The Treasury issues this Order to amend the Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) Order 2025, which primarily addresses the regulation of deferred payment credit agreements, often termed "buy-now-pay-later" (BNPL) agreements.
Key amendments include excluding domestic premises suppliers from certain credit broking regulations related to these agreements and establishing transitional provisions to ensure that existing Part 4A permissions remain valid for the activities as they stand after the Order’s changes take effect on the regulatory commencement date.
Arguments For
Provides final legislative clarity on the regulation of 'buy-now-pay-later' (BNPL) agreements by adjusting definitions and exclusions in existing regulations.
Ensures a smoother transition for firms already holding permissions (Part 4A) related to regulated credit agreements when the new regulatory framework takes effect, by treating existing permissions as covering the newly amended activities.
Removes potentially restrictive wording regarding credit broking activities related to regulated deferred payment credit agreements for domestic premises suppliers, simplifying compliance in that specific context.
Arguments Against
Introducing subsequent amendments (as this Order does) shortly after an initial amending Order (the 2025 Order) suggests potential instability or incompleteness in the initial regulatory approach to BNPL agreements.
The removal of qualifications (like "customer" definition, specific paragraphs, and exceptions) might unintentionally widen or narrow the scopes of regulatory activity in ways not fully detailed in the primary text.
Constant amendments to the scope of regulated activities (e.g., Article 36A, 60B, 64) create ongoing compliance adjustment burdens for regulated entities.
The Treasury make the following Order in exercise of the powers conferred by sections 22(1) and (5) and 428(3) of, and paragraph 25 of Schedule 2 to, the Financial Services and Markets Act 2000¹.
The Treasury is making this statutory order by using specific powers granted under the Financial Services and Markets Act 2000 (FSMA).
These powers relate to defining regulated activities, supplementary powers, and general modification powers concerning financial services regulation.
ARTICLE 1
Citation, commencement and extent
(1) This Order may be cited as the Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) (No. 2) Order 2025.
(2) This Order comes into force on 3rd December 2025.
(3) This Order extends to England and Wales, Scotland and Northern Ireland.
This section establishes the official name of the legislation: the Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) (No. 2) Order 2025.
The Order becomes legally effective on December 3rd, 2025.
Furthermore, the provisions of this Order apply across the entire United Kingdom: England, Wales, Scotland, and Northern Ireland.
ARTICLE 2
Amendment of the Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) Order 2025
(1) The Financial Services and Markets Act 2000 (Regulated Activities etc.) (Amendment) Order 2025² is amended as follows.
(2) In article 3 (amendment of the Regulated Activities Order) in paragraph (2), in new article 36FB (activities in relation to certain regulated credit agreements)—
(a) in paragraph (1), omit the words from “, unless” to the end of the paragraph;
(b) omit paragraphs (2) and (3);
(c) in paragraph (4), omit the definition of “customer”.
(3) In article 6 (interpretation of Part 4), in the definition of “relevant activity”—
(a) in paragraph (a) omit “36A (credit broking) or”;
(b) in paragraph (b) for “activities specified by those articles”, substitute “activities specified by that article”.
(4) After article 6 insert—
“Transitional provision: person with Part 4A permission to carry on an activity in relation to article 60B
6A.
(1) Subject to paragraph (3), where a person has a Part 4A permission to carry on an activity specified by article 60B³ (regulated credit agreements) of the Regulated Activities Order immediately before the regulatory commencement date (“the permission”), then on or after that date the permission is to be treated as permission to carry on an activity of a kind specified by that article as it has effect following the amendments made by this Order.
(2) Subject to paragraph (3), where a person has a Part 4A permission to carry on an activity specified by article 64⁴ (agreeing to carry on specified kinds of activity) of the Regulated Activities Order, so far as it relates to the activities specified by article 60B of that Order immediately before the regulatory commencement date (“the permission”), then on or after that date the permission is to be treated as permission to carry on an activity of a kind specified by article 64 so far as it relates to the activities specified by article 60B as it has effect following the amendments made by this Order.
(3) A Part 4A permission that is treated as having been varied in accordance with paragraph (1) or (2) remains subject to any limitation or requirement imposed in relation to that permission which was in force immediately before the regulatory commencement date.
(4) Paragraphs (1) to (3) do not affect the ability of the FCA to—
(a) vary or cancel a Part 4A permission under the Act or;
(b) impose, vary or cancel a requirement in relation to a Part 4A permission under the Act.”.
(5) In article 10(3) (temporary permission)—
(a) in sub-paragraph (c)(i)—
(i) after “in respect of article”, omit “36A or”;
(ii) for “activities specified by those articles”, substitute “activity specified by that article”.
(b) in sub-paragraph (d)(i)—
(i) after “in respect of article”, omit “36A or”;
(ii) for “activities specified by those articles”, substitute “activity specified by that article”.
(6) In article 11 (application of the 2000 Act to persons with temporary permission)—
(a) in paragraph (4), in the words following sub-paragraph (b) for “some or all”, substitute “either or both”;
(b) in paragraph (5) for “some or all”, substitute “either or both”.
This substantive article details several amendments to the prior 2025 Order, which introduced regulation for BNPL agreements.
Subsections (2)(a)-(c) modify Article 36FB (activities related to regulated credit agreements) by removing exclusions based on contractual conditions, suppressing subsections concerning credit agreement status, and deleting the definition of "customer".
Subsections (3)(a)-(b) amend the definition of a "relevant activity" within Article 6 by removing specific references to Article 36A (credit broking) and making grammatical substitutions to align descriptions of specified activities.
Subsection (4) inserts a new transitional provision (Article 6A) to manage the shift in regulation.
This ensures that existing 'Part 4A permissions' held by firms for activities related to Article 60B (regulated credit agreements) or Article 64 (agreeing to carry on activities) before the 'regulatory commencement date' are automatically treated as permissions for the newly defined activities under the amended rules.
Subsections (5) and (6) make consequential amendments to provisions concerning temporary permissions (Article 10) and the application of FSMA to persons holding such temporary permissions (Article 11), primarily removing references to the now-amended Article 36A and adjusting phrasing regarding the scope of applied rules.