The Consumer Duty Principle is a regulatory standard requiring financial firms to prioritize consumer outcomes, ensuring products and services deliver fair value and clear communication. It mandates that firms act in good faith, avoid causing foreseeable harm, and support consumers in achieving their financial objectives. This principle moves beyond simply avoiding mis-selling to actively promoting positive results for individuals engaging with financial offerings. Its application seeks to elevate consumer protection standards across various financial sectors.
Context
The discussion surrounding the Consumer Duty Principle is particularly relevant in jurisdictions like the UK, where regulators are applying it to traditional finance and increasingly considering its implications for cryptoasset services. Its situation involves regulatory bodies striving to extend investor protections to the nascent digital asset market. A critical future development is how this principle will be adapted to address the unique risks and decentralized nature of cryptocurrency products. News often covers regulatory consultations or enforcement actions related to consumer protection in digital assets.
The UK's integration of crypto activities into the FSMA framework mandates full FCA authorization and robust compliance controls for all firms serving UK clients.
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