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Ofgem said Friday it will move forward with plans to regulate the energy sector’s non-domestic third-party intermediaries (TPIs) through a mandatory code of conduct which is partially overseen by the regulator.
Under these new rules, energy suppliers will only be allowed to engage with TPIs – such as brokers and other energy purchase advisers – that are accredited to the code.
Ofgem’s conclusion follows a recent industry consultation on how best to put in place a framework that ensures effective customer safeguards whilst enabling the TPIs to offer value to customers through innovative services.
The regulator offered a range of potential options through its consultation including maintaining the status quo, implementing a voluntary code of practice, issuing a code of conduct which is overseen by an independent board or full regulatory licensing of non-domestic TPIs under Ofgem.
Ofgem said 41 of the 62 respondents supported its preferred option of having a mandatory code of practice underpinned by a supplier licence condition, while 27 respondents agreed with the proposal for industry-led, independent governance.
“We still intend for the code to be overseen by an independent board. However, we acknowledge the concerns raised through the consultation and are proposing additional oversight from Ofgem over certain aspects of the code,” a statement from the regulator said.
The regulator said it would continue to engage with stakeholders before finalising the detailed governance arrangements later this year.
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