Decision on the Supplier Licensing Review: Ongoing requirements and exit arrangements

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We are reviewing our approach to supplier licensing to strengthen our regulatory regime to improve standards of financial resilience and provide better consumer protection.  These reforms are part of our move to improve customer service standards and minimise the likelihood and impact of disorderly supplier failure.

The measures we are introducing are designed to (i) promote more responsible risk management, (ii) improve governance and increase accountability, and (iii) enhance our market oversight. These changes build upon our enhanced entry requirements introduced in July 2019.

Our decision follows extensive stakeholder engagement over the last year and we have carefully considered the responses to our June 2020 statutory consultation.

The new requirements will take effect on and from 22 January 2021, with the exception of the Customer Supply Continuity Plans requirement, which will take effect on and from 18 March 2021.

We are also providing an update on the timings and process we expect to follow as we undertake the next phase of work to consider whether further, more prescriptive, cost mutualisation protections are required.

We are seeking views on the proposed content of the Financial Responsibility Principle guidance (Appendix 3 of the decision document) by 22 January 2021. Please send your response to licensing@ofgem.gov.uk.