Non-UK wholesale business removed from Consumer Duty scope

The FCA is proposing to take non-UK wholesale business out of scope of Consumer Duty to reduce the regulatory burden on firms.

The changes are part of the regulator’s plans to allow wholesale firms to apply the Duty proportionately. Under the proposals, firms will be able to:

• Remove business for genuinely non-UK customers from the Duty’s scope where there is no clear UK link or reasonable expectation of UK protection.
• See clearer boundaries around what is out of scope, so they can focus on running their business rather than having to show that the Duty does not apply.
• Benefit from more clarity on firms’ responsibilities when they work together, including across distribution chains and in the design of complex products.

Simon Walls, executive director of markets, said: “The Consumer Duty is helping deliver good outcomes and build confidence for retail consumers, but it was never intended to become a Wholesale Duty, imposing on deals between sophisticated parties.

“That’s why we are refining its scope to provide greater clarity to wholesale markets and keep the focus on the consumer outcomes it was created to improve".