The FCA has published its long-awaited consultation on ‘duty of care’ which has morphed into a proposed package of measures intended to deliver better outcomes for consumers – together a new ‘Consumer Duty’.
The consultation, which is open until 31 July 2021, proposes:
- a new Consumer Principle that provides an overarching standard of conduct; and
- a set of Cross‑cutting Rules and four Outcomes that support the Consumer Principle.
The proposals apply to regulated products and services sold to ‘retail clients’ which would include SMEs.
Way back in 2019, the FCA published a Feedback Statement, summarising responses to its July 2018 Discussion Paper on the proposed introduction of a ‘duty of care’ and setting out its next steps. In that Feedback Statement, the FCA said it would publish a further paper seeking detailed views on specific options for change. For understandable reasons, the further paper has been delayed, and delayed again, and again, and again.
In the context of an investor’s claim against the provider of his self-invested personal pension (SIPP) under s.27 of the Financial Services and Markets Act 2000 (FSMA), the Court of Appeal has provided guidance on the question of what constitutes “advice” on investments for the purpose of article 53 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO), which will be of broader interest to the financial services sector, beyond pensions-related disputes: Adams v Options UK Personal Pensions LLP  EWCA Civ 474. Continue reading
The Financial Conduct Authority (FCA) has published a Policy Statement (PS20/17) and final rules and guidance in relation to climate-related financial disclosures for UK premium listed companies.
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.
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?
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.