The FCA has now published FS19/2: ‘A duty of care and potential alternative approaches: summary of responses and next steps’ (link).
Readers will recall that in July 2018, the FCA published Discussion Paper DP18/5 and invited views on whether the introduction of a new and pervasive duty of care, applicable to firms in their dealings with consumers, would enhance consumer protections and promote good conduct and culture in financial services.
The FCA has today published the feedback it has received, saying that the amount and quality of that feedback has given it a strong foundation on which to advance its consideration of these issues.
The FCA has also indicated that its primary focus in its future consideration of these issues, based upon that feedback, is to seek to address any perceived gaps in consumer protection by one or both of these means:
- Reviewing how it applies PRIN in its authorisations, supervisory and enforcement functions and how it communicates this to firms, and/or
- Introducing new/revised PRIN to strengthen and clarify firms’ duties to consumers, including considering whether to make PRIN actionable (and what any unintended consequences of that might be).
Interestingly, the FCA reports that most respondents were against the introduction of a new statutory duty, particularly if it were actionable. The feedback sets out several reasons why an actionable statutory duty may cause problems. Apparently few respondents commented specifically on whether consumers should have a private right of action for breach of PRIN albeit those that did set out the same several reasons why it might cause problems. It appears therefore that the question of whether any new/revised PRIN should be actionable will prove to be controversial. Further consideration of this question can commence once the proposed new/revised PRIN is published.
The FCA plans to issue another paper in the Autumn seeking further views on specific options.