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Irish Financial Services Regulatory Authority, Financial Services & Pensions Ombudsman Memorandum of Understanding

Memorandum of Understanding
between the Irish Financial Services Regulatory Authority, the Financial Services Ombudsman and the Pensions Ombudsman

Introduction

The purpose of this Memorandum of Understanding (“MoU”) is to provide a framework for the relationship between the Irish Financial Services Regulatory Authority (“Financial Regulator”), the Financial Services Ombudsman (“FSO”) and the Pensions Ombudsman (“PO”). Each of the FSO and the PO is referred to herein as an “Ombudsman”. It reflects the fact that while these bodies are independent of each other and have distinct functions, they will need to co-operate and communicate constructively with each other in order to carry out their functions effectively. This MoU refers to these three parties as “the Co-operating Authorities” or a “Co-operating Authority”, when referring to one party alone.

Terms not defined in this MoU shall have the meaning given to such terms by the Central Bank Act, 1942 (“the Act”).

General structure

The Financial Regulator was established under Part IIIA of the Act.

The Financial Services Ombudsman was established as part of the Financial Services Ombudsman’s Bureau, under Part VIIB of the Act.

The Pensions Ombudsman was established under Part XI of the Pensions Act 1990.

The Co-operating Authorities enter into this MoU pursuant to Section 57CQ(3) of the Act, setting out the terms under which the Co-operating Authorities agree to give effect to the provisions of Section 57CQ relating to:

a) co-operation between the Co-operating Authorities with a view to ensuring that the provisions of Part VIIB of the Act operate in a way that contributes to promoting the best interests of consumers of financial services and to the efficient and effective handling of complaints;
b) the receipt by the Financial Regulator of recommendations made by the Financial Services Ombudsman and the Financial Services Ombudsman’s Council pursuant to Section 57CQ(2) of the Act with respect to measures that the Financial Regulator might take so as to:

  • effectively deal with persistent patterns of complaints made against specified regulated financial service providers or against a specified class of those financial service providers;
  • improve the way in which regulated financial service providers deal with complaints that are made against them; or
  • effectively deal with any other matter relating to promoting the interests of consumers of financial services.

The Co-operating Authorities also desire to enter into this MoU in order to regulate the supply of information between them and to maintain controls on the uses of and the confidentiality of any information so shared.

Roles of the Cooperating Authorities

The respective roles of the Financial Regulator, the Financial Services Ombudsman and the Pensions Ombudsman are summarised below:

Financial Regulator
The Financial Regulator is charged with helping consumers to make informed financial decisions in a safe and fair market and fostering sound dynamic financial institutions in Ireland, thereby contributing to financial stability.

Financial Services Ombudsman
The primary role of the Financial Services Ombudsman is to investigate and decide in an independent and impartial manner, on complaints made by consumers about the conduct of financial service providers that have not been resolved by the providers, except for complaints that are within the jurisdiction of the Pensions Ombudsman. The Ombudsman is therefore the arbiter of unresolved financial disputes and is impartial.

Pensions Ombudsman
The role of the Pensions Ombudsman is to investigate and decide in an independent and impartial manner, on complaints and disputes concerning occupational pension schemes and Personal Retirement Savings Accounts (PRSAs)

Jurisdiction for purposes of handling complaints

Any complaints relating to financial service providers that are received from consumers by the Financial Regulator will be recorded on its database system. The Financial Regulator will consider the nature of the complaint and whether it appears to come within the remit of the Financial Services Ombudsman or the Pensions Ombudsman, and if it appears to do, will refer it without delay to the appropriate Ombudsman and the Financial Regulator will issue an acknowledgement letter informing the complainant of this.

Where either the Financial Services Ombudsman or the Pensions Ombudsman receives a complaint from a consumer he will decide whether the complaint falls within his jurisdiction.

The Financial Services Ombudsman and the Pensions Ombudsman each have sole responsibility for deciding whether a complaint falls within their jurisdiction.

If either the Financial Services Ombudsman or the Pensions Ombudsman decides that a complaint he has received does not come within his jurisdiction and therefore cannot be accepted for investigation by him, he will consider whether the complaint seems to come within the remit of the other Ombudsman. If he feels it does, he will refer it to that Ombudsman and at the same time will inform the consumer of the reason(s) why he is unable to investigate the matter and that he has referred it to the other Ombudsman.

Broader issues of consumer protection are the responsibility of the Financial Regulator and, if such issues are brought by consumers to the attention of either Ombudsman, the Ombudsman will refer them to the Financial Regulator for consideration and will inform the consumers accordingly. Similarly any such issues coming to the attention of either Ombudsman in the course of an investigation will be referred to the Financial Regulator.

In cases of uncertainty the Co-operating Authorities will liaise to decide which Co-operating Authority (if any) is the correct forum to deal with a complaint or issues arising from a complaint and to ensure that the complaint is properly dealt with.

The role of the Financial Regulator under this MoU shall be managed and overseen by the Chief Executive for the time being of the Financial Regulator, who as at the date of this MoU has delegated this work to the Consumer Director for the time being of the Financial Regulator.

General co-operation

The Co-operating Authorities will seek to maintain strong and constructive relationships with each other in order to contribute to promoting the best interests of consumers of financial services and to the efficient and effective handling of complaints.

The Co-operating Authorities recognise the importance of close co-operation and communication between them. In particular, they recognise the mutual benefits of ensuring that systemic patterns of complaints are acted upon at the earliest opportunity, in the interests of consumers of financial services.

Information sharing and consultation

The Cooperating Authorities have agreed to observe the following principles:

  • They will consult at an early stage on any issues that might have significant implications for them. In particular they will give each other the opportunity to comment on any proposed action or initiative which might be relevant to each other.
  • They will seek to achieve consistency of approach and to avoid confusion or misunderstanding as to their respective roles.
  • Where appropriate they will seek to exercise their respective responsibilities in a complementary fashion to address issues and problems that affect consumers.

With a view to observing these principles the Cooperating Authorities will ensure that there is an appropriate and timely flow of information between them. This exchange of information will take place on a regular and routine basis and as the circumstances demand.

Confidentiality/Permissible uses

The Co-operating Authorities recognise that the exchange of information between them will be an important contribution to the efficient and effective handling of complaints. They are equally conscious of the need for discretion and for the adoption of procedures that protect (i) the interests of individual complainants, (ii) the confidential nature of certain information, and (iii) the professional secrecy obligations of the Financial Regulator under Section 33AK of the Act and EU law, to which the terms of this MoU are subject (where applicable).

They consider it prudent for them to commit to a level of confidentiality between them as regards the exchange of non-public information, including information concerning individual complaints or the actions of a Co-operating Authority in an individual instance and who has responsibility for a particular complaint. They are able to assist each other through the sharing of certain information as provided for under the relevant statutory provisions.

Where one Co-operating Authority (the “Requesting Authority”) requests information from another Co-Operating Authority (the “Requested Authority”), the Requesting Authority shall state in its request the purpose for such request and the proposed use by the Requesting Authority of such information. The Requested Authority may require that such request be made in writing.

Subject, where relevant, to Section 57CQ(1A) of the Act, where one Co-Operating Authority provides information to another Co-Operating Authority (whether pursuant to a request or otherwise), the Co-operating Authority receiving such information shall use such information only for a purpose agreed with, or consented to by, the Co-operating Authority providing such information.

A Co-operating Authority shall not disclose to a third party non-public information received from another Co-operating Authority (whether pursuant to a request or otherwise) except with the consent in writing of the Co-operating Authority that provided such information, or pursuant to a legally enforceable demand or obligation. A Co-operating Authority that is subject to such demand or obligation shall inform the other Co-operating Authorities of the legal provision(s) that require such disclosure within a reasonable time of such Authority becoming aware of such demand or obligation.

Regular and routine information sharing

In accordance with Section 57CQ(1A), the Financial Services Ombudsman shall, whenever asked to do so by the Financial Regulator, provide the Financial Regulator with records or copies of records, or information, dealing with matters, or matters of a kind, specified by the Financial Regulator from time to time, relevant to the performance of the Financial Regulator’s functions.

In particular and without limitation to the above paragraph, the Financial Services Ombudsman will provide the Financial Regulator with:

(a) Briefing and, as required, records or copies of records, or information dealing with matters, or matters of a kind, specified by the Financial Regulator from time to time as being relevant to the Financial Regulator’s functions.
(b) Statistical and qualitative information about their complaints-handling activities on a quarterly basis setting out details of complaints received, complaints rejected, trends in complaints, the main issues involved and sectoral or systemic issues emerging on an institutional basis;
(c) Reports on the number of complaints made to them, and their outcomes;
(d) Reports on a quarterly basis in relation to the number of complaints he has decided not to investigate or has ceased to investigate.

The Financial Services Ombudsman shall provide a copy of any recommendations to which Section 57CQ(2) of the Act applies (whether of the Financial Services Ombudsman or of the Financial Services Ombudsman’s Council) to the Consumer Director and where appropriate having marked on such copy whether such recommendations are addressed to the Financial Regulator, the Consumer Director and/or the Registrar of Credit Unions, so that the Consumer Director may distribute such recommendations within the Financial Regulator appropriately.

Subject to its duties of confidentiality and professional secrecy, the Financial Regulator will provide to the Financial Services Ombudsman and the Pensions Ombudsman:
(a) Briefing on regulatory action taken which is likely to affect them in the exercise of their functions.
(b) Briefing on any proposed changes to codes of practice, orders, rules or guidance of the Financial Regulator relating to complaints handling.
(c) Statistical and qualitative information arising from consumer research or related activities of relevance to their functions.

Specific information sharing

Without limitation to the above, the Financial Services Ombudsman will provide the Financial Regulator with further detailed and specific information relating to a complaint (or complaints) for its general consideration:

(a) Where the circumstances of the case appear to the Ombudsman to call into question:

  • a firm’s fitness and probity;
  • or whether any specified person may not be a fit and proper person to carry on a relevant function;
  • or if it appears that a criminal offence or a serious regulatory contravention has occurred.

(b) If it appears to the Ombudsman that a complaint or a series of complaints may give rise or are giving rise to issues of regulatory relevance to the Financial Regulator (whether or not the firm has itself drawn the issues to the attention of the Financial Regulator).
(c) If it appears to the Ombudsman that it would be desirable and appropriate for the Financial Regulator to consider using one or more of its regulatory tools, including the exercise of its investigative and other enforcement powers, the making of rules or the giving of guidance to firms.
(d) In response to a request from the Financial Regulator where it is, or is contemplating, using any of its regulatory tools in relation to the subject matter of the request.
(e) Where it appears to the Ombudsman that a person has failed to comply with an award, determination, or direction (or equivalent thereof) made by an ombudsman, or a court order in respect thereof.
(f) Where it appears to the Ombudsman that a firm has, without reasonable excuse, failed to comply with a requirement to provide information or to produce documents to an ombudsman.
(g) If it appears to the Ombudsman that it may be necessary for the Financial
Regulator to exercise its powers to address shortcomings in a firm’s
complaint handling procedures.

Where, in the course of investigating a complaint or dispute, the Pensions Ombudsman becomes aware of any of the matters covered by paragraphs (a) to (g) above, he will furnish the Financial Regulator with information in his possession which will enable the Financial Regulator to investigate the matter in question.

Where the Financial Regulator considers that issues of regulatory relevance have arisen that may also be under consideration as disputes before them, it will alert the Financial Services Ombudsman or the Pensions Ombudsman, as the case requires, to the issues and discuss any proposed action.

The Co-operating Authorities will seek to coordinate communication with consumers and with firms where the circumstances of a complaint, or complaints, give rise to regulatory action by the Financial Regulator, and where it is likely that steps will be taken to address the generality of the problems and concerns which may have arisen in a firm or a number of firms.

Meetings

The Co-operating Authorities will meet regularly (at appropriate levels of seniority), and not less than annually, to discuss matters of mutual interest and will communicate routinely between meetings on such matters of shared interest that may arise in the course of day-to-day business.

Memorandum Not Binding

Except for the paragraph next following, this MoU does not create legally binding relations between the Co-operating Authorities. This MoU shall not be construed so as to restrict the performance by any Co-operating Authority of its functions or exercise by it of its powers.
This MoU shall not operate to make a Co-operating Authority (or any employee, officer or agent thereof) liable to any person in damages or otherwise for anything done or omitted for which such person would not otherwise be so liable.

Implementation and review

This Memorandum of Understanding will be effective from 1 April 2006. The Co-operating Authorities will continue to monitor the operation of this Memorandum of Understanding and will review it from time to time as necessary, with an initial review after it is in operation for twelve months.

SIGNED by:
_____________________________
Joe Meade
FINANCIAL SERVICES OMBUDSMAN
Date: 7 March 2006

SIGNED by:
_____________________________
Paul Kenny
PENSIONS OMBUDSMAN
Date: 7 March 2006

SIGNED by:
_____________________________
Patrick Neary
CHIEF EXECUTIVE
OF THE
IRISH FINANCIAL SERVICES REGULATORY AUTHORITY
Date: 7 March 2006