FCA consults on rule clarifications

The FCA is consulting on various rule changes to:

• resolve uncertainties in current rules;
• make some current rules clearer or more proportionate; and
• resolve conflicts and duplications.

General changes update and remove references to Principles 6 and 7 and TCF in light of the Consumer Duty. The parts of the Handbook most affected by specific changes are:

• COLL 5 to streamline and simplify investment powers by clarifying a rule about a UK UCITS’ powers to ensure good outcomes for investors;
• CASS 6 and 7 to amend record keeping requirements for some due diligence relationships and update rules on the frequency of and sources used for external custody reconciliations, and also to clarify the treatment of bank interest used on client money and how the Consumer Duty applies to certain CASS Rules; and
• PROD to delete 4.5, some product-specific rules and change the product governance rules for funeral plans.

The FCA is also seeking views on creating a Smaller Firms Guide.

Consultation closes on 27 January. Once the FCA has finalised the changes it would bring them all into force immediately, except for the CASS changes, where it proposes to give a lead in time of 3 months.