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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

The Financial Services and Markets Act (“FSMA”), which received Royal Assent on 14 June 2000, establishes a new, single regime for the statutory regulation of financial services in the United Kingdom and establishes the Financial Services Authority (“the FSA”) as the statutory regulator.

Part XVI of FMSA requires the FSA to establish a new, single ombudsman scheme to resolve disputes between consumers and financial services firms quickly and with a minimum of formality.  This new scheme will be known as the Financial Ombudsman Service (“the FOS”).

This new ombudsman scheme will replace eight existing dispute resolution schemes currently operating in the financial services sector.  These schemes (referred to in this consultation document as “former schemes”) are:

• The Investment Ombudsman scheme set up by the Investment Management Regulatory Organisation (“the IMRO scheme”),
  
  
• the Personal Investment Authority Ombudsman Bureau (“the PIA Ombudsman Bureau”),
  
  
• the Securities and Futures Authority Complaints Bureau and Arbitration Service (“the SFA scheme”),
  
  
• the Financial Services Authority’s Complaints Unit and Independent Investigator (“the FSA scheme”),
  
  
• the Building Societies Ombudsman (“the building societies scheme”),
  
  
• the Banking Ombudsman,
  
  
• the Insurance Ombudsman Bureau,
  
  
• the Personal Insurance Arbitration Service

To ensure that consumers and firms alike are able to benefit as soon as possible from the replacement of these former schemes with a single service operating across the financial services sector, it is proposed that these existing schemes shall cease to operate from the date on which the new arrangements under FSMA come into effect (the date commonly known as “N2”).  Responsibility for dealing with complaints that relate to events prior to N2 and which would otherwise have been resolved by these existing schemes will pass to the FOS.   This consultation document is concerned with the arrangements the Government proposes to make to facilitate that process.  It does not deal with the complaints schemes operated by bodies which are Recognised Professional Bodies (“RPBs”) under the Financial Services Act 1986, which will be considered in the context of arrangements relating to the RPBs more generally.

This consultation document also discusses the proposals to continue to allow the FSA to investigate pre-N2 complaints against itself.