On 31 January 2018, the Court of Appeal applied, for the first time, the Supreme Court’s new test to determine whether third parties are “identified” in FCA notices for the purposes of section 393 of the Financial Services and Markets Act 2000. The decision, that the individual in question was not identified in the FCA’s notice, is unsurprising in light of the Supreme Court’s test. Nevertheless, the judgment provides useful guidance on how the new test will be applied by the courts.


Section 393 provides that, if an FCA warning or decision notice ‘”identifies”, prejudicially, an individual who is not the subject of the notice, that individual must be given the opportunity to respond to the criticisms made, before the notice is published. The “new s393 test” is as formulated by Lord Sumption in Macris.

What did the Court of Appeal decide?

Given the Supreme Court’s determination in Macris that references to “CIO London management” did not identify JP Morgan’s international chief investment officer and head of JP Morgan’s chief investment officer, it is unsurprising that the Court of Appeal in this case (The Financial Conduct Authority v Grout) felt it had no choice but to find that Mr Grout was not identified by references to “the traders on the SCP” (traders on JP Morgan’s synthetic credit portfolio trade desk, of which there were four including Mr Grout) or “one of the traders” (which it was not in dispute was in fact a reference to Mr Grout). This was contrary to the decision of the Upper Tribunal, in a judgment that pre-dated the Supreme Court’s decision in Macris.

In relation to the references to “the traders on the SCP”, Lord Justice Longmore was bound by Lord Sumption’s requirement that references needed to apply only to one person for that person to be capable of being identified. The decision was similar in this respect to a recent decision by the Upper Tribunal concerning references to “compliance oversight, “compliance department’s oversight” and “oversight by the central compliance function”, in the case of Stephen Cooper v The FCA (the first reference to the Upper Tribunal post the Supreme Court’s decision in Macris). Longmore LJ also expressed doubt that references to “all traders on the SCP” or “each and every SCP trader” (as Mr Grout submitted references to “traders on the SCP” should be understood, in the context in which those references were made) would have satisfied Lord Sumption’s requirement, but as those phrases had not been used by the FCA, he did not need to make any such determination.

In relation to the references to “one of the traders”, Longmore LJ considered that that was sufficiently vague to be legitimately described as “anonymous” rather than “synonymous” (by contrast to Lord Sumption’s example of “chief executive” of X Company). But in any event, Longmore LJ doubted that ordinary members of the English public would be likely to recall the details of articles in the Financial Times some months earlier, so as to be able to identify that the trader being referred to in that regard was Mr Grout.


The decision is unsurprising, given the Supreme Court’s judgment in Macris, but it does provide helpful guidance as to how courts are likely to apply the Supreme Court’s “new s393 test”. It would have been interesting to know whether the decision would have been the same had the Court of Appeal’s decision in Macris not been overturned.

What is slightly concerning (albeit the comments were obiter) are Longmore LJ’s doubts that references to “all traders on the SCP” or “each and every SCP trader” could mean that the relevant traders would be capable of identification. Similarly concerning are his comments that, if a notice does refer to a position for which there is a sole holder, that person may still not in fact be identifiable by the general public from historic press reports. We would assume that those questions will be highly fact specific and depend, for example, on whether a collective or group reference could apply only to those individuals within the group and it is clear that the criticisms are directed at the collective body members in its entirety (e.g., all the members of the Board of Directors of X Company) or how high profile the press commentary was and the proximity of that press commentary to the FCA concluding its investigation.