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    2021-01-06

DISP 1.1A Complaints handling requirements for MiFID complaints

Application: Who? What?

DISP 1.1A.1 R RP

1This section:

  1. (1)

    applies to the MiFID complaints of a MiFID investment firm and does not apply to complaints that are not MiFID complaints;

  2. (2)

    also applies to the MiFID complaints of a third country investment firm received from a retail client or an elective professional client but does not apply to complaints that are not MiFID complaints; and

  3. (3)

    applies certain other provisions in DISP 1 to such complaints.

DISP 1.1A.2 R RP

For the MiFID complaints of a third country investment firm, the provisions marked “UK”2 shall apply as rules.

DISP 1.1A.3 G RP

A MiFID complaint is, amongst other things, a complaint to which article 26 of the MiFID Org Regulation applies, being a complaint about:

  1. (1)

    the provision of investment services or ancillary services to a client by an investment firm;

  2. (2)

    the provision of one or more investment services to a client by a CRD credit institution;

  3. (3)

    selling structured deposits to clients, or advising clients on them, where the sale or advice is provided by an investment firm or a CRD credit institution;

  4. (4)

    the activities permitted by the UK provisions which implemented2 article 6(3) of the UCITS Directive when carried on by a collective portfolio management investment firm; and

  5. (5)

    the activities permitted by the UK provisions which implemented2 article 6(4) of the AIFMD when carried on by a collective portfolio management investment firm.

[Note: see article 1(1), 1(3) and 1(4) of MiFID, and article 1 of the MiFID Org Regulation]

DISP 1.1A.4 G RP

A MiFID complaint is also a complaint about the equivalent business of a third country investment firm.

[Note: see articles 39 and 41 of MiFID]

DISP 1.1A.5 G RP

In contrast to the other provisions in DISP 1 which generally apply to complaints from eligible complainants, subject to DISP 1.1A.6R:

  1. (1)

    the obligations in this section that apply to the MiFID complaints of MiFID investment firms, apply to complaints from “clients” as defined in the UK provisions which implemented2MiFID (which includes retail clients, professional clients and (in relation to eligible counterparty business) eligible counterparties; and

  2. (2)

    the obligations in this section that apply to the MiFID complaints of third country investment firms, apply to complaints from retail clients and elective professional clients.

[Note: see recital (103) and article 4(1)(9) of MiFID for the definition of “client”]

DISP 1.1A.6 R RP
  1. (1)

    Only the provisions in this section marked “UK”2 and DISP 1.1A.39R apply to a MiFID complaint received from a retail client, professional client or an eligible counterparty that is not an eligible complainant.

  2. (2)

    But where the retail client, professional client or eligible counterparty is also an eligible complainant, all of the provisions in this section apply.

Application: Where?

DISP 1.1A.7 R RP

The table below sets out how DISP 1.1A applies to MiFID complaints relating to:

  1. (1)

    the activities of a MiFID investment firm carried on from an establishment in the United Kingdom; and2

  2. (2)

    the equivalent business of a third country investment firm where the complaint is received from a retail client or an elective professional client.2

  3. (3)

    [deleted]2

  4. (4)

    [deleted]2

Table: Application of DISP 1.1A to the MiFID business of firms in the UK, and the equivalent business of third country investment firms2

(1) Provision

(2) Provision applies to the MiFID business of a firm carried on from an establishment in the UK?

(3) Provision applies to the equivalent third country business of a third country investment firm where the complaint is received from a retail client or an elective professional client?

2

2

1.1A.10UK2

Yes

Yes

2

2

1.1A.11R

Yes

Yes

2

2

1.1A.12UK2

Yes

Yes

2

2

1.1A.13UK2

Yes

Yes

2

2

1.1A.14G

Yes

Yes

2

2

1.1A.15G

Yes

Yes

2

2

1.1A.16UK2

Yes

Yes

2

2

1.1A.17UK2

Yes

Yes

2

2

1.1A.18UK2

Yes

Yes

2

2

1.1A.19G

Yes

Yes

2

2

1.1A.20R

Yes

Yes

2

2

1.1A.21G

Yes

Yes

2

2

1.1A.22R

Yes

Yes

2

2

1.1A.23R

Yes

Yes

2

2

1.1A.24UK2

Yes

Yes

2

2

1.1A.25UK2

Yes

Yes

2

2

1.1A.26R

Yes

Yes

2

2

1.1A.27G

Yes

Yes

2

2

1.1A.28R

Yes

Yes

2

2

1.1A.29UK2

Yes

Yes

2

2

1.1A.30UK2

Yes

Yes

2

2

1.1A.31R

Yes

Yes

2

2

1.1A.32G

Yes

Yes

2

2

1.1A.33G

Yes

Yes

2

2

1.1A.34G

Yes

Yes

2

2

1.1A.35R

Yes

Yes

2

2

1.1A.36R

Yes

Yes

2

2

1.1A.37UK2

Yes

Yes

2

2

1.1A.38UK2

Yes

Yes

2

2

1.1A.39R

Yes

Yes

2

2

1.1A.40R

Yes

Yes

2

2

1.1A.41G

Yes

Yes

2

2

1.1A.42R

No

No

2

2

Notes

(1) [deleted]2

(2) This table should be read in conjunction with the rules and guidance in DISP 1.1A.1R to DISP 1.1A.6R.

Interpretation of this section

DISP 1.1A.8 G RP

This section contains a number of provisions marked with the status letters “UK”2, which have been selectively reproduced from the MiFID Org Regulation.

DISP 1.1A.9 G RP

References in column (1) to a word or phrase used in those provisions marked “UK”2 have the meaning indicated in column (2) of the table below:

(1)

(2)

“complaint”

MiFID complaint

“investment firm” and “firm”

MiFID investment firm

[Note: for the definition of “client” see recital (103) and article 4(1)(9) of MiFID]

Consumer awareness

DISP 1.1A.10 UK RP

2Investment firms shall publish the details of the process to be followed when handling a complaint. Such details shall include information about the complaints management policy and the contact details of the complaints management function. This information shall be provided to clients or potential clients, on request, or when acknowledging a complaint.

[Note: article 26(2) of the MiFID Org Regulation]

DISP 1.1A.11 R RP

A MiFID investment firm must provide information to eligible complainants, in a clear, comprehensible and easily accessible way, about the Financial Ombudsman Service (including the Financial Ombudsman Service’s website address):

  1. (1)

    on its website, where one exists; and

  2. (2)

    if applicable, in the general conditions of its contracts with eligible complainants.

[Note: subject to a few minor changes reflecting its amended application, this provision replicates DISP 1.2.1R(4)]

[Note: article 13(2) of the ADR Directive, article 14(1) of the ODR Regulation, and regulation 19 of the ADR Regulations]

Complaints handling

DISP 1.1A.12 UK RP

2Investment firms shall establish, implement and maintain effective and transparent complaints management policies and procedures for the prompt handling of clients’ or potential clients’ complaints.

[Note: first paragraph, article 26(1) of the MiFID Org Regulation]

DISP 1.1A.13 UK RP

2The complaints management policy shall provide clear, accurate and up-to-date information about the complaints-handling process. This policy shall be endorsed by the firm’s management body.

[Note: second paragraph, article 26(1) of the MiFID Org Regulation]

DISP 1.1A.14 G RP

The complaints management policy should be set out in a written document e.g. as part of a general fair treatment policy. It should be made available to all relevant staff of the firm through appropriate internal channels.

[Note: guideline 1(b) and (c) of the Joint Committee Final Report on guidelines for complaints-handling for the securities (ESMA) and banking (EBA) sectors, 27 May 2014, JC 2014 43.2]

DISP 1.1A.15 G RP

The firm’s senior management should be responsible for the implementation of the complaints management policy and for monitoring compliance with it.

[Note: guideline 1(b) and (c) of the Joint Committee Final Report on guidelines for complaints-handling2 for the securities (ESMA) and banking (EBA) sectors, 27 May 2014, JC 2014 43.2 ]

DISP 1.1A.16 UK RP

2Investment firms shall enable clients and potential clients to submit complaints free of charge.

[Note: article 26(2) of the MiFID Org Regulation]

DISP 1.1A.17 UK

2Investment firms shall establish a complaints management function responsible for the investigation of complaints. This function may be carried out by the compliance function.

[Note: article 26(3) of the MiFID Org Regulation]

DISP 1.1A.18 UK RP

2Investment firms’ compliance function shall analyse complaints and complaints-handling data to ensure that they identify and address any risks or issues.

[Note: article 26(7) of the MiFID Org Regulation]

DISP 1.1A.19 G RP

MiFID complaints should be handled effectively and in an independent manner.

[Note: recital (38) of the MiFID Org Regulation]

Complaints resolution

DISP 1.1A.20 R RP

Once a MiFID complaint has been received by a MiFID investment firm, the firm must:

  1. (1)

    investigate the complaint competently, diligently and impartially, obtaining additional information as necessary;

  2. (2)

    assess fairly, consistently and promptly:

    1. (a)

      the subject matter of the complaint;

    2. (b)

      whether the complaint should be upheld;

    3. (c)

      what remedial action or redress (or both) may be appropriate; and

    4. (d)

      if appropriate, whether it has reasonable grounds to be satisfied that another respondent may be solely or jointly responsible for the matter alleged in the complaint; and

  3. (3)

    comply promptly with any offer of remedial action or redress accepted by the complainant.

[Note: subject to a few minor changes reflecting its amended application, this provision replicates DISP 1.4.1R(1), (2) and (5).]

DISP 1.1A.21 G RP

Factors that may be relevant in the assessment of a MiFID complaint under DISP 1.1A.20R(2) include the following:

  1. (1)

    all the evidence available and the particular circumstances of the complaint;

  2. (2)

    similarities with other complaints received by the respondent;

  3. (3)

    relevant guidance published by the FCA, other relevant regulators, the Financial Ombudsman Service or former schemes; and

  4. (4)

    appropriate analysis of decisions by the Financial Ombudsman Service concerning similar complaints received by the MiFID investment firm.

[Note: subject to a few minor changes reflecting its amended application, this provision replicates DISP 1.4.2G.]

DISP 1.1A.22 R RP

Where a MiFID complaint against a MiFID investment firm is referred to the Financial Ombudsman Service, the MiFID investment firm must cooperate fully with the Financial Ombudsman Service and comply promptly with any settlements or awards made by it.

[Note: subject to a few minor changes reflecting its amended application, this provision replicates DISP 1.4.4R.]

Complaints resolved by close of the third business day

DISP 1.1A.23 R RP

If a MiFID investment firm resolves a MiFID complaint by close of business on the third business day following the day on which it is received, it may choose to comply with DISP 1.1A.24UK2 to DISP 1.1A.27G rather than with DISP 1.1A.28R to DISP 1.1A.34G.

DISP 1.1A.24 UK RP

2When handling a complaint, investment firms shall communicate with clients or potential clients clearly, in plain language that is easy to understand and shall reply to the complaint without undue delay.

[Note: article 26(4) of the MiFID Org Regulation]

DISP 1.1A.25 UK RP

2Investment firms shall communicate the firm’s position on the complaint to clients or potential clients and inform the clients or potential clients about their options, including that they may be able to refer the complaint to an alternative dispute resolution entity, as defined in regulation 4 of the ADR Regulations,2 or that the client may be able to take civil action.

[Note: article 26(5) of the MiFID Org Regulation. See the ADR Directive.2]

DISP 1.1A.26 R RP

The explanation given by MiFID investment firms to clients or potential clients in accordance with DISP 1.1A.25UK2 must also:

  1. (1)

    refer to the fact that the complainant has made a MiFID complaint and inform the complainant that the MiFID investment firm now considers the MiFID complaint to have been resolved;

  2. (2)

    inform the complainant that if, still dissatisfied with the resolution of the MiFID complaint, the complainant may be able to refer it to the Financial Ombudsman Service;

  3. (3)

    indicate whether or not the respondent consents to waiving the relevant time limits in DISP 2.8.2R or DISP 2.8.7R (Was the complaint referred to the Financial Ombudsman Service in time?) by including the appropriate wording set out in DISP 1 Annex 3R;

  4. (4)

    provide the website address of the Financial Ombudsman Service; and

  5. (5)

    refer to the availability of further information on the website of the Financial Ombudsman Service.

[Note: article 13 of the ADR Directive]

DISP 1.1A.27 G RP

The information regarding the Financial Ombudsman Service required to be provided in a communication sent under DISP 1.1A.25UK2 and referred to in DISP 1.1A.26R should be set out clearly, comprehensibly, in an easily accessible way and prominently within the text of those responses.

[Note: article 13 of the ADR Directive]

Complaints time limits

DISP 1.1A.28 R RP

On receipt of a MiFID complaint, a MiFID investment firm must:

  1. (1)

    send the complainant a prompt written acknowledgement providing early reassurance that it has received the MiFID complaint and is dealing with it; and

  2. (2)

    ensure the complainant is kept informed thereafter of the progress of the measures being taken for the MiFID complaint’s resolution.

[Note: subject to a few minor changes reflecting its amended application, this provision replicates DISP 1.6.1R.]

DISP 1.1A.29 UK RP

2When handling a complaint, investment firms shall communicate with clients or potential clients clearly, in plain language that is easy to understand and shall reply to the complaint without undue delay.

[Note: article 26(4) of the MiFID Org Regulation]

DISP 1.1A.30 UK RP

2 Investment firms shall communicate the firm’s position on the complaint to clients or potential clients and inform the clients or potential clients about their options, including that they may be able to refer the complaint to an alternative dispute resolution entity, as defined in regulation 4 of the ADR Regulations,2 or that the client may be able to take civil action.

[Note: article 26(5) of the MiFID Org Regulation. See the ADR Directive.2]

DISP 1.1A.31 R RP

The explanation given by MiFID investment firms to clients or potential clients in accordance with DISP 1.1A.30UK2 must also:

  1. (1)

    enclose a copy of the Financial Ombudsman Service's standard explanatory leaflet;

  2. (2)

    provide the website address of the Financial Ombudsman Service;

  3. (3)

    inform the complainant that if, still dissatisfied with the respondent's response, the complaint may now be referred to the Financial Ombudsman Service; and

  4. (4)

    indicate whether or not the respondent consents to waiving the relevant time limits in DISP 2.8.2R or DISP 2.8.7R (Was the complaint referred to the Financial Ombudsman Service in time?) by including the appropriate wording set out in DISP 1 Annex 3R.

[Note: article 13 of the ADR Directive]

DISP 1.1A.32 G RP

The information regarding the Financial Ombudsman Service required to be provided in a final response sent under DISP 1.1A.30UK2 and referred to in DISP 1.1A.31R should be set out clearly, comprehensibly, in an easily accessible way and prominently within the text of those responses.

[Note: article 13 of the ADR Directive]

DISP 1.1A.33 G RP

When assessing a MiFID investment firm’s response to a MiFID complaint, the FCA may have regard to a number of factors, including, the quality of response, as against the above rules, as well as the speed with which it was made.

[Note: subject to a few minor changes reflecting its amended application, this provision replicates DISP 1.6.8G]

DISP 1.1A.34 G RP

DISP 2.8.1R sets out the circumstances in which the Ombudsman can consider a complaint, including where eight weeks have elapsed since its receipt by the MiFID investment firm and where the MiFID investment firm consents (subject to the other requirements of DISP 2.8.1R(4)).

Complaints forwarding

DISP 1.1A.35 R RP

DISP 1.7 also applies to a MiFID complaint received by a MiFID investment firm.

Complaints time barring

DISP 1.1A.36 R RP

If a MiFID investment firm receives a MiFID complaint which is outside the time limits for referral to the Financial Ombudsman Service (see DISP 2.8) it may reject the MiFID complaint without considering the merits, but must explain this to the complainant in a final response.

[Note: subject to a few minor changes reflecting its amended application, this provision replicates DISP 1.8]

Complaints records

DISP 1.1A.37 UK RP

2 Investment firms shall keep a record of the complaints received and the measures taken for their resolution.

[Note: article 26(1) of the MiFID Org Regulation; see also article 72 of the MiFID Org Regulation regarding the retention of records]

Complaints reporting

DISP 1.1A.38 UK RP

2Investment firms shall provide information on complaints and complaints-handling to the relevant competent authorities and, where applicable under national law, to an alternative dispute resolution (ADR) entity.

[Note: article 26(6) of the MiFID Org Regulation]

DISP 1.1A.39 R RP

The complaints reporting rules also apply to the MiFID complaints of a firm, except that the relevant parts of the report which the firm must provide to the FCA under DISP 1.10.1R must, in relation to MiFID complaints, include information about such complaints received from retail clients, professional clients, and (where relevant) eligible counterparties rather than eligible complainants.

Complaints data publication

DISP 1.1A.40 R RP

The complaints data publication rules apply to the MiFID complaints of a firm.

DISP 1.1A.41 G RP

The effect of the complaints data publication rules and DISP 1.1A.37UK2 is that, for the purposes of complying with those rules, a firm’s complaints data summary should include relevant data about any MiFID complaints received by the firm.

DISP 1.1A.42 R RP

[deleted]2