October Deadline Date Looms for FCA Consumer Duty (PS22/9)
The first FCA Consumer Duty (PS22/9) deadline date is looming: firms will need to have agreed and be able to demonstrate their implementation plans by the end of October 2022.
Although the FCA is not expecting these plans to be fully scoped by the end of October, firms should be able to evidence that they will meet the delivery deadline by the end of July 2023.
To evidence the robustness of plans and meet the 31st October deadline, firms should be prepared to share implementation plans to date, board papers, and minutes with supervisors, and be prepared for challenges on their contents. The regulator is seeking plans to be ‘sufficiently developed to provide both firms’ governing bodies and us [The FCA] with assurance that the expectations set out in the Duty have been carefully considered and will be implemented for new and existing products by 31 July 2023.’
In our blog, FCA Consumer Duty: Understanding and Evidencing Investor Behaviour, we reviewed how this is the clearest regulatory call yet that investor support shouldn’t stop when investing begins, and that behavioural investor oversight can significantly improve long-term investment outcomes.
These plans by the regulator that began in May 2021 with the publishing of ‘The Consumer Duty Principle Consultation’ will culminate in the implementation of the FCA Consumer Duty (PS22/9) on 31st July 2023. The new rules relate to four main outcomes in which applied behavioural finance has an especially important role to play in helping firms better understand support consumers.
To help firms embrace the call for improved outcomes for consumers, the FCA has called for each firm to have a ‘Board Champion’. This is set out in the FCA FG22/5 Finalised Guidance Handbook for firms around the Consumer Duty. Although there have been some enquiries from firms as to what specific role the ‘Board Champion’ will or can hold, broadly speaking, for smaller firms they envisage this should be an Independent Non-Executive Director (NED). For larger firms with more complex group structures, they expect the ‘Board Champion’ to be at an appropriate Board level to ensure that discussions around the Consumer Duty are executed in a meaningful way.
With increasing pressures on firms to comply with these regulations by the 31st October 2022 and 31st July 2023 respectively, please click here to download our latest guide and find out how Oxford Risk can support your firm with the upcoming FCA Consumer Duty (PS22/9).