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Tiner vow over &#39back-door regulation&#39

FSA managing director John Tiner has acknowledged industry concerns about “back-door regulation” as a result of Financial Ombudsman Service decisions and pledged to provide some clarity on the relationship between the two bodies.

Speaking at a breakfast meeting in London last week, Tiner said there is a need for the FSA to address this issue.

FSA manager Susan de Mont told the Building Societies&#39 Association annual conference in Harrogate last week that she had “raised an eyebrow” at some FOS decisions.

The comment has been seen by some in the mortgage industry as referring to the November ruling against Norwich & Peter-borough Building Society over its attempt to offer different interest rates on its Tessa and Isa savings products.

The FOS says there are several issues where there are potential overlaps between the watchdog and the FSA such as split caps, high-income bonds and mortgage endowments.

Tiner said: “There are concerns about there being regulation through the back door through Ombudsman decisions.

“This is an issue which the regulator has to address to ensure that there is some clarity.”

Aifa director of policy Fay Goddard says: “The idea of regulation through the back door has been brought to the forefront as a result of Sandler.

“If you are going to have a sales regime that is outside the conduct of business rules, then should it not be outside the ombudsman?”

FOS head of communications David Cresswell says: “We have done an enormous amount of work on establishing the difference between ourselves and the FSA. It is an ongoing situation.”


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