Kiakiafx Limited v The Financial Conduct Authority

Section 393 of the Financial Services and Markets Act 2000 concerns prejudicial identification in the terms of the relevant warning or decision notice. Identification must appear by name or by a synonym apparent from the notice itself, with publicly available information used only to interpret the notice. The provision addresses criticism or allegations against a third party, rather than the indirect economic consequences of regulatory action against another person. Extrinsic communications made after the notice cannot establish identification or prejudice. The Upper Tribunal has no jurisdiction to entertain a reference against a Final Notice or to suspend its effect. Applications for privacy engage a strong presumption in favour of publication and require cogent evidence of unfairness and disproportionate damage.

The Applicant referred the matter to the Upper Tribunal after the Financial Conduct Authority cancelled Leeds Money Transfer Ltd’s registration as a small payment institution and published a Final Notice. The Applicant, which had become LMT’s controller, alleged that the Decision Notice identified it prejudicially and that it should have received the warning and decision notices under section 393 of the Financial Services and Markets Act 2000.

The Applicant initially challenged the Final Notice, then sought to amend the reference to challenge the Decision Notice. It also sought suspension of the Final Notice and privacy protection. The principal issues were jurisdiction, identification and prejudice under section 393, suspension, and publication.

1. Jurisdiction. The Tribunal had no jurisdiction under the Financial Services and Markets Act 2000 or the Payment Services Regulations 2017 to entertain a reference against a Final Notice. It likewise had no jurisdiction to suspend or otherwise restrain the Final Notice. The proposed amendment to refer to the Decision Notice would not alter the outcome.
2. Identification. Applying Macris v Financial Conduct Authority [2017] UKSC 19, a person is identified where the notice names that person or uses a synonym which, from the notice itself, can refer only to that person. Publicly available information may interpret, but not supplement, the language used. The reference to LMT’s change in control identified LMT, through “The Firm” and “its”. It did not identify the Applicant by name, office, position or synonym. The reasoning in Cooper v Financial Conduct Authority [2017] UKUT 428 (TCC) supported that conclusion.
3. Prejudice. Section 393 is concerned with criticism or allegations against a third party in the notice. It does not extend to the financial, commercial or personal consequences of regulatory action against the person to whom the notice was given. The general observation that inactive firms should cancel their permissions was not prejudicial to the Applicant. Later correspondence and other extrinsic material could not establish prejudicial identification.
4. Privacy. Publication was subject to the strong presumption in favour of open justice. The Applicant produced no cogent evidence of unfairness or a disproportionate level of damage. The privacy application was therefore refused.

The reference and applications failed on the preliminary issues.

First-instance decision of the Upper Tribunal on a reference concerning the FCA’s Final Notice and related applications. No appellate history is stated in the judgment.