BNPL: FCA publishes final rules for 15 July 2026 go-live

Apart from some fairly minor amendments - the most notable of which are tweaks to some of the information requirements aimed at reducing the burden on firms in a continuing spirit of proportionality and flexibility - the FCA is introducing the new rules as consulted on.For more on the full consultation proposals, take a look at our previous article 'BNPL: Buy Now, Regulate in 2026 - FCA publishes proposals'.

In its policy statement, the FCA emphasises that firms preparing to enter the TPR should begin planning early to make sure they’re operationally ready for 15 July 2026 (Regulation Day).  It highlights a number of focus areas including:

• Consumer Duty compliance from Regulation Day;
• Where applying for full authorisation, engaging fully with the process including the Authorisations programme - firms can contact the Authorisations DPC team directly at [email protected] or be routed to it via the FCA’s wider PASS and other services;
• Preparing to engage with the FCA’s supervisors on topics including (but not limited to) creditworthiness assessments, complaints handling, and the fair treatment of customers in vulnerable circumstances;
• Notifying the FCA of any material changes to business models, ownership, or location during the TPR period.

We have significant experience in supporting financial institutions with all aspects of their business journey, including the authorisation journey and related systems, processes and procedures changes.

The combination of our legal and consulting teams provides you with a full range of services and clear guidance on how the solutions can be applied within the business. If you would like to discuss how we can help you, please reach out to any of the people listed in this article or your usual Hogan Lovells contact.

Conduct standards

Pre-contract information requirements

There are minor changes to the key product information:

• Moving the requirement for firms to include:
  • The existence of any rights to withdraw from or cancel the agreement, to complete payments ahead of time, and to refer a complaint to the FOS; and
  • An adequate explanation of what a continuous payment authority is and how it works,

from the key product information to the additional product information which firms must either give, or make available, to a consumer before the agreement is entered into. The aim is to avoid providing an excessive amount of information to consumers as part of the key product information (and thereby limiting their ability to make good decisions);

• Requiring the key product information to include an item highlighting that information about certain rights is set out in the additional product information (so that consumers are still made aware that they have rights under a deferred payment credit (DPC) agreement);
• As key product information is most likely to be given before a firm carries out a creditworthiness assessment – and therefore before the firm knows whether it will obtain information from a credit reference agency (CRA) as part of that assessment – amending the relevant piece of key product information so that a firm must indicate whether it will (where this is known), or otherwise may, obtain information from a CRA.

Information on missed payments

There are also some minor amendments to the information requirements on missed payments:

• Amending CONC 7.20.1R to clarify that communications about missed payments do not necessarily need to explain all the potential future adverse consequences of a missed payment. Instead, a firm would need to provide sufficient information about: any adverse consequences for the customer arising out of the missed payment; any other adverse consequences for the borrower that the firm considers are likely to arise out of the missed payment;
• Requiring firms to signpost to free and impartial money guidance and debt advice, and effectively communicate the potential benefits of accessing it, when giving a customer who is in arrears notice required under the rules before: terminating a DPC agreement; or taking steps to enforce a term of the agreement by demanding earlier payment of any sum, treating any right conferred on the debtor by the agreement as terminated, restricted or deferred, or enforcing any security. However, a firm can still inform a customer about money guidance and debt advice before this point. The FCA points out that firms should consider the guidance in CONC 7.3.7AG, as there will be other situations where it will be appropriate to provide this information;
• Not requiring DPC lenders to notify a guarantor when a borrower has missed a payment under a DPC agreement. While this point was not raised by stakeholders in the consultation feedback, the FCA thinks it would not be proportionate for a DPC lender to communicate with a guarantor in these circumstances. It also points out that this brings DPC in line with other regulated agreements, where there are no requirements under the CCA for firms to provide a guarantor with notices of sums in arrears or notices of default sums.

Application of the wider Handbook

The FCA is implementing its proposals as planned.

It recognises that HMT has recently consulted on proposals to streamline the SMCR and that this may present uncertainties for DPC lenders seeking authorisation during a period of change. The FCA confirms that if changes are announced to the SMCR during the TPR, it will help DPC lenders who are planning to become authorised to understand what requirements they will be subject to under SMCR, and when. It may consider a ‘Modification by consent’ approach where appropriate (and where the legal tests under FSMA are met), which could be used to temporarily waive any Handbook requirements.

The FCA states that where any firm is concerned that it will be unable to comply with the regulatory reporting requirements in time, they should contact it through its usual supervisory routes. The FCA specifies that in doing so, a firm should provide details on the steps it has taken to prioritise compliance, the issues that it is experiencing, the reasons for those and a clear plan as to when these would be resolved.

Dispute resolution

Regarding the proposals on dispute resolution:

• Application of complaint handling requirements in DISP to DPC activities: The FCA is proceeding with the proposals as consulted on. It does not think it is necessary to publish guidance or case studies on how DISP 1 will apply in practice to DPC or that it would be appropriate for there to be transitional arrangements relating to the complaints handling requirements in DISP 1.
• Extension of the FOS’ compulsory jurisdiction (CJ) to DPC activities: The FCA has decided to proceed with the approach as consulted on. It confirms that the FOS’ CJ will only cover complaints about regulated DPC agreements entered into on or after Regulation Day (ie 15 July 2026) and where the DPC activities have been carried on from an establishment in the UK.
• FOS’ voluntary jurisdiction (VJ): There had been a proposal to amend the scope of the FOS’ VJ to cover complaints about DPC activities carried on by a respondent from an EEA or Gibraltar establishment. Taking into account the consultation responses as well as other feedback from the joint FCA/ FOS modernising the redress system consultation and stakeholder engagement, the FOS has decided that its VJ should not be amended as proposed. The FOS has also made the point that the proposed change was highly unlikely to have been used in practice. The FOS will be making changes to its VJ rules and standard terms to make sure the DPC provisions are not mirrored in the VJ.
• FOS case fees: The FCA and the FOS acknowledge the concerns expressed by stakeholders about the proportionality of the FOS case fee to the low average value of DPC agreements. The policy statement refers to a previous FOS consultation on introducing differentiated case fees by product type, where the conclusion was that this was not feasible. A more recent (August 2025) FOS consultation paper ‘Financial Ombudsman Service Evolving Our Funding Model’ proposed options to change its charging structure to charge differentiated fees either by reference to the stage at which the complaint is resolved, by reference to the outcome of the complaint, or both – and potentially helping to address proportionality concerns. However, firms will be disappointed that it looks like the case fees “can” is being kicked down the road again, with the policy statement stating that the proposals and any feedback will be reviewed further by the FOS, with any recommendation to be included in its 2027/28 plan and budget consultation due in November 2026.
• Complaints reporting: Authorised firms (not in the TPR) will need to start reporting DPC complaints using the currently applicable consumer credit return (CCR) complaints reporting form for complaints received about regulated DPC agreements from Regulation Day up to and including 31 December 2026. The first complaints reporting for authorised DPC firms under the new form confirmed in PS25/19 will be expected in July 2027. It will cover complaints received in the first half of 2027 (1 January to 30 June 2027) given the new 6-monthly reporting periods. The  confirms that firms in the TPR will not need to report complaints until they are fully authorised and the complaints form they will need to submit will depend on the date they become authorised. The FCA states that DPC firms should familiarise themselves with the updated requirements for complaints reporting in PS25/19.

Authorisation

Temporary Permissions Regime (TPR)

• The FCA is proceeding with the consultation proposals.
• In ‘good time’ before notification for registration for the TPR opens on 15 May 2026, the FCA will publish Directions on the process for notification.
• The FCA emphasises that firms preparing to enter the TPR should begin planning early to ensure they are operationally ready for Regulation Day. It urges any firms that believe they may need to use the TPR, and who have not already engaged with it, to review the FCA website and contact it at [email protected] if they have any questions.