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FCA proposes removal of ‘ineffective’ comms rules

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The FCA is consulting on the removal of a number of “ineffective” communication requirements from its handbook.

In June the regulator published a discussion paper on consumer communications, in which it announced an intention to consult on removing a number of requirements.

The FCA is proposing removing a requirement for insurance companies to produce a disclosure document setting out their approach to managing their with-profits business.

It is also proposing removing a requirement for fund managers to produce a half-yearly report for investors in retail authorised funds showing information about fund performance.

In addition, the FCA is looking to remove two pieces of guidance.

The first is a template for home finance and investment firms to disclose their services and their cost. The second is a similar template for all firms that offer advice to retail clients or arrange transactions in relation to packaged products.

The FCA says evidence shows the fund manager reports “do not meet the original aim of providing clear and focused information to investors about the fund’s progress and activities”.

It adds that feedback from consumers shows they do not use or value the other documents.

FCA director of strategy and competition Christopher Woolard says: “We would like to see firms changing the way they interact with their customers. We have been encouraged to see a number of firms are already doing this.

“Today’s announcement reflects our commitment to sustainable regulation and addresses disclosures that are not working for consumers, giving firms the freedom to communicate with their customers in a more flexible and open way.”

The consultation closes on 18 December.

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Comments

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  1. You can tell from the very precise but meanless way that they speak that the FCA shouldn’t be advising firms on client communications:

    “The first is a template for home finance and investment firms to disclose their services and their cost. The second is a similar template for all firms that offer advice to retail clients or arrange transactions in relation to packaged products.”

    I have no idea what those sentences mean or whether this applies to advice firms like mine. I guess it does but the FCA never speaks in plain English. This is therefore possibly good news, if only we could understand it.

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