Consumer Duty isn’t the only thing that’s new on 31 July

Most of the talk in the financial services industry relating to 31/7/23 focuses on Consumer Duty and for good reason, because it will bring big changes for many firms, including a new addition to the FCA’s Principles for Businesses.


The new Principle 12 states:

“A firm must act to deliver good outcomes for retail customers.”

But what seems to be slipping under the radar a little is a new rule which also comes into effect on the same day.

All firms will be aware that SM&CR introduced the Conduct Rules – five affecting everyone and another four for those holding Senior Management Functions – but July 31 brings in a sixth Conduct Rule to coincide with the implementation of Consumer Duty.

On the face of it, Conduct Rule 6 is quite straightforward.

You must act to deliver good outcomes for retail customers.

But, as always, there’s a bit more to consider.

The new rules are enshrined within COCON 2.4 in the FCA Handbook and new obligations are as follows:

  • You must act in good faith towards retail customers.
  • Acting in good faith is a standard of conduct characterised by honesty, fair and open dealing and acting consistently with the reasonable expectations of retail customers.
  • You must avoid causing foreseeable harm to retail customers.
  • You must enable and support retail customersto pursue their financial objectives.

All straightforward then!

Firms will, of course, need to inform all staff affected by the new rule and update records appropriately.

This new rule clearly runs alongside Consumer Duty and aligns with FCA’s comments that they intend to make individuals responsible where failings are identified within firms, but it’s really what should be happening anyway.

Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

ATEB Compliance offers compliance and regulatory advice.

ATEB Suitability provides report writing software for the financial services market.

Our View

Given that Principle 12 is being added to the existing set of Principles for Businesses, it probably follows that the Conduct Rules would be amended as well. Perhaps it’s overkill, but also a reminder that Consumer Duty and all that surrounds it really is a big deal to the FCA. Firms that think it isn’t are only fooling themselves.

Action Required By You

For information right now, but prior to 31st July all staff will need to have been informed of the additional rule and where relevant, records will need to be updated.
SUIT - Beautiful Reports
SUIT - Complete Control
SUIT - Comp confidence
previous arrow
next arrow

About the Author

Paul has in-depth experience across a wide spectrum, having headed up compliance, T&C, monitoring, oversight and MLRO functions previously. He was also an IFA for some time so can see things from more than one angle.

Contact Us

Brought to you by

Explore more articles in this category

Other articles that you might be interested in