The FSA and the Financial Ombudsman Service (FOS) have set out proposals designed to achieve greater clarity in the handling of complaints by the ombudsman service.
As part of the two-year review of the Financial Services and Markets Act, the treasury asked the FSA and the ombudsman service to review the circumstances in which the FSA takes regulatory action instead of individual cases being determined by the ombudsman.
The review also includes whether in specific circumstances decisions by the Ombudsman should be subject to some sort of appeal.
Clive Briault, Managing Director Retail Markets at the FSA, said: “We are seeking to clarify the differing roles and responsibilities of the FSA and FOS when 'wider implications' cases arise.
“In particular we want to set out more clearly, for both firms and consumers, how and when the FSA will deal with such cases through the use of our regulatory powers, and the outcomes we want to achieve through doing so.”
The paper also proposes that the FSA and the ombudsman service should nominate named individuals within both organisations as points of contact for “wider implications” cases and be responsible for communication, liaison and coordination.
They would:
· Be available to receive recommendations from firms, trade bodies and consumer bodies; and
· Act as liaison points between FSA and the ombudsman service in order to ensure that the referral process and any feedback is administered efficiently.
The paper also looks at the legal and practical issues that would be involved in introducing an external appeals system that would operate after an Ombudsman's decision. The FSA said it was seeking views on whether such a mechanism is necessary and outlines some of the practical issues surrounding appeals.
CP04/12: FSMA Review: Financial Ombudsman Service (July 2004) can be found on the FSA website www.fsa.gov.uk/pubs/cp/04_11/index.html. Responses are sought by 1 October 2004.
