves, but they are linked to regulated activities and fall within the scope of the Consumer Duty.

Many of our rules apply to how authorised firms run their business more broadly. This includes prudential requirements, systems and controls, the Senior Managers & Certification Regime (SM&CR), and complaints handling.

We can use our powers under general consumer protection law for both regulated and unregulated activities. We have powers under the Consumer Rights Act 2015 and the Unfair Terms in Consumer Contracts Regulations 1999 to take action if we consider a term in a consumer contract is likely to be unfair or insufficiently transparent.

We can also use our powers to enforce other consumer protection law such as the Consumer Protection from Unfair Trading Regulations 2008. This can help us to tackle unfair commercial practices, even where our rules do not apply.

Where we might act against unregulated activities

Financial services markets are dynamic and always changing and our remit is large and growing. We need to prioritise where we take action. Because our powers over unregulated activities are limited, defining when and how we act is not straightforward.

We are more likely to act where the unregulated activity:

• is illegal or fraudulent
• has the potential to undermine confidence in the UK financial system
• is closely linked to, or may affect, a regulated activity

Working with our partner agencies

We work closely with partner agencies to prevent harm and support consumers if things go wrong. These include:

• Organisations that provide consumer protection and guidance in financial services, such as the Financial Ombudsman, the FSCS, and the Money and Pensions Service (MaPS) which offers  free and impartial money, debt and pensions guidance through the MoneyHelper website.
• Other regulators and public bodies such as the Prudential Regulation Authority (PRA) and the Bank of England, the Payment Systems Regulator (PSR), the Competition and Markets Authority (CMA), the Equality and Human Rights Commission (EHRC), The Pensions Regulator (TPR), and the Advertising Standards Authority (ASA).
• Other law enforcement agencies, such as the Serious Fraud Office (SFO), the National Crime Agency (NCA) and the National Economic Crime Centre (NECC). We share information proactively, especially where our partners have powers to act, and we do not, or where they are better placed to do so.

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Our challenges

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Collecting intelligence and data on unregulated activities

Our ability to monitor harm caused from unregulated activities is limited - especially if the firms are not authorised. This makes it more difficult to identify harm and to conduct analysis.

We do not routinely collect significant data on unregulated activities. Firms must comply with our regulatory reporting requirements. These typically focus on activities that fall within our perimeter.

Where we do receive data or intelligence on unregulated activities, for example from other agencies or from consumers, this is often after harm has already occurred.

We are investing in our people, technology and capabilities so we can find and stop harm quicker but will still face significant challenges when unregulated activities are the cause.

Preventing harm

When we take action to prevent misconduct in one product or activity within or outside our perimeter, these players, who may be well resourced, frequently seek out new opportunities in other products or activities. We work to reduce this by sharing intelligence with other agencies and issuing warnings on our website.

We provide clarity on the perimeter where we can and to help consumers to make informed financial decisions. However, the complexity of the perimeter, and continuous changes in financial services and products mean we cannot remove all uncertainty.

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