Related provisions for DISP 1.7.3

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REC 2.16.1UKRP

Schedule to the Recognition Requirements Regulations, Paragraph 9

2(1)

The [UK RIE] must have effective arrangements for the investigation and resolution of complaints arising in connection with the performance of, or failure to perform, any of itsregulatory functions.

(2)

But sub-paragraph (1) does not extend to -

(a)

complaints about the content of rules made by the [UK RIE], or

(b)

complaints about a decision against which the complainant has the right to appeal under procedures of the kind mentioned in paragraph 8(2)(b).

(3)

The arrangements must include arrangements for a complaint to be fairly and impartially investigated by apersonindependent of the [UK RIE], and for him to report on the result of his investigation to the [UK RIE] and to the complainant.

(4)

The arrangements must confer on thepersonmentioned in sub-paragraph (3) the power to recommend, if he thinks appropriate, that the [UK RIE] -

(a)

makes a compensatory payment to the complainant,

(b)

remedies the matter complained of,

or takes both of those steps.

(5)

Sub-paragraph (3) is not to be taken as preventing the [UK RIE] from making arrangements for the initial investigation of a complaint to be conducted by the [UK RIE].
REC 2.16.3GRP
In determining whether a UK recognised body has effective arrangements for the investigation and resolution of complaints arising in connection with the performance of, or failure to perform, any of its regulatory functions, the FSA may have regard to the extent to which the UK recognised body's resources and procedures enable it to:(1) acknowledge complaints promptly;(2) make an objective, prompt and thorough initial investigation of complaints;(3) provide a timely reply to the
REC 2.16.4GRP
In determining whether a UK recognised body's arrangements for the investigation of complaints include appropriate arrangements for the complaint to be fairly and impartially investigated by an independent person (a "complaints investigator"), the FSA may have regard to:(1) the arrangements made for appointing (and removing) a complaints investigator, including the terms and conditions of such an appointment and the provision for remuneration of a complaints investigator; (2)
DISP 1.3.2GRP
These procedures should:(1) allow complaints to be made by any reasonable means; and(2) recognise complaints as requiring resolution.
DISP 2.2.1GRP
The scope of the Financial Ombudsman Service's threejurisdictions depends on:2626(1) the type of activity to which the complaint relates (see DISP 2.3, DISP 2.4 and DISP 2.5);(2) the place where the activity to which the complaint relates was carried on (see DISP 2.6);(3) whether the complainant is eligible (see DISP 2.7); and(4) whether the complaint was referred to the Financial Ombudsman Service in time (see DISP 2.8).
DISP 3.8.1RRP
In dealing with information received in relation to the consideration of a complaint, the Financial Ombudsman Service will have regard to the parties' rights of privacy.24
DISP 3.8.2BRRP
24This does not prevent the Ombudsman disclosing information:(1) to the extent that he is required or authorised to do so by law; or(2) to the parties to the complaint; or(3) in his determination; or(4) at a hearing in connection with the complaint.
DISP 1.9.1RRP
A firm, including, in the case of MiFID business, a branch of a UKfirm in another EEA state, must keep a record of each complaint received and the measures taken for its resolution, and retain that record for:(1) at least five years where the complaint relates to MiFID business; and(2) three years for all other complaints;from the date the complaint was received. [Note: article 10 of the MiFID implementing Directive]
DISP 3.3.3GRP
Under the Ombudsman Transitional Order and the Mortgage and General Insurance Complaints Transitional Order, where the Ombudsman is dealing with a relevant complaint, he must take into account whether an equivalent complaint would have been dismissed without consideration of its merits under the former scheme in question, as it had effect immediately before the relevant transitional order came into effect.2929
DISP 3.3.4RRP
The Ombudsman may dismiss a complaint without considering its merits if he considers that:(1) the complainant has not suffered (or is unlikely to suffer) financial loss, material distress or material inconvenience; or(2) the complaint is frivolous or vexatious; or(3) the complaint clearly does not have any reasonable prospect of success; or(4) the respondent has already made an offer of compensation (or a goodwill payment) which is:(a) fair and reasonable in relation to the circumstances
DISP App 1.5.3GRP
If a complaint is upheld and the policy is to be surrendered as part of the settlement, the firm should remind the complainant in writing that the life cover within the endowment will be terminated and that it may therefore be appropriate to take advice about the merits or otherwise of taking out a stand-alone life policy in substitution.2323
DISP App 1.5.4GRP
If a need for life assurance at inception has been established so that a deduction representing its cost has been made from the redress payable under DISP App 1.2.4 G, the firm should advise the complainant that the firm would be responsible for paying any premium for an appropriate replacement policy which exceeds that used for calculating the deduction or alternatively will, where possible, provide the cover itself at that cost. If it is not possible for the firm to provide
DISP App 1.5.11GRP
23One of the reasons for introducing the guidance in this appendix is to seek a reduction in the number of complaints which are referred to the Financial Ombudsman Service. If a firm writes to the complainant proposing terms for settlement which are in accordance with this appendix, the letter may include a statement that the calculation of loss and redress accords with the FSAguidance, but should not imply that this extends to the assessment of whether or not the complaint should
DISP 2.1.1GRP
The purpose of this chapter is to set out rules and guidance on the scope of the Compulsory Jurisdiction, the Consumer Credit Jurisdiction and the Voluntary Jurisdiction, which are the Financial Ombudsman Service's threejurisdictions:(1) the Compulsory Jurisdiction is not restricted to regulated activities and covers:(a) certain complaints against firms (and businesses which were firms at the time of the events complained about); and(b) relevant complaints against former members
DISP 2.1.2GRP
Relevant complaints covered by the Compulsory Jurisdiction comprise:417(1) relevant existing complaints referred to a former scheme before commencement and inherited by the Financial Ombudsman Service under the Ombudsman Transitional Order;(2) relevant new complaints about events before commencement but referred to the Financial Ombudsman Service after commencement under the Ombudsman Transitional Order; and(3) relevant transitional complaints referred to the Financial Ombudsman
DISP App 1.3.2GRP
12In practice, it is likely to be appropriate for a complainant whose complaint has been upheld to convert to a repayment mortgage, whether or not there is financial loss to date. It will normally be possible for complainants to do so without incurring unreasonable cost. Conversion will of course mean that the complainant no longer has a policy.
DISP App 1.3.3GRP
21Firms should therefore in the case of upheld complaints inform complainants that it is likely to be appropriate and necessary for them to convert to a repayment arrangement.
DISP App 1.4.2GRP
12Two sets of circumstances are examined at DISP App 1.4.3 G to DISP App 1.4.13 G. Although these are considered in isolation, firms should, as part of their investigation of all of the factors involved in the complaint, consider whether either set of circumstances should be considered in conjunction with those factors examined at DISP App 1.2.
DISP App 1.4.15GRP

12Example 9

Example 9

Term extends beyond retirement age: example of failure to explain investment risks

Background

45 year old male non-smoker, having taken out a £50,000 loan in 1998 for a term of 25 years. Unsuitable sale identified on the grounds of affordability and complaint raised on 12th anniversary.

It has always been the intention of the complainant to retire at state retirement age 65.

Term from date of sale to retirement is 20 years and the maturity date of the mortgage is five years after retirement.

In addition, an endowment does not meet the complainant's attitude to investment risk and a repayment mortgage would have been taken out if properly advised.

Established facts

Surrender value (on the 25 year policy) at time complaint assessed:

£12,500

Capital repaid under repayment mortgage of term to retirement date (20 years):

£21,000

Surrender value less capital repaid:

(£8.500)

Difference in outgoings (repayment - endowment):

£5,400

Cost of converting from endowment mortgage to repayment mortgage:

£200

Basis of compensation:

The surrender value of the (25 year term) endowment policy is compared to the capital that would have been repaid to date under a repayment mortgage arranged to repay the loan at retirement age, in this example, a repayment mortgage for a term of 20 years. The complainant has gained from lower outgoings of the endowment mortgage to date. In calculating the redress, the gain may be offset against the loss unless the complainant's particular circumstances are such that it would be unreasonable to take account of the gain. The conversion costs are also taken into account in calculating the redress.

Redress generally

Loss from surrender value less capital repaid:

(£8,500)

Gain from total lower outgoings under endowment mortgage:

£5,400

Cost of converting to a repayment mortgage:

(£200)

Net loss:

(£3,300)

Therefore total redress is:

£3,300

Redress if it is unreasonable to take account of gain from lower outgoings

Loss from surrender value less capital repaid:

(£8,500)

Gain from total lower outgoings under endowment mortgage:

Ignored

Cost of converting to a repayment mortgage:

(£8,700)

Therefore total redress is:

£8,700
DISP 3.4.1RRP
The Ombudsman may refer a complaint to another complaints scheme where:13(1) he considers that it would be more suitable for the matter to be determined by that scheme; and(2) the complainant consents to the referral.13
DISP 1.8.1RRP
If a respondent receives a complaint which is outside the time limits for referral to the Financial Ombudsman Service (see DISP 2.814)14 it may reject the complaint without considering the merits, but must explain this to the complainant in a final response in accordance with DISP 1.6.2 R.
REC 3.10.1RRP
Where a UK recognised body's complaints investigator has investigated a complaint arising in connection with the performance of, or failure to perform, any of its regulatory functions, and that complaints investigator has made a recommendation in respect of that complaint that the UK recognised body should:(1) make a compensatory payment to any person; or(2) remedy the matter which was the subject of that complaint;the UK recognised body must immediately notify the FSA of that
DISP 3.9.1ARRP
24The Ombudsman may designate members of the staff of FOS Ltd to exercise any of the powers of the Ombudsman relating to the consideration of a complaint apart from the powers to:(1) determine a complaint; or(2) authorise the disclosure of information to the FSA or any other body exercising regulatory or statutory functions.
DISP 4.1.1GRP
The purpose of this chapter is to set out how complaints against VJ participants are dealt with under the Voluntary Jurisdiction.1212
GEN 4.4.1RRP
(1) If, in any communication:(a) made to:222(i) 2(in relation to a non-investment insurance contract) aconsumer4;4(ii) 2(in relation to a home finance transaction) a customer; or(iii) 2(in all other cases) a retail client3; and3(b) in connection with a regulated activity carried on from an establishment of the firm (or its appointed representative) that is not in the United Kingdom;the firm indicates that it is an authorised person, it must also, where relevant, and with equal
DISP App 1.2.1GRP
If there has been a failure to give compliant and proper advice, or some other breach of the duty of care, the basic objective of redress is to put the complainant, so far as is possible, in the position he would have been in if the inappropriate advice had not been given, or the other breach had not occurred. In many cases, although it must be a matter for inquiry and assessment in each individual case, this position is likely to have resulted in the complainant taking a repayment
DISP App 1.2.3GRP
The measure of any financial loss suffered by the complainant will be arrived at by:12(1) comparing the complainant's current capital position with the position he would have been in had the loan been a standard repayment mortgage as at the date the firm decides to regard the complaint as justified; and(2) comparing the cost of the complainant's actual monthly outgoings and those he would have made had his loan been on a standard repayment basis as at the date the firm decides
REC 2.1.4GRP

Location of recognition requirements and guidance

Recognition Requirements Regulations

Subject

Section in REC 2

Regulation 6

Method of satisfying recognition requirements

2.2

Part I of the Schedule

UK RIE recognition requirements

Paragraph 1

Financial resources

2.3

Paragraph 2

Suitability

2.4

Paragraph 3

Systems and controls

2.5

Paragraphs 4(1) and 4(2)(aa)2

2

General safeguards for investors

2.6

Paragraph 4(2)(a)

Access to facilities

2.7

Paragraph 4(2)(b)

Proper markets

2.12

Paragraph 4(2)(c)

Availability of relevant information

2.12

Paragraph 4(2)(d)

Settlement

2.8

Paragraph 4(2)(e)

Transaction recording

2.9

2Paragraph 4(2)(ea)

Conflicts

2.5

Paragraph 4(2)(f)

Financial crime and market abuse

2.10

Paragraph 4(2)(g)

Custody

2.11

Paragraph 4(3)

Definition of relevant information

2.12

2Paragraph 4A

Provision of pre-trade information about share trading

2.6

2Paragraph 4B

Provision of post-trade information about share trading

2.6

Paragraph 6

Promotion and maintenance of standards

2.13

Paragraph 7

Rules and consultation

2.14

2Paragraph 7A

Admission of financial instruments to trading

2.12

2Paragraph 7B and 7C

Access to facilities

2.7

2Paragraph 7D

Settlement

2.8

2Paragraph 7E

Suspension and removal of financial instruments from trading

2.6

Paragraph 8

Discipline

2.15

Paragraph 9

Complaints

2.16

2Paragraph 9A

Operation of a multilateral trading facility

2.16A

Part II of the Schedule

UK RIE default rules in respect of market contracts

2.17

Part III of the Schedule

UK RCH recognition requirements

Paragraph 16

Financial resources

2.3

Paragraph 17

Suitability

2.4

Paragraph 18

Systems and controls

2.5

Paragraph 19(1)

General safeguards for investors

2.6

Paragraph 19(2)(a)

Access to facilities

2.7

Paragraph 19(2)(b)

Clearing services

2.8

Paragraph 19(2)(c)

Transactions recording

2.9

Paragraph 19(2)(d)

Financial crime and market abuse

2.10

Paragraph 19(2)(e)

Custody

2.11

Paragraph 20

Promotion and maintenance of standards

2.13

Paragraph 21

Rules

2.14

Paragraph 22

Discipline

2.15

Paragraph 23

Complaints

2.16

Part IV of the Schedule

UK RCH default rules in respect of market contracts

2.17