Financial Conduct Authority v Macris

For the third-party protections in section 393 of the Financial Services and Markets Act 2000 to apply, a regulatory notice must identify the person. It is insufficient that informed readers could identify that person by combining the notice with extrinsic facts.

An unnamed person is identified where the notice uses a synonym, such as an office or job title, which can apply to only one person. Publicly available information may establish who holds that office, but may interpret rather than supplement the notice. Identification is assessed from the perspective of the public at large. Knowledge possessed by acquaintances or a specialised sector is irrelevant.

The Financial Conduct Authority published warning, decision and final notices imposing a penalty on JP Morgan Chase Bank NA for failures connected with losses in its Synthetic Credit Portfolio. The notices criticised “CIO London management” but did not name or state the job title of Mr Macris, the former head of CIO International.

The Upper Tribunal held that the notices identified Mr Macris for the purposes of section 393 of the Financial Services and Markets Act 2000. The Court of Appeal upheld that result in [2015] EWCA Civ 490, relying partly on the understanding of persons acquainted with him or operating in his area of financial services.

The central issue was which background facts and audience could determine whether a notice “identifies” an unnamed third party.

1. Appeal allowed by a majority of four to one. Lord Sumption, with whom Lord Neuberger and Lord Hodge agreed, held that the notices did not identify Mr Macris. Lord Mance agreed with the disposition on a broader legal test. Lord Wilson dissented.

2. Per Lord Sumption, section 393 of the Financial Services and Markets Act 2000 provides a more limited expression of the public law obligation to give an affected person sufficient notice to protect legitimate interests. Its language requires the reasons contained in the notice to identify the third party. Identification by an extrinsic source is insufficient.

3. An unnamed person is identified where the notice uses a synonym, such as an office or job title. The notice must show that the synonym can apply to only one person. Publicly available information may reveal who that person is, but only where it interprets the notice’s language. It cannot supplement the notice with additional facts which, when placed alongside it, disclose the person’s identity.

4. The relevant audience is the public at large. Publishing notices promotes transparent regulatory decision-making and deterrence. Special knowledge held by acquaintances, industry participants or other informed persons cannot determine identification. This construction also enables the Authority to frame notices without having to anticipate all information known to outsiders while related investigations remain incomplete.

5. The analogy with defamation was rejected. Defamation asks whether recipients, with their particular knowledge, would reasonably understand a publication to refer to the claimant. Section 393 instead applies only where the Authority’s notice itself identifies the known third party.

6. “CIO London management” was neither Mr Macris’s name nor a synonym which the notice conveyed to a reasonable member of the public as referring uniquely to him. References to conversations, meetings and emails did not establish that one individual, rather than any member of a group, was intended.

7. Lord Mance considered that identification should be assessed using information generally available in the relevant financial world. He nevertheless found that the evidence did not establish identification on that test. Lord Wilson would have applied an ordinary market operator test and dismissed the appeal.

8. The court declared that Mr Macris was not a third party for the purposes of section 393.

1. United Kingdom Supreme Court: By a majority of four to one, allowed the Financial Conduct Authority’s appeal and declared that Mr Macris was not a third party for the purposes of section 393 of the Financial Services and Markets Act 2000.

2. Court of Appeal: In [2015] EWCA Civ 490, upheld the Upper Tribunal’s conclusion that the references to “CIO London management” identified Mr Macris.

3. Upper Tribunal (Tax and Chancery Chamber): Judge Herrington determined a preliminary issue in Mr Macris’s favour and held that he was entitled to be treated as a third party under section 393.