In a Decision in January the Information Commissioner’s Office (ICO) found that the Financial Conduct Authority (FCA) had breached the Freedom of Information Act 2000 (FOIA) and directed it to issue an “appropriate response” to a document request. This may assist those IFAs still defending the Financial Services Compensation Scheme’s (the FSCS) Keydata litigation, and could limit the regulator’s ability to refuse future FOIA requests.


Almost immediately after the Financial Services Authority (FSA) put Keydata into administration, it was inundated with FOIA requests for documents and information concerning its monitoring of Keydata. 

After the FSA said in November 2011 that all traded life policy investments (TLPIs) were high risk investments unsuitable for most UK retail investors and the FSCS started its litigation against IFAs who had sold Keydata TLPIs, many IFAs sought information about the FSA’s own Thematic Review into Keydata sales between 2006 and 2008. Rumours abound that the FSA itself classified the asset as medium risk, leaving many IFAs asking how “high risks” not apparent to the FSA should have been identified by them. 

In the four and a half years since Keydata was put into administration, we are not aware of a single successful FOIA request to the FSA. The FSA’s (and now FCA’s) response has generally been that it is too onerous and would exceed the FOIA’s £450 cap (calculated at £25 an hour) to find the materials and would breach its regulatory obligations to keep individual IFAs’ information confidential, despite most IFAs seeing this as central to their defence of both Financial Ombudsman Service (FOS) complaints and the FSCS’s litigation. 

This may be about to change.

The ICO’s finding

The unnamed complainant asked the FCA for a series of documents relating to the FSA’s Thematic Review of Keydata’s due diligence and promotion and ten IFAs who had marketed the Keydata TLPIs. The FCA said that it would take two to three minutes to analyse each of 1,000 documents to determine what information might be captured by the request, but even applying a 90 second average would exceed the £450 limit. The ICO said that the FCA and the complainant each had different interpretations of the scope of the requests: the FCA had included the time that it would take to analyse each document, whereas the complainant had merely requested the full documents without needing the FCA to edit them for irrelevant information. The ICO said that under the FOIA, public authorities have a duty to read a request objectively and if there is more than one objective reading, the public authority should seek clarification from the applicant. 

As a result, the FCA had breached FOIA Section 1(1) because it failed to give proper consideration to the complainant’s intended reading of the request. The FCA was required to consider the alternative reading and issue an appropriate response. 

It appears that the FCA has decided not to appeal.

Implications for the future?

Despite the FOIA’s purpose to make public bodies accountable to the public, it remains uncertain whether the FCA will disclose the Thematic Review documents. Many IFAs believe that these documents would shift the balance of what they see as overwhelming evidence garnered against them by the regulatory bodies. The ICO’s decision fell short of directing the FCA to actually provide the materials. The FCA is not the only statutory body to have refused Keydata related FOIA requests for information. In 2011 the Serious Fraud Office (SFO) refused to disclose why it was abandoning its Keydata investigations when a request was submitted by the press. 

While the ICO’s finding is welcome, it is not the first time that it has treated a regulatory body with what some see as considerable leniency. In 2012 the ICO said that the FSCS’s legal adviser, Herbert Smith Freehills, was likely to have breached Data Protection Act rules by naming in the FSCS’s pleading thousands of Keydata investors and identifying the amounts that they had invested or recovered from the FSCS. The ICO decided not to take matters further however (ie, no fine was imposed) after Herbert Smith agreed to redact the information in future versions. 

The reality is, however, that for many IFAs and their insurers, even if the Thematic Review materials do hold helpful information, any disclosure is likely to be too late since many, overwhelmed by both the costs risks of the FSCS’s litigation and the FCA’s powers to impose further sanctions on them, have paid FOS awards or settled with the FSCS. 

Nevertheless, this remains a welcome development since it may make it easier to formulate requests in the future that the regulator will find more difficult to refuse.