FCA sets out terms for probe into bungled insurance probe

Peter Spence
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It's all getting a bit meta at the Financial Conduct Authority.

The regulator has set out its Term of Reference, for a probe into itself, after a briefing to The Telegraph saw billions wiped off the shares of insurers, just over a week ago.

Investors were panicked by reports that a probe into the sector would be more far reaching than previously thought. Having reassured markets that that won't be the case, those stocks have since seen a recovery.

A decision for the regulator to probe itself has been blasted by the chief executive of Prudential, Tidjane Thiam, as being "very much a situation in which even the perception of a lack of objectivity or thoroughness could be damaging to the FCA and its aims."

The FCA's inquiry into the matter will be led by Simon Davis of Clifford Chance, and will be overseen by a committee of the non-executive directors of the FCA's board, to be chaired by FCA chairman John Griffith-Jones.

Said inquiry will tackle matters including:

a) Why and with whose knowledge and authorisation was this briefing given, particularly to a single journalist;
b) What was communicated to the journalist;
c) Were other briefings made and if so, how were these reported;
d) Was the content of any briefing appropriate and did it go further than the agreed line;
e) Was the briefing consistent with any internal guidance available to FCA staff or with previous practice, and who authorised such guidance or practice;
f) To what extent this specific briefing is an isolated exception. If not, does this represent more general practice at the FCA, who authorised this approach and why.