We are consulting on proposed new rules to allow more small and medium-sized enterprises (SMEs) to refer disputes to the Financial Ombudsman Service.
This consultation paper follows our 2015 Discussion Paper (DP15/7), which reviewed whether our rules strike the right balance between providing protection for SMEs and avoiding unnecessary requirements on regulated firms. Following our review, we believe that our current ‘conduct of business’ rules do strike the right balance – as did most respondents to our discussion paper. However, we have found that many SMEs have limited options for resolving complaints and seeking redress.
Our proposed changes will allow a broader range of businesses to refer complaints against financial services firms to the Financial Ombudsman Service in order that they can be resolved quickly and informally and at low cost. At present only the smallest businesses (‘micro-enterprises’) have access to the Ombudsman. Our proposals extend this access to all businesses with fewer than 50 employees, annual turnover of under £6.5m and an annual balance sheet total of under £5m. In total, we estimate around 160,000 more businesses will have access to the Ombudsman as a result of our proposals.
We have considered our role in delivering better outcomes for SMEs carefully. We think the proposals we are consulting on go as far as is appropriate within the powers that we have. However, there might be more that could be done both within and outside of FCA regulation for SME disputes not covered by our proposed changes. In this consultation paper we also discuss and invite feedback on these issues.
Who this applies to
This consultation paper will be of interest to all:
The consultation has now closed. We intend to publish a Policy Statement making final rules in summer 2018.