Fair pricing in financial services: FCA FS19/4 - summary of responses and next steps
The Financial Conduct Authority (FCA) has published a feedback statement (FS19/4) in which it gives a summary of its responses to feedback on its October 2018 discussion paper (DP18/9). The discussion paper launched a debate on fair pricing in the broad context of financial services.
In FS19/4, the FCA:
- summarises the main themes in the submissions it received and, where appropriate, provides its responses;
- provides further clarification on how it will apply its framework in practice; and
- outlines how the FCA will approach the next stage of work, which will focus on operationalising its approach to fair pricing in retail markets. The FCA states that the first application of the fair pricing framework will be in the General Insurance Pricing Practices Market Study, on which it will publish findings later this year. The FCA will also begin the work required to formally embed its thinking on fair pricing into its regulatory approach. A part of that will involve contributing to the review of FCA Handbook principles, which will be the first strand of the FCA's review of its Handbook. The FCA intends to publish a discussion paper on the review of its principles in Q4 2019/20. It will report on the next phase of its fair pricing work at that time.
Fair treatment of vulnerable customers: FCA GC19/3
The FCA has launched a consultation (GC19/3) on proposed Guidance for firms on the fair treatment of vulnerable customers. The proposed Guidance sets out the FCA's view of what the FCA Principles for Business require of firms to ensure that vulnerable consumers are consistently treated fairly across financial services sectors.
The draft Guidance contains three main sections which discuss:
- understanding the needs of vulnerable consumers;
- ensuring staff have the skills and capabilities needed; and
- converting that understanding into practical steps.
The Guidance will be consulted on in two stages. This first stage of the consultation closes on 4 October 2019. In the light of the feedback received from stage one, the FCA intends to consult on revised draft Guidance in a second stage.
Read our blog for further information, FCA draft vulnerability guidance: embedding 'doing the right thing' in firms' culture.
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