Significant room for improvement exists in the complaints handling procedures of stockbroking firms, the Central Bank has found.

A desk-based inspection of 53 investment and stockbroking firms conducted by the regulatory body revealed that 15 per cent of these businesses did not inform clients of their right to refer complaints to the Financial Services Ombudsman.

Furthermore, roughly one in four firms failed to provide complainants with regular written updates, while 19 per cent did not acknowledge each complaint received.

"The Central Bank considers the identified failures do not meet the definition of an effective and transparent procedure for the prompt handling and resolution of complaints," the authority said. It has now written to all firms to advise them of this. However no enforcement action will be taken over the failings identified.

"It is important that firms use complaints information to identify possible trends, to continuously improve procedures and controls where relevant and to prevent similar related complaints in the future," said Sharon Donnelly, head of consumer protection.

As part of this themed investigation, which commenced in March, the Central Bank selected a further six firms (which represented almost 60 per cent of the retail client market) for on-site inspections, and more than 160 individual complaints were reviewed. The results from this inspection were positive, with all firms found to have acknowledged complaints, updated clients on the status of their complaints and maintained adequate records.

Under the Markets in Financial Instruments Directive (MiFID) regulations that came into place in November 2007, regulated investment firms are required to have effective and transparent complaints handling processes in place.