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In a speech last Thursday by David Kenmir, the FSA’s Managing Director of Regulatory Services, to the Compliance Institute Summit 2007, he committed the FSA to being open and transparent as a regulator. However he also revealed that, following recent market discussions regarding the disclosure of financial promotions that had been amended or withdrawn following FSA intervention, it was decided to delay the implementation of such disclosures. This was despite the benefit to the industry in providing knowledge in the industry about what the FSA considered acceptable and what not.
Kenmir said “We are highly constrained by a raft of legislation that governs both what we must disclose and what we cannot disclose, with some untested areas in between. In fact one of those untested areas very recently came to light when the Information Commissioner issued two important decision notices which directed the FSA not only to name individual firms that had been visited but in one case also to disclose our findings in relation to those firms. To date we have considered that the FSA was constrained from releasing information of this specific nature, but the Information Commissioner judged that the public interest weighed in favour of disclosure.”
The Information Commissioner’s Office (ICO) is the UK's independent public body set up to promote access to official information and protect personal information by promoting good practice, ruling on eligible complaints, providing information to individuals and organisations, and taking appropriate action when the law is broken. In September it ruled that the FSA had violated freedom on information principles in an earlier refusal to hand over a 1997 report on Colonial Mutual. However in the same month it found in favour of the FSA regarding withholding data on an investigation into HSBC.
Kenmir said that the Information Commissioner and FSA were exploring and testing the limits on disclosure and did expect there to be greater transparency in future. The FSA will be meeting industry and consumer representatives in coming months, and expects to release a Discussion Paper looking at options in Q1 2008.
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