1. Financial Services Authority (FSA) is the official regulator of financial services in the United Kingdom. Financial services included banking, securities and insurance. FSA is an incorporated body which is conferred with extensive regulatory powers to regulate financial services in the UK. It is not regarded as acting on behalf of the Crown and therefore its members, officers and staff are crown servants.
2. Although, independent but the Financial Ombudsman Service (FOS) is accountable to the FSA and must make an annual report to the FSA on its activities in accordance with the rules made by the FSA. In short, this empowers the FSA to extract the required information from FOS.
3. The Financial Ombudsman Service Ltd – known as Financial Ombudsman Service (FOS) – is a company established by the FSA under Part 16 of the Financial Services and Markets Act 2000 (herein referred to as ‘FSMA’) and Part 2 of Schedule 17 to the FSMA. As required by Schedule 17, the chairman and board members are appointed (and may be removed) by the FSA, with the approval of the Treasury in the case of the chairman. The board members’ terms of appointment are to secure their independence from the FSA in the operation of the scheme. The board determines the appointment of the Chief Ombudsman (who functions as a Chief Executive) and a panel of Ombudsman (with appropriate qualifications and experience), the making of certain rules of FOS (as to procedure, the levying of case fees and the voluntary jurisdiction), and the approval and recommendation to the FSA of an annual budget (which must be approved by the FSA). The FOS and the Chief Ombudsman must make an annual report to the FSA.
4. The Financial Services Compensation Scheme (FSCS) is designed to compensate eligible complainants where a relevant firm is unable or likely to be unable to meet claims against it.
5. Entitlement to compensation: To be entitled to compensation from the scheme, a claimant must:
i) be an eligible claimant. Broadly, an eligible claimant is defined as a claimant who is not:
· a large company or large partnership/mutual association; or
· an authorised firm, unless it is a sole trader/small business and the claim arises out of a regulated activity of which it has no experience, i.e. does not have permission to carry out; or
· an overseas financial services institution, supranational body, government and local authority.
ii) have a protected claim. Protected investment business means designated investment business, the activities of the manager/trustee of an authorised unit trust and the activities of the authorised corporate director/depositor of an ICVC. These activities must be carried on either from an establishment in the UK or in an EEA by a UK firm which is passporting their services there;
iii) be claiming against a relevant person who is in default. A relevant persons means an authorised firm, except an EEA firm passporting into the UK; and
iv) make the claim within the relevant time limit (normally six …