Regulatory organisations

September 2007 

47.31 Requests for disclosure

The official receiver may, in the course of carrying out his/her duties, receive requests from regulatory organisations for information relating to insolvencies with which he/she is dealing. Where an official receiver receives such a request, he/she should obtain details, in writing (which can include in electronic form), of the following;  
  1. what information is being sought,
  2. the exact purpose(s) for which that information is being sought, and
  3. under what statute, if any, the organisation seeking the information is making the request.

In deciding whether to disclose information, the official receiver should consider the matters referred to in paragraph 47.6.

FINANCIAL SERVICES AND MARKETS ACT 2000

47.32 Restrictions on disclosure of information

The Finanical Services Authority (FSA) is an independent non government body given statutory powers by the Financial Services and Markets Act 2000 (FSMA). Under the FSMA the FSA is the single statutory regulator responsible for regulating deposit taking, insurance and investment business. The official receiver may receive confidential information from the FSA [note 1] (but see paragraph 47.33).

47.33 Exemptions from restrictions on disclosure

Subject to any particular duty of confidentiality, the official receiver may use information provided under the FSMA for the purpose of enabling or assisting the official receiver to discharge his/her prescribed public functions [note 2] for example, if he/she learns that a bankrupt has consulted a financial advisor when buying life insurance, the official receiver may obtain information from that advisor. The official receiver can then use the information to pursue any undisclosed assets in the bankruptcy.

47.34 Procedure in cases of doubt

It is a criminal offence [note 3] to breach the restrictions on disclosure of information under the FSMA section 348. Therefore, whenever there is any doubt in the official receiver's mind about the use or onward disclosure of information he/she should first of all consult the person who gave him/her the information. If subsequently there is onward disclosure, the official receiver should warn the recipient of the relevant statutory provisions.

If the person who provided the information objects to onward disclosure and to withhold further disclosure causes the official receiver difficulties, the official receiver should consult Technical Section.

47.35 Financial Services Compensation Scheme

The FSMA requires the FSA to establish a body corporate (the scheme manager) to manage a scheme to compensate investors for losses caused by authorised or former authorised persons [note 4]. The Financial Services Compensation Scheme (FSCS) was set up for this purpose and pays compensation if an authorised firm is unable to pay claims against it usually because it has gone out of business or when a firm is insolvent.

If as a result of the insolvency of a relevant person, any documents have come into the possession of the official receiver he/she must permit a person authorised by the FSCS to inspect those documents for the purposes of establishing-

  1. the identity of persons to whom the FSCS may be liable to make a payment in accordance with the compensation scheme; or
  2. the amount of any payment which the FSCS may be liable to make [note 5].

A relevant person is a person who was an authorised person under the FSMA, or an appointed representative of the authorised person. to carry out an activity regulated by the FSA at the time the act or omission occurred which gave rise to the FSCS becoming liable to make a payment in accordance with the compensation scheme [note 6].

Consequently, where the official receiver is liquidator he/she should comply with any reasonable requests for assistance from the FSCS.

A person inspecting a document on behalf of the FSCS may take copies or extracts from the documents [note 6].

A problem arises where the official receiver is receiver and manager/trustee in bankruptcy of a person who carried on an investment business as a sole trader or as a member of a partnership against which a winding up order has not been made. There is no provision in the compensation scheme rules requiring information to be handed over in those circumstances [note 7].

It may be that some of the documents in question are confidential given that they relate to the financial position of the clients of the insolvent. There should be no problem disclosing the information where the document in question relates to a person who has applied for compensation. Any person applying for compensation is requested to sign a form of consent allowing the FSCS to 'request/receive' any such information and documentation as may be required in connection with the claim for compensation from any party holding information or documentation relevant to the claim for compensation'. The official receiver should request a copy of this form of consent before allowing disclosure of the information requested. Where the documents are subject to some duty of confidentiality owed to a person other than a claimant, the official receiver should only disclose where the public interest balance lies in co-operating with the scheme. If the official receiver has any doubt as to whether information may be disclosed, he/she should seek the advice of Technical Section prior to the disclosure.

Further information with regard to the FSMA may be found in Chapter 80 - Financial Services and Markets Act 2000.

COMPANIES ACTS 1985 AND 1989

47.36 Companies Act 1985, Section 449

(amended April 2012)

It is a criminal offence to disclose certain information which is obtained by the Secretary of State pursuant to his/her statutory powers except in certain circumstances [note 8 ]. Such information may lawfully be disclosed is for the purpose of enabling or assisting an official receiver to discharge his/her functions under insolvency legislation [note 9] Company Investigations are usually responsible for carrying out investigations and are likely to be the source of any information of this nature held by the official receiver.

This provision reflects the importance attached to the official receiver being able to perform his/her functions properly and allows the disclosure of information which could not otherwise lawfully be disclosed.

Similar considerations arise in relation to the onward disclosure by the official receiver of such information as in relation to the disclosure of information covered by "restricted" by virtue of the FSMA [note 1] (see paragraphs 47.32 - 47.33)

47. 37 The Companies Act 1989 and restrictions on disclosure of information

Restrictions are imposed on the disclosure of information obtained either from an overseas regulatory authority or as a result of inquiries to assist an overseas regulatory authority [note 11]. Contravention of these restrictions is a criminal offence and is punishable by a fine and/or imprisonment [note 12].

47.38 Exceptions from restrictions on disclosure

(amended April 2012)

Disclosure of information may be made to an official receiver to enable him/her to discharge his/her duties as a public servant [note 13].

The official receiver should exercise care with regard to any onward disclosure of information received under these provisions. Whenever there is any doubt in the official receiver’s mind as to whether he/she is discharging his/her duties as a ‘public servant’ in onward disclosure of the information or document, he/she should have regard to paragraphs 47.33 and 47.34 of this chapter.

47.39 Disclosure of information to bodies with a regulatory function

Occasionally the official receiver may be requested to disclose information to a professional body with a regulatory function, for example the Law Society or the ACCA.

There is no limitation in the Act on the use to which information obtained under the official receiver's compulsory powers may be put, or the extent to which it may be disclosed. In practice, information should only be disclosed when the public interest in disclosure outweighs that in maintaining the confidentiality of the information.

The balancing exercise can only be done on a case by case basis, taking account of all relevant factors. Technical Section may be consulted during that process.

 

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