The FCA is asking for views on whether, where and how it can refine and simplify its retail conduct rules and guidance, whilst still ensuring that it continues to support and protect consumers. The FCA particularly wants to address potential areas of complexity, duplication, confusion, or over-prescription, which create regulatory costs with limited or no consumer benefit. It also wants to include appropriate flexibility in its rules to be responsive to future changes and innovation.
Whilst primarily focused on the retail conduct rules and guidance, the review also invites views on the FCA’s wider rules and guidance. The FCA particularly invites comments on issues such as:
- Which detailed rules or guidance could be simplified to rely on high-level rules, or have interactions with other rules which could be clarified?
- How any steps to simplify the rules and guidance affect the FCA’s statutory objectives.
- The appropriate balance between high-level and more detailed rules.
- The potential benefits and costs from simplifying the rules.
The FCA wants to understand how different types of firms may be affected by changes to its approach to regulation and rule writing. Note: As the FCA has committed to a post-implementation review of the Consumer Duty, it is not seeking responses with suggestions for changes to the Duty. The FCA is, instead, interested in views on how far it may be appropriate and beneficial to place greater reliance on the Consumer Duty in place of specific rules and guidance.
There may be rules and guidance where:
- similar materials relate to broadly equivalent requirements or expectations of conduct;
- the FCA may be able to achieve substantially the same consumer outcomes while giving firms more flexibility and greater ability to innovate; and
- there may be a lack of clarity on how requirements under the Duty and under other rules interact.
The FCA gives an example of where similar materials may have broadly the same outcome. Provisions in the Dispute Resolution: Complaints (DISP) Sourcebook (DISP 1.3.3R and 1.3.6G) and the Consumer Duty requirements in the Principles for Businesses Sourcebook (PRIN 2A.2.5R and rules and guidance in PRIN 2A.10) cover similar ground, involving firms taking appropriate action once consumer harm has been identified. Also, the oversight of products and services and price and value outcomes under the Consumer Duty (set out at PRIN2A.3 and PRIN 2A.4) mirror the requirements for insurance manufacturers and distributors in PROD 4.
We urge firms to consider responding to the Call for Input where they are able to. This is an opportunity for firms to help shape what the FCA Handbook looks like. Responses need to be sent to the FCA by 31st October 2024.