On 16 March 2026 the FCA finalised new guidance in SUP 15, effective 1 June 2026, clarifying when firms should notify it of an emerging systemic or recurring redress issue. The trigger points are unusually specific for FCA guidance: where the potential redress bill exceeds £10m, where average consumer loss exceeds £10,000, or where a significant spike in complaints is identified. Alongside it, the FCA confirmed its criteria for what amounts to a "mass redress event" — the category that unlocks its own faster interventions.
This sits inside a much larger reform. Following HM Treasury's March 2026 response on the Financial Ombudsman Service, the government intends to legislate so the FCA can act more decisively where a mass redress event is developing — including removing the requirement to consult before pausing complaints-handling deadlines, redirecting in-scope Ombudsman complaints back to firms, and making the test for establishing a section 404 redress scheme more straightforward. Changes to DISP and COMP took effect on 17 March 2026, with the requirement to give complainants a deadline for the final response letter following on 1 June 2026. The direction is consistent: identify problems earlier, and expect the regulator to be able to move earlier too.
The threshold is a floor for reporting, not a target to manage down to.
For firms, the practical shift is about detection, not disclosure. Once you know you have a systemic issue with a potential £10m bill, the notification decision is fairly clear. The harder question is whether your systems would surface it before it got there. Complaints data reviewed monthly only in aggregate; root causes recorded as free text nobody analyses; an issue splintered across three product lines so that no single owner sees the pattern — these are the conditions under which a reportable issue exists for months before anyone names it. The threshold is a floor for reporting, not a target to manage down to.
There's also a strategic reason to get ahead of it. Self-identifying and self-reporting an emerging issue, with a credible plan attached, puts you in a very different conversation with the FCA than being told about your own problem. It is the difference between arriving with a remediation plan and arriving with an explanation. Given the FCA's supervision-led posture — attestations, requirements, skilled person reviews — the firms that surface issues early tend to keep far more control over how they get fixed.
What firms should do
- Map the new thresholds (£10m potential redress, £10,000 average loss, complaints spikes) into your notification policy, and give someone clear ownership of the assessment.
- Test whether you would actually detect an emerging issue: can you see complaints by root cause, product and channel — and spot a trend rather than a total?
- Set an internal trigger below the FCA thresholds, so the assessment happens before the reporting decision becomes urgent.
- Check your final response letter templates and complaint-handling timetables against the DISP changes now in force.
- If an issue is emerging, go early and go with a plan — the conversation is different when you bring the remediation, not just the news.
Sources: FCA/FOS CP26/9, Modernising the Redress System (16 March 2026) and finalised SUP 15 guidance effective 1 June 2026; FCA FG26/2 (16 March 2026); HM Treasury consultation response on FOS reform (16 March 2026); DISP and COMP changes in force 17 March 2026; Freshfields, Clyde & Co, Hogan Lovells and Auxillias commentary (March–April 2026).