Product Governance and Fair value assessments

YOUR COMPLIANCE MATTERS – Product Governance and Fair value assessments

Relevance: All firms.

Action required: Please log all Product Governance and Fair Value Assessments received and continue to cooperate with product manufacture requests for information.

By now we believe you all will have seen the FCA Newsletter highlighting the fact that significant numbers of Product Manufacturers have left it very late to get the Fair Value Assessments to their distributors.

As a reminder, in future, you cannot sell a product unless you understand its value and the type of customer for whom the product may not present fair value. The deadline is 30 September, for Product Manufacturers to distribute the assessments. If they arrive too close to the deadline, you may not have time to review and understand the assessment, before 30th September, meaning that you would not be able to sell that product from 1 October.

Given the potential for market disruption, the FCA will now allow distributors to continue to sell products after 1 October through to 31 December 2022, subject to the following:

1.         The distributor has identified the impact that its own distribution arrangements have on the value of the product by 30 September 2022 and completed any identified remedial action as a result of the assessment.

2.         The distributor has complied with any requests from the manufacturer for information specified in PROD4.3.10BR.

3.         The distributor is able to demonstrate that they received the manufacturer’s value assessment too late for them to be reasonably be expected to meet their obligations by 30 September 2022.

Actions required:

We suspect there will be a flurry of activity, on this issue so you need to keep track of where you are

In order to be able to demonstrate compliance, you will need to keep a log of the Fair Value Assessments as they are received. A template is shown below. If you would like an Excel version, please let us know.