The Financial Conduct Authority (FCA) is scrapping more than 100 pages of regulations covering consumer finance, investments, and mortgage lending. The move follows pressure from businesses and the Government to simplify the regulatory framework and lower compliance costs.
In addition to retiring rules, the FCA will withdraw hundreds of supervisory publications, including outdated ‘Dear CEO’ letters, portfolio letters, and multi-firm or thematic reviews predating its 2022 strategy. It also plans to review some of its more prescriptive disclosure rules to offer firms greater flexibility, particularly those affecting online transactions.
The announcement comes ahead of the FCA’s new five-year strategy, which will set a goal of supporting economic growth by reducing regulatory burdens.
The Chancellor, Rachel Reeves, recently committed to a “radical action plan to cut red tape,” aiming to cut the cost of regulation by 25%. The FCA’s rule book currently exceeds 10,000 pages.
The regulator had previously invited firms to suggest outdated or overlapping rules for removal, especially in light of the new Consumer Duty, which requires companies to treat customers fairly and ensure good outcomes. However, some firms argue that the new duty lacks clarity and would prefer more detailed rules that clearly define what is allowed.
The FCA is also reviewing whether lengthy credit advertising terms are necessary and if UK rules should apply to overseas customers in sectors like insurance.
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