Information gathering by the FSA on its own initiative

Part

SUP Supervision manual

Chapter

Information gathering by the FSA on its own initiative

Printed on: 06/11/2024

Rulebook at: 31/12/2013

SUP 2

Information gathering by the FSA on its own initiative

SUP 2.1

Application and purpose

01/12/2004

Application

SUP 2.1.1

The application of this chapter is the same as the application of Principle 11 (Relations with regulators).

01/04/2013

SUP 2.2

Information gathering by the appropriate regulator on its own initiative: background

01/04/2013

Link to the statutory information gathering and investigation powers

SUP 2.2.1

Breaching Principle 11, or the rules in this chapter, makes a firm liable to regulatory sanctions, including discipline under Part XIV of the Act (Disciplinary Measures), and may be relevant to the use of the appropriate regulator's other powers, including the statutory information gathering and investigation powers (see further PRIN 1.1.7 G to PRIN 1.1.9 G). But, unlike a breach of a requirement imposed under the statutory powers listed in SUP 2.1.5 G, a breach of Principle 11 or a rule:

(1) is not a criminal offence; and

(2) cannot lead to a person being treated as if in contempt of court (see section 177 of the Act (Offences).

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SUP 2.2.2

Neither Principle 11 nor SUP 2.3.5 R (1) (Access to premises) enable the appropriate regulator to force access to premises.

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Banking confidentiality and legal privilege

SUP 2.2.3A

The PRA would not normally seek to gather information using the methods described in SUP 2.3 in a situation where the PRA could not have obtained it under the powers in Part XI of the Act (Information Gathering and Investigations). In particular, the limitations in the following sections of the Act are relevant to this chapter:

(1) section 175(5) (Information and documents: supplementary powers) under which no person may be required under Part XI of the Act (Information Gathering and Investigations) to disclose information or produce a document subject to banking confidentiality (with exceptions); the PRA would not normally seek such information using the methods described in SUP 2.3; and

(2) section 413 (Protected items), under which no person may be required under the Act to produce, disclose or permit the inspection of protected items; a firm would not breach Principle 11 or the rules in this chapter by not producing such items.

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Confidentiality of information

SUP 2.2.4A

When the PRA obtains confidential information using the methods of information gathering described in SUP 2.3, it is obliged under Part XXIII of the Act (Public Record, Disclosure of Information and Co-operation) to treat that information as confidential. The PRA will not disclose confidential information without lawful authority, for example if an exception applies under the Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001 (SI 2001/2188) or with the consent of the person from whom that information was received and (if different) to whom the information relates.

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Admissibility of information in proceedings

SUP 2.2.5A

Information obtained by the PRA using the methods described in SUP 2.3 is admissible in evidence in any proceedings, so long as it complies with any requirements governing the admissibility of evidence in the circumstances in question.

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SUP 2.3

Information gathering by the appropriate regulator on its own initiative: cooperation by firms

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Introduction: Methods of information gathering requiring cooperation

SUP 2.3.2

The appropriate regulator expects to request meetings or access to business premises during reasonable business hours. The appropriate regulator also normally expects to be able to give reasonable notice to a firm or connected person when it seeks information, documents, meetings or access to business premises. On rare occasions, however, the appropriate regulator may seek access to premises without notice. The prospect of unannounced visits is intended to encourage firms to comply with the requirements and standards under the regulatory system at all times.

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Access to a firm's documents and personnel

SUP 2.3.3

In complying with Principle 11, the appropriate regulator considers that a firm should, in relation to the discharge by the appropriate regulator of its functions under the Act:

(1) make itself readily available for meetings with representatives or appointees of the appropriate regulator as reasonably requested;

(2) give representatives or appointees of the appropriate regulator reasonable access to any records, files, tapes or computer systems, which are within the firm's possession or control, and provide any facilities which the representatives or appointees may reasonably request;

(3) produce to representatives or appointees of the appropriate regulator specified documents, files, tapes, computer data or other material in the firm's possession or control as reasonably requested;

(4) print information in the firm's possession or control which is held on computer or on microfilm or otherwise convert it into a readily legible document or any other record which the appropriate regulator may reasonably request;

(5) permit representatives or appointees of the appropriate regulator to copy documents or other material on the premises of the firm at the firm's reasonable expense and to remove copies and hold them elsewhere, or provide any copies, as reasonably requested; and

(6) answer truthfully, fully and promptly all questions which are reasonably put to it by representatives or appointees of the appropriate regulator .

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SUP 2.3.4

In complying with Principle 11, the appropriate regulator considers that a firm should take reasonable steps to ensure that the following persons act in the manner set out in SUP 2.3.3 G:

(1) its employees, agents and appointed representatives; and

(2) any other members of its group, and their employees and agents.

(See also, in respect of appointed representatives, SUP 12.5.3 G (2)).

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Access to premises

SUP 2.3.5

(1) A firm must permit representatives of the appropriate regulator, or persons appointed for the purpose by the appropriate regulator, to have access, with or without notice, during reasonable business hours to any of its business premises in relation to the discharge of the appropriate regulator's functions under the Act or its obligations under the short selling regulation.

(2) A firm must take reasonable steps to ensure that its agents, suppliers under material outsourcing arrangements and appointed representatives permit such access to their business premises. (See also, in respect of appointed representatives, SUP 12.5.3 G (2)).

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SUP 2.3.6

The appropriate regulator normally expects to give reasonable notice of a visit (See SUP 2.3.2 G).

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Suppliers under material outsourcing arrangements

SUP 2.3.7

A firm must take reasonable steps to ensure that each of its suppliers under material outsourcing arrangements deals in an open and cooperative way with the appropriate regulator in the discharge of its functions under the Act in relation to the firm.

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SUP 2.3.8

The cooperation that a firm is expected to procure from such suppliers is similar to that expected of the firm, in the light of the guidance in SUP 2.3.3 G to SUP 2.3.4 G, but does not extend to matters outside the scope of the appropriate regulator's functions in relation to the firm. SUP 2.3.5 R (2) also requires a firm to take reasonable steps regarding access to the premises of such suppliers.

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SUP 2.3.9

When a firm appoints or renews the appointment of a supplier under a material outsourcing arrangement, it should satisfy itself that the terms of its contract with the supplier require the supplier to give the appropriate regulator access to its premises as described in SUP 2.3.5 R (2), and to cooperate with the appropriate regulator as described in SUP 2.3.7 R. The appropriate regulator does not consider that the 'reasonable steps' in SUP 2.3.7 R would require a firm to seek to change a contract, already in place eitherwhen that rule: (1) was made by the appropriate regulator on 21 June 2001; or (2) was designated by the appropriate regulator, until renewal of the contract.

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SUP 2.3.10

The appropriate regulator will normally seek information from the firm in the first instance, but reserves the right to seek it from a supplier under a material outsourcing arrangement if the appropriate regulator considers it appropriate.

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Information requested on behalf of other regulators

SUP 2.3.11

The appropriate regulator may ask a firm to provide it with information at the request of or on behalf of other regulators to enable them to discharge their functions properly. Those regulators may include overseas regulators or the Takeover Panel. The appropriate regulator may also, without notifying a firm, pass on to those regulators information which it already has in its possession. The appropriate regulator's disclosure of information to other regulators is subject to the obligation described in SUP 2.2.4 G (Confidentiality of information).

01/04/2013

SUP 2.3.12B

In complying with Principle 11, the PRA considers that a firm should cooperate with it in providing information for other regulators. Sections 169 (Investigations etc. in support of overseas regulator) and 169A (Support of overseas regulator with respect to financial stability) of the Act give the PRA certain statutory powers to obtain information and appoint investigators for overseas regulators if required (see FINMAR 1).

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