FCA feedback statement on rule review in response to consumer duty

The Financial Conduct Authority (FCA) has published a feedback statement on immediate areas for action and further plans for reviewing FCA requirements following introduction of the Consumer Duty. It follows the FCA's call for input to which it received 172 responses. Most respondents supported simplification of requirements in principle, but opinions varied on the approach and timeline.

The majority did not want a wholesale review of the handbook but encouraged steps to amend or simplify it in discrete areas. Immediate areas listed for action include:

• A mortgage rule review with a consultation in May on proposals to make it easier for consumers to remortgage with a new lender, reduce their overall borrowing costs through term reductions and discuss their options with a firm outside a regulated advice process. In June, the FCA expects to publish a discussion paper covering topics such as risk appetite and responsible risk-taking, alternative affordability testing and product innovation, lending into later life and consumer information needs.
• A review of the handbook definitions of retail customers and small- and medium-sized enterprises to facilitate understanding and simplify application.
• A review of the financial promotion rules for consumer credit. Within the next year, the FCA proposes to consult on removing unnecessary prescription, updating outdated requirements and improving alignment with the Consumer Duty. It intends to discuss whether to review rules on the disclosure of annual percentage rates.
• A consultation on changes to the requirement for asset managers to report annually on their value assessments.
• A consultation on updating requirements in the client assets sourcebook.

The feedback statement also discusses a number of other planned initiatives, subject to stakeholder feedback. The FCA will seek further input on its action plan and will share an update on its programme of work in September.

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