The Supreme Court is soon expected to publish its judgment in the case of FCA v Macris (Macris), the appeal having been heard back in October 2016. The judgment could have a significant impact on the way in which the Financial Conduct Authority (FCA) drafts its warning, decision and final enforcement notices.

The key issue for the court is what legal test should be used to determine whether a warning or decision notice addressed to a firm or corporate entity "identifies" an individual. This issue matters because individuals who are prejudicially identified in such notices are afforded third party rights under s.393 of the Financial Services and Markets Act 2000 (FSMA) and have a right to make their own representations to the FCA and to request disclosure of relevant material held by the FCA.

In deciding on the level of detail to include in its notices the FCA has to juggle conflicting interests. On the one hand it may want to maximise the deterrent effect

of its notices through the inclusion of details, highlighting specific failings and identifying individuals. On the other, singling out individuals and thereby engaging third party rights adds to the complexity of the investigation process and slows the whole process down. The FCA has faced criticism in the past for taking too long to conduct investigations.

The issue of identification and third party rights can also lead to tensions between the corporate entity which is the recipient of the notice and any third party identified in it as the entity may want to reach an early settlement with the FCA so as to secure the benefit of early settlement discounts, whereas the individual often may seek to take whatever steps they can to clear their own name.

In the Macris case the FCA had not identified Mr Macris by name in any of its notices but reference had been made to "CIO London Management". Mr Macris contended that this term had been intentionally employed by the FCA to refer to him specifically and uniquely and that consequently he was identified for the purposes of s.393 of FSMA and was entitled to third party rights. Both the Upper Tribunal and the Court of Appeal agreed with him.

If the Supreme Court upholds the Court of Appeal decision, the FCA will have to review its current modus operandi and work out what its priorities are. If it wants to retain the potential deterrent effect of its enforcement notices and to include a level of detail which will make individuals identifiable by their peers, this will trigger third party rights. This will inevitably mean that it will have to invest extra time and resource before matters can be resolved.

One thing is certain: the decision will be of interest not only to the FCA but also to FCA regulated entities and all those individuals who might suffer reputational damage if they are identified in FCA enforcement notices.