Insights ¦ Review of the Financial Ombudsman Service

Published by: HM Treasury
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Key Take Aways

The UK government has launched a comprehensive review of the Financial Ombudsman Service (FOS), aiming to enhance its simplicity, impartiality, and effectiveness in dispute resolution.
The review seeks to address concerns of regulatory inconsistency where FOS decisions have, at times, acted in a quasi-regulatory capacity, creating uncertainty for firms.
A key recommendation is to adapt the ‘Fair and Reasonable’ test, aligning it with FCA rules to ensure decisions are consistent with high standards of conduct.
The proposed reforms include establishing formal mechanisms for the FOS to seek the FCA’s interpretation on FCA rules and wider implications, improving regulatory coherence.
There is a strong emphasis on clarifying the roles of the FCA and the FOS, especially regarding mass redress events and larger implications issues, to prevent overlapping responsibilities.
The government plans to designate the Chief Omb...