FCA removes non-UK business from Consumer Duty scope

The FCA has removed non-UK business from the scope of its Consumer Duty rules, in an effort to ease the regulatory burden on “wholesale financial business involved in retail markets”.

Such firms – including wholesale brokers and reinsurers – will no longer be bound to Consumer Duty guidelines if their customers have no clear UK link or reasonable expectation of UK protection.

The FCA has also committed to clearer boundaries for out-of-scope activities, as well as more clarity on firms’ responsibilities across distribution chains and complex products.

The authority has also published a set of proposals for simplifying insurance regulations, which are set to remain open to public consultation until September 2026.

The proposals include removing unnecessary disclosure requirements that don’t meaningfully help customers make choices, increasing the flexibility of how disclosures are provided – including increased use of digital channels – simplifying rules for advised sales of insurance products and amending the currency denomination of minimum personal indemnity insurance policies from euros to pounds.

Refined scope

Any changes that are made will affect all FCA-regulated insurers and insurance intermediaries, including Lloyd’s and Gibraltar based firms, trade associations and commercial insurance buyers.

Simon Walls, executive director of markets at the FCA, said: “The Consumer Duty is helping deliver good outcomes and build confidence for retail consumers, but it was never intended to become a wholesale duty, imposing on deals between sophisticated parties.

“That’s why we are refining its scope to provide greater clarity to wholesale markets and keep the focus on the consumer outcomes it was created to improve”.