14 September 2015 - Post by:Sarah Hitchins
The other day the FCA (very quietly) published a new Press Office Handbook on its website. We have taken a look at this new document to see how, if at all, it may affect the way in which the FCA should go about publicising future enforcement action.
Overall, we think that the new Press Office Handbook could prove to be a helpful resource for subjects of FCA enforcement investigations and their advisers. In particular, this document may provide assistance in negotiations relating to a press release that the FCA is intending to publish in connection with an enforcement investigation.
#1: All press communications must be a ‘factual, objective and accurate’ representation of the FCA’s decisions and information available to it
This statement sits at the heart of the new Press Office Handbook. While this may sound like an obvious point, these parameters may prove helpful in enforcement investigations when subjects and their advisers try to negotiate the content of an FCA press release relating to their case. For example, the requirement that all press communications are ‘factual, objective and accurate’ may assist arguments in favour of the deletion or amendment of some of the more subjective comments that can sometimes appear in drafts of FCA press releases relating to enforcement action, especially those that do not correspond with the terms of agreed statutory notices.
Again, this may sound like an obvious point for the new Press Office Handbook to make, but this is an area in relation to which the FCA has faced criticism.
In a recent Upper Tribunal case (which we have previously covered on Investigations Insight, available here), the FCA was found to have sent an email to certain media outlets about an enforcement case. This email mis-described both the status of the enforcement action, as well as the findings that the FCA had made in that case. The Upper Tribunal described the FCA’s actions in this case as ‘deeply disappointing and troubling’. It also made a series of recommendations as to how the FCA should strengthen its procedures relating to publicity of enforcement action. It is these recommendations that may, in part, have led to the publication of the new Press Office Handbook.
In addition to making sure that a draft press release provided by the FCA in the course of an enforcement investigation is ‘factual, objective and accurate’, subjects and their advisers should also look out for wording that may misrepresent the conduct in question or the FCA’s findings in relation to it. The fact that the FCA has expressly stated in the Press Office Handbook that its press communications should not misrepresent or mislead may help in such a situation.
#3: No selective press pre-briefings for forthcoming enforcement activity
In the new Press Office Handbook, the FCA has confirmed that no ‘selective pre-briefing´ (i.e. giving advance information to a specific journalist or group of journalists) will take place in relation to any forthcoming enforcement activity. Nonetheless, firms that are facing FCA enforcement action should still ensure that their corporate communication plans cater for potential information leaks to the press from other sources.
#4: Special procedures for confidential and price-sensitive information
The Press Office Handbook contains a section dealing specifically with press communications that contain confidential and price-sensitive information. Although not expressly stated, it is clear that this section of the document is a direct response to the Final Report of the Davis Inquiry, which last year identified a number of shortcomings in the FCA’s approach to briefing and communicating with the press in relation to potentially price-sensitive information.
In certain situations, it is possible that any of the following may constitute price-sensitive information: the existence of an FCA investigation, the level of financial penalty to be paid by a firm or the amount of compensation that a firm will be required to pay to affected customers. Even though the Press Office Handbook makes it clear that the FCA should proactively consider whether information they are handling may be price-sensitive, firms should also keep a close eye on this point and, if appropriate, raise it with the FCA.