Financial Services and Markets Act 2000, section 226

Compulsory jurisdiction

Part XVI The Ombudsman Scheme

(1) A complaint which relates to an act or omission of a person (“the respondent”) in carrying on an activity to which compulsory jurisdiction rules apply is to be dealt with under the ombudsman scheme if the conditions mentioned in subsection (2) are satisfied.

(2)The conditions are that—

(a)the complainant is eligible and wishes to have the complaint dealt with under the scheme;

(b)the respondent was an authorised person[F1741 or an electronic money issuer within the meaning of the Electronic Money Regulations 2011F1741][F1742 , or a payment service provider within the meaning of the Payment Services Regulations [F1743 2017F1743] ,F1742] at the time of the act or omission to which the complaint relates; and

(c)the act or omission to which the complaint relates occurred at a time when compulsory jurisdiction rules were in force in relation to the activity in question.

(3) “Compulsory jurisdiction rules” means rules—

(a)made by the [F1744FCAF1744] for the purposes of this section; and

(b)specifying the activities to which they apply.

(4)Only activities which are regulated activities, or which could be made regulated activities by an order under section 22, may be specified.

(5)Activities may be specified by reference to specified categories (however described).

[F1745 (5A)If the FCA specifies activities which are account information services provided by authorised payment institutions or EEA authorised payment institutions, the FCA must specify to the same extent account information services provided by registered account information service providers or, as the case may be, EEA registered account information service providers.

(5B)Expressions used in subsection (5A) and in the Payments Services Regulations 2017 have the same meaning in that subsection as they do in those Regulations.F1745]

(6)A complainant is eligible, in relation to the compulsory jurisdiction of the ombudsman scheme, if he falls within a class of person specified in the rules as eligible.

(7)The rules—

(a)may include provision for persons other than individuals to be eligible; but

(b)may not provide for authorised persons to be eligible except in specified circumstances or in relation to complaints of a specified kind.

[F1746 (7A)The rules must provide that a person within subsection (7B) is eligible in relation to a complaint to which subsection (7C) applies.

(7B)A person is within this subsection if he or she has been identified by a respondent, in carrying on an activity to which the rules apply, as—

(a)a politically exposed person;

(b)a family member of a politically exposed person; or

(c)a known close associate of a politically exposed person.

(7C)This subsection applies to a complaint—

(a)that the complainant has been incorrectly identified as a person within subsection (7B); or

(b)relating to an act or omission of the respondent in consequence of the identification of the complainant as a person within subsection (7B).

(7D) In subsection (7B), “politically exposed person”, “family member” and “known close associate” have the meanings given in regulation 35(12) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 . F1746]

(8) The jurisdiction of the scheme which results from this section is referred to in this Act as the “compulsory jurisdiction”.

Read section 226 in the full Act → Definitions (7) Cases (32)

Definitions used in section 226

the ombudsman scheme

(3) The scheme is to be operated under a name chosen by the scheme operator but is referred to in this Act as “the ombudsman scheme”.

Defined in s.225(3) · see it in the full Act

“the ombudsman scheme” has the meaning given in section 225(3);

Defined in s.417(1) · see it in the full Act
authorised person

“authorised person” has the meaning given in section 31(2);

Defined in s.417(1) · see it in the full Act

(2) In this Act “authorised person” means a person who is authorised for the purposes of this Act.

Defined in s.31(2) · see it in the full Act
electronic money issuer

(6A) References in sections 404 and 404E to an “electronic money issuer” are references to a person mentioned in paragraph (a), (b), (c), (d), (h) or (i) of the definition of “electronic money issuer” in regulation 2(1) of the Electronic Money Regulations 2011 .

Defined in s.404F(6A) · see it in the full Act

(6A) References in sections 404 and 404E to an “electronic money issuer” are references to a person mentioned in paragraph (a), (b), (c), (d), (h) or (i) of the definition of “electronic money issuer” in regulation 2(1) of the Electronic Money Regulations 2011 .

Defined in s.404F(6A) · see it in the full Act
rule

“rule” means a rule made by the FCA or the PRA under this Act;

Defined in s.417(1) · see it in the full Act
the FCA

(2) The Financial Conduct Authority is in this Act referred to as “the FCA”.

Defined in s.1A(2) · see it in the full Act

“the FCA” means the Financial Conduct Authority;

Defined in s.417(1) · see it in the full Act
Specified

(5) “Specified” means specified in an order made by the Treasury.

Defined in s.22(5) · see it in the full Act
regulated activity

“regulated activity” has the meaning given in section 22;

Defined in s.417(1) · see it in the full Act

Cases considering section 226 (32)

Assurant General Insurance Limited, R (on the application of) v Financial Ombudsman Service Limited & Ors

[2023] EWCA Civ 1049 · 18 September 2023Interprets

Defines the compulsory jurisdiction by requiring a complaint to relate to a respondent’s act or omission in carrying on an activity governed by compulsory-jurisdiction rules. Agency could bring the retailers’ acts within Assurant’s regulated activity (see paras [10]-[16]; [95]-[107]). Sets objective conditions concerning an eligible complainant, an authorised respondent and the temporal operation of compulsory-jurisdiction rules. The court treated the statutory scheme and the character of each issue as determining whether the Ombudsman or the court has primary responsibility (see paras [11]-[13]; [38]-[63]).

The Official Receiver v Shop Direct Finance Company Limited

[2023] EWCA Civ 367 · 5 April 2023Interprets

The section places qualifying complaints within the Ombudsman scheme where the statutory conditions are met. (see para [88]) The requirement that the complainant be eligible and wish to use the scheme is compatible with a trustee standing in the bankrupt’s place. It does not make the relevant DISP construction ultra vires. (see paras [88]-[93]; [120])

Barclays Bank UK PLC & Ors, R (on the application of) v Financial Ombudsman Service Limited

[2026] EWHC 1555 (Admin) · 24 June 2026Interprets

Interprets the subject matter of compulsory jurisdiction as a complaint relating to an act or omission in carrying on a regulated activity. (see paras [56]-[57], [198]) Confirms the statutory conditions for compulsory jurisdiction and records that they were met in the four complaints. (see para [58]) Confirms that the compulsory jurisdiction rules are FCA rules made for the purpose of section 226, contained in the FCA Handbook and operating as subordinate legislation. (see paras [59], [149])

12 more judgments, and what each says about section 226, are in the case-law panel in the full Act.

Explanatory note

442.This section requires firms authorised by the Authority to submit to the jurisdiction of the scheme. The scheme’s compulsory jurisdiction may only be applied to persons who were authorised at the time the activity to which the complaint relates was carried out, and the rules must have been in force at that time. The Authority is to make rules determining which activities of authorised persons fall within the compulsory jurisdiction. These activities must either be regulated activities as specified by the Treasury under section 22 or other activities which are not regulated, but could be made regulated activities under that section. The Authority is free not to include certain activities, for example kinds of professional business where it is unlikely that retail customers would ever be involved.

443.If an activity is included in the compulsory jurisdiction of the scheme, the ombudsman can consider all disputes arising from the carrying on of that activity by the authorised person. For example, were accepting deposits specified as an activity covered by the compulsory jurisdiction of the scheme, the ombudsman could consider all disputes arising from the operation of a bank account, such as the withdrawal of money from a cash machine, or a stopped cheque.

444.The section also sets the circumstances in which a complaint can be dealt with: namely, that the complainant meets the relevant eligibility criteria (set by the Authority) and has asked the ombudsman to consider the case. The scheme is not able to deal with complaints made by authorised persons, except in circumstances specified in the rules.

All the explanatory notes for the Act

Amendments and notes

10 notes from legislation.gov.uk

Amendments

  1. F1741Words in s. 226(2)(b) inserted (9.2.2011for certain purposes and 30.4.2011otherwise) by The Electronic Money Regulations 2011 (S.I. 2011/99), regs. 1(2)(a)(xv)(b), 79, Sch. 4 para. 2(3)(a) (with reg. 3)
  2. F1742Words in s. 226(2)(b) inserted (2.3.2009 for certain purposes, 1.5.2009 for certain further purposes and 1.11.2009 otherwise) by The Payment Services Regulations 2009 (S.I. 2009/209), regs. 1(2), 126, Sch. 6 para. 1(1)(a) (with reg. 3)
  3. F1743Word in s. 226(2)(b) substituted (13.1.2018) by The Payment Services Regulations 2017 (S.I. 2017/752), reg. 1(6), Sch. 8 para. 2(4)(a) (with reg. 3)
  4. F1744Word in s. 226(3)(a) substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 11 para. 1 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.
  5. F1745S. 226(5A)(5B) inserted (13.1.2018) by The Payment Services Regulations 2017 (S.I. 2017/752), reg. 1(6), Sch. 8 para. 2(4)(b) (with reg. 3)
  6. F1746S. 226(7A)-(7D) inserted (26.6.2017) by The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (S.I. 2017/692), reg. 1(2), Sch. 7 para. 3(2) (with regs. 8, 15)

Modifications

  1. C969S. 226 extended (19.7.2001 for specified purposes otherwise 1.12.2001) by S.I. 2001/2326, arts. 1(1), 3(1); S.I. 2001/3538, art. 2(1)
  2. C970S. 226(2) excluded (19.7.2001 for specified purposes otherwise 1.12.2001) by S.I. 2001/2326, arts. 1(1), 2(4); S.I. 2001/3538, art. 2(1)
  3. C971S. 226(2)(b)(c) excluded (28.1.2021 for specified purposes, 30.7.2022 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2021 (S.I. 2021/90), arts. 1(2)(3), 7(5)

Commencement

  1. I33S. 226 wholly in force at 1.12.2001; s. 226 not in force at Royal Assent see s. 431(2); s. 226 in force for specified purposes at 18.6.2001 by S.I. 2001/1820, art. 2, Sch.; s. 226 in force in so far as not already in force at 1.12.2001 by S.I. 2001/3538, art. 2(1)