446JMinimum requirements for fair conduct programme

1. The fair conduct programme must be in writing and include effective policies, processes, systems, and controls for—

2. enabling the financial institution to meet all of its legal obligations to consumers, including under this Act, the Fair Trading Act 1986, the Credit Contracts and Consumer Finance Act 2003, the Consumer Guarantees Act 1993, and the Financial Service Providers (Registration and Dispute Resolution) Act 2008; and
3. designing, and managing the provision of, the financial institution’s relevant services and associated products to consumers, including by—
   1. providing for the methods by which the relevant services and associated products are provided to consumers (distribution methods) to operate in a manner that is consistent with the fair conduct principle; and
   2. regularly reviewing whether the distribution methods are operating in a manner that is consistent with the fair conduct principle; and
   3. ensuring that any deficiencies identified under subparagraph (ii) are remedied within a reasonable time; and
   4. regularly reviewing the relevant services or associated products that are provided to consumers on an ongoing basis to determine whether they are likely to continue to meet the requirements and objectives of those consumers (when viewed as a group); and
   5. regularly reviewing whether enhancements or improvements in the financial institution’s relevant services or associated products should be made available to those consumers (when viewed as a group); and
   6. ensuring that any enhancements or improvements identified under subparagraph (v) are made available within a reasonable time; and
4. identifying, monitoring, and managing risks associated with conduct that fails to comply with the fair conduct principle, including—
   1. having clearly defined roles, responsibilities, and accountability arrangements in relation to identifying, monitoring, and managing those risks; and
   2. requiring records to be maintained that are sufficient to allow an assessment to be made of the financial institution’s performance in complying with the fair conduct principle; and
   3. requiring regular and comprehensive reporting about those risks, and about failures to comply with the fair conduct principle, to the board or other governing body of the financial institution; and
5. identifying conduct that fails to comply with the fair conduct principle and taking reasonable steps to mitigate any actual or potential adverse effects of the failure; and
6. requiring the financial institution’s employees and agents to follow the procedures or processes that are necessary or desirable to support the financial institution’s compliance with the fair conduct principle; and
7. requiring initial and regular ongoing training for each of those employees on the following matters to the extent that the training is relevant to their work in providing the financial institution’s relevant services or associated products to consumers:
   1. the relevant services or associated products in respect of which the employee carries out work; and
   2. the fair conduct programme and the procedures or processes referred to in paragraph (e) that the employee must follow; and
8. checking that each of those employees has completed that training and has a reasonable understanding of the matters that have been covered by that training; and
9. managing or supervising each of those employees to ensure that they are supporting the financial institution’s compliance with the fair conduct principle, and monitoring whether those persons are giving that support, including by—
   1. obtaining reasonable assurance that each employee is competent to carry out the range of work for which they will be, or are, employed (in relation to the financial institution’s relevant services or associated products); and
   2. setting conduct expectations for those persons; and
   3. establishing robust and transparent procedures or processes for dealing with misconduct by those persons; and
   4. monitoring whether consumers have been treated by those persons in a manner that is consistent with the fair conduct principle; and
10. designing and managing incentives to mitigate or avoid the actual or potential adverse effects of incentives on the interests of consumers, so far as is reasonably practicable; and
11. communicating with consumers about the financial institution’s relevant services or associated products in a timely, clear, concise, and effective manner; and
12. ensuring that there are in place methods for regularly reviewing, and systematically identifying deficiencies in, the effectiveness of the programme; and
13. ensuring that any deficiencies identified are promptly remedied; and
14. complying with all requirements prescribed for the purposes of this section.

15. In considering what policies, processes, systems, and controls are effective for the purposes of subsection (1), the financial institution must have regard to the following:

16. the nature, size, and complexity of its business; and
17. the relevant services and associated products it offers; and
18. the methods by which it provides relevant services and associated products to consumers; and
19. the types of consumers it deals with, including consumers in vulnerable circumstances; and
20. the types of intermediaries that are involved in the provision of its relevant services and associated products, including the nature and extent of the following:
    1. their involvement; and
    2. their legal obligations in connection with that involvement (for example, under subpart 5A in the case of financial advice providers); and
21. the types of agents that are engaged to carry out work in relation to the financial institution’s relevant services or associated products, including the nature and extent of that work and of the authority of those agents; and
22. any other factors that may be provided for in regulations.

23. Subsection (1)(a) to (l) does not limit what may be prescribed by regulations under section 546(1)(oa) (in particular, those regulations may prescribe additional, or more detailed, requirements relating to the matters set out in subsection (1)(a) to (l)).

24. Despite subsection (1), a fair conduct programme—

25. must not impose in relation to an intermediary or agent a requirement of a kind prescribed for the purposes of this paragraph:
26. is not required to impose in relation to an intermediary or agent a requirement of a kind prescribed for the purposes of this paragraph.

27. Section 546(1)(oa) (which allows regulations to prescribe requirements for the programme) is subject to subsection (4).