UK Legislators Threaten To Force Publication Of FCA's RBS Unit Report

LONDON (Alliance News) - UK legislators confirmed Tuesday they will use their parliamentary ...

Alliance News 13 February, 2018 | 2:15PM
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LONDON (Alliance News) - UK legislators confirmed Tuesday they will use their parliamentary power to request the Financial Conduct Authority to provide them with its full report into the conduct of the business restructuring arm of the Royal Bank of Scotland Group PLC.

Nicky Morgan, UK Treasury Committee Chair and Conservative Member of Parliament, wrote to FCA Chief Executive Officer Andrew Bailey on Tuesday saying the committee has ordered the regulator to hand over its the full report by Friday.

In a separate statement, Morgan reiterated that should the FCA not provide the committee with a copy by Friday it would have breached an order from the House of Commons and may be found in contempt of Parliament.

Morgan added the committee would seek to publish the report publicly on receipt under parliamentary privilege, despite concerns raised by the regulator.

"I will be asking [committee] members to agree to publish the final, unredacted report under parliamentary privilege as soon as possible," Morgan said.

The Treasury Committee will vote on whether or not to publish the report in this manner on Tuesday next week.

Morgan's comments come after she argued that, as a version of the report was in the public domain, "the FCA has completely lost control of the publication process".

Tuesday's announcement follows a continued escalation of the argument over the publication of the report which was first received by the FCA a year and a half ago.

Last Friday, the FCA said it was "highly unlikely" it would be able to publicly publish its report by this Friday.

The FCA was responding to a letter sent to it by the UK Treasury Committee last Wednesday. In this, Morgan demanded the FCA publish the full report by that date or at least provide the full report to the committee.

Writing to Morgan, Bailey did confirm last Friday the FCA could deliver the full report to the committee once it was certain they wish to use their parliamentary power to call persons, papers and records, which was confirmed by Tuesday's letter.

Bailey had explained the FCA's inability to publish the report fully in public was because of its legal requirement to get consent for publication from all persons from whom information was obtained or about whom the report is about. The FCA - with an eye to the committee using parliamentary priilieg to publish the report - also cited concerns about the precedent publication prior to this consent being received would provide.

RBS's Global Restructuring Group has been accused of forcing small and medium-sized UK companies into bankruptcy between 2007 and 2012 in order to easily acquire their assets. Over 12,000 companies were transferred into GRG over this period.

In October 2017, the UK regulator found RBS did not "set out to artificially engineer a position" to push customers into the restructuring unit, with all companies clearly in financial difficulty. The FCA has since faced growing pressure to publish the full report, however.

Shares in RBS, which is 70.49% owned by the UK government, were trading flat at 277.00 pence on Tuesday.

By Ahren Lester; ahrenlester@alliancenews.com.

Copyright 2018 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Rating
Royal Bank of Scotland Group (The) PLC 235.90 GBX -0.67
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