The cross-cutting rules

The cross-cutting rules and guidance focusses on three key behaviours:

1. Firms must act in good faith towards retail customers – this means acting honestly, fairly, openly and consistently with the reasonable expectations of retail customer. However, it does not mean that a firm is prevented from pursuing legitimate commercial interests or seeking a profit, provided it does so in a manner which is compliant with Principle 12 and the cross-cutting obligations.
   
   
2. Firms must avoid causing foreseeable harm to retail customers – this includes:
   
   • ensuring that all aspects of the design, terms, marketing, sale of, and support for its products avoid causing foreseeable harm;
   • ensuring that no aspect of its business involves unfairly exploiting the customer’s behavioural biases or vulnerabilities;
   • identifying the potential for harm that might arise if it withdraws a product;
   • responding to emerging trends that identify new sources of harm, including FCA supervisory action and/or communications, e.g. Dear CEO letters; and
   • taking appropriate action to mitigate the risk of actual or foreseeable harm, e.g. updating or amending the product design or distribution strategy.
   However, avoiding causing foreseeable harm does not mean a firm is responsible for preventing all harm; for example, a firm which reasonably believes that a customer understands and accepts the risk of an inherently risky product will not breach the rule if it fails to prevent them.
   
   
3. Firms must enable retail customers to pursue their financial objectives – this includes:
   
   • acting to empower retail customers to make good choices in their interests, such as by ensuring the product design does not frustrate the objectives and interests of retail customers;
   • making sure that retail customers have the information and support they need, when they need it, to make and act on informed decisions;
   • enabling retail customers to enjoy the use of their product, switch, exit or complain without unreasonable barriers or delay; and
   • taking account of retail customers’ behavioural biases and the impact of characteristics of vulnerability in customer interactions;
   However, it does not require firms to go beyond what is reasonably expected by retail customers in the delivery of the product. It also does not require firms to carry out activities or services that they are not authorised to undertake.