RegulationJul 2 2013

Alerting the FCA to bad behaviour

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A ‘relevant person’ may refer matters to the FCA. A ‘relevant person’ is defined as either the scheme operator (ie. Financial Ombudsman Service) or a regulated person.

A relevant person may only refer a matter to the FCA where the matter is either:

* a regular failure by one or more regulated persons to comply with requirements applicable to the carrying on by that person or persons of any activity, which has resulted in consumers having suffered loss for which, if they brought legal proceedings, a remedy or relief would be available; or

* a regular act or failure to act for which, if a complaint were made to the Financial Ombudsman Service, it would be likely to determine the complaint in favour of the relevant person and award redress or make a direction.

While the Financial Ombudsman Service may refer a matter relating to any failing or conduct by any regulated person, a regulated person can only refer a matter to the FCA if that reference relates to that person’s own failing or conduct.

Complainants should tell the FCA:

* the relevant requirement that has not been complied with;

* what activity the relevant requirement relates to;

* how the regulated person’s conduct has failed to meet the relevant requirement;

* the extent and frequency of the failing;

* the impact of the failing on consumers, that is, loss or damage that has been suffered (or that may be suffered); and

* what remedy or relief would be available to consumers if they brought legal proceedings regarding the failing.

Relevant persons are encouraged to discuss their references with the FCA before submitting a formal reference.

If the complaint meets the FCA’s requirements then the regulator has to publish a response to the reference within 90 days setting out how it will deal with the reference, explaining in particular whether it has decided to take any action, if so, what action, and in any event, reasons for the decision.

Any action taken by the FCA will be subject to the usual procedures and controls that may be relevant to that action.

For example, if the FCA proposes making changes to rules as a response to a reference, it will follow its general consultation process for the making of rules. The FCA can:

* take regulatory action;

* initiate a consumer redress scheme;

* review any relevant rules or guidance;

* refer the reference to another regulatory, supervisory or enforcement agency that may be better able to address the reference;

* initiate further assessment of the matters raised in the reference;

* decide no action should be taken; or

* dismiss the reference as frivolous, unnecessary or made in bad faith.

http://www.fca.org.uk/static/fca/documents/fg13-01-section-234d.pdf