PRA policy statement 10/23 ꞁ FCA policy statement 23/12
Published on 27 July 2023
Overview
The Financial Conduct Authority (FCA), the Prudential Regulation
Authority (PRA), and the Bank of England (the Bank) (the
Regulators) have a joint Complaints Scheme (the Scheme) under the
Financial Services Act 2012 (the Act). The Scheme covers the
complaints procedures of the Regulators, and also describes the
role of the independent Financial Regulators Complaints
Commissioner (the Complaints Commissioner). This is a Scheme for
handling complaints against the Regulators, rather than
complaints against the firms that we regulate. A Scheme for
investigating complaints about the Regulators was first
established under the Financial Services and Markets Act 2000
(FSMA) and has been in place since September 2001. The current
Scheme dates in substance from 2013 (revised in 2016).
Complaints are a valuable source of feedback that help the
Regulators improve and learn. The Regulators take all complaints
about them seriously and welcome the transparency and
accountability the Scheme provides.
We launched the consultation in July 2020 with the aim of
proposing a revised Scheme that was more user-friendly, using
plain language to make it more understandable. We sought to
improve the transparency of the Regulators’ approach to what we
described as ‘ex-gratia’ compensatory payments, to help
complainants understand what they can and cannot expect from the
Scheme. This was in part a response to recommendations made by
the former Complaints Commissioner to consult on improving the
Scheme and in particular to clarify the Regulators’ approach to
compensatory payments.
This is a joint policy statement by the FCA, the PRA and the
Bank. It sets out our response to the feedback we received to the
CP and details the final changes to the Scheme we are
introducing.
The statutory framework for the Scheme is set out in Part 6 of
the Act, which requires us to maintain a Scheme for the
investigation of complaints arising in connection with the
exercise of, or failure to exercise, any of our ‘relevant
functions’ as defined in section 85 of the Act. For the FCA and
the PRA, broadly speaking, relevant functions include our
authorisation, supervision, and enforcement functions and our
operation of the Scheme, and in the case of the FCA only,
maintaining the Financial Services Register. For the Bank, the
complaint must relate to relevant functions in relation to
recognised clearing houses, central securities depositaries, or
inter-bank payment systems or wholesale cash distribution.
Complaints about the exercise of the Regulators’ legislative
functions, such as rule-making, the issuing of
guidance/statements, and the processes for these, cannot be
investigated under the Scheme as they are excluded from
investigation by the Act. So far as reasonably practicable, the
Scheme must be designed to investigate complaints quickly.
Responses
We received 411 responses to the consultation. These came from
individuals, consumer groups, firms, and trade bodies. We have
included a list of non-confidential respondents in Annex
1.
A large proportion of respondents did not support all our
proposals concerning compensatory payments in recognition of
financial loss. In particular, our proposals to introduce limits
on compensatory payments save for exceptional circumstances were
not welcomed. Several of the more detailed responses, mainly from
organisations, also raised objections to the use of the ‘sole or
primary’ cause condition when considering a payment in
recognition of financial loss.
Respondents were generally supportive of our proposals in
relation to compensatory payments for non-financial loss. Some
respondents expressed the view that we should keep the levels
under review.
We received supportive overall feedback about the language being
more understandable than the language in the current Scheme.
Respondents told us that the diagrams proposed in the
consultation were a useful addition.
We have made changes to our proposals to reflect these comments
where we agreed it would improve the accessibility of the revised
Scheme and help to clarify our approach to compensatory payments.
Implementation
We set out in the consultation that we would handle all
complaints made after the revised Scheme comes into force under
the revised Scheme.
Existing complaints would continue to be handled under the
current Scheme. Where the Complaints Commissioner provides a
report to us about a complaint concluded before the revised
Scheme comes into force on 1 November 2023, we would decide how
to respond to the Complaints Commissioner’s report and any
recommendations in line with Part 7 of the current Scheme.
Policy statement 12/23
