The FCA's second consultation paper on its proposed consumer duty offers some helpful clarity and narrowing of the proposals.
The FCA now favours a "good outcomes" Principle over a "best interests" formulation. That's welcome, as it steers clear of risk that it may be misinterpreted as imposing a fiduciary duty. The FCA has refined and narrowed the proposed underlying rules and outcomes and has also decided against extending the private right of action to cover breaches of the new consumer Principle.
The second consultation paper also leaves important questions open, including how the consumer duty would interact with (or is any different to) existing consumer protection Principles and rules.
The FCA also wants individuals to take responsibilty for delivering the Duty - including via a new Conduct Rule.
With continuing uncertainty as to the effect of the proposals - and a tight proposed implementation periods - firms would do well to prepare.
For more details, listen to our podcast episode on the topic.
And for all our resources, visit our consumer duty webpage.
The new Consumer Duty aims to bring about a fairer, more consumer-focused and level playing field