UK overseas recognition regime to start on 28 Nov 2025

Here’s the short version you can teach in five minutes: the UK now has a formal way to recognise other countries’ financial rules. It’s called the overseas recognition regime. The instrument was approved by both Houses under the affirmative procedure, made on Thursday 30 October 2025, and it comes into force on Friday 28 November 2025.

In plain English, an “overseas recognition regime designation” is a decision by HM Treasury that the law and practice in another country - or in an organisation like the European Union - matches the UK closely enough in a specific area of financial services. The Treasury can later vary, limit or revoke a designation if circumstances change.

Who does what is straightforward once you map it. The Treasury decides whether to make, amend or revoke a designation. The Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA) and the Bank of England count as regulators for these purposes and can be required, by written notice and within a reasonable period, to provide information or advice to help the Treasury decide. They can also offer advice without being asked.

To keep decisions consistent, the Treasury, FCA, PRA and Bank of England must coordinate their work and write a joint memorandum explaining how they plan to do it. The Treasury must lay this memo before Parliament and publish it so the public can see the approach.

On confidentiality, the regulations plug the Bank of England into the existing FSMA 2000 rules on sharing information. That allows the Bank to share confidential material with the Treasury for these decisions, while keeping the usual legal protections in place.

If you want a classroom example, look at insurance. Under the 2023 prudential rules, once the Treasury designates a jurisdiction for reinsurance, the PRA must treat reinsurance from that place in the same way as a domestic reinsurance contract for prudential purposes. For some insurance groups, the PRA may also rely on the home supervisor’s group supervision when specific conditions are met.

The instrument also tidies language so different regimes use the same terms. In the insurance rules, it removes the words “or Gibraltar” from the meaning of “overseas jurisdiction”. In the short selling rules, it reframes “overseas jurisdiction” using “territory outside” and clarifies that a “territory” can include the European Union or another international organisation, not only individual countries.

What this means for day one: nothing changes automatically for firms or consumers until the Treasury actually makes a designation naming a country and the part of the rulebook affected. Designations can come with conditions and can be varied or revoked. The official note also says no full impact assessment was produced because no significant impact is expected at this stage.

For your timeline, FSMA 2023 rebuilt the UK’s approach after EU exit. This instrument restates, with changes, a 2019 regulation that has been revoked by FSMA 2023, and it uses section 4 powers with Parliament’s approval process. The upshot is a clearer route for recognition decisions and a duty on regulators to work together.

Study prompts you can use this week: first, sketch the accountability chain - Act → statutory instrument → joint memorandum. Next, choose a hypothetical country and draft a one‑page briefing advising the Treasury on whether to designate it, using the PRA’s criteria on authorisation, prudential standards, group supervision and information‑sharing as your headings.