The United Kingdom’s Financial Conduct Authority (FCA) is further strengthening consumer protection in retail financial markets by adding a new set of consumer duties for the regulated financial companies.
The consumer duties will have three key elements: the consumer principle, which will ensure the firms’ standard of behavior towards its clients; cross-cutting rules that will require the firms to avoid foreseeable harm to customers, take steps ‘to enable customers to pursue their financial objectives and to act in good faith’; and the firms need to comply with a certain set of rules for communications, products and services, customer service and price and value.
According to the British regulator, the new consumer duty will benefit the retail financial product consumers. It is optimistic that the consumers will receive products and services that are fit for purpose, representing fair value.
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Much Room for Consultation
The FCA has now opened a consultation on the proposed rules and will receive comments till the end of July. There will be further consultation at the end of this year, and if everything aligns, these will be imposed by July 2022.
Commenting on the new duties, FCA’s Executive Director of consumers and competition, Sheldon Mills, said: “The package of measures we are proposing will enhance our existing rules and is designed to tackle the harms we see in financial services markets, and their causes, as well as put consumers in a stronger position to make good decisions.”
“We want firms to be putting themselves in the shoes of consumers and asking ‘would I be happy to be treated in the way I treat my customers?’. We want consumers to be able to advance their financial wellbeing and build positive futures for themselves and their families.”