Financial Conduct Authority (FCA) publishes the Protocol and updated Terms of Reference for the independent inquiry, to be conducted by Simon Davis of Clifford Chance, into the handling of the FCA’s announcement of proposed supervisory work on the fair treatment of long standing customers in life insurance.
Commenting on the FCA’s announcement of the terms of the independent review, Mr Andrew Tyrie MP, Chairman of the Treasury Committee, said:
“The credibility and integrity of the regulator is at stake. So are the needs of consumers of financial services – who must be able to rely on the competence of their regulator. So it is essential that this investigation is, and is seen to be, both comprehensive and completely independent. This has been made clear repeatedly since 28 March.
“On both these points, the announcement today appears to be a welcome step forward. The FCA board’s original approach of 28 March, to conduct an inquiry itself with external legal support, would have commanded no public confidence. It would have been interpreted – rightly – as the regulator marking its own homework.
“It is crucial – now that the FCA’s non-executive directors have commissioned this inquiry – that neither they nor the board play any further role until Mr Davis has completed his final report.
“On the need for the inquiry to be comprehensive, the terms of reference clarify that Mr Davis ‘can examine any other matters he might reasonably consider relevant and make such recommendations as he sees fit’. Mr Davis will probably need to range far more widely than the events of the days prior to the pre-briefing of the Telegraph, as the Treasury Committee has already pointed out to him and the FCA.
"Mr Davis may need to look, among other things, at the extent to which the apparent blunder was associated with the FCA’s wider media strategy; the new approach that it seems to be taking with the regulated community; its wider effects on the UK financial services industry and hence consumers; and the extent of board members’ involvement in the strategy, as well as the FCA’s procedures – as the listing authority – for dealing with price-sensitive information.
“The Treasury Committee will take evidence from Mr Davis when his report is published.”