The Financial Conduct Authority has launched a consultation on targeted changes to the Consumer Duty to curb what it sees as overly broad and intensive application in wholesale markets and complex distribution chains. The main proposals would remove genuinely non-UK retail business from scope, generally by limiting the Duty to business for retail customers usually resident in the UK, and would give firms clearer boundaries on when wholesale activities and other remote or supporting roles fall outside the regime, while preserving protections where there is a clear link to UK retail consumer outcomes. The package would clarify which firms are part of a distribution chain, when firms can rely on information or representations from other firms, and how responsibilities should be allocated where more than one firm contributes to manufacturing a product. It would also make proportionality more explicit for customer vulnerability, information gathering, outcomes monitoring and board reporting, and add or confirm exclusions for activities such as market making, merchant acquiring in most cases, certain custody and depositary services, and some instruments or services supplied into third-party retail products where the connection to retail outcomes is remote. For retail investment products, the FCA is not proposing to change the current framework under PROD 3, but would clarify how firms can use existing product governance and disclosure processes to meet relevant Duty obligations. Technical changes would also clarify that the existing minimum investment exclusion of GBP 50,000 applies per investment and per end investor. Comments are due by 18 September 2026. The FCA expects to publish a policy statement and make any new rules in Q1 2027.
Financial Conduct Authority2026-06-29
Financial Conduct Authority consults on narrowing Consumer Duty scope for non-UK business and wholesale markets
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.