UK: ICO And FCA Announce New Memorandum Of Understanding

Last Updated: 3 April 2019
Article by Miriam Everett and Maggie O'Leary

On 18 February 2019, the Information Commissioner’s Office (the “ICO“) and the Financial Conduct Authority (the “FCA“) published a new Memorandum of Understanding (“MoU“) between them. This will no doubt be of interest to any business regulated by the FCA and while it is good news that regulators will be co-operating in the exercise of their functions, the MoU does not remove the risk for such businesses that they could, in the event of any data protection breach, face parallel investigation and enforcement action from more than one regulator, both with very significant sanctioning powers.

We have set out below a high-level overview of the MoU, the conduct of investigation and enforcement and the legal basis on which information can flow between the two regulators – paving the way for further joined-up regulatory thinking in the wake of the GDPR.

The MoU

The MoU sets out the broad principles of collaboration and the legal framework governing the sharing of information and intelligence between the ICO and the FCA. The shared aims of the MoU are to enable closer working relations, including the exchange of appropriate information, to assist in and enhance the discharge of each of the regulators’ enforcement and regulatory functions.

Under the MoU the ICO and FCA agree, at their discretion, to:

  • alert each other to potential breaches of the legislation regulated by either the ICO or the FCA, discovered whilst undertaking regulatory duties, and to provide relevant and necessary supporting information (subject to any legal or procedural restriction on the disclosure of information);
  • communicate and consult on a regular basis to discuss matters of mutual interest and to address common issues and threats;
  • share information on issues of interest including, but not limited to:
    • investigations and notification of action taken against a person or entity by one regulator which may be relevant to the functions of the other;
    • information held by either regulator in respect of fraud or criminal activity which may call in to question the fitness or propriety of an FCA-authorised firm, certified individual or approved person; or
    • information or intelligence held by the ICO indicating there may be a failure of an FCA-authorised firm’s regulated activities;
  • co-ordinate in respect of reviews, calls for evidence and recommendations directed at either regulator and if information gathered by one regulator is deemed to be materially relevant to the other, notification will be provided to that regulator so that it may request disclosure of such information;
  • in the case of a major incident of mutual interest at an FCA regulated firm, work together in line with agreed incident protocols to secure optimum outcomes for consumers and ensure incidents are handled expeditiously;
  • collaborate and harmonise in rule and policy making as well as ensuring respective awareness activities are complementary;
  • where appropriate, share communication and publication plans to facilitate consistent messaging and effective resource planning;
  • ensure that:
    • appropriate security measures are agreed to protect information transfers in accordance with the sensitivity of the information and mitigate the risk of inappropriate disclosures;
    • appropriate consultation is held prior to any onward transmission of information to a third party, or for use in an enforcement proceeding or court case; and
    • in addition to the reporting obligations conferred by the GDPR and/or the Data Protection Act 2018 (“DPA“), the regulators shall notify the originating party of any wrongful disclosure of information without delay;
  • monitor the operation of the MoU and perform biennial reviews.

Investigation and enforcement

The ICO and FCA have overlapping functions and powers and in mutual cases they will agree the most appropriate body to commence and lead investigations. Where the regulators agree that both bodies should carry out an investigation it is agreed that they will run in parallel unless the facts suggest that one investigation should take precedence. Further, the regulators have the ability to refer an action to the other if they are better placed to appropriately deal with the action. The MoU therefore does not rule out the possibility that businesses could face investigation and enforcement action from both the ICO and the FCA for the same data breach.

To the extent permissible by law and having regard to their respective powers, expertise and resources, the regulators will keep each other abreast of significant developments where the other is likely to have an interest and will allow for the proper exchange of views. If an enforcement decision is taken against a subject the regulators should consider if co-ordinated publication of enforcement announcements are possible and, in any event, will notify each other at least 24 hours in advance of any public statement or press release in which the other regulator may have an interest.

Information sharing between regulators

The FCA may share confidential information with the ICO in order to carry out its own statutory functions under the Financial Services and Markets Act 2000 (Confidential Information) Regulations 2001 or to facilitate the carrying out of a statutory function of the ICO. In respect of the disclosure of personal data, the FCA may disclose such information under the GDPR and the DPA as a controller to the extent there is a legal basis to share it and that in doing so would otherwise be compliant with data protection principles. Pursuant to Section 131 of the DPA, the FCA would not be prohibited or restricted from disclosing information to the ICO provided it is information necessary for the discharge of the ICO’s functions. Section 131 may therefore provide a legal basis on which the FCA can disclose personal data to the ICO.

The ICO will receive information from a range of sources, including personal data. The ICO may process personal data in accordance with the principles of the GDPR, the DPA and all other applicable legislation. Section 132 of the DPA provides that the ICO may share information obtained in the course of discharging its functions where there is lawful authority to do so. Disclosure will be lawful in circumstances where the sharing is:

  • necessary for the purposes of the ICO discharging its functions;
  • made for the purposes of criminal or civil proceedings; or
  • necessary in the public interest, taking into account the rights, freedoms and legitimate interests of any person.

Summary

In the pre-GDPR era, businesses in the financial services sector had more reason to fear the long-arm of the FCA for data protection infringements. Since May 2018 and the new sanctioning powers conferred by the GDPR (fines of up to 4% of total global annual turnover or €20 million (whichever is the higher)) boards the UK over are rightfully concerned by the risk of potentially significant penalties being issued by the ICO. As we can see from the MoU, however, both regulators have the ability to investigate and take enforcement action on businesses, in parallel or consecutively. The regularity with which dual-investigations and enforcements will be undertaken remains to be seen but will continue to cause consternation among businesses regulated by both the FCA and the ICO.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions