Information on the FCA response to the Swift Report - March 2022

I would like to request the following information in relation to the recently published FCA response to the Swift Report on the FCA supervisory intervention on IRHPs.

1. On what date(s) was the FCA response considered and approved by the FCA Board?
2. Please provide the full minutes (appropriately redacted) of the above discussion(s).

Question 1

The Board considered the FCA’s draft public response to the Swift Report on 21 July 2021. The public response was ultimately signed off by the Chairman (Charles Randell) on 12 December 2021, with input from a sub-committee of the Board, the Chief Executive Officer (Nikhil Rathi) and the Accountable Executive for the Review (Mark Steward).

Question 2

Extract from FCA Board Minutes – 21 July 2021

Independent Review on the supervisory intervention on Interest Rate Hedging Products – Inside Information

1. The Board was briefed on the current status of the Independent Review into the FSA and FCA's handling of the Interest Rate Hedging Products redress scheme (the Review). It was noted the Review was continuing and that the draft executive summary had not yet been received. Two sets of representations had been made on behalf of the FCA. The Board was reminded that it was originally envisaged that the review report would be published in July, although it now appeared publication would likely be delayed.
2. The Board noted that the draft report contained some positive commentary on the FSA’s handling of the redress scheme but also included some significant criticism, especially around the exclusion of customers classified as sophisticated from the scheme.
3. It was explained to the Board that the tone adopted in the FCA’s draft public response (the draft response) was to acknowledge the positive aspects but to adopt a humble and learning tone that accepted, in full, as many of the recommendations as possible. It was noted, however, that the FCA’s response to certain findings, such as those relating to sophisticated customers and the role of skilled persons, would need to be nuanced in the light of the FCA’s interpretation of relevant provisions of the Financial Services and Markets Act 2000.
4. The Board made a number of comments on the draft response but was generally supportive of the tone and approach used. The Board felt that aspects, such as the amount of redress achieved through the scheme, could be drawn out more strongly. The Board noted that care should be taken where recommendations were accepted on a qualified basis, noting that generally the recommendations should be accepted, with more specific comments about the underlying analysis drawn out in the detail where necessary.