6 What do the FCA proposals involve? The FCA is clear that its proposals in this area do not amount to product regulation and it doesn’t expect the proposed rules to restrict access to products or services. There are separate proposals for distributors and for manufacturers. Proposed requirements for distributors Distributors need to: • Develop distribution arrangements for each product or service distributed • Obtain information from the manufacturer to understand the product or service, its target market and its intended distribution strategy • Regularly review the distribution arrangements to ensure they are appropriate and, if they identify issues, take appropriate action to mitigate the situation and prevent any further harm • Share relevant sales information with manufacturers When selling a product or service that was manufactured by a person not subject to the Consumer Duty, the FCA proposes that the distributor must take all reasonable steps to comply with these obligations. Proposed requirements for manufacturers Manufacturers need to develop approval and testing processes for their products or services, identify target markets and select appropriate distribution channels. There is also an obligation to regularly review their product and services. Manufacturers of investment and insurance products will already have procedures in place for this as part of their existing product governance procedures. However, some product manufacturers such as mortgage lenders or providers of contract-based pensions, will not previously have had formal product governance obligations for these products and may have more work to do to prepare for the requirements of the products and services outcome. We are reaching out to a range of product manufacturers to establish to what extent they are ready to support our clients and will provide an update you when we have more information.
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