Consultations and discussion papers: how new rules are made and how to respond

When a regulator wants to change the rules that govern your bank account, your credit card or your pension, it almost never just changes them. It first publishes a document setting out what it proposes, invites anyone to comment, reads what comes back, and only then publishes the final rules. That process is a consultation, and the documents it produces, consultation papers, discussion papers and policy statements, are all public.

On 25 October 2022, for example, the FCA published a consultation paper proposing a package of new measures designed to clamp down on greenwashing, that is, firms making their investments sound greener than they are¹. One earlier FCA consultation drew around 300 responses from a wide range of stakeholders². Consultations are not unique to the FCA: the Competition and Markets Authority has responded to consultations run by others³, and the FSA, the FCA's predecessor, was consulting on capital rules as far back as 2011⁴.

This page explains how the process works, who runs it, how to take part, and, just as importantly, what a consultation cannot do for you.

What consultations and discussion papers are

A consultation paper is a published document in which a regulator sets out draft rules or proposals and asks for comments by a stated closing date. A discussion paper, or a call for views, comes earlier: it gathers evidence and views before the regulator has drafted anything, and it may be followed by a consultation paper with actual proposals. A policy statement comes at the end: it publishes the final rules and explains what the regulator decided after reading the responses.

The FCA's power to make rules, and its duty to consult, come from the Financial Services and Markets Act 2000. An FCA rule instrument from 2024 lists its legal basis as, among other provisions, "section 137A (The FCA's general rules)" and "section 138L (Consultation: general exemptions)" of that Act¹¹. In plain terms: the FCA must consult before making most rules unless a specific exemption applies, and the consultation must allow time for responses.

The scale of the process varies enormously. The FCA's consultation on anti-greenwashing measures was one paper among many it publishes each year¹. An earlier one on complaints handling received around 300 responses from a wide range of stakeholders². Responses come from trade bodies, firms, consumer groups, charities, academics and individual members of the public. Government departments run consultations in a similar way: a Treasury consultation page sets out the proposals, the deadline and how to respond, and a response document is published afterwards.

Not every document that looks like a consultation is one. Regulators also publish calls for input, thought pieces and market reviews, which inform their thinking without proposing rules. The distinction matters if you want your comments to land in the right place: a response to a consultation paper with draft rules can change those rules; a response to an earlier discussion paper helps shape what gets proposed at all.

Who consults: the FCA, the Payment Systems Regulator and the Treasury

Three bodies between them run most of the consultations that affect consumers' money.

The Financial Conduct Authority regulates financial services in the UK⁵, and one of its responsibilities is ensuring fair practice in consumer credit⁶. It consults before changing its rulebook, which covers everything from how lenders treat borrowers in difficulty to how firms handle complaints. Its rules are what the Financial Ombudsman Service applies when it decides complaints: the ombudsman follows the FCA's Dispute Resolution Rules¹².

The Payment Systems Regulator (PSR) oversees the systems that move money between accounts. It is the first economic regulator to oversee payment systems⁷, and eight payment systems have been designated by HM Treasury⁷. The scale is vast: last year payment systems processed more than 22 billion transactions worth around £75 trillion⁷. The PSR consults on matters such as card fees and fraud data, and it is the lead competent authority for monitoring and enforcing the UK Interchange Fee Regulation, which caps certain card fees¹³. If you have a complaint about a breach of that regulation, you may submit it to the PSR, which may then decide to open an investigation¹³.

HM Treasury writes the laws rather than the rulebook, and it consults before making regulations. When the Payment Services (Amendment) Regulations 2024 were made, "The Treasury have consulted the regulators as required by section 3(6) of the Act", the Financial Services and Markets Act 2023¹⁴. Treasury consultations are answered on the gov.uk consultation pages, and one on modernising payment services regulation even gave a postal address for responses: the Payments & Fintech team at Horse Guards Road, London¹⁵.

Other bodies feed into the same process. A parliamentary commission has recommended that the FCA consult on options for widening access to the Financial Ombudsman Service¹⁶, which shows how a consultation can be triggered by a recommendation rather than by the regulator's own initiative. The Bank of England and the Prudential Regulation Authority sit alongside the FCA in the regulatory system⁶, and the FCA is the go-to contact if you want to check whether a firm is legitimate or report a possible scam⁶.

From proposal to final rules

The journey from an idea to a rule you live with follows a recognisable pattern, and the documents at each stage have names worth knowing.

A consultation paper states its closing date plainly. One FCA consultation paper, CP23/29, asked for comments by 8 February 2024, and noted that "The final rate after consultation will be set by the FCA Board in June 2024"¹⁸. That gap, between the deadline and the final decision, is when the regulator reads and weighs the responses.

What follows is a policy statement. When the FCA consulted on complaints handling in CP13/10, it told readers: "When our current consultation ends, we will consider all the responses we receive and publish a policy statement setting" out its final rules, which it expected in February or March 2014¹⁹. Another consultation, CP14/20, promised: "we will consider your feedback and aim to publish our rules in a policy statement by the end of Q1 2015"²⁰.

Sometimes the rules that follow a consultation are made almost immediately, and sometimes they are technical instruments with their own legal force. An FCA instrument from 2024, made under sections 137A, 137T, 138L, 139A and 226 of the Financial Services and Markets Act 2000, required firms handling motor finance commission complaints to pause their response deadlines and direct complainants to the FCA's published information; that rule applied until 21 November 2024²¹. That is a good illustration of the process in miniature: a consultation, then an instrument, then rules firms had to follow, with an end date.

The key point for a consumer is that nothing in a consultation paper is final. Draft rules can change, and sometimes do, in response to what people say. The policy statement is where you find out what actually happened to the proposals.

Implementation periods: the gap before new rules take effect

Final rules rarely take effect the day they are published. Regulators give firms an implementation period to change their systems, and the length of that period is itself often consulted on.

Recent FCA payments rules show the typical range. In its policy statement PS25/12 the FCA provided "a 9-month implementation period from the publication of the Supplementary Regime rules before they come into force"⁸, while its proposed Post-Repeal Regime carried "a 12-month implementation period following the publication of the rules before they come into force"⁸. Transitional provisions can soften the edges: payments firms could continue to rely on acknowledgement letters obtained before the end of the implementation period⁸, and firms did not have to record why they chose third parties appointed before that date⁸.

The mortgage prisoner consultation of 2019 shows the whole timetable in one example. On 26 March 2019 the FCA launched a consultation on rule changes that aimed to enable mortgage prisoners to move to a better deal; the consultation closed on 26 June 2019, with a decision being announced later in 2019²². Three months from launch to close, then a decision within the year.

Implementation can also be very fast when the circumstances demand it. When the Mortgage Charter was agreed in 2023, "The FCA will work rapidly with signatories in order to adopt the necessary rules by Friday 30 June"²³. And some rules carry their own deadlines for regulators: the FCA must determine an application for authorisation or the variation of an authorisation before the end of a period of three months beginning with the date it received the completed application²⁴.

Consultations sometimes propose transitional periods on top of implementation. In CP23/29 the FCA was "considering, and consulting on, a transitional period which would give designated entities additional time to carry out cash access assessments for the first 3 months after the rules come into force"¹⁸. So a consumer reading a policy statement may see three dates that matter: when the rules are published, when they come into force, and when any transitional relief ends.

How to respond to a consultation

Anyone can respond to a consultation. You do not need to be a firm, a lawyer or an expert, and consumer responses are part of what regulators say they want.

The practical steps are straightforward:

1. Find the consultation. FCA consultations are on fca.org.uk, PSR consultations on psr.org.uk, and Treasury consultations on gov.uk. Each page states the deadline and how to respond.
2. Read the questions. Consultation papers set out numbered questions at the end of each chapter. You can answer only the ones that concern you.
3. Send your response by the stated route and deadline. The FCA usually takes responses online or by email; Treasury consultations can be answered online, by email or by post, with the address given on the consultation page, such as the Payments & Fintech team at HM Treasury, Horse Guards Road, SW1A 2HQ¹⁵.
4. Say if you want confidentiality. Consultation papers explain how responses may be published or summarised.

Who regulators expect to hear from is broader than many people assume. A PSR document on access to cash stated it "will be of particular interest to ATM operators, consumer groups and merchants, as well as anyone with an interest in the provision of access to cash"¹⁷. The PSR has also run calls for views, one of which was conducted in spring 2023¹⁷, and it consults on specific directions, such as a draft direction on regulatory financial reporting as a third remedy in its card fees work²⁵.

Joint consultations happen too. In May 2026 the FCA and the Financial Ombudsman Service published a joint consultation setting out an updated framework for mass redress events and a new FOS case process, with the two bodies beginning to implement changes from that day where they could²⁶. A consumer reading that consultation could respond to both bodies' proposals in one place.

A good response does not need to be long. It needs to say who you are, which questions you are answering, what your experience or evidence is, and what you think should change and why. A concrete example of how a proposal would affect you carries more weight than a general opinion.

What regulators weigh up: costs, benefits and evidence

When responses come in, regulators do not simply count them. They weigh the evidence, and they are required to work within the objectives Parliament has set. On the question of a new redress scheme, "The FCA will be required to assess the need for such a scheme in accordance with the overarching objectives that Parliament has set for the FCA as the consumer and conduct regulator"²⁷.

Cost-benefit analysis is central, and the FCA's payments rules show how it works in practice. The FCA previously estimated audit costs to payments firms of £49m and, after consultation, estimated total costs of £53.3m⁸. It set a threshold under which payments firms that did not safeguard over £100,000 of relevant funds at any point in the previous 53 weeks would not need to arrange a safeguarding audit⁸. Its sensitivity analysis found that compliance among failed payments firms may need to be 53% for the proposals to break even⁸. On the benefit side, the average reduction of time to return funds was assumed to fall from 2.3 years to 1.3 years, with an opportunity cost benefit estimated at £3.6m in present value over a 10-year appraisal period⁸.

The PSR applies the same discipline to payments markets. Its market review into card scheme and processing fees found that Mastercard and Visa do not face competition, with fees rising and a lack of clarity on how much businesses will have to pay to accept card payments²⁵. It found that scheme fees paid by acquirers had increased significantly from 2014 to 2018 and have continued to increase since then²⁵. Scheme fees are those charged by scheme operators to participate in the scheme, while processing fees are those charged for the authorisation, clearing and settlement of payments²⁵. Yet even with those findings, the PSR stated "we do not propose to intervene in the market at this stage" in one area of its work²⁸, and it has acknowledged that it "does not have the power to widen the scope of interchange fee regulation in the UK"²⁹.

What this means for a respondent is that evidence beats opinion. If a proposal would cost you money, or protect you from harm, saying how and roughly how much is the kind of input that changes a cost-benefit analysis. Regulators also change their minds between consultation and policy statement: the FCA's audit cost estimate moved from £49m to £53.3m after it considered what respondents told it⁸.

Consultations that changed consumer protections

The rules consumers rely on today mostly began as consultations. A few examples show the range.

The mortgage prisoner rules began with the FCA's consultation launched on 26 March 2019 on rule changes that aimed to enable mortgage prisoners to move to a better deal²². Borrowers stuck on expensive deals with inactive lenders were the subject of a rule change that went through the full process.

The Reform of the Consumer Credit Act consultation was a Treasury-led exercise. The consultation has concluded, and on 10 July the government published a response to its consultation on reforming the Consumer Credit Act³⁰. That response sets the direction for how consumer credit law changes, which matters to anyone borrowing money.

The anti-greenwashing measures came from the FCA's consultation paper published on 25 October 2022, proposing a package of new measures designed to clamp down on greenwashing¹. Anyone buying investments marketed as sustainable benefits from rules that started there.

The PSR's work on app scams is producing new rules that will let people see how well their bank is protecting them against APP scams³¹. Its latest report covering 1 January 2024 to 6 October 2024 includes the UK's 14 largest banking groups, along with data for eleven other smaller firms that were in the top 20 highest receivers of fraud³². Publication of that data followed consultation on how the market should be held to account.

The FCA and FOS joint reforms of 2026 came from a joint consultation setting out an updated framework for mass redress events and a new FOS case process²⁶. It also created a referral mechanism: where the FOS considers there may be ambiguity in what FCA rules require, the FOS will be required to request a view from the FCA, and the FCA is obliged to provide it, with the FCA given 30 days to respond²⁷. One or more parties to a complaint will be able to make a request to the FOS for a view to be sought from the FCA, with the FOS deciding whether to approve such requests²⁷.

The motor finance commission redress process shows how rules made after consultation translate into individual outcomes. If you are unhappy with, or wish to query, your lender's response to a commission complaint, you go back to them and ask for a "redress determination"³³.

Where a consultation cannot help with your own problem

A consultation changes the rules for the future. It is not a complaints procedure, and it is worth being clear about what it cannot do.

The FCA cannot pay compensation or order a claims management company to compensate you, even if you have received poor service⁹. The PSR does not deal with consumer related issues, does not handle complaints from consumers about individual payments, and does not get involved with financial issues beyond the payments industry¹⁰. Neither body will resolve your personal case through a consultation response.

For your own problem, the routes are different:

• Complain to the firm first. With payment problems, the best thing to do first is contact your account provider, for example your bank³¹. The same applies to most financial products.
• Then the Financial Ombudsman Service. If you are unhappy with the firm's response, you can take the matter further by referring it to the Financial Ombudsman Service³⁴. You answer a few questions online, and the service will let you know whether it thinks it can help and what you need to do next to send your complaint³⁵. The ombudsman can help with complaints about a financial adviser or pensions provider that is regulated by the FCA³⁶.
• Check the firm's status. The FCA publishes contact details for regulated financial businesses, and its register can be searched by firm name³⁷.
• FSCS claims and complaints. The Financial Services Compensation Scheme handles complaints over the phone or in writing, or using its contact form, and you can escalate a complaint about claim handling or service to its independent investigator³⁸. A customer who wants to submit an appeal request should email it to appeals@fscs.org.uk, identifying the parts of the decision challenged³⁹.
• If the ombudsman cannot help. "If you aren't happy with our final answer, we can't help you anymore. But you can take your complaint to court if you want."⁴⁰

One warning belongs here. Fraudsters have posed as PSR employees, and the PSR's guidance is that if someone claiming to be from your bank, the PSR or another regulator contacts you out of the blue, the safe course is to hang up and contact the organisation directly using publicly listed contact details, and not to be pressured into sending money⁴¹. A consultation will never ask you for money or personal account details.

For free, impartial help with a money problem, MoneyHelper and debt advice charities exist alongside these routes, and the scams and fraud guide covers what to do if you have already paid a fraudster.