Section 393 of the Financial Services and Markets “FSMA” Act 2000 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 criticism made, before the notice is made public. As prejudicial comments by the FCA can cause significant, potentially irreparable, reputational damage to individuals, Section 393 is intended to allow individuals to defend themselves before criticisms are made public.

In September 2013, the FCA fined JP Morgan Chase Bank NA £137.6m in respect of losses arising out of its Synthetic Credit Portfolio (the so-called “London Whale” trades). The Bank had incurred losses of $6.2bn from high-risk trading, and during the period in which the losses were being incurred the Bank had withheld information form the FCA, and may have actively misled the regulator.

Giving the leading judgment of the Supreme Court, Lord Sumption took a restrictive approach to Section 393, noticing that the person must be “identified” not merely “identifiable” in the notice to qualify for protection. For Section 393 to apply:

  • the notice must identify the individual by name or by synonym for him, such as his or her office or job title, such that it must be apparent from the notice itself that the relevant reference could apply only to one person; and
  • that one person must be identifiable by the general public from the notice itself, the notice could be interpreted by publically available information if necessary (for example, reference to the “chief executive” of X Company would identify that individual, as the company’s website could easily be used to obtain the name of the relevant individual). This did not mean the notice could be supplemented by obscure publically available information or, for example, digging around and putting a number of facts in the public domain together to reveal the identity of the individual referred to – by what Lord Neuberger referred to as “jigsaw identification”).


The Supreme Court took a pragmatic view in reaching their decision. If the FCA was required to carry out numerous searches via search engines on third parties to see if they had somehow been identified before publishing its notice then the FCA would not be able to conduct its enforcement activities efficiently. So long as the individual is not identified then there will be no breach of Section 393 and third party rights will not be engaged.


Philip Rubens