On 16 October 2018, the FCA published Policy Statement 18/21: SME access to the Financial Ombudsman Service – near final rules (PS18/21).

In PS18/21 the FCA sets out its response to the feedback it received to its earlier consultation which set out proposals to enable a wider range of complainants to complain to the Financial Ombudsman Service (FOS). The FCA proposed to do this by changing the definition of an ‘eligible complainant’ in the Dispute resolution: complaints (DISP) section of the Handbook so that it includes more small and medium-sized enterprises (SMEs), charities and trusts, as well as personal guarantors of loans to a business they are involved in.

The FCA reports that it is proceeding with its proposals although it had made some changes in light of the feedback it received on its consultation. In summary the FCA has:

  • relaxed its proposed eligibility criteria for SMEs so that they would only have to meet the turnover test and one of either the headcount or balance sheet total tests, rather than all three; and
  • allowed the FOS more time to prepare for the changes and allowed itself more time to consider the changes as part of its wider consultation of the FOS’ business plan and budget for 2019-20.

The FCA believes that the changes to the rules will mean that around 210,000 additional SMEs will have access to the FOS.

The FCA sets out in PS18/21 near final rules with a provisional start date of 1 April 2019. The FCA expects to make final rules before the end of 2018. The FCA is publishing near-final rules now in order to give the FOS the degree of certainty it needs to take reasonable, concrete steps in order to implement the proposals. These steps include hiring any extra staff and consultants with the necessary skills and expertise the FOS feels are appropriate.