The FCA has said that the Financial Ombudsman Service does not need more guidance on how it should match the regulator’s rules with the complaints adjudicator’s judgments.
While the FCA regulates firms according to its handbook, FOS decides on complaints based on a ‘fair and reasonable’ test, that is, whether the claim would be successful in court.
While the FOS guidelines currently say adjudicators should bear the FCA’s positions in mind, there is no further details on the weight it should give them or which ones should be prioritised.
The FCA says is a paper today: “The Financial Services and Markets Act 2000 requires the FOS to determine complaints on the basis of what is fair and reasonable in all the circumstances of the case. In doing so, it will take into account, amongst other things, relevant law and regulations, regulators’ rules, guidance and standards. We do not believe that a new rule needs to be introduced to clarify which of our rules the ombudsman should take into account when deciding what is fair and reasonable in a complaint about the provision of guidance.”
The statement comes in response to feedback from firms on an incoming change to the definition of advice to clarify that it must be a personalised recommendation, with other services more clearly defined as guidance.
Respondents to the FCA’s consultation on the proposals suggested a further rule for the FOS, that it if guidance had been given and not advice, it would only take into account the FCA’s looser rules on guidance.