Recent disclosure of our Governance Committees meeting papers under the Freedom of Information Act has led to speculation about the reason that we did not publish the full Skilled Person’s Report following the independent review of Royal Bank of Scotland’s (RBS) treatment of small and medium-sized enterprise (SME) customers transferred to its Global Restructuring Group (GRG). It has been suggested that we chose not to publish the report because we were afraid of legal action being taken against us.
It is normal practice in regulatory decision making to consider legal risks, which we did in this case. That included advice from external Counsel. It is usual practice for material risks identified in the FCA’s Governance Committees to be reflected in Board papers and discussed at Board meetings to ensure robust oversight of FCA decision making. We, as a regulator, would expect the same rigour and standards of risk management from the firms that we regulate.
We must work within the legal framework established by Parliament and the courts. Publishing the full skilled person’s report would be unlawful without getting the necessary consents from all affected parties as the FCA would be acting in breach of statutory restrictions on the disclosure of confidential information if the full report is published without the consent of all parties to which its full content may relate. In addition, individuals are allowed the opportunity to see and comment on criticisms which are to be made of them in a published report (so called “Maxwellisation”). Likewise, we had to have regard to the possible effect of publication on our ongoing focused investigation.
We have therefore not sought consent from the individuals or groups of individuals who are identified in the Skilled Person’s Report. Our experience of previous reviews carried out by the regulators is that that would be a complex and lengthy process and, where consents were not forthcoming, would likely result in only a heavily redacted version of the Skilled Persons’ Report being publishable. The Specialist Advisers appointed by the Treasury Committee commented that they saw “considerable force” in the FCA’s concern that it would potentially be unfair to publish relevant findings as to management knowledge, even in summary form, prior to consulting relevant individuals.
We therefore concluded that the best way forward was to publish an extended summary of the report. Our guiding principle in drafting the summary of the report has been to balance our desire to give as much information as possible to small businesses and the wider public about the contents of the report with our obligation as a public authority to act fairly towards the potentially affected parties who have legal rights. We are firmly of the view that the approach we took was fair and balanced, a view we have had confirmed by external independent Counsel.