Clifford Chance

Consumer Duty: FCA issues final rules and guidance

7 September 2022

On 27 July 2022, the UK's Financial Conduct Authority ("FCA") published its policy statement and final rules and guidance setting out how it intends to implement its new Consumer Duty ("the Duty") in Policy Statement 22/9 and Final Guidance 22/5. The Duty is described as the 'cornerstone' in the FCA's strategy of setting higher standards of consumer protection in retail financial markets. The Duty marks a return to a more outcome-focused approach by the regulator and will place the onus on firms to proactively assess and evidence the extent to which and how they deliver good consumer outcomes.

The fundamental elements of the FCA's proposals have not changed from those outlined in Consultation Paper CP21/36, published in December 2021, which followed Consultation Paper CP21/13, published in June 2021. Therefore, the Duty's hierarchy and its different components comprising the Consumer Principle, cross-cutting rules and four outcomes remain the same. However, there are some important clarifications on the Duty's scope of application to "retail customers", including in respect of a distribution chain and new sector-specific guidance. The implementation timeline is being phased in with a deadline of 31 July 2023 for all in-scope new and existing products and services that are open to sale or renewal and 31 July 2024 for closed products and services.

This briefing considers the final rules and guidance and is relevant to all regulated financial services firms.

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