CALL FOR INPUT: FCA – Review of the Requirements Following the Introduction of the Consumer Duty

CALL FOR INPUT: FCA – Review of the requirements following the introduction of the Consumer Duty

Comments for Call for Input should be submitted by October 31, 2024.

Comments should address the following issues:

• Which specific rules or guidance can be simplified or clarified to rely on overarching regulations or have interactions with other rules that could be explained
• How do any efforts to streamline our rules and guidance impact our statutory objectives
• The appropriate balance between overarching and more detailed rules
• The potential benefits and costs of simplifying our rules

Please note that this Call for Input is not seeking feedback on suggestions for changes to the Duty.

Call for Input and the review of the FCA’s rules:

The FCA is seeking input on the extent to which it may be appropriate and beneficial to place greater emphasis on Consumer Duty instead of specific regulations and guidance.

Some areas where rules and guidance may be affected:

• Similar materials that broadly correspond to requirements or conduct expectations: Removing or consolidating rules or guidance that cover similar ground to Duty provisions would help simplify the Handbook.
• FCA may achieve comparable consumer outcomes while providing firms with more flexibility and innovation: Relying on high-level standards tends to support better flexibility, innovation, and future-proofing than detailed or prescriptive rules.
• There may be a lack of clarity on how Duty requirements interact with other rules: Providing clearer standards of conduct should reduce regulatory uncertainty and lower firms’ compliance costs. This could involve, for instance, removing materials that contain similar, but not identical, requirements to those under the Duty, or providing guidance on how sectoral requirements and Duty requirements interact.

QUESTIONS:

Question 1: Could any of our retail conduct rules or guidance be

usefully simplified or removed by relying on requirements

under the Consumer Duty? Please tell us:

1. which rules or guidance (e.g. Handbook chapters, or non-Handbook guidance) you consider cover similar ground to Duty requirements, or are otherwise overly detailed or prescriptive, or arguably redundant in light of other materials, and why
2. your thinking on the likely benefits, including, for example, any estimate on compliance cost savings
3. what the impact could be on consumers or consumer protection, or other relevant considerations

Question 2: Is there a lack of clarity on how requirements under the Duty and other FCA rules interact? Please tell us where this issue arises and your views on how it could be addressed. For example, would guidance on the interaction be helpful?

Question 3: Are there other areas in our rules or guidance, beyond those with an overlap with the Duty, where we should consider simplification or removal? Please tell us:

1. which rules or guidance (e.g. Handbook chapters, or non-Handbook guidance) we should review, and why
2. your thinking on the likely benefits including, for example, any estimate on compliance cost savings
3. what the impact could be on consumer protection, or other relevant considerations

Question 4: Do you agree that work towards simplifying our retail conduct rules can help us meet all our objectives, including the secondary objective? Please explain why or why not?

Question 5: In which circumstances do you think it is appropriate to rely on:

1. high-level rules under the Consumer Duty
2. more detailed rules
3. a hybrid approach with both high-level and detailed

rules?

Question 6: What do you see as the main costs and benefits of making

changes to the FCA Handbook by simplifying or removing detailed expectations of firms?

Question 7: Where do you see high-level or detailed expectations having differing costs or benefits for different types of sizes of firm?

The full paper is accessible here.