Consumer Duty – FCA publishes additional clarification
The Financial Conduct Authority (FCA) has published a new webpage, providing additional clarity around the level of detail required in implementation plans by the end of October 2022; the role of the Board Champion; and the definition of closed books. The FCA stated that it was providing this update in response to the number of queries it was receiving on these matters.
On the level of detail in implementation plans, the FCA stated: ‘We do not expect firms to have necessarily fully scoped all work required to embed the Duty by the October deadline, but… [they should] be sufficiently developed to provide both firms’ governing bodies and us with assurance that the expectations set out in the Duty have been carefully considered and will be implemented’.
In its finalised guidance FG22/5, the FCA asserted that it expected firms to have a Consumer Duty champion at Board (or equivalent governing body) level, who ideally should be an Independent Non-Executive Director where possible. The primary role of the Board champion is to support the Chair and CEO in ensuring that that the Duty is being raised regularly in all relevant discussions and in a meaningful way.
Importantly, the Consumer Duty champion is not a prescribed responsibility under the Senior Managers & Certification Regime (SM&CR) and although this was not stated in the FCA’s contemplation, this does allow Non-Executive Directors in smaller firms who are not caught under the SM&CR to fulfil the role.
In a simple, one line sentence, the FCA confirmed that ‘Closed products are those that are no longer marketed or distributed to retail customers or open to renewal.’
Members may access the relevant FCA webpage.
BIBA members compliance and regulation queries should be directed to compliance@biba.org.uk quoting their membership number.
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