The Financial Conduct Authority (FCA) and HM Treasury (HMT) will be consulting this month on tighter rules for the appointed representative (AR) regime.
The regulator also revealed that it plans to publish the resulting final rule changes between April and June next year.
Issues have been raised regarding the AR regime and the FCA is keen to clamp down on bad practice and hopes this will eventually lead to lower compensation fees.
Last month it revealed that under a pilot scheme of tighter controls half of new applications to the FCA for AR permissions did not proceed.
In its latest update the regulator said: “The FCA and HMT will be engaging with stakeholders to understand more about the appointed representatives regime and address known issues and harms.
“The FCA will be consulting on policy proposals to enhance its rules for principals with ARs, and HMT will have a call for evidence to gather views on the overall aim, scope, benefits and risks from the current AR regime.”
Consumer Duty and GI pricing rules
The FCA also confirmed a second consultation on its proposed Consumer Duty will be published before the end of the year, with final rules expected in the third quarter of 2022.
The regulator said it will: “Consult on options to introduce a new Consumer Duty, comprising of a new Consumer Principle, cross-cutting rules, and outcomes, which together set clearer, higher expectations of firms providing retail financial services.”
And there is no change to the general insurance pricing practice rules, that include some areas of health and protection cover, which will come into force in January.
Last month incoming Aviva managing director of protection Fran Bruce told Health & Protection the insurer was wondering if the Consumer Duty and general insurance fair value pricing rules could lead to the end of commission for protection products.
