Recommendation 173

The uncertainty caused by the way in which the FOS operates has created a perception of a regulatory ‘risk premium’ or penalty to the valuations of UK financial services firms that can act as a barrier to foreign investment in the UK financial services sector and presents a significant limitation to the advancement of the FCA’s secondary objective. The tension between the FCA regulations and the FOS’s decision processes is a long-standing issue and the need for action to address this and to remove the uncertainty it creates from the regulatory system is long overdue.