FCA Removes Non-UK Business from Consumer Duty to Help Wholesale Firms

What the FCA's Latest Consumer Duty Changes Mean for Wholesale Businesses

The Financial Conduct Authority (FCA) has announced proposals to remove non-UK business from the scope of its Consumer Duty, aiming to reduce regulatory burdens on wholesale firms. This is a significant shift for companies that deal with sophisticated international clients, as it clarifies that the Duty was never intended to apply to deals between professional parties outside the UK.

If you run a wholesale business that occasionally touches retail markets, or you're a UK consumer dealing with a firm that operates across borders, these changes could affect how you're treated. Here's what you need to know in plain English.

What is the Consumer Duty?

The Consumer Duty is a set of FCA rules designed to ensure that financial firms deliver good outcomes for retail customers. It came into force in 2023 and applies to products and services sold to individuals and small businesses. The Duty requires firms to act in good faith, avoid causing foreseeable harm, and enable customers to pursue their financial objectives.

However, the Duty was never meant to apply to wholesale transactions—deals between banks, investment firms, or other sophisticated parties. Yet many wholesale firms found themselves spending time and money proving that certain activities were out of scope. The FCA's latest proposals are meant to fix that.

What is changing?

The FCA's consultation proposes three key changes:

• Removing non-UK customers from scope: If a customer has no clear UK link—for example, they are based abroad and dealing with a UK firm through a professional intermediary—the Consumer Duty will no longer apply. This removes the need for firms to prove that the Duty doesn't apply to each transaction.
• Clearer boundaries: The FCA will provide more explicit guidance on what is out of scope, so firms can focus on running their business instead of jumping through regulatory hoops.
• More clarity on joint responsibilities: When multiple firms work together—for example, in a distribution chain or designing complex products—the rules around who is responsible for what will be clearer.

Simon Walls, executive director of markets at the FCA, said: 'The Consumer Duty is helping deliver good outcomes and build confidence for retail consumers, but it was never intended to become a Wholesale Duty imposing on deals between sophisticated parties.'

Who does this affect?

This change mainly affects wholesale financial businesses—such as investment banks, asset managers, and insurance companies—that deal with professional clients outside the UK. If you are a UK consumer, your protections under the Consumer Duty remain unchanged. The FCA is not weakening protections for individuals; it is simply narrowing the scope to avoid unnecessary burdens on firms.

However, if you are a small business owner who uses a UK-based financial service for international trade, you may still be covered by the Duty if you meet the definition of a 'retail client'. It's worth checking your status with your provider.

What about insurance?

Alongside the wholesale changes, the FCA has also published proposals to simplify its insurance rules. The aim is to maintain consumer protection while reducing red tape. This could mean fewer paperwork requirements for insurers and brokers, making it easier to offer competitive products to UK customers.

What should businesses do now?

If you run a wholesale firm, now is the time to review your compliance processes. The FCA is consulting on these proposals, so you may want to respond to the consultation or prepare for the changes once they are finalised. You can read the full FCA press release for more details.

For UK consumers, these changes are unlikely to affect your rights. But if you're struggling with debt or financial products, you still have strong protections. At First Credit Advice, we help individuals and businesses navigate financial difficulties, including those involving regulated firms.

If you're facing issues like CCJs, defaults, or mortgage arrears, our team can advise you on your options. We're regulated by the FCA, so you can trust us to give you clear, honest guidance.

How First Credit Advice can help

Whether you're a consumer dealing with debt or a business owner looking for support, we offer a range of services tailored to your situation. Our debt advice services include help with HMRC debt, business debt, and bailiff action. We also provide a fee calculator so you can see upfront what our services cost—no hidden charges.

If you're unsure where to start, contact us today. Our team will listen to your situation and explain the best way forward.

Final thoughts

The FCA's decision to remove non-UK business from the Consumer Duty scope is a sensible move that reduces unnecessary red tape for wholesale firms. It clarifies that the Duty is for protecting retail consumers, not for regulating transactions between sophisticated parties. For UK consumers, your protections remain strong, and you can still rely on the FCA to hold firms accountable.

If you have any concerns about how financial products or debt are affecting you, don't wait. Get in touch with First Credit Advice for free, impartial advice. We're here to help you take control of your finances.

Call us or use our contact page to speak to an advisor today.