During the summer of 2012, Steeles Law reported on the outcome of the Financial Services Authority’s review of the conduct of banks when selling interest rate derivative products to SMEs. In that article, we provided our comments and suggested that, in our opinion, loose ends had been left by the FSA.
It will shortly be revealed whether the FSA has attempted to address, and succeeded in tying up, those loose ends!
As regular readers of our articles will know, the FSA and major banking institutions reached an agreement in June 2012 whereby, amongst other things, the banks would provide redress to non-sophisticated customers to whom it sold Structured Collars and would review the sales to non-sophisticated customers of other interest-rate hedging products.
Whilst further progress of the agreement has been perceived by some as being too slow, to ensure that all customers in scope of the agreement with all the banks are treated fairly, the FSA has over the last few months required those banks to develop a methodology explaining how they propose to conduct the redress and review of past business.
In doing so, the FSA has required the relevant banks to conduct a pilot scheme involving a selection of each bank’s affected customers to assess each bank’s approach and ensure that it is delivering the right outcomes for customers. The FSA stated that it would be actively involved in reviewing the bank’s methodology and conduct of the pilot scheme, and would require changes where necessary.
It has recently been reported in the media that the outcome of the pilot scheme is due to be published on Thursday 31 January 2013.
Please refer back to our website for an update on the outcome of the pilot scheme and our comments as to how this will affect SMEs who have unfortunately found themselves embroiled in the “Interest Rate Swap Scandal”.
At Steeles Law we have acted and continue to act for a number of clients involved in disputes with banks including the mis-selling of complex financial products. If you or your business has entered into a hedging agreement, whether that agreement remains in place or not, we would like to hear from you. For a no obligation discussion about interest rate hedging products call us today.
If you require do require assistance please contact us.