Complaints-handling and Regulatory Expectations (2024-10-23)

Summary

This CIMA Supervisory Information Circular, dated 23 October 2024, sets out the Authority's expectations for how regulated entities should handle customer complaints. It does not create new rules but reiterates and elaborates on obligations already contained in CIMA's Rule and Statement of Guidance on Internal Controls for Regulated Entities and the Rule on Corporate Governance for Regulated Entities (both issued April 2023, effective 14 October 2023), highlighting in particular Section 5.7.5 of the Corporate Governance Rule and Sections 12.11 and 12.12 of the Internal Controls Rule and SOG.

The circular applies broadly to CIMA-regulated entities (REs) and addresses the roles of the Board, Senior Management and staff in receiving, recording, investigating, tracking, and resolving complaints.

Core Expectations

• Directors must take an active interest in complaints.
• Complaints must be handled fairly, consistently and in a timely manner.
• Adequate training must be given to staff.
• The Board and Senior Management must periodically receive reports on complaints trends and remediation.

Best-Practice Recommendations

• Publishing clear complaint contact details.
• Providing complainants with process timelines and updates.
• Offering redress mechanisms.
• Fostering a culture that does not penalize customers for complaining.

The circular notes that failure to follow these best practices leads complainants to escalate matters directly to CIMA or via social media, increasing reputational risk. It closes by stating that CIMA will assess compliance with the existing Rules and SOG during onsite inspections and complaint investigations, and expects REs to make any necessary related filings with other regulators simultaneously. It also references a prior related circular published 13 March 2024 and encourages REs to review it.

Key obligations

• Each director of the governing body must ensure complaints submitted to the RE are addressed appropriately and in a timely manner, with issues documented and evidence of corrective action retained (Corporate Governance Rule s.5.7.5).
• REs must maintain adequate procedures for receiving, recording, investigating, monitoring and resolving complaints (Internal Controls Rule and SOG s.12.11).
• REs must handle complaints fairly, consistently and in a timely manner and take necessary action to remediate control deficiencies identified by upheld complaints (s.12.11).
• REs must establish procedures to track complaints received through multiple channels and monitor progress toward resolution until concluded (s.12.11).
• REs must provide adequate formal training on complaint-handling to relevant staff upon joining and on an ongoing basis (s.12.11).
• Complaints must be investigated independently by experienced, knowledgeable staff of sufficient seniority (s.12.12, referencing s.8.9).
• The Governing Body and Senior Management must periodically receive reports summarising key control issues and/or complaints received, including nature, volume, frequency, trends, remediation and disciplinary actions taken (s.12.12).
• REs are expected to make any related regulatory filings with other regulatory bodies simultaneously where a complaints matter triggers such requirements.

Applies to

Regulated Entities (REs) supervised by CIMA