The Financial Conduct Authority has published a Feedback Statement to its July 2018 discussion paper, "A duty of care and potential alternative approaches". In the discussion paper, the FCA raised the possibility of introducing a new duty of care for all financial services firms. The FCA sought feedback on whether: (i) there is a gap in the U.K.'s regulatory and legal framework or the way it is applied and, if there is, whether a new duty would remedy the situation; (ii) a change in the existing framework is desirable, what form it might take and how it would work in practice, including the impact of any changes for consumers, firms and the FCA; (iii) alternative approaches might better address the concerns; and (iv) a new duty of care would improve conduct and culture in financial services and influence consumer outcomes in the context of the Senior Managers and Certification Regime (SM&CR). The Feedback Statement summarizes the responses received, including how some firms consider that a new duty of care is necessary while others consider that the SM&CR is and will address the issue. The FCA has identified options that will most likely achieve a higher degree of consumer protection. These options are:
- Reviewing how the FCA applies the regulatory framework, in particular how the Principles are applied and the FCA's communication with firms around the Principles; and
- New or revised Principles to strengthen firms' duties to consumers, including a potential private right of action for breach of a Principle.
The FCA is going to examine these options more closely and intends to publish a further paper in autumn 2019.
View the Feedback Statement (FS19/2).
View details of the FCA's consultation paper.
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