What we’ve learnt from early stakeholder engagement on Code 15

Many of you joined our webinars over the past few weeks to share your thoughts and insights with us about Code 15 – the most comprehensive review of our regulatory framework in ten years. 

We hope you found the webinars as useful as we did, and we wanted to share with you the key messages we took away. 

Stakeholders agree that it’s time for a change

One of the things we discussed with you was why we think a review is timely – we’ve had an outcomes-based approach in place for ten years and in this time the market has changed and so have consumer expectations. We want to ensure we have a Code that is fit for purpose and effective. 

Many of you agreed with us: the Code review is a positive opportunity to update the regulatory framework for the better, to make it clearer and simpler. 

You highlighted to us that while an outcomes-based Code can be great as it provides flexibility, we’ve made many changes over time which has resulted in costs, complexities and uncertainty for some of you, and impacted on your ability to be flexible in how you achieve an outcome.  

Specifically, you highlighted to us that we’ve been quite reactive over time, with lots of service types now having Special conditions in place which set out much more prescriptive requirements for how a Code outcome must be met, as well as best practice Guidance. Some of you felt that these can impact on your ability to innovate and can negatively impact compliant companies. 

We heard from you that as we look to Code 15, we need to think about how we can develop a Code that is easier to navigate and simpler to comply with, and one that isn’t too prescriptive. 

The importance of clarity and simplicity came through strongly in other areas of our discussions too. We heard from you that we should look at opportunities to streamline enforcement through Code 15, and to be clearer about the process and timeframes. 

You asked for more detail on what we mean by standards 

You told us that it would be helpful to understand more about what we mean when we say we are thinking about a ‘standards-based approach’ to Code 15. 

We shared our early thoughts on this, setting out that a standard is likely to set out an expected level of quality that providers would have to meet – somewhere in between outcomes and prescriptive rules. So it will detail what you have to do, without prescribing exactly how you have to do it. 

Many of you were supportive of this approach, but indicated that more detail on what the standards might be would be really useful. 

Getting the barrier to entry right 

We have been told by some in the industry that the barrier to entry into this market is too low, with many problems associated with bad actors able to enter and exit the market too easily and without consequence.  We are looking at changes in this area. 

Many of you agreed, and suggested we look at what we can do through Code 15 to ensure that only well-intentioned providers that put consumers at the forefront of what they do can enter the market. You also asked us to think about responsibilities across the value chain and the opportunities to strengthen due diligence requirements, alongside considerations about market entry. 

We also heard you clearly when you said that we need to strike a balance here between getting the entry requirements right, while supporting innovation and enabling new and different services to enter the market to the benefit of consumers.
 
How we’ll use this engagement to inform the development of Code 15
 
Thanks to everyone who shared their thoughts with us. This input will inform our thinking as we start to develop the new Code. 
 
This is just the beginning of our engagement and we are currently planning another set of issues-based webinars, which we will be in touch about over the next few weeks. 

As you’ll know, we have extended the deadline for responses to our discussion document to early July, to give you ample time to respond, and we look forward to receiving your feedback. There will also be further opportunities to share your views when we publish our formal consultation in early 2021.