The Government has appointed the Financial Conduct Authority (FCA) to regulate the pre-paid funeral industry from the middle of 2022.
The FCA appointment will start 18 months after the government sets out new legislation.
In a statement the FCA said it intends to consult in spring 2021 on its plans for regulating the sector, including proposed rules and approach to authorising firms.
It said: “Our rules will aim to achieve good outcomes for consumers in this sector. For example, that consumers receive the product they’ve paid for, and that customer funds are looked after and used responsibly. “
It continued: “Once we’ve finalised our rules, firms seeking our authorisation will need to submit an application demonstrating how they meet our regulatory standards. We’ll assess all applications and seek additional information from firms where needed, to decide if they can be authorised.
“In order to carry out regulated funeral plan activities, firms must be authorised by us at the point at which we take responsibility for regulation. Continuing with regulated activity without authorisation is a criminal offence. Firms that don’t intend to seek our authorisation should start planning now for how to wind down their business in an orderly way before FCA regulation comes into force.”