FCA ban of "restrictive contractual clauses" in financing transactions

12 July 2017

The Financial Conduct Authority (FCA) has recently confirmed that it will ban certain restrictive contractual clauses in agreements between regulated firms and their clients from 3 January 2018.

The FCA believes the ban will protect those clients that are explicitly constrained by such clauses and provide clients with greater choice of providers for future services, as well as more competitive terms. The ban is of particular interest to those involved in financing transactions – in connection with which various restrictions or mandates relating to future business have become commonplace. It will, however, not reach as widely in this area as the FCA’s original proposals suggested it might.