FCA asks: Are we too hard on small businesses?


The UK financial regulator Financial Conduct Authority (FCA) has issued a discussion paper and is seeking views on the way in which small and medium sized enterprises (or ‘SMEs’) that use financial services are treated in its rules.

Across regulated industries, SMEs have traditionally been treated as having greater self-sufficiency and bargaining power than individual consumers. So they have often been seen by regulators as requiring less assistance, even though their needs, behaviour and expertise are often similar.

The FCA’s initial work has shown that SMEs can experience poor outcomes in a wider range of situations. They can be exposed to risk at the point of purchase due to product complexity, limited choice or poorly managed expectations. When things go wrong, some struggle to navigate the complaints and claims processes or to obtain redress.

So the FCA is seeking evidence and views on whether its rules should provide SMEs with greater protections, including access to the ombudsman service, thus treating them more like individual consumers.

FCA product knowledge

The FCA plans to use responses to the discussion paper, alongside evidence from discussions and roundtables with stakeholders, to consider whether to consult on changing its rules or to take other action.

All comments and other submissions should be made to the FCA by March 18, 2016. More information can be seen here.

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FCA asks: Are we too hard on small businesses?

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