Financial Conduct Authority Publishes Call for Input on Requirements Following Introduction of the Consumer Duty

The U.K. Financial Conduct Authority has published a Call for Input on the potential for simplification of existing FCA retail conduct rules and guidance in light of the Consumer Duty. The Consumer Duty was required to be fully implemented by firms by July 31, 2024. The Call for Input responds to concerns voiced by industry about the length and complexity of the FCA's rules and guidance, which in some cases have been found to overlap with the Consumer Duty.

The FCA is seeking input on: (i) which detailed rules and guidance could be simplified to rely on high-level rules under the Consumer Duty, or clarified in terms of their interaction with other rules; (ii) how such simplification could support the FCA's statutory objectives (e.g., the FCA's secondary international competitiveness and growth objective, which came into force on August 29, 2023, by reducing regulatory costs for firms); (iii) the correct balance between high-level and more detailed rules; and (iv) the potential costs and benefits of simplifying the rules. Rules apt for potential consolidation include the requirements to take appropriate action once consumer harm has been identified under the DISP sourcebook of the FCA's Handbook and the Consumer Duty. The FCA stresses that it will conduct a post-implementation review of the Consumer Duty itself, so is not seeking suggestions for changes to the Duty, nor amendments to recently introduced FCA rules, as it seeks to give time for those rules to embed.

Responses to the call for input should be submitted by October 31, 2024. The FCA plans to engage with interested parties over the course of summer and autumn 2024 and intends to outline its approach in its next publication in early 2025.

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