SVS Securities - shut down?

eskbanker

RasputinB said:
In some ombudsman cases (including one of mine) the ombudsman stated that 'complaint handling isn't a regulated activity' (or words to that effect).

I just searched on those terms and can now understand what they mean by that - https://www.financial-ombudsman.org.uk/decision/DRN1808361.pdf, for example, explains their rationale:

The handling of complaints is not itself a regulated activity. It’s something that the regulator – the Financial Conduct Authority (FCA) – requires financial businesses to do. But that isn’t enough to make it a “regulated activity” within the meaning of the rule – that is, one of the list of activities set out in the legislation from which we derive our powers. 

and that list of regulated activities is indeed prescribed at https://www.handbook.fca.org.uk/handbook/glossary/G974.html

So, even though complaint handling is an activity directed by the regulator, from a technicality point of view it's not a regulated activity as such!  Therefore the FOS assert that they don't need to consider complaints relating to complaint handling....

RasputinB

eskbanker said:

RasputinB said:
In some ombudsman cases (including one of mine) the ombudsman stated that 'complaint handling isn't a regulated activity' (or words to that effect).

I just searched on those terms and can now understand what they mean by that - https://www.financial-ombudsman.org.uk/decision/DRN1808361.pdf, for example, explains their rationale:

The handling of complaints is not itself a regulated activity. It’s something that the regulator – the Financial Conduct Authority (FCA) – requires financial businesses to do. But that isn’t enough to make it a “regulated activity” within the meaning of the rule – that is, one of the list of activities set out in the legislation from which we derive our powers. 

and that list of regulated activities is indeed prescribed at https://www.handbook.fca.org.uk/handbook/glossary/G974.html

So, even though complaint handling is an activity directed by the regulator, from a technicality point of view it's not a regulated activity as such!  Therefore the FOS assert that they don't need to consider complaints relating to complaint handling....

Thanks, that does give some clarification. However, the ombudsman, said "I’m able to consider concerns about complaint handling in some limited circumstances. For example, if the complaint handling was ancillary to something I do have the power to consider." 

ancillary = providing necessary support to the primary activities or operation of an organization, system, etc.
I think I'll need to think on this as I have difficulty understanding how the FOS could assert that they don't need to consider complaints relating to complaint handling when the considerable delays in handling complaints have aggravated the Distress & Inconvenience caused by the delays in returning assets etc.
Also, if the FOS don't need to consider complaints relating to complaint handling then why have they done so? (I'll maybe have to check to confirm that they have!)

johnburman

Read para 274 of Axa

A long line of authority has established that a claimant is entitled to general damages for distress, inconvenience and discomfort caused by breaches of contract. Authority for this proposition includes Watts v Morrow [1991] 1 WLR 1421, Ezekiel v McDade [1994] 43 Con LR 45 and Hoadley v Edwards [2001] PNLR 41. 

and 275

1. From the various authorities I draw the following conclusions so far as are material to this case:
(a) General damages will be allowed to each of the claimants for inconvenience, distress and discomfort caused by breaches of contract.(b) The amount allowable for this will be modest.............

eskbanker

RasputinB said:
I think I'll need to think on this as I have difficulty understanding how the FOS could assert that they don't need to consider complaints relating to complaint handling when the considerable delays in handling complaints have aggravated the Distress & Inconvenience caused by the delays in returning assets etc.

If you're seeking to treat complaint handling as an incremental head of damages in that way, are you referring to a scenario where assets were returned (after a delay) and then subsequently a complaint took ages to address, or are these timescales concurrent?

RasputinB said:
Also, if the FOS don't need to consider complaints relating to complaint handling then why have they done so? (I'll maybe have to check to confirm that they have!)

I suspect that it comes down to case-specific context and detail, but that's not to say that they always act in a consistent manner of course!  Perhaps also worth noting that in at least one of the cases you cited, it was the institution that volunteered compensation for poor complaint handling and the FOS simply chose not to go against that rather than actually ruling on it as such.

eskbanker

johnburman said:

Read para 274 of Axa

A long line of authority has established that a claimant is entitled to general damages for distress, inconvenience and discomfort caused by breaches of contract. Authority for this proposition includes Watts v Morrow [1991] 1 WLR 1421, Ezekiel v McDade [1994] 43 Con LR 45 and Hoadley v Edwards [2001] PNLR 41. 

and 275

1. From the various authorities I draw the following conclusions so far as are material to this case:
(a) General damages will be allowed to each of the claimants for inconvenience, distress and discomfort caused by breaches of contract.(b) The amount allowable for this will be modest.............

I've bolded the two critical words that you appear not to have noticed - these cases all relate to building works and entail physical inconvenience such as complainants being unable to occupy their homes.

Although Watts v Morrow was the first of these, the analysis there of types of contracts applies, i.e. these later ones don't set precedents for financial services disputes....

RasputinB

eskbanker said:

RasputinB said:
I think I'll need to think on this as I have difficulty understanding how the FOS could assert that they don't need to consider complaints relating to complaint handling when the considerable delays in handling complaints have aggravated the Distress & Inconvenience caused by the delays in returning assets etc.

If you're seeking to treat complaint handling as an incremental head of damages in that way, are you referring to a scenario where assets were returned (after a delay) and then subsequently a complaint took ages to address, or are these timescales concurrent?

RasputinB said:
Also, if the FOS don't need to consider complaints relating to complaint handling then why have they done so? (I'll maybe have to check to confirm that they have!)

I suspect that it comes down to case-specific context and detail, but that's not to say that they always act in a consistent manner of course!  Perhaps also worth noting that in at least one of the cases you cited, it was the institution that volunteered compensation for poor complaint handling and the FOS simply chose not to go against that rather than actually ruling on it as such.

Very likely that a complaint was raised at the time of delay of return of assets and is ongoing until all assets are returned. In my case ITI have still not provided me with confirmation that they have returned all assets. (Assets include the fruits of assets i.e. dividends, right issues etc. Scenarios could include further complaints relating to those.) 
If I've missed the point that you are making please feel free to elaborate.

Noted that the FOS didn't go against the volunteered compensation in that case. I only had a brief look at the ombudsman decisions so expect to find more relevant ones if I spend some time at it.

I have looked at the list of regulated activities and can't see that the transfer of securities to another broker is included. If that isn't a regulated activity would it mean that the FOS don't need to consider complaints relating to transfers of securities to another broker?

eskbanker

RasputinB said:

eskbanker said:

RasputinB said:
I think I'll need to think on this as I have difficulty understanding how the FOS could assert that they don't need to consider complaints relating to complaint handling when the considerable delays in handling complaints have aggravated the Distress & Inconvenience caused by the delays in returning assets etc.

If you're seeking to treat complaint handling as an incremental head of damages in that way, are you referring to a scenario where assets were returned (after a delay) and then subsequently a complaint took ages to address, or are these timescales concurrent?

Very likely that a complaint was raised at the time of delay of return of assets and is ongoing until all assets are returned. In my case ITI have still not provided me with confirmation that they have returned all assets. (Assets include the fruits of assets i.e. dividends, right issues etc. Scenarios could include further complaints relating to those.) 
If I've missed the point that you are making please feel free to elaborate.

I'm just trying to understand the extent to which delays in complaint handling can legitimately be decoupled from delays in processing instructions - if it's all concurrent in this example and the complaint is seen as ongoing until all assets are returned then to me there's an argument that any compensation award would relate to the distress and inconvenience of the whole situation?  I imagine you'd disagree with that though!

RasputinB said:

I have looked at the list of regulated activities and can't see that the transfer of securities to another broker is included. If that isn't a regulated activity would it mean that the FOS don't need to consider complaints relating to transfers of securities to another broker?

Likewise, I can't see anything obvious, but https://www.legislation.gov.uk/uksi/2001/544/made is the full version of the associated legislation and it may be in there somewhere (article 40, administering investments, perhaps?)!  I imagine you'll have found FOS decisions relating to such transfers though?

RasputinB

eskbanker said:

RasputinB said:

eskbanker said:

RasputinB said:
I think I'll need to think on this as I have difficulty understanding how the FOS could assert that they don't need to consider complaints relating to complaint handling when the considerable delays in handling complaints have aggravated the Distress & Inconvenience caused by the delays in returning assets etc.

If you're seeking to treat complaint handling as an incremental head of damages in that way, are you referring to a scenario where assets were returned (after a delay) and then subsequently a complaint took ages to address, or are these timescales concurrent?

Very likely that a complaint was raised at the time of delay of return of assets and is ongoing until all assets are returned. In my case ITI have still not provided me with confirmation that they have returned all assets. (Assets include the fruits of assets i.e. dividends, right issues etc. Scenarios could include further complaints relating to those.) 
If I've missed the point that you are making please feel free to elaborate.

I'm just trying to understand the extent to which delays in complaint handling can legitimately be decoupled from delays in processing instructions - if it's all concurrent in this example and the complaint is seen as ongoing until all assets are returned then to me there's an argument that any compensation award would relate to the distress and inconvenience of the whole situation?  I imagine you'd disagree with that though!

RasputinB said:

I have looked at the list of regulated activities and can't see that the transfer of securities to another broker is included. If that isn't a regulated activity would it mean that the FOS don't need to consider complaints relating to transfers of securities to another broker?

Likewise, I can't see anything obvious, but https://www.legislation.gov.uk/uksi/2001/544/made is the full version of the associated legislation and it may be in there somewhere (article 40, administering investments, perhaps?)!  I imagine you'll have found FOS decisions relating to such transfers though?

My core argument has been that we should expect compensation for delays in complaint handling. If any award would relate to the whole situation and you are wondering whether or not the the complaint handling part can be decoupled then it looks like you agree that there could be an element of compensation for delays in complaint handling?
Some ombudsman decisions suggest that complaint handling is an area that is not regulated and therefore they shouldn't consider it. I'm sure that I have found instances of FOS awards for failures relating to activities which aren't listed as regulated activities. This may include transfer of stockholdings and I have read that sometime this year the FCA intend carrying out a review of the progress that the industry has made towards making the switching process more efficient.
Maybe that will give some clarity.
Moving on a bit, I have noticed that the ombudsman decisions appear to be very clear that hypothetical losses should not be considered. There wasn't much interest in my post where the SFA had awarded for hypothetical loss. That award was made about two decades ago; but some years after the Watts v Morrow court case that appears to still be a legal precedent. I didn't have a trading loss, theoretical or otherwise, that was due to the delay in transfer of my main assets but I have read that others think they had. I've flagged this up again as I think it worth wondering why the FOS can now exclude compensation for hypothetical loss when it wasn't excluded in the earlier arbitration scheme.

johnburman

My core argument has been that we should expect compensation for delays in complaint handling. 

This must be right, as it is a failure of ITI and a failure to "treat clients fairly". The problem is what is the quantum?  It is non-pecuniary; it causes stress and inconvenience (which can be claimed), but only a modest sum will be awarded.

So it is worth claiming ...but not worthing going to the 'small claims court' for!

eskbanker

RasputinB said:
My core argument has been that we should expect compensation for delays in complaint handling. If any award would relate to the whole situation and you are wondering whether or not the the complaint handling part can be decoupled then it looks like you agree that there could be an element of compensation for delays in complaint handling?

Not really, in the context of the scenario you described - if, for the sake of argument, there was a two year delay in completing all your transfer activities, then my understanding is that FOS will consider the associated distress and inconvenience holistically, rather than trying to split it up into a chunk of time relating specifically to complaint handling and the rest not, with separate compensation figures for each.  In other words, I'd expect them to consider two years' worth of distress and inconvenience regardless of its composition, although I don't know whether or not they'd differentiate between, say, one year and two years in total when evaluating compensation.

RasputinB said:

Moving on a bit, I have noticed that the ombudsman decisions appear to be very clear that hypothetical losses should not be considered. There wasn't much interest in my post where the SFA had awarded for hypothetical loss. That award was made about two decades ago; but some years after the Watts v Morrow court case that appears to still be a legal precedent. I didn't have a trading loss, theoretical or otherwise, that was due to the delay in transfer of my main assets but I have read that others think they had. I've flagged this up again as I think it worth wondering why the FOS can now exclude compensation for hypothetical loss when it wasn't excluded in the earlier arbitration scheme.

The basics of contract law haven't changed since well before Watts v Morrow, but the legislation governing the creation of FOS, i.e. the Financial Services and Markets Act 2000, was after that, so my understanding is that FOS isn't bound by the regulations associated with its precursor and decisions made by the SFA wouldn't be seen as forming precedents today.