The Financial Conduct Authority (FCA) has launched a review to streamline financial services rules, aiming to reduce burdens on businesses and support economic growth.
This move follows the introduction of the Consumer Duty, which ensures businesses deliver good outcomes for consumers purchasing financial products and services.
The FCA is calling on the industry to identify overlapping rules that could be removed or simplified in line with the new Duty.
Nikhil Rathi, chief executive of the FCA, said: “We are firmly committed to playing our part in supporting economic growth.
“The Consumer Duty marked a major shift for firms and consumers by setting higher and clearer standards of consumer protection and requiring firms to put their customers’ needs first.
“We now want to seize the opportunity of the Duty and the move to a clear outcomes-based approach to streamline our rulebook, lowering costs for businesses and supporting the competitiveness and growth of the economy.”
In addition to the broad rule review, the FCA is considering simplifying rules in the commercial insurance sector, a market worth over £15.5bn in the UK.
The regulator is seeking views on whether changing customer categorisation could significantly reduce the time needed to onboard new customers or renew contracts, allowing for more custom-made products and reducing regulatory costs. This could increase the competitiveness of the commercial insurance market.
The launch of these reviews coincides with the FCA publishing its first report on its efforts to support UK competitiveness and economic growth over the medium to long term.
The regulator has improved its authorisation process, with 98% of cases now assessed within statutory deadlines, up from 78.9% in Q1 of 2022/23. Overseas wholesale financial firms wishing to operate in the UK can also benefit from pre-application support from the FCA.
The FCA continues to support innovation in financial markets, including the creation of a permanent Digital Sandbox to aid firms in the early stages of product development.
Additionally, from 1st August, the FCA will consult a new independent panel of experts when preparing cost-benefit analyses for proposed regulations with an estimated net annual direct cost to the industry of £10m per year and above.
