Jamaica’s Fair Trading Commission (FTC) has published new draft guidelines to regulate business “panels” — approved lists of third-party service providers — to prevent them from stifling competition.

The rules mandate that panels must be transparent, offer genuine consumer choice with at least three providers, and must not unnecessarily duplicate existing professional regulations.

The move aims to strike a balance, allowing companies to manage risk while ensuring qualified service providers aren’t unfairly frozen out of the market.

If you have ever applied for a mortgage in Jamaica, you have likely encountered it: the bank’s “panel”. You are told you must use one of their approved property valuers or surveyors — a list created and managed by the financial institution.

This common practice, used across banking, insurance, and other sectors, is the target of new draft guidelines from Jamaica’s Fair Trading Commission (FTC). The regulator aims to strike a delicate balance: allowing businesses to protect themselves from risky third-party providers while preventing these “panels” from illegally stifling competition.

WHY PANELS ARE A DOUBLE-EDGED SWORD

The FTC’s analysis, detailed in a newly published document, acknowledges that panels are not inherently bad. They solve a genuine business problem: information asymmetry.

“Consider a bank giving a mortgage,” the report explains. “It relies on a valuer’s report but does not know if that valuer is incompetent or dishonest. A flawed valuation could lead to a significant loss.” Panels act as a private quality control system, screening providers to mitigate this risk.

However, the FTC warns that this same system can create a significant barrier to entry for service providers. Qualified, skilled valuers, inspectors, or repair companies can be frozen out of crucial business if they are not on the right panels, which may be governed by vague or subjective rules. This limits choice for consumers and can stifle innovation and price competition in these complementary service markets.

New Rules of the Game

To help businesses navigate this tightrope, the FTC has proposed seven clear guidelines. The core principle is that any restriction a panel imposes must be indispensable — meaning no stricter than absolutely necessary to manage the specific risk identified.

The proposed guidelines set out a clear framework for businesses to follow. Fundamentally, companies must begin by documenting a clear Statement of Justification. This formal rationale must explain the specific harm the panel is designed to prevent, such as avoiding fraudulent property valuations or incompetent workmanship.

Transparency is a non-negotiable pillar of the new rules. Businesses will be required to make their panel criteria public and, crucially, must provide clear reasons to any service provider whose application is rejected. Furthermore, to guarantee genuine choice, the FTC mandates that every panel must include a minimum of three unaffiliated service providers. This ensures consumers have meaningful options based on price, service, and other competitive factors.

To prevent panels from becoming stagnant, exclusive clubs, the guidelines require a formal review at least once every three years. This process must allow both new applicants and previously rejected ones to apply, ensuring the list remains dynamic and competitive.

Perhaps the most significant guideline addresses the duplication of oversight. The FTC stresses that if a provider is already fully licensed and in good standing with an independent regulatory body — like the Real Estate Board for valuers — a company must provide a compelling justification for imposing its own, higher standards. This principle is designed to prevent businesses from creating unnecessary barriers that go beyond legitimate risk management and verge into anti-competitive behaviour.

A Practical Example: The Surveyor Dilemma 

The FTC uses a powerful example to illustrate this last point. To process a mortgage, banks require reports from both land surveyors and valuation surveyors.

Land surveyors are regulated by the Land Surveyors Board.

Valuation surveyors are regulated by the Real Estate Board.

The FTC notes that the oversight for both professions is comparable. Yet, in practice, banks rarely use panels for land surveyors but almost always do for valuers.

“The question we are asking,” the guidelines state, “is why? If a valuer is licensed and in good standing with the Real Estate Board, what indispensable risk does the bank’s additional panel requirement manage?” A dominant bank that cannot answer this question clearly may be exposed to enforcement action for substantially lessening competition.

What It Means for Businesses

For companies that use panels, the message is clear: Review your practices. The FTC will focus its scrutiny on panels that may substantially lessen competition or be used by a dominant player to abuse its market position. By following these guidelines — documenting decisions, being transparent, and ensuring rules are proportionate — businesses can continue to use panels to manage risk without fearing an FTC investigation. The result should be a win-win: safer, more efficient transaction markets for businesses and more dynamic, competitive markets for service providers and consumers alike.

The draft guidelines are now open for public comment. Stakeholders are encouraged to submit their feedback to the FTC.