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Sections 348 & 352 of the Financial Services & Markets Act 2000

Did you know that the law establishing the Financial Services Authority (FSA), an executive agency of the government, gives the agency the right to gag journalists and threatens the freedom of the press?

 

I am an experienced financial journalist and am currently writing a book about the recent financial crisis which will be published next year. I am currently checking facts for my book with various institutions, and I recently received an email from a lawyer at the FSA including the following paragraph:

You appear to intend to refer to the financial condition of RBS (and possibly other banks) during 2008.  On the basis of your e-mails, it is not possible for us to know what information you intend to publish about the bank(s) concerned.  To the extent that the information you intend to publish was originally received by the FSA in the course of carrying out our supervisory functions, it will be "confidential information" for the purposes of the confidentiality regime set up under section 348 of the Financial Services and Markets Act 2000 ("FSMA").  It is not possible to disclose such information, let alone publish it, unless certain, limited exemptions apply or the consent of the subject of the information (for example RBS) has been obtained.  It seems to us that none of the exemptions will apply to your book, but we do not know if you have obtained RBS's consent.  Assuming you have not, however, you should be aware that the unauthorised disclosure of confidential information is a criminal offence (see section 352 FSMA).

My idea is that the relevant sections of the Financial Services and Markets Act 2000 be amended or abolished so that no financial regulatory agency can be permitted to threaten or intimidate journalists who wish to disclose information in the public interest and hold the relevant bodies to account.

Why does this matter?

This idea is important because the freedom of the press is one of our most precious democratic freedoms. Aside from very specific and narrowly defined cases involving national security, government agencies should not be permitted to prevent publication of information that is in the public interest.

The recent financial crisis has damaged our economy and worsened our fiscal picture, confronting the new government with tough decisions. Independent journalists such as myself need to examine the causes of the crisis so that the public can learn about it and ensure that nothing like this ever happens again. Bodies like the FSA should not be allowed to hide behind the law and stop themselves from being held to account.


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