FCA shakes up disclosure document rules

FCA shakes up disclosure document rules

The Financial Conduct Authority is proposing to amend rules for the initial disclosure document and costs disclosure document.

A consultation was published earlier today (22 October) proposing a revamp of disclosure rules.

The Services and Costs Disclosure Document, which was introduced in 2008 and brings together into one document the key information about services contained in the initial disclosure document and key information about the cost of services, is set for change.

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Guidance issued by the FCA currently suggests that firms that offer advice to retail clients or arrange transactions for them in relation to packaged products, can use the SCDD templates to disclose their services and how much these cost.

However, anecdotal evidence suggests the template leads to duplicated information to consumers and firms adopting a tick-box approach to these disclosures rather than considering how disclosure of services and costs can be best delivered.

The FCA stated this was not the policy intention and therefore the it is proposing to remove the SCDD template.

The watchdog added that firms were free to continue to present the information in the same way set out in the templates, but added that if the proposed rule change gets the go-ahead firms will no longer be able to use the Key Facts logo.

Christopher Woolard, director of strategy and competition at the FCA, said it is looking to change the way firms interact with their customers.

“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 will close on 18 December, with final rules and a policy statement due in early 2016.