Jurisdiction(s):
United Kingdom

UK FCA seeks government risk appetite and metrics before easing Consumer Duty; potential PSR merger and APP fraud implications under growth agenda

Published on: 07 March 2025

Published by a Law360 reporter

Legal News

Article summary

The FCA’s call for certainty followed Chancellor of the Exchequer, Rachel Reeves, whose Mansion House address in November 2024 and accompanying letters pressed financial regulators to recalibrate risk aversion with economic growth. Her push gained broad backing from financial firms wrestling with the entrenched demands of the FCA’s Consumer Duty regime introduced 16 months prior right across the market already. Nikhil Rathi, the FCA’s chief executive, pressed ministers to spell out their tolerance for consumer harm in a speech on 27 February 2025, restating a request he had set out in a publicised letter dated 16 January 2025. Rathi has already scrapped the need for firms to appoint a board champion under Consumer Duty, which mandates good outcomes for consumers. Firms in the sector still argue that the sheer volume and intricacy of FCA guidance suppresses innovation and overburdens compliance teams. The FCA now seeks political cover before moving to unwind further elements of the consumer-protection measures imposed in 2023. Government has pledged to issue fresh guidance in an “action plan” due later in Spring 2025, while declining to indicate whether this will define the degree of acceptable failure that the FCA is seeking...

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