The regulatory pendulum is continuing to swing towards an outcomes-focused supervisory approach and away from prescriptive rule based requirements.
Last week the FCA issued a call for input to review FCA rules following the introduction of the Consumer Duty (the Call for Input). Whilst the FCA has made clear that it intends to reduce the burden on firms and support growth, firms must not mistake this for any lowering of standards when in fact the opposite is true.
The Call for Input invites comments from firms to assist the FCA's understanding of where rules could be simplified or removed. The FCA has stated that it wants to address potential areas of complexity, duplication, confusion or over prescription which create regulatory costs with limited or no consumer benefit.
Whilst the Consumer Duty is a central theme of the document, the Call for Input is broader in scope and seeks views on the utility and impact of other rules in the FCA Handbook. In addition, the FCA has clarified that it is still committed to a full post-implementation review of the Consumer Duty and so is not seeking suggestions in the Call for Input for changes to the Consumer Duty itself . Similarly, it has confirmed that where it has recently introduced new rules, these will also be out of scope of the Call for Input. This is on the basis that the FCA wants to give time for those rules to become embedded before considering further changes.
The Call for Input includes specific questions regarding the FCA's approach to high level rules and prescriptive requirements. Respondents have until 31 October 2024 to respond to the Call for Input
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