Financial regulators have joined forces to reach a formal agreement for collaboration on matters of common interest, the Wider Implications Framework.

The framework was produced and agreed by the Financial Ombudsman Service (FOS), the Financial Conduct Authority (FCA), the Financial Services Compensation Scheme (FSCS), The Pensions Regulator (TPR) and the Money and Pensions Service (Maps).

It sets out a structure for members to collaborate on matters of common interest in an effort to achieve a better outcome for consumers, small businesses and the financial services industry, building on the existing collaboration already on place.

The framework will be overseen by a group currently chaired by the Financial Ombudsman Service, rotating on a 12-month basis between its members.

Commenting on the framework, FOS interim chief executive and chief ombudsman, Nausicaa Delfas, said: “The Wider Implications Framework is a significant step forward. The framework formalises existing collaboration among members on matters of common interest and will give greater transparency to wider stakeholders.”

Adding to this, TPR chief executive, Charles Counsell, said: “Driving better outcomes for savers by putting them at the heart of what we do is central to our strategic approach.

“We therefore welcome the Wider Implications Framework which has the same goal at its core and formalises our existing ways to collaborate. Only by working collaboratively on issues where there are wider implications to the remits of any of our individual organisations can we, as regulators, bring the greatest benefit to those we protect.”

Issues with wider implications have been identified by the regulators as those that could have an impact across the financial services industry, and there is a need to work together to determine the optimal way to deal with the issue.

For example, it could be because a large number of consumers are potentially affected, or because of the amount of redress at stake, or because there is a risk of business failure.

Although not all issues that have potential wider implications will be relevant to all the members of the regulatory family involved in the process, the framework aims to ensure all members can be involved where relevant, to "maximise collaboration without compromising the ability to act quickly and robustly".

British Steel Pension Scheme members receiving unsuitable advice to transfer their pension was identified as an example of an issue with wider implications, with work still ongoing to address these issues.

The increased risk of savers transferring their pensions amid the market volatility seen as a result of the pandemic in spring 2020 was highlighted as a further example of a wider issue, and the collaboration that the framework will encourage.

Indeed, to address this issue, TPR, FCA and Maps worked together to introduce a Covid-19 specific joint Cash Equivalent Transfer Value letter for savers looking to transfer from a defined benefit to a defined contribution pension and worked jointly with scheme trustees associated with companies deemed at risk.

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