The Financial Conduct Authority (FCA) has proposed changes to the scope of its Consumer Duty that would exclude certain non-UK businesses and provide greater clarity for wholesale financial firms operating in retail markets.
Under the proposals, business involving genuinely non-UK customers would fall outside the Consumer Duty where there is no clear connection to the UK or a reasonable expectation of UK consumer protection.
The regulator also plans to clarify which activities fall outside the Duty’s scope and provide additional guidance on firms’ responsibilities when working together across distribution chains or developing complex financial products.
The FCA said the changes are intended to help wholesale firms apply the Consumer Duty more proportionately and reduce unnecessary compliance burdens, while keeping the regime focused on improving outcomes for retail consumers.
The consultation forms part of the regulator’s wider review of its rules to simplify the UK regulatory framework. Separately on Monday, the FCA also published proposals to streamline insurance rules while maintaining existing consumer protections.
The Consumer Duty came into force for open products and services in July 2023, introducing a higher standard of consumer protection that requires firms to deliver good outcomes for retail customers.
Since its introduction, the FCA has continued to refine the framework in response to feedback from firms on its implementation.
