The draft Financial Services Bill needs changes due to the Prudential Regulation Authority being subject to a less transparent and less independent complaint process than the present system, says Complaints Commissioner Sir Anthony Holland.
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 new regulatory structure, it is 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.
Speaking at a joint committee hearing on the draft bill last week, Complaints Commissioner Sir Anthony Holland said he was not being critical of the new arrangements just to preserve his job, as his term as commissioner expires in 2013.
He 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.
He called for a single independent complaint system across the two bodies. When asked whether the joint committee should push for the Financial Services Bill to be amended, Holland replied: “In a word, yes.” The Financial Services Practitioner Panel said it would support a single complaint system across the PRA and the FCA.