Industry Guidance
To further help you work out how to meet your regulatory requirements, we formally recognise guidance produced by the industry.
We have overarching Principles and high-level, outcome focused rules. We also provide guidance and supporting materials where we think it will help. Guidance produced by the industry will supplement what we produce – not replace it.
We have published a paper setting out the role of Industry Guidance and the following Q & As summarise the key points for small retail firms.
Frequently asked questions
What is Industry Guidance?
It is guidance produced by a body, other than the FSA, which will help your firm meet its regulatory requirements. Guidance developed by the industry will make use of industry expertise and will be more tailored to the sector in which you operate.
When a piece of Industry Guidance has been confirmed by the FSA, it means we agree that the guidance is a useful tool to help a firm meet their regulatory requirements in a specific area.
Why is this happening now?
We recognise that in making a shift to principles-based regulation the industry may wish to create more of its own guidance to assist firms that want more information on our Principles and high-level, outcome focused rules.
We have in the past made public comments about specific pieces of guidance produced by the Industry so in some respects this isn't new.
However, we have decided to formalise how we recognise Industry Guidance and clarify the status this recognition has in our regulatory regime.
Will the FSA stop providing guidance?
It is not our intention to strip the Handbook of guidance. We will look more carefully at whether including guidance is required. Where we do decide to provide guidance we will make it less detailed and more outcome focused which will make the purpose of the rule clearer.
Must a firm use Industry Guidance?
No, it is voluntary. We want to be very clear that following Industry Guidance is one way, but not the only way, to meet your regulatory requirements.
How will the FSA view a firm following Industry Guidance?
If a firm follows a piece of FSA confirmed Industry Guidance and it was appropriate for them to do so, we will take this into account when exercising our regulatory functions. This means, where a firm has followed a piece of Industry Guidance correctly, and it was appropriate for them to do so, we will not take action against that firm.
However, when a breach has been established, the use of Industry Guidance may be used in enforcement cases. See further information.
Who can produce Industry Guidance?
The FSA anticipates trade associations, professional bodies, and other organisations are most likely to develop Industry Guidance. However, this should not limit firms and networks from producing guidance.
One of the main benefits of Industry Guidance is that it will be developed by the industry for the industry.
How will Industry Guidance be treated by FOS?
FOS decisions are not about enforcing FSA rules; its role is to protect the rights of consumers. Industry Guidance cannot affect the rights of third parties, such as consumers when they seek to enforce their rights through the FOS or the courts.
There is no explicit requirement within DISP rules for the FOS to consider Industry Guidance, but relevant Industry Guidance may help the FOS to establish what was considered good industry practice at a particular time.
Summary
The FSA will:
- continue to produce guidance on our rules where we consider it will benefit firms. Where it is provided, the emphasis will be on the regulatory outcomes we want firms to achieve rather than detailed processes;
- ensure our rules stand on their own without the need for Industry Guidance;
- ensure that where compliance with Industry Guidance takes a firm beyond the minimum acceptable standards of firm behaviour, it is clearly stated;
- provide help and assistance on our own rules and guidance, but not on Industry Guidance produced by other parties;
- expect the guidance provider to:
- ensure the guidance is kept up to date and relevant;
- be proactive in requesting FSA confirmation of its guidance;
- work with other trade bodies , if required, to develop guidance; or
- ensure the guidance is free and publicly available.
The FSA will not:
- monitor firms' use of the guidance – it is up to each firm to decide to use the guidance available;
- expect guidance providers to monitor or enforce compliance with the guidance;
- require the industry to produce guidance to 'plug gaps' in the regulatory regime – though industry solutions, including Industry Guidance may pre-empt the need for rules; and
- require guidance providers to answer queries on their Industry Guidance for example, non-members of a Trade Association.
