The Court of Appeal has today handed down an important decision on the nature and scope of the FSA’s powers to require production of documents under the Financial Services and Markets Act 2000 (FSMA), Financial Services Authority & Ors v Amro International & Ors [2010] EWCA Civ 123. The case involved a request made to the FSA by the United States Securities and Exchange Commission. The Commission had instituted proceedings in the United States alleging fraudulent and manipulative trading in the shares of a US company. Pursuant to a multilateral memorandum of understanding concerning the exchange of information (the Memorandum), the Commission sent to the FSA a letter requesting the FSA’s assistance in obtaining the production of documents from a London-based accounting firm (G) which acted for two companies implicated in the US litigation. In response to the request, the FSA appointed investigators under the FSMA and the investigators issued notices to G pursuant to s. 171 and/or s. 172 FSMA to produce the documents and information described in the Commission’s request. Overturning the judgment of the High Court, the Court of Appeal held that the FSA’s actions in appointing investigators and issuing the notices were lawful under the FSMA. In the course of its judgment, the Court of Appeal rejected arguments advanced by the respondents to the effect that: (a) the FSA had to verify the information provided by the Commission and the Commission’s need for documents prior to taking action under the FSMA; (b) the FSA’s actions were at odds with the terms of the Memorandum and (c) it had to be established that production of the documents was ‘necessary or expedient’ in all the circumstances. It held that: there was nothing in the statute which required the FSA to second-guess a foreign regulator as to its own laws and procedures or as to the genuineness or validity of its request for assistance; the question of whether to provide the requested assistance was to be determined under the FSMA and not the Memorandum; and the test to be applied in respect of the production of documents was that contained in s. 171(2), namely whether the investigator reasonably considered production to be relevant to the purposes of the investigation; the test contained in s. 171(2) was a relatively low hurdle which had been cleared on the facts of the case. The Court of Appeal recognized that the FSA’s actions might engage the Article 8 right to privacy and, hence, considerations of proportionality came into play. However, it concluded that the actions taken by the FSA were proportionate in all the circumstances.