FCA Consultation on Modernising the Redress System

FCA Publications

Published March 16th, 2026

Detected March 16th, 2026

Summary

The FCA and Financial Ombudsman Service are seeking views on proposals to modernise the financial services redress framework. This consultation aims to provide greater certainty for firms and better serve consumers, with a comment deadline of May 11, 2026.

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What changed

The Financial Conduct Authority (FCA) and the Financial Ombudsman Service have opened a consultation (CP26/9) seeking views on proposals to modernise the financial services redress system. This initiative follows previous calls for input and consultations, aiming to create a more predictable, certain, and transparent regime. Key proposals include finalising guidance on identifying and rectifying harm, clarifying reporting requirements for emerging issues, and implementing rule changes for improved efficiency within the Financial Ombudsman and Financial Services Compensation Scheme. Additionally, the consultation seeks feedback on potential updates to the fair and reasonable test and dismissal grounds, as well as the introduction of a complaints registration stage by the Financial Ombudsman.

Regulated firms and consumers involved in financial services are encouraged to review the proposals and submit feedback by the deadline of May 11, 2026. The FCA aims to publish a Policy Statement later in 2026. The objective is to encourage earlier proactive resolution of issues by firms and enable the Financial Ombudsman to resolve complaints more quickly and informally, leading to faster, more consistent resolutions and improved outcomes for all parties. This consultation is particularly relevant for firms seeking greater certainty to invest and innovate, and for consumers seeking better redress mechanisms.

What to do next

Review CP26/9 and FG26/2 proposals for modernising the redress system.
Submit feedback on proposed changes to the fair and reasonable test and dismissal grounds by May 11, 2026.
Assess implications of rule changes for the Financial Ombudsman and FSCS efficiency.

Source document (simplified)

CP26/9: Modernising the redress system

Consultation opened 15/07/2025 Consultation closed 08/10/2025 Further consultation opens and Finalised Guidance published 16/03/2026 16/03/2026 Consultation closes 11/05/2026

Consultation papers First published:

16/03/2026

Last updated: 16/03/2026 See all updates
The FCA and Financial Ombudsman Service are seeking views on proposals to modernise the redress framework, to better serve consumers and give firms greater certainty to invest and innovate.

Read CP26/9 (PDF)

Read FG26/2 (PDF)

Why we are consulting

Our strategy (PDF) recognises that the current redress regime can create uncertainty for consumers, firms and investors.

We want to achieve greater predictability, certainty and transparency, with appropriate responsibility for firms to identify and address redress issues early on.

This paper follows our November 2024 joint Call for Input (PDF) and July 2025 consultation (PDF) with the Financial Ombudsman.

We are finalising a number of the proposals we consulted on:

Finalised guidance FG26/2, which includes good and poor practice on identifying and rectifying harm.
Guidance in SUP 15 clarifying when firms should report emerging issues to us.
Rule changes for improved efficiency by the Financial Ombudsman and the Financial Services Compensation Scheme. We are also seeking views on further changes possible within the existing framework, including proposed updates to the fair and reasonable test and to the dismissal grounds. The Financial Ombudsman is also seeking views on the introduction of a complaints registration stage to ensure that all complaints referred to the Financial Ombudsman are within its scope and ready to be investigated before being allocated a caseworker and businesses are charged.

The proposals seek to ensure that the Financial Ombudsman can resolve complaints more quickly and informally, leading to faster and more consistent resolutions, reduced delays and improved outcomes for all parties. The proposals will also encourage earlier proactive resolution of issues by firms.

The Treasury has also published the outcome of its review into the Financial Ombudsman, which should be read alongside this paper.

Our Memorandum of Understanding (PDF) with the Financial Ombudsman sets out how we work together on important issues.

Who this is for

Our proposals are relevant to all consumers, firms and professional representatives involved in financial services where redress may be due.

The proposals and finalised policy positions will also be of interest to policymakers in other regulatory bodies, industry advisers, consultancies, academics and think tanks, experts and media commentators.

Next steps

Online response form

The Financial Ombudsman welcomes views on their proposals in Chapter 2 by 11 May 2026.

You can send comments to us using our online response form, or in writing to: Redress Pathways and Risk Team, Financial Conduct Authority, 12 Endeavour Square, London E20 1JN

Email: [email protected]

We aim to publish another Policy Statement on all the proposals consulted on later in 2026.

Page updates

16/03/2026

: Publication added Further consultation and Finalised Guidance published

02/03/2026

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FCA Strategy 2025-2030 (PDF) Call for input: Modernising the Redress System (PDF) CP25/22: Modernising the redress system Blog: Creating a redress system that works better for consumers and firms