On 8 December 2025, the Financial Conduct Authority (FCA) published a statement on Consumer Duty expectations for firms working together to manufacture products or services.

Background

In September 2025, the FCA set out in a letter to the Chancellor of the Exchequer its action plan in relation to the application of the consumer duty in particular in relation to wholesale activity.

Overview

The FCA makes clear in this statement what it is looking for from firms in its current supervisory work, in particular:  

  • Whether firms correctly identify which firms have a role in the manufacture of a product or service ultimately offered or provided to retail customers.
  • Where more than one firm is involved in manufacturing a product or service, whether there is a written agreement setting out an allocation of responsibilities that reflects the actual role of each firm.

The FCA also sets out its expectations under the current rules. In particular, the FCA does make clear that regulated firms in the distribution chain can rely on each other, where reasonable, to comply with the relevant rules. However, the FCA also highlights certain areas for improvement, including:

  • Decision-making: That its rules should not be interpreted to mean firms working together to manufacture a product or service must have a say in each other’s decisions, as it may be appropriate for their responsibilities and decision-making to remain separate, though they should still be clearly agreed and a record kept of the position.
  • Allocation of responsibility: One firm can be responsible for ensuring compliance with most of the requirements where this reflects the reality of its role and of the arrangements with the other firms involved.
  • Liability: In some cases, regulatory requirements or contracts might mean a firm is responsible or liable for harm caused by another firm in the distribution chain.
  • Outsourcing: An exception to the general position above is where one firm outsources an activity or service to another party. Under the SYSC rules, the outsourcing firm remains responsible and accountable for compliance with regulatory responsibilities applying to the relevant outsourced activity or service.

Next Steps

The FCA sets out that, in order to develop further proposals for consultation aimed at clarifying the application of its rules under the Consumer Duty, in the first half of next year the FCA will consider further stakeholder views and concerns in relation to this and will review the rules covering firms working together to manufacture a product or service.