Author Lauren Howells

The Financial Conduct Authority (the FCA), has reportedly refused requests from MPs to publish a report, leaked to the BBC in late August, into a “scandal” at the Royal Bank of Scotland’s Global Restructuring Group (GRG).

MPs demanded full report 

The review into the Royal Bank of Scotland’s GRG department by the FCA, which the BBC reported had found that the RBS department, which was originally set up to aid companies who were in trouble, had “mistreated many of its clients”, was leaked to the BBC last month.

According to the BBC, RBS denies the claims alleged in the report that it mistreated businesses.

At the beginning of September, the BBC reported that a number of MPs had joined the Treasury Committee Chair and MP, Nicky Morgan, to ask the FCA to publish the report in full.

In her letter to the FCA chief executive, Andrew Bailey, Nicky Morgan had said that:

“The balance has tipped firmly in favour of full publication, and I urge you to secure the approval of RBS to do so, without delay.”

FCA chief executive has said that they do not intend to publish the full report

The Independent has now reported that Andrew Bailey has said that the FCA does not intend to publish the full report.

In his response to Nicky Morgan, Andrew Bailey said that although he recognised the public interest in the outcome of the review, he did not believe it was best served by publishing the full ‘section 166’ report, also known as a skilled person review. 

Under a skilled person review, the FCA has “the power to obtain a view from a third party (a ‘skilled person’) about aspects of a regulated firm’s activities if we are concerned or want further analysis”.

Mr Bailey continued:

“Section 166 reports are an important supervisory tool for the FCA. They are conducted on the basis that there is no intention to publish, and it is our view that this greatly facilitates the efficiency of the process. Typically, it does not, for instance, mean that firms seek to withhold information and we are not required to use our legal powers to deal with such situations. I am very keen that this situation should continue, and that it would not be in the public interest to limit the effectiveness of the process.

“It is also the case that because Section 166 reports are not intended for publication, individuals who may be identifiable in the GRG report have not had the opportunity to see or comment on adverse comments which may relate to them – they have not been “Maxwellised”. This is very important because were we to decide to publish the report, it would have to be Maxwellised, and since there is a possibility of formal investigation and sanctions my assessment is that it would be a lengthy and difficult process.” 


The FCA intends to publish “detailed summary” of the report

Mr Bailey concluded that it was the FCA’s intention to publish a “detailed summary” of the report, as he said that there was a public interest in publishing material relevant to the complaints of customers.

In response to Mr Bailey’s refusal to publish the full report, Ms Morgan said that the situation was “unsustainable”.

She continued:

“Seven years since it was shut down, there are still conflicting accounts of what really happened to customers referred to GRG. The leak and selective reporting of the skilled persons’ report, which the FCA has had for almost a year, has added to the confusion.” 

Ms Morgan went on to say that although the Treasury Committee recognised that these types of reports were not normally indented for publication and in “normal circumstances” should remain confidential, the report was now “in the hands of an unknown number of third parties”.

She said that they considered the public interest in publication, in this case, to be “overwhelming”.

The Treasury Committee is due to meet with the FCA in October when Ms Morgan said she had “no doubt” that these issues would be raised.