HM Treasury has signed the Financial Services (Overseas Recognition Regime Designations) Regulations 2025, approved by both Houses and published on legislation.gov.uk. The instrument was made on 30 October 2025 and takes effect on 28 November 2025 across the United Kingdom.

In practical terms, the rules standardise how the government can determine that another country or territory’s financial services law and practice are equivalent to the UK’s. The definition of an “overseas recognition regime designation” now applies across relevant areas of financial services and markets, and expressly allows designations that refer to the European Union or other international organisations comprising countries or territories.

The Treasury can attach conditions, limit the scope of a designation, and vary or revoke it. For firms and investors, that signals a modular approach: recognition can be granted for specific activities or products and recalibrated over time. It should reduce friction where overseas rules deliver comparable outcomes, while keeping scope to tighten or withdraw recognition if risks emerge.

To support those decisions, the Treasury may require information or advice from the Financial Conduct Authority, the Prudential Regulation Authority and the Bank of England. Requests must be in writing, set out what is needed and specify a reasonable timeframe. The regulators may also provide analysis proactively, giving the centre of government a fuller view of market structure and risk before any designation is made or amended.

Co‑ordination is made explicit. The Treasury, FCA, PRA and Bank of England must align their roles on designations and on the sharing of information and advice. They are required to prepare and maintain a memorandum describing how they will do this, lay it before Parliament and publish it. For market participants, that document should offer visibility on who does what, and when.

Confidentiality provisions are clarified rather than diluted. Sections 348 to 350 and 352 of the Financial Services and Markets Act 2000 will apply to information received by the Bank of England for these purposes, with targeted adjustments to permit disclosures to the Treasury where necessary to discharge functions under the new regime. That balances information flow with statutory safeguards.

Two technical updates matter operationally. In the Insurance and Reinsurance Undertakings (Prudential Requirements) Regulations 2023, Gibraltar is removed from the definition of an “overseas jurisdiction”. Insurers with UK–Gibraltar footprints should review how this interacts with their authorisation routes, group capital planning and reporting assumptions under existing approvals.

Short selling rules are also tidied up. In the Short Selling Regulations 2025, “overseas jurisdiction” becomes “territory outside”, and “territory” is defined to include the European Union and other international organisations comprising countries or territories. That wording should make it cleaner to frame recognition decisions at bloc level and align reporting and compliance for cross‑border strategies.

This is continuity with a cleaner chassis. According to the explanatory note on legislation.gov.uk, the instrument restates-with modifications-the 2019 EU Exit equivalence regulations, which were revoked by the Financial Services and Markets Act 2023. The powers now sit within the post‑FSMA 2023 framework rather than as a legacy fix.

For market access, the message is straightforward: this instrument does not grant recognition by itself. It builds the plumbing for the Treasury to designate, condition or withdraw recognition in specific areas once the evidence supports it. Used well, it can cut duplicate compliance for cross‑border business and modestly improve liquidity and product availability.

Compliance teams should map where they rely on overseas recognition across trading, custody, insurance and short selling, then document monitoring for conditions and revocation risk. Contract wording and onboarding questionnaires may need to shift from “jurisdiction” to “territory”, and reporting pipelines should be checked against the refreshed short‑selling definitions.

The timetable is clear. The rules apply from Friday 28 November 2025, with the inter‑authority memorandum to follow. The instrument is signed by Lords Commissioners Lilian Greenwood and Stephen Morgan on behalf of HM Treasury. We will track the first wave of designations-and any conditions attached-for practical impact on firms and investors.