HISTORIC PRESS RELEASE : Fair and just enforcement procedures announced for the financial regulator [December 1998]

The press release issued by HM Treasury on 22 December 1998.

Measures to ensure the enforcement procedures of the new financial regulator are fair and transparent, and that it is not seen to be ‘prosecutor, judge and jury’, were announced today by the Chief Secretary, Stephen Byers.

The measures are being introduced in the light of the consultation on the Financial Services and Markets Bill, which will establish the Financial Services Authority (the FSA) as the new single regulator. Today’s announcement clarifies the role of the FSA and the new tribunal. The FSA is responsible for conducting fair internal procedures before reaching a decision on a case that can, if the individual concerned wishes, be referred to the independent tribunal.

In addition, Mr Byers disclosed that the Lord Chancellor’s Department is to publish draft rules of procedure for the tribunal in the new year.

Mr Byers announced 4 changes to the Bill to clarify and support the basis on which the process would work:

• a statutory duty on the FSA to establish publish and procedures and to act in accordance with such procedures;
• an explicit right to request to see the evidence on which a case rests and a duty on the FSA to disclose such evidence;
• an explicit bar on the FSA publicising enforcement action until the full process, including any tribunal procedures, has been completed; and
• dropping the power to make rules on when relevant evidence might be inadvisable before the tribunal.

Mr Byers said:

“The consultation has been truly open and we are taking on board comments received. There is support for the basic model of effective, open and fair administrative procedures, backed up by the opportunity to refer cases to a fully independent tribunal.

“These measures will further clarify the role of the tribunal and reinforce the transparency of the FSA procedures, which must be simple and fair.

“Concern has been expressed that the FSA could act as ‘prosecutor, judge and jury’. This would clearly be unacceptable. I hope that the changes I’ve announced today will meet with broad approval and demonstrate that we are responding positively to the consultation process.”