Information on HBOS senior managers - November 2022

We can confirm that the cost to the FCA of the HBOS investigation is estimated at £3,103,000. This includes both the FCA’s internal and external costs. The internal costs cover the cost of the permanent FCA staff engaged on this matter. The external costs include expenditure on external legal counsel, external forensic accountants and external contractors to assist with the investigation.

The FCA and PRA’s joint investigations considered the performance of certain former senior managers at HBOS in the years before its failure. The investigations considered whether or not those individuals should be subject to a prohibition order which would prohibit them from performing certain roles within the financial services industry.

The FCA and PRA conducted rigorous and forensic investigations. Evidence was gathered in order to assess whether or not each individual may lack fitness and propriety to hold certain senior roles within the financial services industry in the future. In the course of these investigations, the FCA and PRA gathered more than 2 million documents, interviewed former HBOS senior managers, engaged extensively with the parties, and undertook substantial analysis of contemporaneous documentary evidence considering those senior managers’ roles and responsibilities at HBOS prior to its failure in 2008.

The PRA’s Enforcement Decision Making Committee (EDMC) was created in August 2018 following HMT recommendation and exists separately to the FCA’s pre-established Regulatory Decisions Committee (RDC). In line with standard practice, each of these independent decision-makers reviewed the matters under investigation and have determined that no enforcement action should be taken against these former HBOS senior managers. These investigations have therefore been closed.

We estimate that responding to this part of your request in full would exceed the cost limit allowed under FOIA and therefore, that the exemption under section 12 (Cost of compliance exceeds appropriate limit) of FOIA applies. For more information on why this exemption applies, please see Annex A below.

When we refuse a request because it exceeds the cost limit, it is our policy to provide you with advice and assistance on how you can refine or limit your request so that it is more likely to fall within the cost limit. In this instance, we anticipate that specifying a shorter period of time would assist your request to possibly fall within cost limit. It would be helpful if you could also specify the names of people or parties that you are interested in terms of correspondence to/from Nikhil Rathi.    

Please note that, in offering to consider such a refined request, we have not considered whether any other exemptions apply, however due to the nature of the information requested, even if your request can be complied within the cost limit, it is likely that one or more exemptions under FOIA may apply. In particular, it is very likely that s44 FOIA (Prohibition on disclosure) would apply.