This post was originally published on fca.org.uk
How the FCA reviews its rules
Reviews help us keep regulation effective and proportionate, improve future rule-making and ensure we remain accountable for our decisions.
Sometimes we do this under our Rule Review Framework using evidence assessments, post-implementation reviews (PIRs) and impact evaluations.
These reviews help us understand whether interventions have achieved their objectives, and what lessons can be learned.
An early example was our review of the high-cost short-term credit price cap, which found that the intervention was delivering better outcomes for consumers. That evidence, alongside feedback from industry and consumer stakeholders, informed our recent decision to maintain the existing cap.
More recent examples include:
We are also currently progressing an evaluation of our 2018 persistent debt interventions and will publish that soon.
But formal reviews are only one part of how we learn from experience.
We also explore how rules are affecting firms, consumers and markets through our ongoing supervisory activities, data monitoring, market studies and calls for evidence.
Stakeholders can also tell us through our feedback tool whether our rules are working as intended.
Reviewing rules is also an important part of the wider regulatory reform now underway. As responsibility for more rules moves into the FCA Handbook, we are revisiting existing requirements, seeking views through consultations and considering whether rules are achieving their objectives in practice or need updating.
Recent examples include the Advice Guidance Boundary Review and reforms to investment research rules. The high standards and outcomes-focused approach of the Consumer Duty allows us to look again at where we can reduce reliance on more prescriptive rules and provide firms greater flexibility.
Whenever we consult on changing existing new rules or frameworks, the purpose is the same: to understand whether the previous rules have delivered as intended, to test what is happening in practice and to use that evidence to make better decisions so that we can future-proof our rule set as much as possible.
Some examples show how this works.
