The regulator is proposing a confidentiality requirement for complainants dealing with the independent Complaints Commissioner following a recent case where a complainant informed the press of an ongoing investigation.
In January, Money Marketing reported that the Complaints Commissioner was investigating the FSA’s handling of a complaint against an unauthorised Colonial Mutual subsidiary, after the paper learnt of the investigation from an unnamed source.
The amendment, included in the FSA’s quarterly consultation, requires that “confidentiality should be observed by all the parties involved to protect the integrity of the investigation”.
It says if a complainant breaches the confidentiality requirement, the Complaints Commissioner may decide to bring the investigation to an end without reporting.
But compliance and legal experts warn this could breach the Human Rights Act.
Beachcroft Regulatory Consulting managing director Richard Hobbs says: “Freedom of speech is enshrined in our statute through the Human Rights Act and it is surprising that a public body would seek some kind of privilege that would deny the complainant their basic rights.”
Compliance consultant Adam Samuel says: “The proposal is outrageous. The FSA is the only UK organisation claiming the right to gag complainants during the complaint process. Adviser firms cannot do it under Disp. The FSA has nothing to be scared of about complainants talking to the press if it has acted properly. It also appears to breach the European Convention on Human Rights.”
An FSA spokeswoman says: “We are satisfied that this amendment, at the request of the commissioner, is the most appropriate way to reduce the risk to integrity through press coverage of the ongoing investigation.”