Tag: FSA

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Green & Rowley v RBS considered by Court of Appeal

The Green & Rowley v RBS appeal, heard by the Court of Appeal, focused on whether RBS properly explained the risks of an interest rate swap product. The FCA intervened to clarify regulatory rules on swaps mis-selling. The claimants’ decision to accept the section 150 FSMA claim as time-barred weakened their case. The judgment highlights the critical need to correctly calculate limitation periods and thoroughly manage these complex claims from the outset.

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‘FCA Swaps Review’ Update: Comment on Bank IRHP Review Delays with Statistics from the FCA

The FCA Swaps Review has faced significant delays since beginning in April 2013, frustrating many affected businesses. Latest FCA data reveals that only 50% of sophistication assessments are complete, 3.9% of cases have reached interviews, and 2.6% have had payments suspended. Delays risk customers losing legal rights due to the six-year limitation period. Concerns exist over banks bypassing the sophistication stage while fairness issues arise over banks self-assessing their mis-selling.

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‘FCA Review’ of Interest Rate Hedging (IRHP) Sales: Written Statement or ‘Fact Find’ Interview?

The FCA/FSA Hedging Review is conducted by the banks, not the regulator, and involves recorded interviews or fact-find meetings with customers. These interviews can be one-sided, with the bank’s lawyers asking questions designed to limit compensation. Customers often have limited rights to access bank records or challenge questions. A written statement, prepared with legal guidance, can be a safer way to present the sales experience without the risks of interviews.

The Parliamentary Commission on Banking Standards’ Final Report calls for radical reforms to restore banking trust, addressing LIBOR manipulation and derivatives mis-selling. Key proposals include criminal liability for reckless bankers, improved governance, stronger regulator duties, and wider access to the Financial Ombudsman Service for small businesses. The report also urges greater financial literacy, transparency, and regulation to prevent banks from disclaiming advisory responsibility when selling complex products like interest rate swaps. Lexlaw supports clients affected by such mis-selling and advocates for fairer banking practices. Contact Lexlaw for expert legal advice and representation.

The Banking Commission’s Proposals relevant to Swaps Mis-selling

The Parliamentary Commission on Banking Standards’ Final Report calls for radical reforms to restore banking trust, addressing LIBOR manipulation and derivatives mis-selling. Key proposals include criminal liability for reckless bankers, improved governance, stronger regulator duties, and wider access to the Financial Ombudsman Service for small businesses. The report urges greater financial literacy, transparency, and regulation to prevent banks from disclaiming advisory responsibility when selling complex products.

RBS announced a £700 million provision for Interest Rate Hedging Products (IRHP) mis-selling in their 2012 results, a 1300% increase from the previous £50 million. Despite this, RBS downplays its role in the scandal, highlighting court wins and Financial Ombudsman rulings in its favour, which contrasts with the FSA finding over 90% of such products mis-sold. The provision remains inadequate given the scale of affected non-sophisticated customers. Lexlaw advises anyone affected by RBS swaps mis-selling to seek independent legal counsel promptly. [1](https://lexlaw.co.uk/solicitors-london/rbs-announce-results-provision-for-swaps-mis-selling-increased-by-1300/)

RBS Announce Results: Provision for Swaps Mis-selling Increased by 1300%

RBS announced a £700 million provision for Interest Rate Hedging Products (IRHP) mis-selling in their 2012 results, a 1300% increase from the previous £50 million. Despite this, RBS downplays its role in the scandal, highlighting court wins and Ombudsman rulings in its favour, which contrasts with the FSA finding over 90% of such products mis-sold. The provision remains inadequate given the scale of affected non-sophisticated customers.

The FSA’s definition of sophistication for swaps mis-selling reviews is complex and has caused confusion due to inconsistent communications. The original test deems a business sophisticated if it meets two of three criteria: turnover above £6.5m, balance sheet over £3.26m, or more than 50 employees. A new £10 million test modifies this for certain businesses, affecting their inclusion in the review. Clarification is expected from the FSA. Lexlaw offers expert advice to help businesses understand and navigate these rules. Contact Lexlaw for assistance with swaps claims.

What is Sophistication in the FSA Swaps Mis-selling Scheme?

The FSA’s definition of sophistication for swaps mis-selling reviews is complex and has caused confusion. The original test deems a business sophisticated if it meets two of three criteria: turnover above £6.5m, balance sheet over £3.26m, or more than 50 employees. A new £10 million test modifies this excluding them from the FSA review.

Here's an image depicting the FSA's pilot review findings for swaps mis-selling. It shows a scene with financial professionals looking concerned over documents, charts highlighting high mis-selling rates, and subtle visual cues indicating inadequate explanations, undisclosed costs, and over-hedging. The overall tone conveys seriousness and the implications of regulatory failure.

FSA Findings on Banks’ Pilot Swaps Mis-selling Review

The FSA’s pilot review of swaps mis-selling reveals over 90% of sales did not meet regulatory standards, highlighting inadequate risk explanation, undisclosed break costs, and over-hedging. Banks prioritised commissions over clients’ interests. The proposed review process raises concerns about reviewer independence and incomplete redress. Lexlaw advises court action before limitation periods expire.

The Manipulation of LIBOR by the Banks and the Impact on Interest Rate Swap Mis-selling Claims

Barclays Bank was fined for manipulating LIBOR, impacting many UK small businesses sold complex interest rate derivatives on misleading terms. Banks implied LIBOR rates would be fair, but this was untrue, affecting the validity of these contracts. Businesses may seek contract termination or damages. Contact Lexlaw for expert evaluation and legal support on your claim.