Consumer Duty under review: what CP26/23 means for firms

Over the coming weeks Burges Salmon's Financial Services Regulation team will be publishing a series of articles looking into the FCA's proposed changes to the Consumer Duty as set out in CP26/23. The consultation contains a number of important proposals affecting manufacturers, distributors and firms operating within distribution chains. 

In this first article, we provide an overview of the consultation and highlight some of the key themes emerging from the proposals. Future articles in the series will explore specific aspects of CP26/23 in more detail, including the proposed changes to the co-manufacturing model, vulnerable customers and the interaction between the Consumer Duty and other regulatory regimes.

On 29 June 2026, almost three years after the Consumer Duty came into force, the FCA published Consultation Paper CP26/23, setting out a package of proposals aimed at clarifying the Consumer Duty's scope and enabling a more proportionate approach to compliance for firms. As an outcomes-based regime, the Consumer Duty has required firms to exercise judgement when determining how its requirements apply to their particular business models and in some areas, particularly wholesale markets and complex distribution chains, this has led firms to take a more cautious approach to compliance than the FCA originally envisaged. 

The FCA's latest consultation is therefore less about changing the Consumer Duty's primary objective of securing good outcomes for retail customers and more about providing greater clarity around where the Consumer Duty applies and how firms can comply in a proportionate way. While several of the proposals are likely to be welcomed by firms and may formalise approaches that have already been adopted in the market, questions remain as to whether some of the changes will deliver meaningful benefits to firms in practice. 

The key proposals include:

• removing retail market business involving non-UK customers from the scope of the Consumer Duty, subject to limited exceptions;
• introducing a new PRIN 3A and amending key concepts such as "retail market business" and "product" to make the scope of the Consumer Duty clearer;
• replacing the existing co-manufacturer framework with a distinction between principal and secondary manufacturers;
• clarifying how firms can rely on each other, share information and allocate responsibilities within distribution chains;
• providing further guidance on applying the Consumer Duty proportionately according to a firm's role and ability to influence customer outcomes;
• clarifying expectations in relation to customers in vulnerable circumstances where different firms perform different roles in the customer journey;
• confirming that board oversight and reporting should focus on matters for which a firm is responsible and should be proportionate;
• providing further guidance on how the Consumer Duty interacts with existing PROD requirements and the Consumer Composite Investments (CCI) regime.

With consultation responses due by 18 September 2026 and final rules expected in Q1 2027, firms should begin considering how the proposals could affect their business models, manufacturing arrangements and distribution chains, particularly if they operate internationally or play a more limited role in the customer journey.

If you have any questions about the FCA's proposed changes to the Consumer Duty, please contact a member of our Financial Services Regulation team or your usual Burges Salmon contact. 

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