Clifford Chance, one of what is known as the ‘Magic Circle’ of prestigious and highly costly legal companies, will assess the regulator’s guidelines concerning press interviews after director of supervision Clive Adamson revealed to the Daily Telegraph that the body would be investigating closed book products, ahead of a formal announcement.
The news prompted significant falls in the share prices of several life companies and prompted some to defend their business models.
Treasury Select Committee (TSC) chairman Andrew Tyrie, who said Adamson’s comments may been been an “extraordinary blunder”, stressed the need for the resulting FCA-initiated review to be completely independent.
The FCA announced Clifford Chance would take up the investigation, which an expert says could cost up to £10m.
Clifford Chance already has a relationship with the FCA. It was appointed to the regulator’s expert panel in April 2013 and will remain in place until 2017.
The panel is called upon to provide skilled person reports, also known as Section 166 (s166) reports into financial businesses suspected of poor practice or wrongdoing.
The business that is being subjected to the s166 report pays for it to be carried out.
‘No conflict’
An FCA spokesperson said the regulator did not believe there was any conflict of interest in the appointment of Clifford Chance to carry out the review into the FCA, and that the law firm has never actually performed a s166 review.
“The FCA is confident there isn’t a conflict of interest in this case and, as we’ve said, we will be publishing the findings of the review in due course.”
