The Financial Conduct Authority (FCA) has approved the Financial Ombudsman Service’s (FOS) budget for 2020/21. Members may access the fees instrument in the FCA Handbook by clicking here.
The FOS has revised its funding arrangements for the coming year in recognition of the unprecedented impact on firms of the Coronavirus (Covid-19) pandemic and the clear potential for increased financial hardship and vulnerability. The revisions represent a combination of targeted interventions to benefit smaller firms, and broader steps to benefit other firms that contribute to its funding.
The FOS said the budget will also help to provide the effective service that businesses and their customers are relying on at this extremely challenging time. In summary, in 2020/21:
- The ombudsman service will maintain the number of ‘free’ cases at 25 for firms outside the group account fee arrangement. This means nine out of ten firms will not pay any case fees (set at £650). In line with its consultation, the number of ‘free’ cases will be 50 for each group in the group account fee arrangement.
- It has asked the FCA to freeze all minimum levies at 2019/20 levels.
- The overall income the service takes from its levy will be reduced – with a case fee to levy income split of around 70:30, compared with the 60:40 split it consulted on.
The FOS said it will absorb the cost of these changes – which amount to £25.4 million in total – by reducing its reserves.
BIBA members’ compliance and regulation queries should be directed to: [email protected].