The FCA has proposed removing non-UK business from the scope of Consumer Duty to help wholesale financial businesses involved in retail markets.
The regulator said the change will make it easier for wholesale firms to comply with the Consumer Duty.
The changes are part of the FCA's plans to give wholesale firms the confidence to apply the Duty proportionately, it said.
Under the proposals, the FCA said firms will benefit from:
• Removing business for genuinely non-UK customers from the Duty’s scope where there is no clear UK link or reasonable expectation of UK protection.
• Clearer boundaries around what is out of scope, so they can focus on running their business rather than having to show that the Duty does not apply.
• More clarity on firms’ responsibilities when they work together, including across distribution chains and in the design of complex products.
Simon Walls, executive director of markets, 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.”
The FCA said the consultation is likely to interest regulated firms subject to the Duty and particularly those that:
· Have a role early in the distribution chain, including those in the wholesale sector.
· Work with other firms to manufacture a retail product or service.
· Are part of a complex distribution chain.
· Conduct retail business for retail customers outside the UK.
The regulator said it will continue to engage firms and other stakeholders to support effective implementation of the Consumer Duty and ensure it delivers good outcomes across markets.
The FCA has asked for feedback on the proposals by 18 September.
It said people can use its online response form, or you can send their comments in writing to: Consumer Duty Policy Team, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN, or by emailing:
The regulator said it expects to publish a policy statement summarising responses and to make any new rules in Q1 2027.