I have written previously about the EU (and UK) rules designed to provide firms' clients with information about the quality of the execution services they are providing. These rules have not been the success intended, primarily because (a) the format and quality of the data have been inconsistent and (b) those clients it was designed to benefit do not access or read the information. The rules have been suspended for now.

The discussion around payment for order flow (or PFOF) has been going on for some time in the UK, is nascent in the EU and rages in the US (particularly in relation to retail broking). Gary Gensler, the Chair of the US Securities and Exchange Commission, has been vocal on the subject, leading to the riposte in this article from an Emeritus Professor at Harvard Law School. 

Whilst I am clear that PFOF is a contentious subject (see the tweets linked), what caught my eye in the article was his proposal that brokers "demonstrate" the quality of the service (execution) to their clients as an alternative to restricting or banning PFOF in retail broking. Lessons can be learned from the EU's and the UK's example: will these data be useful; or will the obligation to provide these data be a source of fines for non-compliance?

To bring it back home and to the FCA's Consumer Duty (and again, this is something I and many others have said before and in response to the FCA's consultation on the proposed Consumer Duty) there is the potential for a material disconnect between what consumers want and what regulators say they need. There is also a disconnect between what is possible/practicable and what might be useful: for example, how does one broker objectively compare other brokers' offers of fractional shares or CFDs prices with that broker's offer of self-routed (or smart routed) whole-share broking?

"It is the principle of the thing", of course, but as the FCA's consultation demonstrates, even principles can be (mis)interpreted many different ways.