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ACCA is pleased to comment on the above consultation draft.

We would agree that there is much to be said for the adoption of a traffic light scenario to categorise potentially reportable matters, on the lines already adopted by OPRA in respect of s48(1) reports. In principle, this formula should be of material help to those who might be faced with the dilemma of whether or not to report. The specific scenarios contained in the 'traffic light' section of the text are helpful, even if in real life the actual circumstances may not be quite so clear cut. We also trust that the revised Note can succeed in reducing the level of reporting required in respect of errors and omissions, which we believe would be beneficial in a regulatory sense.

Our main concern about the draft, however, is that the text appears to suggest that those who have the right to report under the relevant section of the Act are 'expected' by OPRA to report, and that matters covered in the 'red light' scenario give rise to an enhanced expectation in this regard. According to our understanding, the legal position is that there is no compulsion on parties to report under s48(4). The text of the Note should, accordingly, not give the impression that persons are under any obligation in respect of these matters. The aim of the Note should, rather, be to offer guidance on what sort of matters OPRA would consider it helpful to be informed about in the context of its regulatory functions, and to offer encouragement to relevant parties to take this guidance into account when faced by specific issues in their own schemes.

The wording of the text therefore needs to stress that the target audience of the guidance have a 'right' to report and not (like auditors and actuaries) a duty. So the text should not say, for example, that 'red' matters should be reported; it should also avoid suggesting that, in such circumstances, OPRA expects to receive a report. The text should, instead, focus on explaining the sort of circumstances which i) are relevant under s48(4) and ii) meet the test of 'material significance' to OPRA. The emphasis should be on encouraging advisers to make reports and identifying the circumstances in which OPRA would find it, to varying degrees, useful to receive them. 

Given the status of the reporting function under s48(4), we suggest that any  reference in the text to OPRA making complaints to advisers' professional bodies should be considered very carefully. It is important to remember that, when deciding whether or not to make a s48(4) report, advisers (and professionally qualified persons fulfilling other roles) will consider relevant guidance issued by their professional bodies. Professional bodies will, we are sure, take the view that their members should be encouraged to co-operate with regulators and to provide them with helpful information where appropriate. But OPRA should acknowledge that professionally-qualified individuals will take account of their own bodies' rulebooks and not only the guidance contained in the Note.

We have the following specific points:

1. Paragraph 3 of the Note, in the Introduction, says that trustees and others have the 'power' to report 'relevant breaches' to OPRA. We suggest that 'right' would be a more correct term than 'power' to use in this context. Also, it would be helpful if 'relevant breaches' could be explained either immediately in this paragraph or soon after in the Introduction.
   
   
2. OPRA's understanding of what is of 'material significance' is crucial to this Note. But there appears to be an inconsistency between paragraph 6, where OPRA suggests that it would 'expect' to receive reports in relation to specified types of breach which could immediately or potentially pose a significant risk to members' interests, and paragraph 48, where the text says that those circumstances would only 'in principle' interest OPRA. There must be consistency of line in this important respect.
   
   
3. In paragraph 18, the wording should be clarified to stress that it is the trustees who should be clear about their responsibilities to the scheme beneficiaries.
   
   
4. In paragraph 29, we suggest that it is unnecessary for advisers to seek agreement with schemes for a clause in their service agreement with a scheme to allow them to report under s48(4). The power is statutory and overrides any provision in an agreement. If anything, advisers' rights should be acknowledged in such agreements.
   
   
5. In paragraph 37, the two words 'Financial Services' in the first line should be deleted since they are not mentioned in the title of the regulations referred to. 
   
   
6. It would be helpful if all the relevant passages of the legislation could be reproduced in the Note.

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