LONDON — The U.K. government is proposing a new approach to regulating financial benchmarks that would narrow supervision to only those indices judged to pose systemic risk, potentially removing 80% to 90% of benchmark administrators from the current regime. Ministers say the reset is meant to modernize the rulebook and cut compliance costs while keeping safeguards for the benchmarks most embedded in U.K. markets, Dec. 17, 2025.
UK benchmarks regulation: what the Treasury is changing
HM Treasury’s consultation would replace the current U.K. framework for benchmarks with a “specified” regime that focuses oversight on a smaller set of benchmarks and benchmark administrators. The proposal is set out in the government’s benchmarks consultation, which is open for feedback until March 11, 2026.
Today, the Financial Conduct Authority authorizes and supervises benchmark administrators under the U.K. version of the post-LIBOR/EU-era rules. Under the proposed UK benchmarks regulation overhaul, the FCA would instead concentrate on a subset of benchmarks that meet criteria tied to systemic importance and potential harm, leaving most providers outside day-to-day benchmark regulation.
How big is the expected cut in oversight?
The Treasury estimates the changes could shrink the population of regulated benchmark administrators by 80% to 90%, a shift that would materially reduce the number of firms needing FCA authorization to provide benchmarks used by U.K. supervised entities. Reuters first reported the scale and the government’s emphasis on focusing on “systemic” benchmarks in its coverage of the plan to overhaul benchmark rules.
The FCA said it supports rebuilding the framework to better match how markets work now, while maintaining standards for the benchmarks that matter most. The regulator’s response is outlined in its statement that it welcomes reform to the UK Benchmarks Regulation.
Why UK benchmarks regulation has been under review for years
The push to recalibrate benchmark regulation sits on more than a decade of reform following manipulation scandals and the global transition away from LIBOR. In 2015, Reuters reported that EU policymakers reached a deal on new rules to curb “rigging” of benchmarks after the LIBOR and EURIBOR controversies, with the EU aiming to stop manipulation of market benchmarks.
As the wind-down of LIBOR accelerated, the FCA also rolled out temporary “synthetic” settings for certain legacy contracts, underscoring how benchmark regulation can be used to manage market transition risk. Reuters detailed the FCA’s stance in 2021 when it gave a green light to limited synthetic LIBOR use.
More recently, the debate has also turned to whether the U.K. regulates too broadly compared with other major markets. The Financial Times reported that the Treasury’s plan would “water down” requirements for most providers, while keeping oversight of the most widely used benchmarks and dropping some future restrictions on overseas indices, as described in its report on plans to ease rules for financial benchmarks.
What happens next
Officials will assess consultation responses before setting out draft legislation and any transition timetable. For firms and investors, the practical question is which benchmarks remain inside the tighter perimeter — and whether the UK benchmarks regulation rewrite preserves confidence in key indices while meaningfully reducing red tape elsewhere.
