FCA CP26/23 Consumer Duty: scope and proportionality

On 30 June 2026, the FCA published Consultation Paper CP26/23, "Consumer Duty - Scope and Proportionality" (the CP). The CP responds to sustained industry concern that the Consumer Duty, which came into force in July 2023 to raise standards of consumer protection across retail financial services, has been applied more widely and more intensively than the FCA intended, particularly by firms operating in wholesale markets and complex distribution chains. The proposals follow the Chancellor's 2025 Mansion House speech and seek to recalibrate the Duty's reach without dismantling its core objectives. The FCA's reform of the Consumer Duty forms part of a broader government and regulatory agenda to shift the UK towards a retail investment culture - moving consumers' savings into long-term investments in a way that supports both individual financial wellbeing and the wider economy.

The CP sets out targeted amendments to the PRIN rules and associated non-Handbook guidance, covering six principal areas:

• Limiting the Duty's scope to UK-resident retail customers;
• Introducing a clearer principal/secondary manufacturer distinction;
• Consolidating distribution chain obligations into a new chapter (PRIN 3A) with express activity exclusions;
• Clarifying that firms need not police compliance by other firms in the chain;
• Removing the requirement for a standalone Consumer Duty board report; and
• Providing further guidance on how the Duty interacts with PROD 3 and the Consumer Composite Investments (CCI) regime.

The consultation period closes on 18 September 2026, with a Policy Statement and final rules expected in Q1 2027. Our Consumer Duty team has analysed the key proposals and what they mean for firms, read our full note below.