FCA delays Consumer Duty rules

The FCA has confirmed a delay to the introduction of Consumer Duty rules.

The press release details are described in this note we have received from the FCA.

 

“We have now published our Consumer Duty press release, policy statement and final guidance on our website – please see the links below:

 

Press release: https://www.fca.org.uk/news/press-releases/fca-consumer-duty-major-shift-financial-services 

Policy statement and finalised guidance: https://www.fca.org.uk/publications/policy-statements/ps22-9-new-consumer-duty

 

The Consumer Duty will set higher and clearer standards of consumer protection across financial services and require firms to put their customers’ needs first.   

 

The Duty is made up of an overarching principle ‘a firm must act to deliver good outcomes for retail customers’ and new rules firms will have to follow. It will mean that consumers should receive communications they can understand, products and services that meet their needs and offer fair value, and get the customer support they need, when they need it.    

 

With clarity on our expectations and firms focusing on what their customers need, this should lead to more flexibility for firms to compete and innovate in the interests of consumers.  

 

The Duty forms part of the FCA’s transformation to becoming a more assertive and data-led regulator. With firms assessing how they’re meeting their customers’ needs, we will be able to quickly identify practices that don’t deliver the right outcomes for consumers and take action before practices become entrenched as market norms. 

 

Firms will have 12 months to implement the new rules for all new and existing products and services that are currently on sale. The rules will be extended to closed book products 12 months later, to give firms more time to bring these older products, that are no longer on sale, up to the new standards. 

 

We will work with firms during the implementation period, including hosting a series of industry events, to ensure that they are implementing the Duty effectively. If you’d like to hear more about future Consumer Duty events and related communications, please sign up for email updates.”

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

We have stated before that Consumer Duty does not seem to do much beyond reinforcing long extant rules and principles. However, it is clear that it is on its way and that the FCA is placing a lot of emphasis on Consumer Duty so firms will be well advised to devote some time and resource to its implementation.

Action Required By You

Despite the formal deferral of the start date, firms will be expected to have created a plan for implementing Consumer Duty by the end of October 2022. ATEB can assist firms in creating an appropriate plan.
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About the Author

Shirley has a wealth of industry experience and proven track record of working closely with firms to deliver high quality compliance and T&C solutions across a wide range of regulatory disciplines.

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