The G20/OECD High-Level Principles on Financial Consumer Protection has now been revised following a review process.
The Principles are the leading international standard for effective and comprehensive financial consumer protection frameworks. As a high-level standard, the Principles are specifically designed and intended to be applicable to any jurisdiction and are cross-sectoral in nature (i.e. they can be applied to credit, banking, payments, insurance, pensions and investment sectors). Many countries, including OECD, G20 and FSB jurisdictions, have adopted the Principles in establishing or enhancing their financial consumer protection frameworks.
Building on the existing Principles, the main policy changes to the updated Principles are summarised in the infage above and explained below:
- two new Principles (12 in total), i.e. “Access and Inclusion” and “Quality Financial Products” because these concepts, which are important to a holistic approach to financial consumer protection, were not covered in the original Principles.
- three new cross-cutting themes that are relevant to the consideration and implementation of each and all of the Principles, namely “Digitalisation”, “Financial Well-being” and “Sustainable Finance”, and to include references throughout the Principles to illustrate the cross-cutting themes.
- incorporation of high-level lessons from the response to the COVID-19 pandemic throughout the Principles such as enhanced protections for consumers who may be vulnerable and a greater focus on tackling financial scams.
CFA provided a submission to the consultation in 2022. The new principles pick up on themes in CFA’s submission, including in relation to protection against frauds, scams and misuse. In particular, the new standards note that protection mechanisms “should include clear and transparent liability arrangements between financial services providers and consumers in the event of financial loss”
The updated FCP Principles were endorsed by G20 Leaders at their Bali Summit on 5-16 November 2022, and adopted by OECD Governments on 12 December 2022 via a revised Recommendation. As a result, the updated FCP Principles have now been published on the OECD website, and are available here along with supporting materials.