The Personal Investment Management & Financial Advice Association (PIMFA) has welcomed the Financial Conduct Authority’s (FCA) proposed targeted clarifications of Handbook materials, while calling for further consideration of some aspects of the changes.

In its response to the consultation, PIMFA said it broadly supported the FCA’s objectives to simplify requirements, reduce duplication, and improve clarity and proportionality, while maintaining strong consumer protection.

The association described the proposals as a meaningful step toward simplification, proportionality, and improved regulatory understanding.

The consultation formed part of the FCA’s Consumer Duty Requirements Review and sought views on proposals to simplify its requirements and reduce uncertainty in its rules and guidance.

Overall, PIMFA welcomed the proposed amendments to the Client Assets Sourcebook (CASS), stating they were likely to reduce administrative burden and bridge the gap between regulatory requirements and practical application.

However, it felt that certain proposals would benefit from further consideration and clearer guidance.

The association argued that the record retention proposal required clarification on how CASS retention requirements would interact with other regulatory obligations.

Additionally, it believed the Consumer Duty clarification would benefit from more detailed guidance or clarification of the additional value added, given the potential for subjectivity when combining prescriptive CASS rules with principles-based frameworks.

“From a systems and operational perspective, the areas with the greatest implementation impact are the detailed treatment of interest and the scaling up of daily reconciliations where using Euroclear UK & International's Investment Funds Service System Record,” PIMFA continued.

“In these areas, clear, practical examples in the final rules or guidance would support consistent implementation by firms and vendors.”

PIMFA said it would welcome a review and enhancement of the CASS 8 rules, as it felt they could benefit from modernisation to ensure the remained fit for purpose.

The FCA’s consultation also sought views on how it could improve its support for smaller firms, and PIMFA welcomed the recognition that smaller firms faced challenges regarding outcomes-based regulation.

The association supported the proposal to pilot sector-specific, directory-style guides, alongside good and poor practice examples.

It highlighted that the success of the guides would depend on clear communication that the guides would not create new obligations or become de facto rulebooks, regular review and updates, consistent use by supervisory teams, and the careful consideration of implementation impacts.

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