GUIDANCE NOTE: COMPLAINTS AGAINST REGULATED FINANCIAL SERVICE PROVIDERS Part I: Background and Introduction... 2 1 Introduction... 2 2 Scope... 2 3 Structure of this document... 3 Part II: Guidance Note on Complaints... 4 4 The nature of the Commission s role... 4 5 First lodge your complaint with the registered person... 4 6 When to make your complaint to the Commission... 4 7 How to make a complaint to the Commission... 5 8 How the Commission will handle your complaint... 5 9 Regulatory Concerns... 6 10 Commission contact details... 7 Issued: 26 October 2009 Page 1 of 7
PART I: BACKGROUND AND INTRODUCTION 1 Introduction 1.1 The Jersey Financial Services Commission (the Commission ) is responsible for the regulation and supervision of financial services provided in or from within the Island and certain fund products. That responsibility is discharged through a regulatory framework 1 which includes a number of regulatory laws (listed below at 2.2). 1.2 The Commission has responsibility for the prudential oversight of banks, insurance companies, fund services businesses, investment businesses (investment managers, dealers and advisers), trust company service providers, general insurance mediation businesses, money service businesses (bureaux de change and money transmitters) and certain fund products. 1.3 The regulatory laws require that persons apply for and be granted a licence 2 by the Commission before they undertake the relevant financial service. In determining whether to grant or refuse such licences, or whether to revoke an existing licence, the Commission will need to determine whether the applicant meets, and in the case of a person granted a licence ( registered person ), continues to meet fitness and propriety standards on matters such as integrity, competency, financial standing and structure/organisation. 1.4 To assist the industry in understanding the regulatory framework, the Commission, from time to time, issues policy statements and/or guidance notes on relevant matters. Such policy statements and guidance notes do not have force of law but compliance with them will be taken into account when considering an application for a licence or when determining whether a registered person remains a fit and proper person. 2 Scope 2.1 The guidance contained in this document applies to all registered persons and formerly registered persons. 2.2 The Commission is unable to investigate complaints in relation to products or services sold or provided prior to the regulatory laws coming into force, as detailed:- 2.2.1 Collective Investment Funds (Jersey) Law 1988, as amended (the CIF(J)L ) - in force from 1 June 1989; 1 The regulatory framework includes: legislation; policy statements; codes of practice and guidance notes. 2 Taking the form of: a registration certificate (Article 8B) or permit (Article 7) granted in accordance with the CIF(J)L; a registration certificate granted in accordance with Article 9 of the BB(J)L; a permit granted in accordance with Article 7 of the IB(J)L; or a registration certificate granted in accordance with Article 9 of the FS(J)L. Page 2 of 7 Issued: 26 October 2009
2.2.2 Banking Business (Jersey) Law 1991, as amended (the BB(J)L ) - in force from 1 October 1991; 2.2.3 Insurance Business (Jersey) Law 1996, as amended (the IB(J)L ) - in force from 1 October 1996; 2.2.4 Financial Services (Jersey) Law 1998, as amended (the FS(J)L ) - in force for: 2.2.4.1 investment business from 1 March 1999; 2.2.4.2 trust company business from 27 November 2000; 2.2.4.3 general insurance mediation business from 21 January 2005; 2.2.4.4 money service business from 26 July 2007; and 2.2.4.5 fund services business from 14 November 2007. 3 Structure of this document 3.1 Part II of this document is divided into six sections (see 3.3) and provides guidance regarding the role of the Commission in handling complaints and explains the actions which the Commission may take. 3.2 The guidance covers what the Commission expects of a complainant in the first instance, before addressing the circumstances in which the Commission will investigate complaints against a registered person. 3.3 Six sections of Part II: 3.3.1 The nature of the Commission s role 3.3.2 First lodge your complaint with the registered person 3.3.3 When to make your complaint to the Commission 3.3.4 How to make a complaint to the Commission 3.3.5 How the Commission will handle your complaint 3.3.6 Regulatory Concerns Issued: 26 October 2009 Page 3 of 7
PART II: GUIDANCE NOTE ON COMPLAINTS 4 The nature of the Commission s role 4.1 When considering lodging a complaint it must be recognised that, the Commission: 4.1.1 does not have an explicit statutory responsibility for consumer protection, and 4.1.2 has not been given the role of an ombudsman. 4.2 Consequently, the Commission is not able to adjudicate in disputes between complainants and registered persons nor can it order the registered person to pay compensation. 4.3 Ordinarily, the Commission will not investigate complaints that relate solely to the cost or quality of banking services, commercial decisions of banks or investment performance, or the fee charging scales of registered persons. 4.4 It is useful, however, for the Commission to be made aware of complaints against persons it regulates and supervises, as a complaint might draw attention to more general shortcomings in a registered person such as the inadequacy of systems and controls and lack of competence of its directors, managers or employees. 5 First lodge your complaint with the registered person 5.1 If you have a complaint about the regulated products or financial services provided by a registered person, you should first try to resolve the complaint directly with that registered person. Complaining first to the registered person allows that business an opportunity to put things right at an early stage. Complaints should be addressed to the senior management using the contact details provided by the registered person concerned. 5.2 The Commission has issued, under the regulatory laws, codes of practice 3 for registered persons that require establishment of an effective complaints handling system and procedure that, in the majority of instances, includes a requirement that customers/clients/policyholders are informed of how complaints may be made. 6 When to make your complaint to the Commission 6.1 If you are not happy with the way in which the registered person has dealt with your complaint, or if the registered person has not sent you a response within 14 working days 4 of receiving your complaint, you may wish to seek the assistance of the Commission. 3 Copies of codes of practice are available from the relevant financial sector area of the Commission Website: http://www.jerseyfsc.org/index.asp. As at 7 October 2009 no codes of practice have been issued for those persons that are registered persons by virtue of holding a licence granted under the Collective Investment Funds (Jersey) Law 1988. 4 Up to 14 days is permitted for the Registered Person to provide an initial response to your complaint. Page 4 of 7 Issued: 26 October 2009
7 How to make a complaint to the Commission 7.1 The Commission does not normally deal with oral or anonymous complaints, however, please contact the Commission by telephone if you have any individual difficulties which might prevent you from making a written complaint. 7.2 Subject to 7.1, complaints to the Commission must be made in writing (using the contact details provided at paragraph 10), and should provide: 7.2.1 the name of the registered person (or formerly registered person) against which the complaint is being raised; 7.2.2 the full name and address of the complainant and any third party acting on behalf of the complainant; 7.2.3 full details of the nature of the complaint; and 7.2.4 evidence that any third party acting on behalf of a complainant is authorised to act for the complainant. 7.3 In order to assist with your complaint, the Commission needs authority to release details of your complaint to the relevant registered person. Consequently, unless you advise the Commission (in writing) to the contrary or the complaint documentation includes matters of a nature that meet the sensitive personal data description, as provided by Article 2 of the Data Protection (Jersey) Law 2005 5, the Commission operates on the basis that by corresponding with the Commission you have provided the necessary authority. 7.4 Where sensitive personal data is involved the Commission requires explicit authority to release details to the relevant registered person. 8 How the Commission will handle your complaint 8.1 The Commission will acknowledge receipt of a written complaint, normally within five working days. 8.2 All complaints will be treated in strict confidence, although to assist with your complaint the Commission will have to disclose complaint details to the relevant registered person. 5 Article 2 of the Data Protection (Jersey) Law 2005 states: In this Law sensitive personal data means, in relation to a data subject, personal data consisting of information as to (a) the racial or ethnic origin of the data subject; (b) the political opinions of the data subject; (c) the data subject s religious beliefs or other beliefs of a similar nature; (d) whether the data subject is a member of a trade union; (e) the data subject s physical or mental health or condition; (f) the data subject s sexual life; (g) the data subject s commission, or alleged commission, of any offence; or (h) any proceedings for any offence committed, or alleged to have been committed, by the data subject, the disposal of any such proceedings or any sentence of a court in any such proceedings. Issued: 26 October 2009 Page 5 of 7
8.3 The Commission will refer your complaint to the relevant registered person for prompt investigation and response. Complainants should note that the Commission may, in some cases, need to send a copy of the complainant s written representations to the relevant registered person in order for them to follow up the complaint. 8.4 The Commission will ask the relevant registered person to reply directly to you with as full an explanation as possible of the circumstances surrounding your complaint. Additionally, the registered person will be asked to provide the Commission with a copy of its response to you. 8.5 Once a response has been received, the Commission will consider the response of the registered person in order to assess whether: 8.5.1 your complaint has been handled properly in line with the requirements as set out in the regulatory framework; and 8.5.2 the registered person has followed its own complaint procedures properly. 8.6 If your complaint raises issues of regulatory concern or the Commission s assessment is that the complaint has not been handled properly or complaints procedure followed, the Commission will separately pursue this with the registered person (see section 9). 8.7 The Commission has no remit where a financial service or product was sold or provided before the relevant regulatory law came into effect (paragraph 2.2 provides the dates on which the relevant regulatory laws came into force). However, in these circumstances the Commission continues to assess whether the registered person is following its own complaints procedures properly. 9 Regulatory Concerns 9.1 In the case of regulatory concern, as a result of a complaint, or series of complaints, the Commission may decide to take action against a registered person, for instance by requiring it to address any general shortcomings such as inadequacy of systems and controls or a lack of competence by its managers, directors or employees. Complaints which may lead the Commission to this course of action are those which indicate that a registered person has breached one or more requirements of the relevant legislation or codes of practice - or it appears that a registered person has acted in a way that is unfit and improper. 9.2 Remedial action takes many forms, the most serious of which will be undertaken in line with the Guidance Note on the Commission s Decision-Making Process. 9.3 The Guidance Note on the Commission s Decision-Making Process is available from the Commission Website and provides, at paragraph 2.8, details of the decisions covered by the guidance note. These include publicising a decision taken through a public statement, as permitted by the regulatory laws. 9.4 The Commission s ability to disclose to you the outcome of our regulatory investigation and any action taken is limited by the regulatory laws. The Commission will not be in a position to advise individual complainants of the nature and scale of its enquiries. Page 6 of 7 Issued: 26 October 2009
10 Commission contact details Jersey Financial Services Commission PO Box 267 14 18 Castle Street St Helier Jersey JE4 8TP Channel Islands Telephone: +44 (0)1534 822000 Facsimile: +44 (0)1534 822001 Email: info@jerseyfsc.org Issued: 26 October 2009 Page 7 of 7