Regulation  

Incoming FCA chairman admits error of judgement

Incoming FCA chairman admits error of judgement

The nominee for the position of chairman of the Financial Conduct Authority has said he made an "error of judgement" when he invested in the Ingenious film partnership.

Charles Randell has been put forward by HM Treasury to replace John Griffith Jones when he leaves the regulator in April.

Mr Randell, currently an external member of the Bank of England's prudential regulation committee, was a member of Ingenious Film Partners two LLP between 2006 and 2011.

He was asked about this today when he appeared before the Treasury select committee and said he considered the fact he hadn't made "sufficient investigation" into the scheme and had relied on his financial adviser to be an "error of judgement".

Mr Randell said: "I need to be careful here because anything I say will sound like an excuse and I take responsibility for the decision that I took, but I was reassured to hear that this partnership had been discussed with senior policy officials at HMRC who had indicated that they approved of it.

"It is clear to me now that far from taking any comfort from that, I should have seen it as a warning signal because the mere fact that an informal assurance was seen to be necessary should have been telling me that this was an investment for which there wasn't a specific statutory framework, there wasn't a binding approval mechanism and if HMRC did approve it in 2005, which I have been told repeatedly is the case, then it was always open to them to change their mind, which they obviously did do."

Mr Randell said he had not given specific instructions to his adviser which would have led them to recommend this investment.

He told the committee he had since "dispensed with the services" of his financial adviser, asked HMRC to provide him with an individual bill for the amount of tax he owed and paid this back in 2015.

The total bill came to around £114,000 plus interest.

Mr Randell was also asked about his opinion on the process for releasing FCA reports, and whether this should be reformed to allow this to be done more speedily.

This comes after the lengthy process for releasing the reports into HBoS and Royal Bank of Scotland's restructuring unit, which were both held up by the process of seeking consent from those mentioned in the reports.

Mr Randell said he did not think the problem was the process of Maxwellisation, which allows people to respond to criticisms in reports, but the process of obtaining consent from those mentioned.

He said: "You don't have to keep going back to someone who knows what the criticism is. They don't have a right to approve wording. They have a right to know what criticism may be made of them and to make representations."

Mr Randell worked at law firm Slaughter & May from 1980 to 2013, becoming a partner in 1989.