On 30 September 2025, the Financial Conduct Authority (FCA) published three updates in relation to the Consumer Duty: a webpage setting out an update on
On 30 September 2025, the Financial Conduct Authority (FCA) published three updates in relation to the Consumer Duty: a webpage setting out an update on the FCA’s Consumer Duty requirements review; a letter from FCA Chief Executive Officer, Nikhil Rathi, to Chancellor Rachel Reeves on the FCA’s review of the Consumer Duty’s application to wholesale firms; and, a webpage setting out areas of focus in relation to the Consumer Duty for 2025/6.
The FCA set out an update on progress it has made in relation to streamlining certain requirements introduced by the Consumer Duty and further action it intends to take, in particular:
The FCA highlighted that it has already made progress on areas such as improving the rule review feedback tool embedded in the FCA handbook, which allows users to directly feedback where they think rules could be improved, and on the withdrawal of historic supervisory communications, intended to make priorities in relation to the Consumer Duty clearer.
The FCA also highlighted a range of other commitments and areas of ongoing progress where deliverables, such as consultation papers or policy statements, can be expected later in 2025 or in early 2026. This includes on topics such as the mortgage rule review, assessment of value reporting for asset managers, review of client categorisation rules and the advice guidance boundary review.
Finally, the FCA also sets out feedback that it received on the Consumer Duty at a Regulatory Summit in July 2025 and highlighted key themes such as its application to firms in distribution chains, providing clearer guidance on scope, co-ordination with the Financial Ombudsman, improving consistency and updating existing disclosure rules.
Letter from the FCA CEO to the Chancellor on Consumer Duty application to wholesale firms
In his letter, Mr Rathi responds to the Chancellor’s request in July 2025 that the FCA report on how it will address concerns about the application of the Consumer Duty to wholesale activity conducted by firms.
Key comments made by Mr Rathi include:
The FCA agrees that it should distinguish between different types of activities and protections under the Consumer Duty should be proportionate, including highlighting that much wholesale activity is outside of its scope, but that the FCA does consider that it is right that the Consumer Duty applies to some wholesale firms’ activities.
However, the FCA has undertaken engagement to address concerns since the Chancellor’s request, in particular where firms are unclear about the about how the Consumer Duty applies in relation to certain activities.
As a result, the FCA is intending to take forward a four-point plan to address these concerns, including providing more clarity on its supervisory approach and expectations, consulting on plans to update the client categorisation framework, consulting on changes to rules on the application of the duty including through distribution chains, and introducing proposals to remove business with non-UK customers from scope.
The FCA also set out its priorities for the rest of 2025 and 2026 in relation to the Consumer Duty, these include:
Disclaimer
This article is intended for general information purposes only and does not constitute legal advice. For advice specific to your situation, please contact our team at T & M Legis for a consultation with our Legal Experts.
