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The Financial Services and Markets Act 2000 (Regulated Activities etc) (Amendment) (No 2) Order 2025 (SI 2025/1154) has been laid before Parliament alongside an explanatory memorandum.
The Order amends the Financial Services and Markets Act 2000 (Regulated Activities etc) (Amendment) Order 2025 (SI 2025/859). That Order provides for certain buy-now-pay-later (BNPL) agreements to become regulated credit agreements from 15 July 2026.
The Order will exempt domestic premises suppliers from credit broking regulation when they offer newly regulated interest-free BNPL products to their customers.
Domestic premises suppliers, as defined in Schedule 6, paragraph 2G(3A)(3B) of the Financial Services and Markets Act 2000, are businesses that sell, offer to sell, or agree to sell goods, or offer to supply or contract to supply services in people's homes. Examples are plumbers, double glazing companies, and mobile hairdressers.
There were concerns that numerous small businesses might opt not to offer BNPL services to avoid the time and expense associated with obtaining credit broking permissions. This could have limited consumer choice and potentially led some consumers to resort to using interest-bearing credit cards or other forms of credit, thereby increasing the cost of accessing goods or services. Additionally, it was feared that such regulation would disproportionately affect small businesses, which would be contrary to the UK government's growth agenda.
The Order brings domestic premises suppliers in line with the treatment of other merchants who offer newly regulated BNPL products as a payment option when the regulation of these products comes into effect in July 2026.
The instrument also makes amendments relating to the transition to the new regulatory regime. The effect of these amendments is to clarify that firms with existing Part 4A permission who already have the relevant regulatory approval to undertake consumer credit lending under article 60B (regulated credit agreements), before the new regulatory regime in July 2026, will be treated as having permission to lend newly regulated BNPL products, on or after the regulatory commencement date.
HM Treasury and the FCA will continue to closely monitor the DPS market and will take action if they identify any evidence of emerging consumer harm.
The Order comes into force on 3 December 2025.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
