Independent review of Interest Rate Hedging Products

An independent review into the FSA’s – and subsequently the FCA’s – approach to, implementation and oversight of the Interest Rate Hedging Products Redress Scheme.

September 2021 update:
John Swift QC, the Independent Reviewer appointed to lead the review of the supervisory intervention on Interest Rate Hedging Products, provided the FCA with his draft report earlier this year and has been carrying out a substantial representations process. The final report is now expected to be published by the end of 2021 following the conclusion of the representations process, which is nearing completion.

Background to the IRHP review

In March 2012, the Financial Services Authority (predecessor regulator to the FCA) identified significant issues with the sale of Interest Rate Hedging Products (IRHPs) to UK Small and Medium Enterprises (SMEs). The FSA intervened and secured voluntary agreements with the banks to provide redress.

Following the Treasury Select Committee’s recommendation in its report Conduct and Competition in SME Lending published in June 2015, the FCA committed to a review of its supervisory intervention on IRHPs. But the start of the review was deferred pending the conclusion of legal action relating to the redress scheme.

The independent review will consider the FSA’s approach, implementation and oversight of the redress scheme to understand what lessons can be learned. The review is not intended to be a route to lead to the redress scheme being re-opened.

Independent Reviewer and scope of the review

On 20 June 2019, the FCA announced the appointment of John Swift QC to carry out the review and published a detailed Terms of Reference setting out the scope and parameters of the review.

In scoping this review, the FCA has considered issues and questions MPs raised from individual cases during the backbench debate on 4 December 2014 on the intervention on the mis-selling of IRHPs.

The FCA has also considered the points raised in correspondence from MPs, enquiries from small and medium sized enterprises (SMEs) and formal complaints against the FSA and FCA. It has also reviewed the evidence from FSA/FCA Senior Managers appearances at relevant sessions before the Treasury Select Committee and the National Audit Office’s report Financial Services mis-selling: regulation and redress from 24 February 2016.

The FCA also sought the input of key external stakeholders or represented parties affected by the Scheme.

Review Protocol

A Protocol setting out the approach to the conduct of the investigation and underlining the nature of the review was published on 14 August 2019.

John Swift QC biography

John Swift QC is a barrister and Head of Monckton Chambers from 1999-2002. From 2014-2019 he was the first Chairman of the Enforcement Decision Panel of Ofgem, the energy regulator. Over the same period he was a member of the Case Work Committee of Ofwat. He has been a member of the Determinations Panel of the Pensions Regulator since 2017. His experience of Regulation goes back to 1993-1998, when he was the first Rail Regulator, and the Cooperation and Competition Panel for NHS funded services (2008-2013).

John is a graduate of the University of Oxford and the Johns Hopkins School of Advanced International Studies and is a Fellow of the Chartered Institute of Transport and Logistics.


To contact the Independent Review team, please email [email protected].

This email address will only be accessed by the Independent Reviewer and his independent support team.

Page updates

27/09/2021: Information changed September 2021 update added.