Financial Services and Markets Act 2000, section 166

Reports by skilled persons

Part XI Information Gathering and Investigations

(1) This section applies where either regulator has required or could require a person to whom subsection (2) applies (“the person concerned”) to provide information or produce documents with respect to any matter (“the matter concerned”).

(2)This subsection applies to—

(a) an authorised person (“A”),

(b)any other member of A's group,

(c)a partnership of which A is a member, or

(d)a person who has at any relevant time been a person falling within paragraph (a), (b) or (c),

who is, or was at the relevant time, carrying on a business.

(3)The regulator mentioned in subsection (1) may either—

(a)by notice in writing given to the person concerned, require the person concerned to provide the regulator with a report on the matter concerned, or

(b)itself appoint a person to provide the regulator with a report on the matter concerned.

(4)When acting under subsection (3)(a), the regulator may require the report to be in such form as may be specified in the notice.

(5)The regulator must give notice of an appointment under subsection (3)(b) to the person concerned.

(6)The person appointed to make a report—

(a)must be a person appearing to the regulator to have the skills necessary to make a report on the matter concerned, and

(b)where the appointment is to be made by the person concerned, must be a person nominated or approved by the regulator.

(7)It is the duty of—

(a)the person concerned, and

(b)any person who is providing (or who has at any time provided) services to the person concerned in relation to the matter concerned,

to give the person appointed to prepare a report all such assistance as the appointed person may reasonably require.

(8)The obligation imposed by subsection (7) is enforceable, on the application of the regulator in question, by an injunction or, in Scotland, by an order for specific performance under section 45 of the Court of Session Act 1988.

(9)A regulator may make rules providing for expenses incurred by it in relation to an appointment under subsection (3)(b) to be payable as a fee by the person concerned.

(10)The powers conferred by this section may also be exercised by the FCA in relation to a person to whom subsection [F1273 (10A),F1273] (11) [F1274 , (12) or (13)F1274] applies, (and references to the person concerned are to be read accordingly).

[F1275 (10A)This subsection applies to a person who is or has been subject to a relevant Part 5A requirement.F1275]

(11)This subsection applies to—

(a) a recognised investment exchange (“A”),

(b)any other member of A's group,

(c)a partnership of which A is a member, or

(d)a person who has at any time been a person falling within paragraph (a), (b) or (c),

who is, or was at the relevant time, carrying on a business.

[F1276 (12)This subsection applies to a person who provides, or has provided, a service to an FCA investment firm or to a relevant parent undertaking of such a firm.F1276]

[F1277 (13)This subsection applies to a person who is or has at any relevant time been involved in the administration of any trust arrangement relating to a funeral plan contract entered into or carried out by an authorised person.

(14) In this section, “funeral plan contract” has the same meaning as in article 59(2) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 . F1277,F1272]]

Read section 166 in the full Act → Definitions (12) Cases (16)

Definitions used in section 166

regulator

“regulator” has the meaning given in section 3A(2);

Defined in s.417(1) · see it in the full Act
documents

“documents” includes information recorded in any form and, in relation to information recorded otherwise than in legible form, references to its production include references to producing a copy of the information in legible form , or in a form from which it can readily be produced in visible and legible form ;

Defined in s.417(1) · see it in the full Act
authorised person

“authorised person” has the meaning given in section 31(2);

Defined in s.417(1) · see it in the full Act

(2) In this Act “authorised person” means a person who is authorised for the purposes of this Act.

Defined in s.31(2) · see it in the full Act
group

(1) In this Act “group”, in relation to a person (“A”), means A and any person who is—

(a)a parent undertaking of A;

(b)a subsidiary undertaking of A;

(c)a subsidiary undertaking of a parent undertaking of A;

(d)a parent undertaking of a subsidiary undertaking of A;

(e)an undertaking in which A or an undertaking mentioned in paragraph (a), (b), (c) or (d) has a participating interest;

(f)if A or an undertaking mentioned in paragraph (a) or (d) is a building society, an associated undertaking of the society; or

(g)if A or an undertaking mentioned in paragraph (a) or (d) is an incorporated friendly society, a body corporate of which the society has joint control (within the meaning of section 13(9)(c) or (cc) of the Friendly Societies Act 1992).

Defined in s.421(1) · see it in the full Act
partnership

“partnership” includes a partnership constituted under the law of a country or territory outside the United Kingdom;

Defined in s.417(1) · see it in the full Act
Specified

(5) “Specified” means specified in an order made by the Treasury.

Defined in s.22(5) · see it in the full Act
rule

“rule” means a rule made by the FCA or the PRA under this Act;

Defined in s.417(1) · see it in the full Act
the FCA

(2) The Financial Conduct Authority is in this Act referred to as “the FCA”.

Defined in s.1A(2) · see it in the full Act

“the FCA” means the Financial Conduct Authority;

Defined in s.417(1) · see it in the full Act
relevant Part 5A requirement

“relevant Part 5A requirement” is to be read in accordance with section 71T(2);

Defined in s.417(1) · see it in the full Act

(2) In this Act “relevant Part 5A requirement” means, in relation to a provision of this Act listed in the first column of the Table in Part 2 of Schedule 6C, a requirement that—

(a)is imposed by virtue of any of the designated activity regulations specified in the corresponding entry in the second column, and

(b)is of any of the descriptions specified in the corresponding entry in the third column.

Defined in s.71T(2) · see it in the full Act
recognised investment exchange

“recognised CSD”, “recognised clearing house” and “recognised investment exchange” have the meaning given in section 285;

Defined in s.417(1) · see it in the full Act

(a) “recognised investment exchange” means an investment exchange in relation to which a recognition order is in force;

Defined in s.285(1) · see it in the full Act
FCA investment firm

“FCA investment firm” has the meaning given in section 143A;

Defined in s.177A · see it in the full Act
relevant parent undertaking

“relevant parent undertaking”, in relation to an FCA investment firm, means an authorised parent undertaking or a non-authorised parent undertaking (as defined in section 143B).

Defined in s.177A · see it in the full Act

Cases considering section 166 (16)

Holmcroft Properties Ltd, R (On the Application Of) v KPMG LLP

[2018] EWCA Civ 2093 · 28 September 2018Limits

The provision empowered the regulator to require a report by a nominated or approved skilled person. That statutory reporting role formed part of the wider regulatory context, but did not extend to the reviewer’s assessments of individual compensation offers or convert those assessments into a public function. (see paras [2]; [49]–[52])

CGL Group Ltd & Ors v The Royal Bank of Scotland Plc & National Westminster Bank Plc & Ors (Rev. 1)

[2017] EWCA Civ 1073 · 24 July 2017

The independent reviewer was appointed as a skilled person under this provision. The reviewer’s scrutiny and decisive role reduced the bank’s control and militated against an assumption of responsibility to customers (see para [93]).

The All-Party Parliamentary Group on Fair Banking Group, R (on the application of) v The Financial Conduct Authority

[2025] EWHC 525 (Admin) · 7 March 2025

The court treated section 166 investigations as a slower and resource-intensive alternative to the voluntary scheme, which the FCA could rationally regard as less preferable in the urgent circumstances. (see paras [27], [55], [68]-[69])

What each judgment says about section 166 is in the case-law panel in the full Act.

Explanatory note

317.This gives the Authority the power to require an authorised person or a formerly authorised person to commission and provide the Authority with a report into any relevant matter the Authority may specify.  This must be a matter about which the Authority could require information under section 165, so the report must reasonably be required in connection with the discharge of the Authority’s functions.

318.The power also enables the Authority to require such reports from other persons carrying on a business who are, or were, connected to the authorised or formerly authorised person in the ways specified in subsection (2).  Essentially, these are members of the same group of companies, or companies closely linked through a common shareholder, or any partnership of which the authorised or formerly authorised person is or was a member.  This is a more limited set of persons than under section 165 and Schedule 13.

319.The person making the report must be nominated by the Authority, or his appointment must be approved by it.  The Authority has to be satisfied that he has the relevant skills to report on the matter concerned.  In many cases this person may be an accountant, or they may be a person with some other suitable professional qualification, such as a lawyer or an actuary, or they may be a person with particular commercial or professional experience, such as a banker.  The Authority may also specify the form of the report.

320.Subsection (5) imposes an obligation on any in‑house expert working for the authorised or connected person to co-operate with the person appointed to produce the report.  Thus, if the report is to be produced by an actuary then the in‑house actuary who works for the firm is obliged to co-operate in the production of the report.  This duty is enforceable by the Authority through an injunction, or a comparable order in Scotland.

All the explanatory notes for the Act

Amendments and notes

21 notes from legislation.gov.uk

Amendments

  1. F1272S. 166 substituted (24.1.2013 for specified purposes, 1.4.2013 in so far as not already in force) by Financial Services Act 2012 (c. 21), s. 122(3), Sch. 12 para. 5 (with Sch. 20); S.I. 2013/113, art. 2(1)(c), Sch. Pt. 3; S.I. 2013/423, art. 3, Sch.
  2. F1273Word in s. 166(10) inserted (14.1.2025) by The Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2025 (S.I. 2025/22), reg. 1(2), Sch. para. 6(2)
  3. F1274Words in s. 166(10) substituted (16.5.2022 for specified purposes, 29.7.2022 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2022 (S.I. 2022/466), arts. 1(3), 6(3)(a)
  4. F1275S. 166(10A) inserted (14.1.2025) by The Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2025 (S.I. 2025/22), reg. 1(2), Sch. para. 6(3)
  5. F1276S. 166(12) inserted (1.7.2021) by Financial Services Act 2021 (c. 22), s. 49(5), Sch. 2 para. 6(3) (with Sch. 2 Pt. 3); S.I. 2021/671, reg. 4(b)
  6. F1277S. 166(13)(14) inserted (16.5.2022 for specified purposes, 29.7.2022 in so far as not already in force) by The Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2022 (S.I. 2022/466), arts. 1(3), 6(3)(b)

Modifications

  1. C683S. 166 applied (22.7.2013) by The Alternative Investment Fund Managers Regulations 2013 (S.I. 2013/1773), regs. 1, 71(1)(b)
  2. C684S. 166 applied (20.4.2015 for specified purposes, 21.12.2015 for specified purposes, 21.3.2016 in so far as not already in force) by The Mortgage Credit Directive Order 2015 (S.I. 2015/910), arts. 1(5), 23(2)(b) (with Pt. 4)
  3. C685S. 166 applied (with modifications) (13.7.2016) by The Financial Services and Markets Act 2000 (Transparency of Securities Financing Transactions and of Reuse) Regulations 2016 (S.I. 2016/715), regs. 1(2), 6
  4. C686S. 166 modified (29.11.2018 for specified purposes, 1.4.2019 in so far as not already in force) by The Financial Services and Markets Act 2000 (Claims Management Activity) Order 2018 (S.I. 2018/1253), arts. 1(2)(3), 55(4)
  5. C687S. 166 applied by S.I. 2018/1149, reg. 60 (as inserted (1.3.2019) by The Financial Services Contracts (Transitional and Saving Provision) (EU Exit) Regulations 2019 (S.I. 2019/405), regs. 1(2), 3)
  6. C688S. 166 applied (with modifications) by S.I. 2018/1201, Sch. 3 para. 32A(2) (as substituted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(15))
  7. C689S. 166 applied (with modifications) by S.I. 2018/1201, Sch. 3 para. 12H(2) (as substituted (6.9.2019) by The Financial Services (Electronic Money, Payment Services and Miscellaneous Amendments) (EU Exit) Regulations 2019 (S.I. 2019/1212), regs. 1(2), 7(8))
  8. C690S. 166 applied (31.12.2020) by The Electronic Commerce and Solvency 2 (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/1361), regs. 1(2), 20 (as amended by S.I. 2019/1390, regs. 1(2), 6); 2020 c. 1, Sch. 5 para. 1(1)
  9. C691S. 166 applied (with modifications) (31.5.2021) by The Civil Liability Act 2018 (Financial Conduct Authority) (Whiplash) Regulations 2021 (S.I. 2021/594), regs. 1, 2(4)(b)
  10. C692S. 166 applied (with modifications) (8.6.2023 for specified purposes, 7.10.2023 in so far as not already in force) by The Financial Services and Markets Act 2000 (Financial Promotion) (Amendment) Order 2023 (S.I. 2023/612), art. 1(2), Sch. para. 15 (with art. 11)
  11. C693S. 166 applied (temp.) (16.12.2025 for specified purposes and 29.6.2028 otherwise) by The Financial Services and Markets Act 2000 (Regulated Activities) (ESG Ratings) Order 2025 (S.I. 2025/1349), arts. 2, 17 (with art. 20)
  12. C694S. 166 applied (1.1.2026) by The Financial Services and Markets Act 2023 (Mutual Recognition Agreement) (Switzerland) Regulations 2025 (S.I. 2025/1145), regs. 1(2), 35
  13. C695S. 166 applied (25.2.2026 for specified purposes) by The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 (S.I. 2026/102), regs. 1(2)(3), 61(b) (with regs. 53-56)
  14. C696S. 166 applied (with modifications) (14.1.2025 for specified purposes, 13.7.2026 in so far as not already in force) by The Short Selling Regulations 2025 (S.I. 2025/29), regs. 2(2)(3), 24, Sch. 1 Pt. 1; S.I. 2026/587, reg. 2(b)
  15. C697S. 166(1)-(8) applied (with modifications) (1.1.2014) by The Capital Requirements Regulations 2013 (S.I. 2013/3115), regs. 1(2), 14