Case Number: 160399

Whether the Bank's decision to refuse access to records concerning an investigation into Bloxham Stockbrokers on the grounds that they fell outside the scope of the FOI Act was justified

Conducted in accordance with section 22(2) of the FOI Act by Stephen Rafferty, Senior Investigator, who is authorised by the Information Commissioner to conduct this review

Background

On 2 August 2016, the applicants, through their solicitor, submitted a request to the Bank for any summary or final report following the Bank's investigation into Bloxham Stockbrokers (Bloxham) detailing the reasons for the closure of the firm in June 2012, and in particular, the reason why the Bank imposed directions on the firm to cease all regulated activities. On 25 August 2016, the Bank decided to refuse the three records it identified as coming within the scope of the request on a number of grounds, including that the Act does not apply to the records in question. On 26 August 2016, the applicants sought an internal review of the decision on the grounds that the Bank had not identified all relevant records and that they did not accept the Bank's contention that the records did not fall to be released.

In its internal review decision of 16 September 2016, the Bank stated that it had discussed with the applicants the matter of the large volume of records relating to the particular investigation and that it had agreed to identify and consider for release particular records that contained the information sought. It affirmed the original decision to refuse the request. On 20 September 2016, the applicants sought a review by this Office.

I have decided to conclude this review by way of a formal binding decision. In conducting this review, I have had regard to the contents of the records identified by the Bank as coming within the scope of the applicants' request, to the relevant correspondence between the applicants and the Bank, and to the correspondence between this Office and both the applicants and the Bank on the matter.

Scope of the Review

As I have explained above, the Bank identified three records as coming within the scope of the request. While the applicants questioned whether the Bank had identified all relevant records for consideration in their application for internal review, I note that they made no specific reference to this point in their letter of 20 September 2016 to this Office and that they chose not to make a submission to this Office when invited to do so. I am satisfied that the Bank's approach to processing the review, as outlined in its internal review decision of 16 September 2016 and described above, was reasonable.

Accordingly, this review is concerned solely with whether the Bank was justified in its decision to refuse access to the three records in question.

Findings

In its submission to this Office, the Bank argued that the records are excluded from the ambit of the FOI Act by virtue of Schedule 1, Part 1(b)(i). On a without prejudice basis, it argued that if this Office does not accept that the records fall outside the jurisdiction of the FOI Act, a number of exclusions under the Act apply to them. Therefore, it is necessary to consider the issue of jurisdiction first.

Schedule 1, Part 1(b)(i) provides that the right of access to records does not apply to the Bank insofar as it relates to "records held by it containing

(I) confidential personal information relating to the financial or business affairs of any individual, or
(II) confidential financial, commercial or regulatory information relating to the business affairs of any person who holds or has held or who has applied for a licence, authorisation, approval or registration from the [Bank], or is otherwise regulated by the [Bank],

that the [Bank] has received for the purposes of performing, or in the discharge of, any of its statutory functions (other than when that information is contained in records in summary or aggregate form, such that persons cannot be identified from the record)".

The background to the request is that, in 2012, the Bank carried out an investigation into financial irregularities in the management of Bloxham, a regulated entity. Subsequently, the Bank directed Bloxham to cease all regulated activity, and its business was transferred to another stockbroking firm. The applicants are the committee of a Ward of Court whose funds were handled by Bloxham.

The three records identified by the Bank are an internal email, an email between the Bank and its external legal advisers with attachments, and an internal memorandum. The Bank contends that Schedule 1, Part 1(b)(i)(I) and (II) apply to exclude these records from the FOI Act. It seems to me that (II) is the more directly relevant provision in this instance, and I will consider it first.

The first criterion that must be met is that the records contain confidential financial, commercial or regulatory information relating to the business affairs of any person. Section 18 of the Interpretation Act 2005 stipulates that a "person" includes a body corporate and an unincorporated body of persons. As Bloxham was a partnership I am satisfied that it was a legal person. The records at issue relate to the discovery of suspected financial irregularities in Bloxham and the subsequent investigation and enforcement action taken by the Bank against the firm.

I am satisfied that the information in the records comprises financial, commercial and/or regulatory information relating to Bloxham's business affairs. The Bank argued that given its sensitivity, such information is clearly confidential. It argued that the information contained in the records is not in the public domain. I am aware that a limited amount of information concerning the Bank's dealings with Bloxham is publicly available. I note, for example, that in a published statement dated 28 May 2012, the Bank stated that it had been informed of financial irregularities by the management of Bloxham, that it had imposed directions on Bloxham to cease all regulated activities, with immediate effect, and that Bloxham agreed to transfer all private client and fund management business to Davy. Nevertheless, it seems to me that the records at issue contain a significantly greater level of detail and I accept the Bank's assertion that such information is not publicly available. I also accept that the information is of such sensitivity that the Bank has appropriately treated it as confidential. Consequently, I am satisfied that the first criterion has been met.

The second criterion is that the person holds or has held or has applied for a licence, authorisation, approval or registration from the Bank, or is otherwise regulated by the Bank. Bloxham was, and remains, authorised by the Bank as an investment firm under the European Communities (Markets in Financial Instruments) Regulations 2007 (SI 60/2007) (the MiFID Regulations). Therefore, I am satisfied that this second criterion has been met.

The third criterion is that the Bank received the information for the purposes of performing, or in the discharge of, any of its statutory duties. The MiFID Regulations designate the Bank as the competent authority in the State to ensure compliance with the parent Directive, and empower the Bank to regulate and supervise investment firms. I am satisfied that Bloxham's confidential information was provided to the Bank for the purpose of the performance of the Bank's duties under the MiFID Regulations, and therefore I find that the third criterion has been met.

Schedule 1, Part 1(b)(i)(II) is subject to an exception where the information is contained in records in summary or aggregate form, such that persons cannot be identified from the record. The records in this instance relate only to Bloxham, and therefore I am satisfied that this exception is not applicable.

Consequently, as I am satisfied that Schedule 1, Part 1(b)(i)(II) applies to the three records in question, I find that the Act does not apply to the records and that no right of access, therefore, exists.

Decision

Having carried out a review under section 22(2) of the Act, I hereby affirm the decision of the Bank in this case.

Right of Appeal

Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated not later than four weeks after notice of the decision was given to the person bringing the appeal.

Stephen Rafferty
Senior Investigator