The FCA's latest Consumer Duty course corrections

Since the FCA published its "final" Consumer Duty rules, it's consulted on some important changes.  It's also started a webpage offering further guidance.  It initially published three clarifications on that webpage, but there are more now, and though these do to some extent reiterate the FCA's already-published policy statement and finalised guidance, there are a few new points:

• On information sharing:
  • Distributors are not expected to share information without being asked.  Manufacturers are expected to consider what information would be helpful and take reasonable steps to gather it, for example through focus groups or sending surveys to distributors.
  • When it comes to non-UK customers, where the chain includes ex-UK firms that are out of scope of the Consumer Duty, the FCA recognises that UK firms "may not be able to meet elements of the Duty to the same degree" (for example re obtaining information - a problem they had already recognised).
• Firms are expected to take "additional care" where customers "are more likely to have characteristics of vulnerability".
• The FCA recommends that firms start monitoring (of customer outcomes, that is) before the implementation deadline to check they're ready in time.
• The FCA and FOS will not apply the Consumer Duty retrospectively.
• The FCA previously said that applicants for authorisation will need to demonstrate Consumer Duty compliance on a forward-looking basis.  It now says that from February 2023, firms applying for the first time will have to prove they can comply with the Consumer Duty.  Also, applicants for variation of permission will be asked for a copy of their implementation plan and any supporting evidence.

And the FCA's said that in early 2023 it will publish a package of portfolio and sector-specific letters to firms which will set out implementation expectations and the FCA's findings from its review of firm implementation plans.  Happy New Year - the industry engagement continues!