FCA publishes report on duty of care in financial services

The Financial Conduct Authority (FCA) has published a report exploring the need for duty of care requirements for businesses in the financial services sector.

The financial regulatory body’s report looks at how a new duty of care could help to boost good conduct and culture in the sector and enhance the protection of consumers.

Objectives

The report comes after the FCA’s “Mission 2017” paper, which looked at how it prioritises, protects and intervenes in financial markets. In the report, the FCA highlighted the three objectives that have been set by Parliament to help it with its mission.

The strategic objective is for the regulatory body to make sure that relevant markets are functioning well, while the three operational objectives are making sure that consumers have an appropriate degree of protection, protecting and enhancing the integrity of the financial system in the UK, and boosting competition in the interest of consumers.

Concerns were raised over the Mission 2017 report, with respondents stating that the current regulatory framework does not provide consumers with appropriate protection.

The FCA’s new report has now addressed these concerns, with the regulatory body inviting consumer groups, industry experts, regulated firms and academics to share their views on the introduction of a New Duty framework to help improve conduct and culture in financial services.

Needs

The FCA’s Chief Executive Andrew Bailey commented: “Consumer protection is absolutely central to the FCA’s purpose and Mission. Nearly everyone at some stage in their life will come into contact with a financial organisation and people need to know that they are being treated fairly and that the right protections are in place. Different groups of consumers have different financial needs, which will naturally change over their lifetime.”