ENFG 4.1 Publicity during FCA investigations

The FCA will not normally make public the fact that it is or is not investigating a particular matter, or any of the findings or conclusions of an investigation except as described in other sections of this chapter. The following paragraphs deal with the circumstances in which the FCA may make a public announcement that it is or is not investigating a particular matter.

The principal test is that described in ENFG 4.1.4G to ENFG 4.1.5G (the exceptional circumstances test). Notwithstanding this, the FCA may also make announcements concerning suspected unauthorised activity or a suspected criminal offence in relation to unregulated activity as set out in ENFG 4.1.6G , reactive announcements as set out in ENFG 4.1.7G and anonymous announcements as set out in ENFG 4.1.8G . Any announcement will be subject to the restriction on disclosure of confidential information in section 348 of the Act and restrictions imposed by data protection legislation and other applicable statutory restrictions.

Where the matter in question has occurred in the context of a takeover bid, and the circumstances in (1) and (2) apply, the FCA may make a public announcement that it is not investigating, and does not propose to investigate, the matter. Those circumstances are where the FCA:

1. (1)

   has not appointed, and does not propose to appoint, investigators; and

2. (2)

   considers (following discussion with the Takeover Panel) that such an announcement is appropriate in the interests of preventing or eliminating public uncertainty, speculation or rumour.

Where it is investigating any matter, the FCA will, in exceptional circumstances, make a public announcement that it is doing so if it considers such an announcement is desirable to:

1. (1)

   maintain public confidence in the UK financial system or the market;

2. (2)

   protect consumers or investors;

3. (3)

   prevent widespread malpractice;

4. (4)

   help the investigation itself, for example by bringing forward witnesses; or

5. (5)

   maintain the smooth operation of the market.

In deciding whether to make an announcement, the FCA will consider the potential prejudice that it believes may be caused to any persons who are, or who are likely to be, a subject of the investigation.

The exceptional circumstances referred to above may arise where the matters under investigation have become the subject of public concern, speculation or rumour. In this case it may be desirable for the FCA to make public the fact of its investigation in order to allay concern, or contain the speculation or rumour. Where the matter in question relates to a takeover bid, the FCA will discuss any announcement beforehand with the Takeover Panel.

Where the FCA is investigating suspected unauthorised activity or a suspected criminal offence in relation to an unregulated activity, there are often concerns around consumer harm and the FCA generally has no supervisory, intervention or oversight powers to protect relevant consumers. The FCA may make public that it is investigating a named person for suspected unauthorised activity or for a suspected criminal offence in relation to an unregulated activity if it considers such an announcement is desirable for the purpose of warning or alerting consumers or investors, or to help the investigation itself – for example, by bringing forward witnesses. In deciding whether to make an announcement, the FCA will consider the potential prejudice that it believes may be caused to any persons who are, or who are likely to be, a subject of the investigation.

The FCA may make a public announcement confirming that it is investigating a named person if that fact has already been made public by that person, an affiliated company or a regulatory body, government or public body. The FCA’s announcement may also confirm the subject matter of the investigation to the extent that it has already been made public in that manner.

The FCA may make public that it is investigating a particular matter without naming or otherwise identifying the subject of the investigation, where it is desirable for the purpose of educating persons generally as to the types of conduct that the FCA is investigating or to encourage compliance with the FCA’s rules or other requirements.

The FCA will not normally publish details of the information found or conclusions reached during its investigations. In many cases, statutory restrictions on the disclosure of information obtained by the FCA in the course of exercising its functions are likely to prevent publication (see section 348 of the Act). In exceptional circumstances, and where it is not prevented from doing so, the FCA may publish details. Circumstances in which it may do so include those where the fact that the FCA is investigating has been made public, by the FCA or otherwise, and the FCA subsequently concludes that the concerns that prompted the investigation were unwarranted. This is particularly so if the firm under investigation wishes the FCA to clarify the matter.