Welcome to the UKGI weekly regulation update service for Aviva ABC brokers

Context

The FCA has updated the web page on which it highlights its ongoing work to review the requirements of the Consumer Duty.  The updates are across the web page to reflect the FCA’s current work.  The page was first published in September 2025 and sets out how the FCA is streamlining its rules and reducing complexity for businesses following the introduction of the Consumer Duty.

Key points to note and next actions

The FCA provides responses to feedback on its requirements for firms, that feedback being received via the FCA’s 2025 Regulatory Summit.  Key themes that were highlighted are:

• Clarifying how the Duty applies to firms in distribution chains.
• Providing clearer guidance on the scope of rules, including the Duty.
• Ensuring the FCA coordinates effectively with FOS.
• Improving consistency in rules and definitions.
• Updating legacy disclosure rules.

The page sets out the FCA’s future priorities under four headings:

• Reviewing the foundations.
• Future-proofing disclosure.
• Reducing the administrative burden.
• Streamlining requirements.

The page includes reference to the FCA’s most recent publications in relation to the further streamlining of insurance rules and the geographical scope of Consumer Duty.

Context

The FCA has published an introductory blog article, a news item, a web page introducing the proposed changes, and a Consultation Paper (CP26/23) on the scope and proportionality of Consumer Duty.  These changes are primarily aimed at wholesale firms.  This work is in line with the FCA’s 4-point plan (PDF) on addressing concerns about the Consumer Duty and wholesale markets.

This consultation is likely to interest regulated firms subject to the Duty and particularly those which:

• 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; and
• conduct retail business for retail customers outside the UK.

Key points to note and next actions

The FCA is consulting on a targeted package of changes to its rules and non-Handbook guidance to:

• remove business with non-UK customers from the Duty’s scope;
• make it clearer where the Duty applies and where it does not;
• clarify when and how firms can rely on each other when they work together in distribution chains;
• how firms can apply the Duty more proportionately (but moving away from the concept of ‘material influence’, focussing more on the firm’s role and the extent of its involvement with a retail product or service); and
• explain the interaction between the Duty and other product governance rules (with a proposal to remove references to ‘co‑manufacturing’ from the Consumer Duty rules and guidance in PRIN 2A, introducing instead the concept of ‘principal’ and ‘secondary’ manufacturers).

The three substantial changes to make the Duty more precise, proportionate and workable in wholesale markets are:

• Clearer boundaries around what is out of scope, with case studies of what is not in scope in areas that participants have said are ‘grey’ (e.g., market making, custody, and safeguarding should not normally be caught).  The FCA is clear that where firms do not genuinely shape consumer outcomes, the Duty does not apply.    
• Clarifying accountability and responsibilities when firms work together, removing duplication, including across distribution chains and in the design of complex products.
• 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.  It is appropriate for local distribution to comply with local rules.  Therefore, business conducted for genuinely non-UK customers will generally fall outside the Duty, so the FCA is proposing to limit the application of the Duty to firms conducting retail market business where the retail customer is usually resident in the UK, based on the customer’s residential address or, where the customer is not an individual, the place of establishment. In general, the FCA is not, at this stage, proposing similar changes across the FCA Handbook where other rules apply to business outside the UK. However, it is consulting separately, in CP26/22 (see below), on changes to the scope of conduct rules in the insurance sector, where the FCA has observed particular issues.  The FCA is, therefore, proposing that the application of the Duty to non‑investment insurance products would follow the approach set out in CP26/22. This would streamline the FCA’s proposed approach for firms in this market across the Duty, ICOBS and PROD 4.

The Consultation will be open until 18 September 2026.

Context

The FCA has set out further proposals for simplifying insurance and funeral plan requirements in a new Consultation Paper, CP26/22.  The FCA is asking for comments on this Consultation by 4 September 2026.  These proposals are part of the FCA’s wider plans to streamline rules and reduce complexity for firms following the introduction of the Consumer Duty, and follow final rules published in December 2025.  Alongside this consultation, the FCA is consulting on the application of the Consumer Duty to business with non-UK customers (see above). The FCA has taken a consistent approach to disapplying ICOBS and PROD 4 with disapplying the Duty.

The FCA suggests that insurance and / or funeral planning firms should read this Consultation alongside:

• CP26/23: Consumer Duty – Scope and proportionality in wholesale markets (see above) – insurers and insurance intermediaries working with other firms to manufacture products or services, with a role in the distribution chain, or conducting retail business for retail customers outside the UK;
• PS25/21: Simplifying the insurance rules (PDF) – insurers and insurance intermediaries, and funeral plan firms;
• Handbook Notice No. 142 (see below) and CP25/37: Targeted clarifications of Handbook materials – firms providing payment protection insurance or packaged bank accounts, all insurance firms that submit value measures and pricing practices data, and funeral plan firms should read the finalised rules, including insurance rules, covering:
  • Removing specific rules for PPI and packaged bank accounts.Deleting product governance rules.Pricing practices and value measures reporting.
  • Removing the minimum 12-month product review for funeral plans.

Most of the insurance rules came into force on 26 June 2026, with the remainder coming into force on 27 July 2026.

• CP25/36: Client categorisation and conflicts of interest – insurers and insurance intermediaries – chapter 4 contained proposals to rationalise rules on conflict of interests under SYSC 10. Final rules and guidance expected in Q4 2026.

Key points to note and next actions

In this Consultation, the FCA is proposing the following measures:

Narrowing the scope of FCA rules for non-UK business:

• Amending the territorial application scope of the Insurance Conduct of Business Sourcebook (ICOBS) and the Product Intervention and Governance Sourcebook, chapter 4 (PROD 4). The detailed insurance conduct requirements would apply where there is a clear UK connection, based on the customer’s habitual residence and, where relevant, the location of the risk. This would reduce duplication and potential conflict with overseas regulation. High-level requirements (such as the Principles for Business in PRIN (other than the Consumer Duty) and the Senior Manager Arrangements, Systems and Controls sourcebook (SYSC) rules) will maintain appropriate consumer protections. 

Removing unnecessary disclosure requirements:

• Removing certain duplicative or low-value disclosure requirements across ICOBS that don’t meaningfully help customers make choices (e.g., the firm’s postal address; whether a firm is an insurance undertaking or an intermediary; whether the intermediary holds (directly or indirectly) 10% or more of the voting rights or capital in an insurance undertaking, or is acting on behalf of the customer or on behalf of the insurer, or is contractually obliged to place business exclusively with one or more insurance undertakings (and, if so, name them); the nature and basis of remuneration; and the additional ‘pure protection’ disclosure requirements in ICOBS 4.2).

Increasing flexibility in means of disclosure:

• Giving firms greater flexibility in how disclosures are provided to customers, including increased use of digital channels. Firms must still provide required information in a durable medium appropriate to customer needs and way the product is distributed. Firms must continue to provide information on paper at the customer’s request.

Simplifying rules for advised sales of insurance products:

• Simplifying the rules that apply when insurance is sold with advice by removing references to ‘advice’ that do not involve a personal recommendation. This leaves a clearer distinction between sales involving a personal recommendation and those that do not.

Amending rules for professional indemnity insurance (PII):

• Amending the currency denomination of minimum PII levels for insurance intermediaries from euros to Pounds Sterling at an appropriate conversion rate, without reviewing or changing the underlying minimum levels.

Context

The FCA has updated the content of its ‘Trading names’ web page by adding information across the page to help firms meet requirements.  The aim of the page is to help firms to learn what they should and should not do when registering a trading name that is different to the firm’s registered company name.

Key points to note and next actions

The web page covers the use of ‘sensitive words’ (more commonly known as ‘sensitive business names’), and outlines where consumer harm can occur:

• If your firm is carrying out unregulated activities under a trading name;
• Consider your requirements under our Consumer Duty;
• Consider how many names you trade under.

Under the heading ‘Trading names and regulatory breaches’ the FCA reminds firms that:

• registering a trading name with us has no legal effect;
• adding a third party as one of a firm’s trading names does not change that person’s regulated status, or mean that an unauthorised person can carry out regulated activities;
• if that person carries out regulated activities without being authorised or exempt, they’re likely to be carrying out unlawful unauthorised business;
• registering a trading name is not an alternative to becoming authorised or appointed as an Appointed Representative (AR);
• a trading name describes a name under which a firm carries on its own business.

By contrast, an AR is a separate legal person, carrying on its own business for which the Principal firm has accepted responsibility.

• Firms should therefore carefully consider the consistency of these concepts. Presenting an AR as a trading name of the Principal firm is likely to be misleading, as it may obscure the identity of the entity carrying on the business, and give a false impression about regulatory status. 
• It’s a criminal offence for a person who isn’t authorised or exempt to carry on regulated activity in the UK – with a potential penalty of 2 years’ imprisonment, a fine or both.
• The authorised person that registered the trading name may also be in breach of our rules, because inappropriate registration or use of trading names could mislead consumers and create risk of harm.
• Firms should not engage in this practice, as doing so may breach FCA requirements, including the obligation to communicate with customers in a way that is clear, fair and not misleading.

Context

The FCA has published Handbook Notice 142, which included Policy Statement details of the ‘Targeted Clarifications of Handbook Materials’ which were part of Consultation Paper CP25/37, published on 9 December 2025.  These changes are being made as part of the Consumer Duty Requirements Review and is part of the workplan the FCA announced in its March 2025 Feedback Statement FS25/2.

Key points to note and next actions

The handbook changes of most relevance to UKGI clients are as follows:

• Payment protection insurance (PPI) and packaged bank accounts (PBAs) – the FCA is removing PPI-specific rules on customer eligibility and disclosure, and deleting the PBA-specific suitability of advice and annual eligibility statement requirements.  This is on the basis that the Duty and broader ICOBS rules on eligibility and advice provide sufficient protections to ensure firms identify client needs and provide appropriate support and, where relevant, suitable advice.  Alongside this the FCA is adding non-product specific guidance on eligibility, further explaining its expectations under Consumer Duty.
• Removing the 12-month minimum review frequency for funeral plans – this is in line with the more flexible approach for non-investment insurance products.
• Product governance requirements in relation to value measures – PROD 4.5 (additional expectations for manufacturers and distributors in relation to value measures data) is to be deleted.
• Updating and removing references to Principles 6 and 7 and ‘Treating Customers Fairly’ – the changes include updating references to Principles 6 and 7 to reflect the scope of their application following the Consumer Duty’s introduction, removing materials from the FCA website related to Principle 6 (including historic guidance relating to the ‘Treating Customers Fairly’ (TCF) initiative), and removing guidance on the Responsibilities of Providers and Distributors for the Fair Treatment of Customers (RPPD).  Examples of the publications / web pages to be removed are Treating customers fairly – towards fair outcomes for consumers (2006), Treating customers fairly – guide to management information (2007), Treating customers fairly – culture (2007), and the FCA’s web page ‘Fair treatment of customers’.
• The ‘pricing record retention rule’ at ICOBS 6B.2.57 R – this rule (which requires firms to share pricing governance records with the senior manager responsible for FCA reporting) will be deleted.

Context

The FCA has published its final regulatory fee and levy rates for 2026/27 including feedback on Consultation Paper CP26/11. Fees and levies are charged to firms to enable the funding of the FCA, Financial Ombudsman Service (FOS) and certain government departments. The FCA also responded to feedback from their consultation on draft fees and levies, as outlined in CP26/11.

Key points to note and next actions

• The FCA has reduced the total fees payable by applying the £72.4m of financial penalty revenues they retained from 2025/26. This means the total fees payable by fee payers in 2026/27 is £716.5m, which is 0.7% higher than last year.
• CP26/11, announced in March 2026, sought opinions on the FCA’s proposals to increase minimum, flat rate and application fees in line with their Ongoing Regulatory Activities budget, which pays for the FCA’s core day to day work such as staff salaries, technology and administration, to regulate the UK financial services sector. The FCA has commented on the responses it received within PS26/14.
• The consultation also covered the continuation of staged increases to the minimum fees in the consumer credit and “A” fee-block, as well as draft periodic fee-rates, FOS draft general levy rates, and levy rates for the government departments the FCA collects fees for. 
• Firms can use the FCA’s online fees calculator to determine their individual fees based on the final rates announced in Appendix 1 of PS26/14.

Context

The FCA has published a speech given by Alison Walters, FCA Director of Consumer Finance, at the ‘Credit Week: Powering the Future of Finance’ event.  The speech recognises that consumer credit plays a vital role in the real economy and in people’s everyday lives, and that the credit market and consumer demands and needs are changing.

Key points to note and next actions

• In addressing the shared challenge, Walters sets out that a more resilient, joined up and trusted credit market will only be achieved through collective action across industry, regulators and partners.
• Walters considers the 50 years since the Consumer Credit Act 1974 came into force, reflecting on how much the finance and credit markets have changed and supporting the Government’s work to reform the consumer credit framework.
• Firms must go beyond avoiding harm to actively delivering better outcomes using data, technology and insight to support consumers in practice, not just in principle.
• The speech discusses the topics of enabling responsible innovation and growth, technology and the consumer of the future, data, open finance and smarter regulation, cost of living pressures and consumer resilience, responding to a market in motion, shaping the way forward together, moving beyond silos, and ‘from transition to transformation’.
• Bringing Buy Now Pay Later into regulation will give consumers stronger protections and support more sustainable borrowing.

Context

EIOPA has published a Note on Competitiveness, and an ‘op-ed’ article alongside it.  An ‘op-ed’ (short for ‘opposite the editorial’) is a written piece that expresses the author’s personal opinion on a specific topic, typically published opposite a newspaper’s editorial page to offer an independent perspective.  The Op-Ed provides an insight into the usefulness (or otherwise) of the UK financial services regulators’ secondary growth and competitiveness objective.

Key points to note and next actions

The Note on Competitiveness comments on:

• Competitiveness and stability.
• The broader determinants of EU competitiveness.
• Looking ahead: burden reduction and simplification.
• An assessment of the Prudential Regulatory Authority’s (PRA’s) second report on competitiveness and growth.

The Op-Ed sets out the view that an explicit competitiveness mandate for EIOPA would ‘miss the point’, and that Europe’s competitiveness challenge ‘cannot be solved by tinkering with the mandate of its financial supervisors’.  The opinions include:

• Recent shifts in the global economy have forced Europe to face up to an uncomfortable reality: its competitiveness is flagging. The causes are numerous, from high energy costs and market fragmentation to the lack of scale-up financing. Complex rules, including in financial services, have also been blamed for holding back European businesses.
• Europe’s renewed focus on competitiveness and regulatory streamlining has also prompted bolder calls for the bloc’s financial supervisors to be given an explicit competitiveness mandate (like the FCA and the PRA have been given by the UK Government).
• For financial supervisors in the EU, such a mandate would be largely symbolic, and it would do little to address the structural factors that determine Europe’s competitiveness.  The author’s view is that it would likely leave supervisors with ‘few meaningful levers to influence economic outcomes’, and could create confusion about priorities, weaken supervisory credibility and ultimately risk undermining trust in the financial system.

The article concludes that Europe’s competitiveness challenge is real and demands forceful policy responses. Supervisors will contribute most effectively to the continent’s prosperity by doing what they were created to do: safeguarding a stable, trusted and resilient financial system for the benefit of consumers.

Context

Companies House has updated its ‘Incorporation and names’ web page to confirm that is has added an additional point under section 6.7 (‘Same as’ exceptions) of its incorporation and names guidance.

Key points to note and next actions

The added point explains that the ‘same as’ rule (see sections 6.3 to 6.6) does not apply if the proposed ‘same name’ differs from the parent company name by using any of the ‘matters’ listed in inverted commas in paragraph 5 of schedule 3 of The Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015