Consumer Duty
On 31 July 2024 the Consumer Duty came fully into force following the implementation deadline for closed products and services.
To mark this, and the 1-year milestone for new and existing products, we held an event alongside the Financial Ombudsman Service. This focused on the impact the Duty has had, examples of good practice and areas for improvement, and our priorities for the year ahead.
You can register to and read Sheldon Mills' speech where he celebrates how far we’ve come and talks about our future programme of work.
Our approach to cost benefit analyses
Cost benefit analyses (CBA) allow us to understand how effective and proportionate proposed policy interventions will be and how they will affect industry, consumers, and markets.
We have a statutory duty to consult the new independent CBA Panel where proposed policies have an expected equivalent annual net direct cost to business of £10m or above.
Read our updated statement of policy for more detail about our approach to CBA and the thresholds for referring CBA to the Panel.
Credit information market study
Following our study into the credit information market, we proposed creating a more representative and accountable industry body to oversee arrangements about sharing of credit information.
The Interim Working Group (IWG) was set up to provide recommendations to us on the design, implementation, and operation of a Credit Reporting Governance Body (CRGB). It published a report on how the CRGB should be constituted and we have published our feedback to that on 14 August. You can read more here.
The IWG will publish a report on ‘How the CRGB should operate’ in November 2024 and all recommendations in February 2025.
Dormant Assets Scheme expansion - second phase
We have amended our rules and guidance to enable dormant investment assets and client money to be available to the Dormant Assets Scheme (DAS).
Since 2011, the UK Dormant Assets Scheme has unlocked more than £745m for social and environment initiatives, from over £1.35 billion in dormant bank and building society accounts. The expansion of the scheme is estimated to potentially unlock a further £880m.
These rules will primarily affect Reclaim Fund Limited (RFL), managers and depositaries of authorised collective investment schemes and firms holding client money. They may also be relevant to insolvency practitioners, professional advisers, trade associations and consumer organisations.
Helping crypto firms comply with new marketing rules
This month we published a review of firms’ compliance with certain financial promotion rules. These rules follow a change in legislation and are designed to help people better understand the risks of investing in crypto.
Our review found examples of firms demonstrating good practice and multiple instances where firms did not meet the required standards. We also found firms relying on industry comparisons to benchmark what is acceptable. Given the levels of poor practice in the market, firms should not be doing this.
We want to work collaboratively with the sector to raise standards. We urge all firms to read our good and poor practice, as well as our guidance and engage with us.
Insurance fair value and good customer outcomes
We recently published the findings from our review of insurance manufacturers and distributors’ compliance with our PROD 4 rules. This is a thematic review looking at whether firms are complying with their product governance obligations both for general insurance and pure protection products.
At the same time, we published our latest insurance Value Measures Data covering the period Jan-Dec 2023. The data was accompanied with an explanatory page analysing the data and providing key observations. Our analysis highlights several lines of insurance which may be providing poor value for consumers.
Over £100m in redress offered to former British Steel pension scheme members
£106m in redress has now been offered to 1,870 former British Steel Pension Scheme (BSPS) members to put them back in the position they would have been at retirement. We have been working closely with the Financial Ombudsman Service and Financial Services Compensation Scheme to help those who transferred out of the BSPS following poor advice get the retirement they worked for.
As our redress scheme draws to a close, we have reported on the action we have jointly taken, how many people have had their advice reviewed and total redress offered. Read our report here.
Further expansion of FCA Leeds office, creating more jobs in the region
We are set to base a further 100 of our workforce in Leeds as we expand our presence in the city. An office refurbishment project will begin in late summer, and the new space will open in the autumn.
FCA announces work into pure protection market
We plan to launch a market study into how pure protection insurance products are sold as we are concerned that competition is not working well in the market. Pure protection products are designed to help individuals and their families with their finances should the policyholder die or become unable to meet their financial commitments. We have concerns that the design of commission arrangements may not allow firms to deliver good outcomes to policyholders and that some products may be providing poor value.
We will launch the study later in 2024/25. In the meantime have your say on the proposed scope of the study.
Insurers liable for employers’ liability claims
We used to publish a list of insurers with potential liabilities falling under our employer’s liability tracing rules. The requirement to provide us with this information was introduced because the information needed to identify all relevant insurers was not otherwise available. This position has now changed, as the majority of information is now readily available on the Employers' Liability Tracing Office (ELTO) website. We will therefore no longer be publishing this list on our website.
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