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

FCA orders listed company to compensate investors following market abuse

The Financial Conduct Authority (FCA) has ordered that Tesco plc and Tesco Stores Limited (together, Tesco) pay compensation to certain Tesco shareholders and bondholders following the FCA's finding that they committed market abuse in relation to a trading update published in August 2014. 

On 29 August 2014, Tesco plc published, via a regulatory information service, a trading update which contained a statement as to its expected trading profit for half-year period just ended (the August trading update).  In producing that update, Tesco plc relied on information provided to it by its wholly-owned subsidiary, Tesco Stores Limited, which was not correct.  On 22 September 2014, Tesco plc published a further trading update in which it announced that it had “identified an overstatement of its expected profit for the half year, principally due to the accelerated recognition of commercial income and delayed accrual of costs.”

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UK FCA past business reviews: what duties, if any, do financial institutions owe directly to customers? High Court finds no contractual obligations, but tortious duties are arguable

The recent and somewhat surprising decision of the High Court in Suremime Limited v Barclays Bank plc [2015] EWHC 2277 (QB) is important to any financial institution that has agreed to conduct an FCA past business review or redress exercise.

In particular, the court has held that it is arguable that such institutions owe duties of care in tort, such that customers would have private law rights of action against the institution if the terms agreed with the FCA are not followed. However, the existence of such rights has not been finally determined by the court because the questions arose in the context of an interim application to amend Particulars of Claim. Continue reading

UK: Improving accountability of the FCA and the financial services industry through transparency and more effective disclosure

Being a transparent regulator is at the heart of the approach of the new Financial Conduct Authority (FCA).  Clearly there is a need to strike the right balance between fostering the public’s legitimate interest in transparency and refraining from disclosure where there would be unfairness in doing so, where the public interest might be harmed, or where other legal considerations might prevent it.  To stimulate debate about when and how the FCA should balance competing calls of transparency and sound regulation, the Financial Services Authority has today published a discussion paper on Transparency: DP13/1.

Martin Wheatley, CEO designate of the FCA, sees this paper as a first step in what will be an ongoing process of identifying ways to increase transparency.  Comments on the paper are sought by 26 April 2013. Continue reading