Independent Complaints Commissioner for FSA appointed

The Complaints Commissioner will be responsible for investigating complaints against the FSA. She will operate independently of the FSA, fulfilling a pivotal role within its accountability arrangements under the Financial Services and Markets Act 2000.

The complaints arrangements, which come into effect on 3 September, will deal with complaints made against the FSA by firms, consumers and others who come into direct contact with the FSA. The Commissioners remit includes the power to investigate allegations of mistakes and lack of care, unreasonable delay, unprofessional behaviour, bias and lack of integrity. Disputes over policy issues or regulatory judgements will be dealt with through separate procedures.

The Economic Secretary to the Treasury, Ruth Kelly who approved the appointment said:

The independent Complaints Commissioner will play a key part in ensuring the FSAs accountability. Rosemarys distinguished career spans more than 30 years in both the private and public sector. Her breadth of expertise and judgement will be invaluable in making the FSA answerable to all its stakeholders.

Rosemary Radcliffe said:

I see my role as crucial in underwriting the FSAs accountability, as regulator, to the financial services industry and to the wider public. It is vital for regulators to know that their actions may be exposed to independent scrutiny.

Notes for editors

1. The appointment of an independent Complaints Commissioner is one of several distinct ways in which the FSA will be held accountable under the Act. The others include:
   • Statutory objectives which provide both political accountability and legal accountability through judicial review.
     
   • Clear governance structures with the Board dominated by non-executive directors.
     
   • An annual report which goes to the Treasury, is laid before Parliament and discussed at the FSAs annual open meeting.
     
   • Direct input from the industry via the Consumer and Practitioner panels.
     
   • Independent review of the FSAs rules by the competition authorities.
     
   • Where agreement cannot be reached, independent review of enforcement and authorisation decisions by the Financial Services and Markets Tribunal run by the Lord Chancellors department.
     
   • Regular appearances before the Treasury Select Committee.

2. The appointment of the Commissioner by the FSA Board required Treasury approval. To enhance and emphasise the independence of the appointment process, a panel consisting of the non-executive Deputy Chairman of the FSA, the Chairman of the Practitioner Panel, the Chairman of the Consumer Panel and a former Civil Service Commissioner acting in a personal capacity advised the FSA on the selection and appointment of the Commissioner.

3. Rosemary Radcliffe, aged 56, was a partner at PwC from 1982 to July 2001. In addition to her practice responsibilities, she played a key role in the corporate governance of PwC. Rosemary was a member of the Global Oversight Board which has responsibility for the governance of PwC world-wide and Chairman of its Governance Committee. She was also Chairman of PwCs UK Supervisory Board and, before the merger of Coopers & Lybrand and Price Waterhouse, of C&Ls Council of Partners where her role included acting to resolve disputes between partners and the firm. Rosemary was awarded the CBE in January 2000 for services to business competitiveness.

4. She has also served on a number of government advisory and review bodies, including:
   • Secretary of State for Trade and Industrys Advisory Group on competitiveness issues
     
   • Steering Group for the Review of Company Law
     
   • Advisory panel for the Queens Award for Industry

5. The role and responsibilities of the Complaints Commissioner were consulted upon in CP 73 Investigation of Complaints against the FSA November 2000 and CP 93: Investigation of Complaints against the FSA: Feedback on CP73 and final text May 2001. They can be found on the FSAs Website www.fsa.gov.uk.

6. The Financial Services and Markets Act (Schedule 1 - paragraphs 7 and 8) requires the FSA to set up a Complaints Scheme for investigation of complaints against the FSA. The scheme starts operating on 3 September in advance of the FSA taking on its full powers - N2 -after 30 November. This will enable the scheme to handle complaints about how the FSA is exercising its powers under the Act before N2, such as applications by firms for authorisation.

7. In line with the provisions of the FSM Act, the FSA will not normally investigate complaints under the scheme which could be dealt with more appropriately in some other way, for example by referring the matter to the Financial Services and Markets Tribunal or by institution of other legal proceedings.

8. A complaint is defined as any expression of dissatisfaction about the manner in which the FSA has carried out its statutory functions other than its legislative functions.

9. Under the scheme, there are two stages for handling a complaint: first, the FSA will carry out an initial investigation of any complaint which in its view falls within the scheme. These investigations will be carried out by a member of staff of appropriate seniority and who has had no previous involvement in the issue. The aim will be to resolve the matter to the satisfaction of the complainant. Where the FSA finds a complaint well-founded, it will consider how best to put the matter right. This may include apologising to the complainant, explaining what went wrong, putting in place procedures to stop the error happening again, or offering an ex-gratia payment.

10. If a complainant is dissatisfied with the outcome of the FSA's investigation of his case or how it has been handled, he can require the FSA to refer the complaint to the independent Complaints Commissioner. In addition, if the FSA decides not to investigate a complaint itself, the Complaints Commissioner has the power to review the complaint to decide whether it should be investigated. This is the second stage of the process and the Commissioner's role will include conducting a full and thorough inquiry into any complaint which she decides to investigate; reporting to the complainant and the FSA on the results of her investigation; and in appropriate cases publishing her report (or any part of it) and requiring the FSA to publish the whole or part of its response. She can also recommend that the FSA make a compensatory payment to a complainant.

11. The Commissioners Annual Report may include information on trends in the subject matter of complaints and on the general lessons which she considers the FSA should learn. The FSA will respond to the Commissioners points in its own Annual Report which will also include:
    • data on complaints which the FSA has investigated itself including details of compensatory payments made
      
    • data on complaints which the FSA decided not to investigate
      
    • a summary of the FSAs responses to critical reports by the Commissioner.

12. The FSA and the Complaints Commissioner will each be issuing on 3 September a short guidance booklet (see FSA's booklet) which will explain, in a user-friendly way, how the complaints handling arrangements will work and their respective roles under the Scheme.

13. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; the protection of consumers; and fighting financial crime.

14. The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.