The Prudential Regulation Authority and the Financial Conduct Authority will operate under one complaint system, under new Government proposals.
In October, Complaints Commissioner Sir Anthony Holland called for the draft financial services bill to be changed because it would have seen the PRA being subject to a less transparent and less independent complaints process. In December, the joint committee on the draft bill warned that having separate systems could see complaints about how the two regulators co-operate “falling between two stools”.
In guidance to the financial services bill, published today, the Government has confirmed it wants the two regulators to operate under one system.
It says: “The Bill therefore provides for an independent complaints system with a single complaints commissioner and system operating across both the FCA and PRA. This reflects the Government’s commitment to openness and transparency for the new regulators, and will ensure consistent investigation of complaints involving both regulators – including, as highlighted by the joint committee, possible complaints about the coordination arrangements between the FCA and PRA.”
Currently, the commissioner investigates complaints against the FSA where the regulator has rejected a complaint about its actions but where the complainant remains unsatisfied. Under the draft bill, it was proposed that complaints against the Financial Conduct Authority will be referred to an independent investigator, like the current Complaints Commissioner. However complaints against the PRA will be investigated by someone appointed by the Bank of England.
Giving evidence to the joint committee in October, Holland said: “”The separation of the complaint system between the PRA and the FCA will lead to less transparency, it will create more problems for the FCA and it will also mean you cannot truly say the system is a stand-alone independent one, which you can now.”
Holland also argued the PRA may refuse to disclose information to the FCA on the grounds of confidentiality which would in turn prevent the FCA from investigating complaints properly.