The Oversight Committee provides support and advice to the Board on its relationships with the Financial Ombudsman Service, the Financial Services Compensation Scheme and the Payment Systems Regulator.
Under the Financial Services and Markets Act 2000 (FSMA), the FCA must take 'such steps as are necessary’ to ensure that the Financial Ombudsman Service (the Financial Ombudsman) and the Financial Services Compensation Scheme (FSCS) can carry out their roles.
For the FSCS, the FCA does this jointly with the Prudential Regulation Authority (PRA), which has its own governance processes. The Oversight Committee provides support and advice to the FCA Board on these matters.
Under the Financial Services (Banking Reform) Act, the PSR has a number of accountability measures in place, including the requirement to report annually to the FCA. The Oversight Committee advises the FCA Board about these accountabilities, including making recommendations about approval of the PSR’s annual plan and budget, the PSR’s annual report, and the appointment of PSR Board members.
Financial Ombudsman Service
The Financial Ombudsman's role under FSMA is to ‘independently resolve certain disputes quickly and with minimum formality on the basis of what it believes is fair and reasonable in all the circumstances of the case’.
For the Financial Ombudsman, the Oversight Committee:
- reviews and challenges the Financial Ombudsman’s annual budget, and recommends to the Board whether it should approve the annual budget
- advises the Board on the Financial Ombudsman’s qualification as an Alternative Dispute Resolution (ADR) Entity under the Alternative Dispute Resolution Regulations 2015[1]
- advises the Board on appointing and removing the directors (including the chairman) of the Financial Ombudsman (in the case of the chairman, this is done with the approval of the Treasury)
- advises the Board on ensuring the directors are appointed on terms that secure their independence from the FCA in the operation of the Financial Ombudsman Scheme
- provides any other advice and support the Board requires to satisfy the FCA’s legal obligations, and exercise its powers, in relation to the Financial Ombudsman
The Financial Ombudsman is operationally independent of the FCA. The FCA can't get involved in decisions the Financial Ombudsman makes on individual complaints.
Financial Services Compensation Scheme
The FSCS’s role under FSMA is to ‘protect eligible claimants that incur financial losses when firms authorised under FSMA are unable, or likely to be unable, to pay claims against them relating to certain regulated activities’.
For the FSCS, the Oversight Committee:
- reviews and challenges the FSCS’s management expenses budget, and recommends to the Board the amount at which the management expenses levy limit of the FSCS should be fixed
- advises the Board on appointing and removing the directors (including the chairman) of the FSCS (in the case of the chairman, this is done with the approval of the Treasury)
- advises the Board on ensuring the directors are appointed on terms that secure their independence from the FCA in the operation of the FSCS
- provides any other advice and support the Board requires to satisfy the FCA’s legal obligations, and exercise its powers, in relation to the FSCS
The FSCS is operationally independent of the FCA. The FCA can't get involved in the decisions the FSCS makes on individual claims.
Payment Systems Regulator
The PSR is a subsidiary of the FCA. It has its own Board made up of members appointed by the FCA acting with the approval of the Treasury.
For the PSR, the Oversight Committee advises the FCA Board on:
- approval of the PSR’s annual budget and annual plan and any variations to the budget or plan
- the making of rules requiring participants in regulated payment systems to pay the FCA for relevant costs
- the PSR’s annual report in relation to the discharge of its duties
- appointment of PSR Board members
Meetings
The Oversight Committee meets at least 3 times a year with the executive and non-executive directors of the Financial Ombudsman, the FSCS and the PSR, including the chairs.
Membership
See the current membership[2].
