The Financial Services Duty of Care Bill

On 29 October Lord Sharkey introduced a Private Members’ Bill into the House of Lords, which proposed amending the Financial Services and Markets Act 2000 (“FSMA“) to empower the FCA to introduce a duty of care owed by authorised persons to consumers in carrying out regulated activities under FSMA (the “Bill“).

The Bill proposed that a duty of care be defined as an obligation to exercise reasonable care and skill when providing a product or a service.

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Proposed ‘duty of care’ in financial services: next steps

Authors: Jenny Stainsby, Jon Ford and Cheryl Jones

The FCA has published its Feedback Statement on ‘A duty of care and potential alternative approaches’ (FS19/2). This contains a summary of responses to its Discussion Paper on this subject which was published in July 2018 (DP18/5). For more information on the Discussion Paper, see our briefing here.

In the Feedback Statement, the FCA does not put forward any specific options for change but confirms that the “quality of responses received have given us a strong foundation on which to advance our consideration of the issues”.

So where does this take us and what can we expect next?

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Do we need a new duty of care in financial services?

On 17 July 2018, the FCA published a paper on its Approach to Consumers (the Approach), accompanied by a discussion paper DP18/5 (the DP) on the possible introduction of a new duty of care and other alternative approaches (a New Duty).

The Approach sets the FCA’s vision for well-functioning markets that work for consumers, and builds on the November 2017 consultation on its Future Approach to Consumers. The aim is to provide greater transparency on when and how the FCA will act to protect consumers, its policy positions on key issues, and its strategy for ensuring that it advances its consumer protection objective with the greatest impact. For our full briefing on the matter, please click here.

 

Jenny Stainsby
Jenny Stainsby
Partner
+44 20 7466 2995
Karen Anderson
Karen Anderson
Partner
+44 20 7466 2404
Jon Ford
Jon Ford
Senior Associate
+44 20 7466 2539