HM Treasury has finalised the Financial Services (Overseas Recognition Regime Designations) Regulations 2025, made on 30 October 2025 and due to take effect on 28 November 2025, according to legislation.gov.uk. The rules create a single UK mechanism to recognise foreign financial law and practice as equivalent, with clear powers to attach conditions and to revoke recognition.

Approved by both Houses under section 4(9) of the Financial Services and Markets Act 2023, the instrument resets the post‑Brexit approach by restating, with modifications, the 2019 EU Exit regulations that FSMA 2023 repealed. For firms, this offers a cleaner legal route for cross‑border access and reduces reliance on ad‑hoc fixes.

An “overseas recognition regime designation”, defined in regulation 2, can cover a country, a territory, the European Union itself or another international organisation where the overall effect mirrors the UK regime. That wider scope matters for activities governed by EU‑level rulebooks, allowing recognition at bloc level rather than piecemeal country listings.

Regulation 3 states the Treasury may impose conditions or limitations on any designation, and may vary or revoke it. In practice, recognition could arrive with reporting requirements, scope limits or sunset dates-useful flexibility for policymakers and a dependency that risk teams should map into operating plans.

Regulation 4 lets the Treasury require information or advice from the FCA, the PRA or the Bank of England to support designation decisions within a specified timeframe. Regulation 5 then requires those bodies and the Treasury to coordinate and to publish a memorandum-laid before Parliament-describing how they will work together. Once published, that memo will become the practical manual firms look to for timings and touchpoints.

To support this coordination, regulation 6 aligns the Bank of England’s handling of confidential information with FSMA 2000, clarifying when disclosures to the Treasury are permitted. The aim is to enable informed decisions without weakening statutory protections over firm‑level data.

Insurance gets a tidy‑up. Regulation 7 amends the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023 so the definition of “overseas jurisdiction” no longer carves out Gibraltar. The effect is a simpler rule-any jurisdiction other than the United Kingdom is “overseas” for these provisions-so groups should reflect this in structuring, reinsurance placements and board reporting.

Short selling is similarly clarified. Regulation 8 amends the Short Selling Regulations 2025 so “overseas jurisdiction” becomes “territory outside” the UK, and “territory” explicitly includes the European Union and other international organisations. That phrasing enables recognition of EU‑wide regimes, relevant for market makers and asset managers hedging across UK and EU venues.

What changes on day one is the machinery, not the country list. The instrument itself does not grant recognition to any specific jurisdiction; that follows through separate Treasury decisions and could include conditions. Firms should map where they rely on third‑country outcomes-insurer capital credit, short selling exemptions, market access-and plan for conditional equivalence rather than a simple pass/fail.

With 28 November approaching, legal and compliance teams should brief audit and risk committees, refresh regulatory inventories to reflect the new definitions, and set alerts for Treasury notices and the forthcoming memorandum. The government has not produced a full impact assessment, signalling limited direct costs, but operational stakes rise if a designation is varied or revoked mid‑cycle.

The instrument is signed by Lilian Greenwood and Stephen Morgan as Lords Commissioners of His Majesty’s Treasury, dated 30 October 2025. The parliamentary approval requirement and the obligation to publish the memorandum add useful transparency; industry should use that to press for clear, data‑based tests when designations are proposed.