HM Treasury has made the Financial Services (Overseas Recognition Regime Designations) Regulations 2025 (S.I. 2025/1147). The instrument was made on 30 October 2025 and comes into force on 28 November 2025, following approval by both Houses under the affirmative procedure. It extends to England and Wales, Scotland and Northern Ireland.
The Regulations define an overseas recognition regime designation as a Treasury designation, whether under a provision listed in the Schedule or another enactment, that the law and practice of another country or territory is equivalent to, or has equivalent effect to, UK law in a relevant area of financial services or markets. For these purposes, territory includes the European Union and any other international organisation or authority comprising countries or territories.
Where legislation empowers the Treasury to make a designation, that power includes the ability to revoke or vary a designation and to impose conditions or limitations on its application, unless a contrary intention appears in the enabling enactment. This provides a mechanism for time‑limited, partial or conditional recognition where appropriate.
To inform decisions, the Treasury may require the Financial Conduct Authority, the Prudential Regulation Authority or the Bank of England to provide specified information or advice within a reasonable period set out in a written notice. Regulators may also provide information voluntarily in connection with a proposed or existing designation.
The Treasury, FCA, PRA and Bank of England must co‑ordinate the discharge of their respective functions on designations and information provision. They are required to prepare and maintain a memorandum describing in general terms how they propose to exercise those functions and comply with the duty to co‑ordinate. The Treasury must lay the memorandum before Parliament and publish it.
FSMA 2000 confidentiality provisions are applied to information the Bank of England receives under the information‑gathering power. Sections 348 to 350 and 352 are applied with modifications so the Bank may lawfully disclose confidential information to the Treasury for the purposes of these functions and may receive disclosures needed to discharge them.
Amendments align terminology across related legislation. In the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023, the definition of overseas jurisdiction in the overseas insurance regime no longer includes Gibraltar. In the Short Selling Regulations 2025, overseas jurisdiction is replaced with territory outside the United Kingdom, and territory is defined to include the European Union and other international organisations or authorities comprising countries or territories.
The Schedule enumerates key powers under which the Treasury may make designations, including regulation 11 of the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023 and regulation 11(1) of the Short Selling Regulations 2025. These sit alongside any other enactments that allow equivalence‑type determinations across financial services and markets.
For firms, this instrument does not grant equivalence to any jurisdiction in itself. It establishes the process and clarifies the Treasury’s ability to calibrate decisions, including by imposing conditions. Compliance teams should plan for designations that may be narrowed to specific products, activities or entities, and that may be varied or revoked over time.
Insurers with cross‑border operations should review how the revised concept of an overseas jurisdiction interacts with group and solo prudential assessments, particularly regarding Gibraltar business once the instrument is in force. Trading venues and investment firms engaged in short selling should update internal manuals to reflect the new definitions and the recognition that the EU or other organisations may be treated as territories for these purposes.
The Treasury states that a full impact assessment has not been produced because no, or no significant, impact on the private, voluntary or public sector is foreseen. The instrument aims to create uniformity across overseas recognition regimes and ensure consistent handling of confidential information.
The Regulations are made under sections 4, 84(2) and 86(5) of the Financial Services and Markets Act 2023. They restate with modifications the approach previously contained in S.I. 2019/541, which has been revoked by FSMA 2023. Section 4(9) required use of the affirmative procedure, which has been satisfied.