Line to take - LTT18 - Financial Services and Markets Act 2000

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  • Section/Regulation: s44
  • Issue: Financial Services and Markets Act 2000
  • Source: Information Tribunal
  • Details: Slann / Financial Services Authority (FSA) (11 July 2006)
  • Related Lines to Take: n/a
  • Related Documents: FS50069723, EA/2005/0019, Awareness Guidance 27
  • Contact: AB
  • Date: 12/10/2006
  • Policy Reference: LTT18
  • © Copyright Information Commissioner's Office, re-used with permission
  • Original source linked from here: LTT

Line to take

Section 348 of the Financial Services Act 2000 prohibits the disclosure of information to which it applies and therefore operates as a statutory bar under section 44 of the FOIA 2000.

Further Information

In Slann v The Information Commissioner, the IT upheld the IC’s decision that information relating to monthly mortgage balances provided to the Financial Services Authority (“the FSA”) by building societies was exempt from disclosure under section 44 of the FOIA. The FSA gathered this information as part of its functions as the regulatory body overseeing the financial services industry.

The reason for upholding the IC’s decision was that section 348 of the Financial Services and Markets Act 2000 (“FSMA”) acted as a statutory bar to disclosure of the requested information.

When determining whether this statutory bar applies the IT identified a number of issues which need to be considered.

1. Is this confidential information under section 348(2) of FSMA?

Under section 348(2) information is confidential information if it

“(a) relates to the business or other affairs of any person;
(b) was received by the primary recipient for the purposes of, or in the discharge of, any functions of the Authority, the competent authority for the purposes of Part VI or the Secretary of State under any provision made by or under this Act; and
(c) is not prevented from being confidential information by subsection (4).”

However even if (a) and (b) above are satisfied, under section 348(4) information is not confidential if it:

“(a) has been disclosed to the public or
(b) is in the form of a summary or collection of information which is framed so that it is not possible to ascertain information relating to a particular person”

In relation to (a), the IT considered that information had been disclosed to the public if “...was in the public domain” (para 39). However if it had been in the public domain then the information “...would have constituted exempt information by virtue of section 21 of the 2000 Act...” (para 39).

In relation to (b), the IT felt that it is not appropriate to produce a redacted anonymised version of the information requested, so that it would fall within (b), if to do so would alter the essential nature and content of the information (para 40).

2. If it is confidential information under section 348(2), has consent been obtained to its disclosure under section 348(1)?

Even if information is confidential information under section 348(2) it may still be disclosed if consent is obtained to its disclosure.

Under section 348(1):

“(1) Confidential in formation must not be disclosed by a primary recipient or by any person obtaining the information directly or indirectly from a primary recipient, without the consent of-
(a) the person from whom the primary recipient obtained the information; and
(b) if different, the person to whom it relates.”

The IT accepted that the primary recipient in this case was the FSA and that therefore it should not disclose information received without the consent of the building societies from whom it obtained the information. It went on to accept that the IC was justified in accepting the FSA’s reasons for not approaching each building society to ascertain if they consented to the release of the information it provided to the FSA. Relevant factors to take into account in deciding whether individual consents should be sought would include:

  • the likelihood that consent would be given
  • the past experience of the primary recipient with regard to the willingness of bodies to disclose regulatory information (para 36)

3. If it is confidential information, is there an entitlement to disclose the information under section 349 to assist in discharging any of a public function?

In addition to the disclosure of confidential information under section 348, the disclosure of confidential information is allowed if the conditions in section 349 are satisfied.

Section 349 states that:

“(1) Section 348 does not prevent a disclosure of confidential information which is(a) made for the purpose of facilitating the carrying out of a public function; and (b) permitted by regulations made by the Treasury under this section.”

“Public functions” are identified in section 349(5) as including:-

(a) functions conferred by or in accordance with any provision contained in any enactment or subordinate legislation; ...

The IT agreed with the view that the term “public functions” in section 349(5)(a) related to powers conferred on FSA by legislation and not legislation, such as FOIA, to which it was subject. Therefore in making a disclosure under FOIA the FSA was not carrying out a public function within the section and therefore section 349(5)(a) did not allow it to disclose confidential information.

In addition, the regulations referred to in section 349(1)(b), the Financial Services and Markets Act 2000 (Disclosure of Confidential Information) Regulations 2001, provide in Regulation 3 that

“(1) A disclosure of confidential information is permitted when it is made to any person -
(a) by the Authority or an Authority worker for the purposes of enabling or assisting the person making the disclosure to discharge any public functions of the authority or (if different) of the Authority worker...”

The same argument is applicable to this as to section 349(1)(a), that the making of a disclosure under the FOIA is not a public function for the purposes of the regulations and therefore is not a basis for disclosing confidential information held by the FSA.

As therefore neither section 349(1)(a) or (b) is satisfied in relation to possible disclosures by FSA under FOIA the section does not provide a basis for the FSA to disclose confidential information which it holds.

General points on the application of the statutory bar

The IT stated that the age of information and the fact that it could be said to relate to historical matters does not affect the operation of the statutory bar (in Slann the request for information was made in 2005 and related to information for 2003/4). The IT said that

“...the IC makes no mention of the fact that the information is...stale. In the Tribunal’s view, this was entirely understandable since the age of the information sought can bear no relation to the engagement of section 44(1)(a) of the 2000 Act.” (para 18)

It also confirmed that there was no duty to consult third parties under Part IV of the s45 Code of Practice where the statutory bar was clearly applicable.

“The Tribunal confirms that in the circumstances of this case where an absolute exemption is engaged on the basis of a clear legislative prohibition, there is no room for the Code of Practice in which to operate.” (para 42)