Julia Irvine 14 Feb 2018 08:38am

Treasury committee threatens FCA with contempt

The Financial Conduct Authority faces being found in contempt of parliament if it doesn’t comply with the 16 February deadline imposed by the Treasury Select Committee (TSC) and provide it with a copy of its report into the behaviour of RBS’s Global Restructuring Group (GRG)

TSC chair Nicky Morgan confirmed in writing to FCA chief executive Andrew Bailey that the committee has employed a standing order to demand an unredacted copy of the report.

The financial services regulator had been arguing that it could not supply the committee with one by the deadline because it needed to go back to the individuals mentioned in the report and seek their permission for publication, a move – known as maxwellisation – that could take several months.

By using the standing order, however, the committee will be able to force the FCA to hand over the report which the MPs will then be able to publish under parliamentary privilege.

Meanwhile, a blogger involved with one of the SMEs that were mistreated by GRG has illegally uploaded a copy to his blog and several other copies have found their way on to the news desks of media outlets such as The Telegraph and the BBC.

The contents make clear that many SMEs were sacrificed along the way in the bankers’ pursuit of commercial advantage.

Morgan was clearly annoyed with the regulator. “A version of the report is now in the public domain,” she said. “The FCA has completely lost control of the publication process.

“If the FCA doesn’t publish or provide the report by Friday, it will have breached an order of the House of Commons and may be found in contempt of parliament.”

She added that when parliament returned on 20 February, she would be asking her fellow TSC colleagues to agree to publish the final, unredacted report as soon as possible.

Commenting on the day’s events, an FCA spokesperson said, “A leaked version of the report does not change the FCA’s obligation to comply with the law in order to get the report published.
“The FCA wrote to the Treasury Committee last week to set out the next steps we are taking.”

In that letter, the FCA said that it would comply with the Order once the TSC had confirmed in writing that it had demanded a copy of the report.

However, it also warned that before the committee decided to publish the report, it should “consider carefully the precedent of publishing a document obtained from the FCA under parliamentary privilege” when the FCA considered that, for its part, it was “legally constrained” from putting the document into the public domain.