|
Financial Services and
Markets Act 2000
March 2001
The Transition to the New Ombudsman Scheme and the Investigation
of Complaints against the Financial Services Authority- A Consultation
Document
back
to index
PART I - OVERVIEW
Introduction
1.1
In developing its proposals, the Government has sought to apply a
number of basic principles:
- the arrangements should be fair to firms and protect consumers’
rights to obtain redress for acts or omissions occurring before
N2;
- the arrangements
should be as simple and transparent as possible, so that people
are clear where they stand;
- the benefits
of a single ombudsman scheme should be delivered as soon as possible;
and
- the arrangements
should be simple to administer, allowing the FOS to operate efficiently.
The
draft Order
1.2 Part
XVI of FSMA requires the FSA to establish a scheme to deal with disputes
relating to acts or omissions occurring at a time when jurisdiction
rules (compulsory or voluntary) were in force in relation to the activity
in question. The compulsory jurisdiction rules will be made by the
FSA[1]. They will only apply to acts or omissions occurring on or after
N2. In order to enable the FOS to take over responsibility for dealing
with complaints against members of the former schemes relating to
events that occurred before N2, the Treasury needs to make transitional
provisions using the powers conferred by FSMA.
1.3 Paragraphs
7 and 8 of Schedule 1 to FSMA require the FSA to make arrangements
for the investigation of complaints made against the FSA itself.
These arrangements will only apply to complaints received after commencement
and only to its functions under FSMA (not any functions under any
previous legislation). In order to enable the FSA to investigate
complaints made against the authority prior to commencement (and which
relate to its functions under pre-FSMA legislation) the Treasury needs
to make transitional provisions using the powers conferred by FSMA.
1.4 The
necessary provisions are set out in the draft Financial Services
and Markets Act 2000 (Transitional Provisions) (Ombudsman Scheme and
Complaints Scheme) Order (“the Order”),
which can be found in Part VII of this consultation document. The
Order will be made under powers provided in sections 426 to 428 of
FSMA. For information, the text of those sections of FSMA is at annex
A.
Summary
of the proposed approach
1.5 Once
the FOS assumes responsibility for dealing with all complaints
at N2, we think it will make sense for a single set of procedures
to apply wherever possible. This should allow the FOS to streamline
its own procedures and operate more efficiently. It should also mean
that firms are able to rationalise their own complaints-handling arrangements,
while consumers will benefit as both the FOS and firms start to deal
with all complaints on a consistent basis. The Order has therefore
been designed to allow for such a harmonisation of procedures.
1.6 The
Order proposes that complaints relating to events occurring before
N2 involving firms which were members of the former schemes should
normally be dealt with under the rules of the new scheme. However,
we do not think it would be fair - either to firms or to consumers
- to alter the criteria by which existing complaints which are partly
completed at N2 will be determined after N2 or the effect that determination
could have. We therefore propose that, in determining such complaints,
the FOS ombudsman will be required to apply the same criteria as would
have been applied by an ombudsman, arbitrator or adjudicator (all
of which are referred to in this consultation document as “former
ombudsmen”) acting under the former scheme in question and
that the awards that can be made and the directions that can be issued
will be limited to awards or directions that could have been made
or issued by that former ombudsman.
|
