On 11 August 2026, the Financial Ombudsman Service (FOS) published Modernising the Redress System: policy statement.

In this policy statement the FOS sets out its position on the proposals it consulted on in CP26/9 which included introducing a registration stage at the FOS, updates to the FOS’ grounds for dismissing a complaint and amending the fair and reasonable test in the Dispute Resolution sourcebook (DISP) 3.6.4R.

Final policy

In the policy statement the FOS confirms the following:

  • Registration: The FOS will proceed with introducing a registration approach within its complaint handling framework, as set out in CP26/9. Formal rules will follow alignment with the FOS’ consultation on case fees to ensure a coherent overall framework. To prepare for future rollout, the FOS will test its internal processes and conduct pilots where possible to assess the appropriate level for readiness criteria and their impact.
  • Dismissal framework: The FOS is proceeding with the proposed changes to its dismissal powers, with one minor amendment. The FOS has decided to remove the word ‘material’ in relation to financial loss which means that for dismissal on this ground to become a consideration, there will need to be evidence that the complainant has not suffered any financial loss, material distress or material inconvenience. Formal rule changes will take effect from 1 October 2026. As with its approach to charging professional representatives, the FOS will report after the first year of operation to provide transparency on the impact of the change and to identify any adjustments needed in light of experience.
  • Fair and reasonable test: The FOS will amend DISP 3.6.4R to clarify that its decisions are based on the standards applicable at the time of the act or omission complained about. Although the rule change will take effect from 1 October 2026, it will apply to all current and future complaints given the change is clarificatory only. Given the progress of the Financial Services and Markets Bill through Parliament, the FOS will retain the reference to “good industry practice” in DISP 3.6.4R at this stage and keep the position under review as the legislative process continues.