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Terms of reference for the Wider Implications Framework

This page set out the terms of reference for the Wider Implications Framework. You can read more about the process and case study examples on the Wider Implications Framework page.

On this page

  1. Purpose
  2. Membership
  3. Scope
  4. Outcome
  5. Framework
  6. Transparency and accountability
  7. Information sharing
  8. Quorum
  9. Chair
  10. Secretariat
  11. Annex A: Members statutory functions
  12. Annex B: Information sharing gateways

Purpose

1. The Wider Implications Framework (the Framework) sets out a structure for its members to collaborate on matters of common interest to achieve a better outcome for consumers, small businesses and the financial services industry, where compatible with members’ independent statutory roles and functions.

2. The Framework is in addition to other regular collaboration, such as sharing of information, which members already undertake pursuant to applicable statutory provisions and other agreements, such as bilateral Memoranda of Understanding.

3. The purpose of the Framework is to establish a procedure consistent with each member’s independent role and statutory functions to:

  • discuss openly and frankly risks and issues that may have wider implications as soon as the members become aware of them;
  • agree the most appropriate approach to managing these risks and issues, including which member(s) should lead on that approach; and
  • provide an escalation point, where necessary.

Membership

4. Membership comprises:

  • The Financial Conduct Authority (FCA)
  • The Financial Ombudsman Service
  • The Financial Services Compensation Scheme (FSCS)
  • The Pensions Regulator (TPR)
  • The Money and Pensions Service (MaPS)

together, the members.

Scope

5. An opportunity, risk or issue (collectively referred in this page as an ‘issue’) may be considered under this Framework where it appears that either:

  • activities by one or more financial services firms give rise to (or could give rise to) common interest questions concerning how members individually or collectively might best respond, given their respective statutory roles and functions; or
  • activities by one or more of the members may have or could have an impact on the activities of another member, for example, if general expectations of firms in a relevant area change because of changes to the regulatory framework, supervisory action by the regulators, or other activities such as trends or issues in the Financial Ombudsman Service’s or the FSCS’s casework.

6. In considering whether to take action under the Framework, due consideration will be given to the materiality of an issue. This may include, but is not limited to, the following factors:

  • number of consumers affected;
  • amount of potential loss/redress owed;
  • risk of firm failure;
  • where relevant, extent of alignment between relevant members in their understanding of and approach to the issue; and
  • wider regulatory action under contemplation.

Outcome

7. The intended outcome of this Framework is to:

  • ensure that issues are considered by members in a timely manner given their respective statutory roles and functions, in a way which gives due recognition to the wider impact of those issues and the needs of consumers and small businesses, for example the need to be quickly and fairly compensated for detriment caused by financial services firms where applicable;
  • provide a transparent and robust process for managing issues within the scope of this Framework; and
  • seek (where compatible with members’ independent statutory roles and functions) a consistent and complementary approach to dealing with issues within the scope of this Framework, in order to provide greater certainty for users and providers of financial services and quicker and more efficient resolution of problems and detriment (if applicable) for all concerned.

8. The relevant members will decide whether to define further outcomes at the outset of considering a particular issue under this framework.

Framework

9. The Framework comprises of:

  • Working level meetings held at least quarterly with all relevant members. Meetings may be called more frequently if required and will include relevant persons from those members.

    Issues flagged under this framework will be noted in the central Wider Implications log maintained by the Secretariat.

  • Executive-level meetings will be held every four months with CEO/Executive Directors (or a Director in FCA’s case) from each member.

    These meetings will set the approach, receive and consider updates on relevant wider implications issues, and provide an escalation point for significant issues. Meetings may be called more frequently as the need arises.

  • Chair-level meetings will be held on a bi-annual basis with the Chairperson from each member as well as the CEO/Executive Directors (or a Director in FCA’s case).

    The purpose of these meetings is to oversee the Framework and provide strategic direction within the scope of this Framework.

Transparency and accountability

10. The following will, where appropriate, and subject to any applicable legal restrictions be published on the members’ respective websites:

  • Terms of Reference;
  • an up to date version of the central log of issues (published after each Chair-level meeting);
  • Minutes of the Executive level and Chair-level meetings will be published after each meeting;
  • a copy of the Annual Report (see below); and
  • a copy of the Memoranda of Understanding (MoU) between members on information sharing.

11. Members will assess if the Framework is achieving its purpose on a yearly basis. This assessment will be set out in an Annual Report, which will be approved at the Chair-level meeting and published on an annual basis.

Information sharing

12. Information sharing between members will be subject to any restrictions set out in relevant legislation including but not limited to information sharing regulations. However, members agree to make every effort to share information at the earliest possible stage to support and facilitate discussions of the issues within the scope of this Framework.

This is supported by the MoUs between members and information sharing gateways.

Quorum

13. Quorum will be met when at least one delegate from each member is present to which the relevant issue pertains.

14. Where an issue may also be relevant for other regulatory bodies, for example the Prudential Regulation Authority (PRA), the Bank of England (BoE), The Pensions Ombudsman (TPO) and the Payment Services Regulator (PSR), the members may invite the relevant body to engage with them on the issue in question.

15. The members may invite any person or organisation whom is not a member, such as trade associations and consumer groups or levy payers, to make representations if the members consider this appropriate. This could be done by invitation to participate in meetings or to make written submissions on particular points of interest.

Chair

16. The Financial Ombudsman Service currently chairs the meetings. This will be rotated between members every twelve months.

Secretariat

17. The member that chairs the meeting will provide an appropriate Secretariat for the meetings. The Secretariat will be responsible for organising the meetings and ensuring proper records are kept.

Annex A: Members statutory functions

  • The FCA is the financial conduct regulator. Its strategic objective is ensuring that the relevant markets function well.

    Its operational objectives are:

    • securing an appropriate degree of protection for consumers;
    • protecting and enhancing the integrity of the UK financial system; and
    • promoting effective competition in the interests of consumers in the market for regulated financial services.

  • The Financial Ombudsman Service’s main statutory function under the Financial Services and Markets Act 2000 (FSMA) is to operate a scheme to resolve disputes within its jurisdiction independently and on the basis of what is fair and reasonable in all the circumstances.

  • If an authorised financial firm fails and cannot pay claims against it, the FSCS can step in to compensate customers (sections 213 and 214 of FSMA).

  • TPR protects workplace pensions in the UK. They work with employers and those running pensions so that people can save safely for their retirement.

    TPR are responsible for:

    • making sure employers put their staff into a pension scheme and pay money into it;
    • protecting people’s savings in workplace pensions;
    • improving the way that workplace pension schemes are run;
    • reducing the risk of pension schemes ending up in the Pension Protection Fund (PPF);
    • making sure employers balance the needs of their defined benefit pension scheme with growing their business.

  • As laid out in the Financial Guidance and Claims Act 2018 (S.2), MaPS exists to improve the ability of members of the public to make informed financial decisions;

    • support the provision of information, guidance and advice in areas where it is lacking;
    • ensure that information, guidance and advice is provided to members of the public in the clearest and most cost-effective way (including having regard to information provided by other organisations);
    • ensure that information, guidance and advice is available to those most in need of it (and to allocate its resources accordingly), bearing in mind in particular the needs of people in vulnerable circumstances;
    • and work closely with the devolved authorities as regards the provision of information, guidance and advice to members of the public in Scotland, Wales and Northern Ireland.

Annex B: Information sharing gateways

  • Subject to any restrictions on disclosure of information (confidential or otherwise) at law, the FCA may disclose information to:

    • any person for the purposes of enabling or assisting the FCA to discharge any of its public functions or functions;
    • the Financial Ombudsman Service for the purpose or enabling or assisting it to discharge its functions;
    • the Chief Ombudsman and any other member of the panel of ombudsmen for the purpose of enabling or assisting such persons to discharge their functions;
    • TPR for the purpose of enabling or assisting it to discharge its functions; and
    • the FSCS for the purpose of enabling or assisting it to discharge its functions under Part XV of FSMA.

  • The Financial Ombudsman Service must disclose information to the FCA where in its opinion it considers that the information would or might be of assistance to the FCA in advancing one or more of the FCA’s operational objectives.

    Subject to any other applicable legal restrictions or limitations on the disclosure of information (for example, confidential information or personal data), the Financial Ombudsman Service Limited may disclose information which it has received or generated and which is relevant to its functions under FSMA 2000:

    • to another person for the purpose of assisting the Financial Ombudsman Service to discharge its own functions under FSMA 2000; and
    • to the FCA for the purpose of enabling or assisting the FCA to discharge any of its public functions.

  • The FSCS is subject to the FSMA (Disclosure of Information by Prescribed Persons) Regulations 2001.

    The FSCS must disclose information to the FCA where in its opinion it considers that the information would or might be of assistance to the FCA in advancing one or more of the FCA’s operational objectives.

    Subject to any other applicable legal restrictions or limitations on the disclosure of information (for example, confidential information or personal data), the FSCS may disclose information which it has received or generated and which is relevant to its functions under FSMA:

    • to another person for the purpose of assisting the FSCS to discharge its own functions under FSMA; and
    • to the FCA for the purpose of enabling or assisting the FCA to discharge any of its public functions.

    The FSCS has entered into MoUs with a number of organisations which also set out circumstances in which we will share information with specific organisations.

    The MoUs can be found on the FSCS website.

  • TPR can disclose certain restricted information to other bodies listed within Schedule 3 of the Pensions Act 2004 (eg FCA and the Financial Ombudsman Service), so long as the TPR considers that the information shared would enable or assist them to facilitate exercise of their functions. 

    However, this disclosure is made subject to —

    • the consent of the TPR, and
    • for the purpose of enabling or assisting the person to exercise any functions specified in relation to them. The FCA is covered for all of its functions whereas the Financial Ombudsman Service is covered specifically in relation to functions under the Pensions Schemes Act 1993.

    Importantly, before deciding whether to give its consent to such a disclosure, TPR must take account of any representations made to it, by the person seeking to make the disclosure, as to the desirability or necessity for it. TPR can also disclose restricted information to any qualified person on any matter requiring the exercise of professional skill within the remit of Pensions Act 2004.

    TPR cannot disclose information if subject to other legal restrictions or limitations on the disclosure of information (including Unpublished Price Sensitive Information, confidential information or personal data).

  • As laid out in the Financial Guidance and Claims Act 2018 (S.17), MaPS may disclose information to the FCA, a devolved authority or delivery partner provided that the disclosure is:

    • for the purpose of enabling or facilitating the exercise of a function that MaPS is carrying out;
    • for the purpose of enabling or facilitating the exercise of the consumer protection function;
    • relating to the provision of information or advice on debt;
    • or information for the purposes of a review of MaPS functions.