The Financial Conduct Authority has launched a consultation on targeted changes to the Consumer Duty aimed at making its scope and application clearer and more proportionate, particularly for wholesale firms and complex distribution chains. The main proposal is to remove retail market business for customers usually resident outside the UK from the Duty’s scope, while keeping it for clearly UK-connected business such as pre-paid UK funeral plans, regulated or ancillary activities relating to UK pensions, and business for crown servants and armed forces personnel posted overseas with British Forces Post Office addresses. The package is intended to address cases where firms have applied the Duty more widely and more intensively than the FCA intended, without changing its core role in protecting UK retail customers. The consultation also proposes to clarify core scope concepts such as retail market business, distribution chain and material influence, and to set clearer exclusions for activities regarded as too remote from retail outcomes. These include, in various circumstances, market making, merchant acquiring, ESG ratings, indirect access to payment systems, certain derivatives or other components supplied into third-party retail products, safeguarding accounts, third-party custody, depositary activity and support to defined benefit pension trustees. Across firms that work together, the FCA would make each firm responsible only for its own role and activities, allow reasonable reliance on information and actions of other firms in the chain, and distinguish principal manufacturers from secondary manufacturers with narrower obligations. It also proposes more proportionate expectations on vulnerability, information gathering, outcomes monitoring and board reporting, plus technical clarifications including that the exclusion for instruments with a minimum investment of GBP 50,000 applies per investment and per end investor. For retail investment products, the FCA is proposing guidance changes rather than rule changes to explain how the Duty interacts with PROD 3 and the Consumer Composite Investments disclosure regime. The consultation closes on 18 September 2026. The FCA expects to publish a policy statement summarising responses and to make any new rules in Q1 2027.
Financial Conduct Authority2026-06-29
Financial Conduct Authority consults on narrowing Consumer Duty for non-UK business and clarifying wholesale responsibilities
The Financial Conduct Authority has proposed removing genuinely non-UK business from the Consumer Duty where there is no clear UK link or reasonable expectation of UK protection. The changes are aimed at reducing burdens on wholesale firms and clarifying both what falls outside scope and how responsibilities should be handled across distribution chains and complex product design.