FCA recognition of industry codes criteria and process

Read about how we grant recognition and the criteria you have to meet.

How we grant recognition

Our recognition of industry codes process ensures a consistent and efficient approach when dealing with requests for recognition.

Process step

Note

1

Code Authors approach the FCA to seek recognition of the most recent version of their industry code, by emailing us.

2

The FCA will request specific information about the code and how, in the code author’s view, the code meets the recognition criteria

3

The FCA may request further information, request a meeting to discuss the code, or provide written comments about the code

4

If, in the FCA’s opinion, there is a preliminary case for recognising a code, the FCA will publicly consult and seek views about whether the FCA should or should not recognise the code, considering the recognition criteria and other relevant considerations

5

If, considering the consultation feedback, the FCA believes it would be beneficial to recognise the code, it will do so for a period of 3 years listing it on the FCA website. This will have the status set out on our website.

6

At the expiry of the period of 3 years, or before, code authors may review, revise (where appropriate) and re-request a further 3-year period of recognition. Code authors may apply earlier than the expiry of the 3-year period for further recognition where there is a new version of the code available.

7

At its sole discretion, the FCA may withdraw recognition at any time if it finds that any of the recognition criteria are not met.  If a further period of recognition is not sought at the expiry of a 3-year period, recognition will lapse at the expiry date.

Recognition criteria

Given the large number of possible market codes we could recognise, we will only give recognition if it is a priority to do so considering the risks and potential harm we see for consumers or markets within the industry sector. However, we would only recognise codes if in our judgement they meet the following criteria:

The code must advance the FCA strategic objective of ensuring that the relevant markets function well and one or more of our three operational objectives of:

  1. securing an appropriate degree of protection for consumers
  2. protecting and enhancing the integrity of the UK financial system
  3. promoting effective competition in the interests of consumers

The code must also:

  • focus on market activities and issues which are not already covered by binding regulatory rules
  • represent an effort to define, set or raise standards taking into account the views of relevant stakeholders during its development
  • have been subject to scrutiny that has allowed alternative views to those of the authors to be expressed and taken into consideration
  • including (as appropriate) from firms, public authorities, consumer groups and academics
  • be publicly available and free for all parties who wish to use it
  • not condone any practices the FCA has previously objected to, or which the FCA would expect not to condone

Codes should aim to:

  • be widely supported, clear, practical and unambiguous articulation of the proper standard of market conduct, covering significant conduct issues that a reader would reasonably expect to be covered
  • set standards broadly comparable in substance or intended outcomes with those that exist in other comparable financial markets
  • encapsulate what would otherwise be considered proper standards of market conduct among knowledgeable, experienced and reasonable market participants representing their industry and profession