FCA Handbook - PDCOB 4 Communications: general principles applying to all communications

You are viewing PDCOB 4 Communications: general principles applying to all communications as of . PDCOB 4 Communications: general principles applying to all communications was last updated on 30/11/2024.

Rules

Guidance

Related resources

PDCOB 4.1 Application

This chapter applies with respect to a firm’s communications in relation to a pensions dashboard platform.

PDCOB 4.2 General principles applicable to all communications: the fair, clear and not misleading rule

A firm must ensure that any communication it makes is fair, clear and not misleading.

A firm should consider whether the omission of any relevant fact could result in a communication being insufficiently clear or unfair, or could result in the communication being misleading.

If a communication names the FCA, the PRA or both as the regulator of a firm or other provider and refers to matters not regulated by the FCA, the PRA or both, the firm should ensure that the communication makes clear that those matters are not regulated by the FCA, the PRA or both.

Part 7 (Offences relating to financial services) of the Financial Services Act 2012 (www.legislation.gov.uk/ukpga/2012/21/contents) creates criminal offences relating to certain misleading statements and practices.

PDCOB 4.3 General principles applicable to communications: additional requirements including comprehensibility, prominence and notification of changes

A firm must communicate information:

(1)
in the manner and form most likely to be comprehensible to a customer and in good time, having regard to their expected ability to comprehend information, including the abilities of customers with characteristics of vulnerability;
(2)
in English or in any other language agreed by the parties;
(3)
free of charge; and
(4)
prominently.

The requirement to communicate to the customer prominently includes ensuring that the communication is visible and that the communication is accessible to customers without requiring them to expand a window or text box.

A firm must notify a customer in good time about any material change to any information communicated to the customer which is relevant to a service that the firm is providing, or is proposing to provide, to that customer.

(1)
In determining what constitutes the provision of information ‘in good time’, a firm should take into account, having regard to the urgency of the situation, the customer’s need for sufficient time to read and understand the information before taking a decision.
(2)
A customer is likely to require more time to review information given on a complex or unfamiliar service, or a service a customer has no experience with, than a customer considering a simpler or more familiar service, or where the customer has relevant prior experience.

The rules in this sourcebook regarding communications to customers do not prescribe the exact wording or formatting of the communications. To comply with the customer’s best interests rule, Principle 12 and the rules in relation to general communications in this sourcebook, a firm should consider the information needs of, and seek to make general communications appropriate and comprehensible for, a customer in their target market, including:

(1)
what a customer needs in order to understand the relevance of any information provided by the firm;
(2)
the point at which information will be most useful to the customer to enable them to make an informed decision; and
(3)
the firm’s obligations under PRIN 2A.5.

PDCOB 4.4 General principles applicable to communications: additional requirements for content to be balanced with appropriate warnings

A firm must ensure that any communication it makes is balanced and contains appropriate risk warnings and, in particular:

(1)
does not emphasise any potential benefits that may be available to customers without also giving a fair and prominent indication of any relevant risks or downsides;
(2)
does not disguise, omit, diminish or obscure important items, statements or warnings; and
(3)
ensures that any comparisons or contrasts are meaningful and are presented in a fair, balanced way.

PDCOB 4.5 General principles applicable to communications: additional requirements in relation to the use of advertisements

A firm must ensure that advertisements do not have the effect of impairing the quality of the firm’s communications. This includes not concealing or reducing their prominence or allowing for them to give a misleading impression. A firm must take into account the requirements in the FCA’s Handbook and the other requirements that a firm is subject to under law, including the Dashboard Regulations.

PDCOB 4.6 The reasonable steps defence to an action for damages

If, in relation to a particular communication, a firm takes reasonable steps to ensure it complies with the fair, clear and not misleading rule, a contravention of that rule does not give rise to a right of action under section 138D of the Act.