Provider and distributor responsibilities set out in guidance

The FSA aims, in new guidance, issued under section 157 of the Financial Services and Markets Act , on the responsibilities of providers and distributors throughout the product lifecycle, to ensure that consumers receive the same fair treatment whether a product is provided and distributed by one or more firms. The ‘Regulatory Guide’ was developed out of consultation following publication of DP06/4, which contained a broad ‘Statement’ of responsibilities. The Guide, in PS07/11, is shorter than the Statement and in keeping with the principles-based approach does not contain detail on how firms should act; instead it makes extensive reference to the Principles for Businesses. In its response to the DP the regulator says it “broadly agrees” that responsibilities flow from the roles or functions carried out in a transaction. There are circumstances, the FSA acknowledges, when firms may be able to apportion responsibilities between them; these will depend upon the nature of the responsibility, the degree to which any allocation would be reasonable. The arrangement would also have to be clear to both parties, which means it would need to be precisely recorded and systems and controls would need to check that it continued to be appropriate.