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Will skip a lot of the pages initially,

Looks like Barclays withdrawing from the Clydesdale appeal is possibly clear now, because the FCA were going to run ahead of any appeal with the court ruling and force a redress process through. I did wonder if the legal system was such that if you had an appeal active you could then not challenge the same case in parallel on the same grounds. Hence, any appeal may now be going via the redrerss process directly.

1. The consultation on extension of the deadline to 2026 may be a bargaining chip on 2007 and the application of the Limitations act. The committee meeting touched on why 2007 and 2014 are an issue to do with Limitations act and suspending consumer rights.

2. The initial very telling point is that it is as soon as Page 4 (first page after the index) that they roll out the Clydesdale ruling and then in 1.8 lean on the "did not adequately disclose the commission arrangement" which is quite plausibly flawed on ground 1 to start with due to the lack of holistic consistency and the the inconcistency in the treatment of the commercial contract between the bank and the broker. Zero alignment with the commercial interests mentioned in the Supreme Court ruling or other higher case rulings.

3. Applying the claims to 1 Nov 2024 has other issues, namely the handbook and COCN changes in 2021 (i.e. the FCA made new rules that were flawed, even if you followed them to the letter).

4. [1.13] "moved to more transparent disclosure practices following the Court of Appeal judgment" - this may relate to the commercial tie, otherwise they are ignoring the Supreme Court.

5. [1.14] "proposing that lenders will deliver the scheme, rather than brokers" - because a number of brokers have already stopped trading.

6. [1.15] "Consumers who have already been compensated for complaints covered by the scheme would be excluded" - i.e. getting customers to agreeing compensation early.

7. [1.21] (a) a DCA - all included by default - this has serious legal flaws and is not in alignment with S404 redress. (b) 35% irrespective of the base rate at the time (considering this is up to Nov 2024) and the loan size is completely numerically incoherent and economically illiterate. This is stunningly dumb. 35% of 1% interest on £2000 one year loan = £7.

[1.26] - referencing Johnson commercial tie cases "These cases will be relatively rare."

[3.5] - "11.43 million with a DCA" - so, basic math, 11.43m x 85% participation x £750 average = £7.3bn

[3.6] - "We received advice from a statistician to ensure that our work was representative of the market." - we hired a consultant to take the blame.

I'll stop there while I have a break as this looks incoherent with section 404 aligning with what a court would award.

My guesses - do your own research - this is not advice of any sort.

The "existence and nature" of popcorn... munch... munch...

Don't forget to add the dividend taxes that have also been missed out on.

Then factor in that those tax revenues are immediate (predictable) and not delayed as a consumer then sits on any redress award before it cycles back into the economy again. That is if the consumer does not use the redress to pay down other loans and ends up with zero near term tax revenue at all.

Overall to date the whole FCA issue may well have had a considerable negative impact on HMRC revenue and it could add up to the equivalent of somewhere between 10% and 20% of the pending black hole. That's not a small percentage given the size of the black hole. Consider the whole process (redress is not taxable income in part or on the whole) and the net tax loss may end up quite considerable relative to the size of the overall redress pool. Just think it could end up as a £5bn plus tax loss, wow. Quarter or more of the pending black hole.

Unintended consequences springs to mind at this point or the road to hell is paved with good intentions.

I'll stick with the belief that the start of the consultation process will mark the low point in redress uncertainty, which may well mark the relative low point in the shares. That said I'd guess the shorts will try a flush and possibly get completely run over again (post result swing).

Todays volumes with 62% in the 485 to 487 range and only 6.6% in the 491 or higher range and yet the auction closed 491.4p. That gives a 0.2p change on the day. 30th Sep had reasonable volumes around the 494 level in addition to the 500, so the 491 may well be closer to the support for the 500 resistance.

Next week will be interesting to see if the 500 is tested more than once, breaks though and holds. Continuing the longer term trend and aligning more with the perspective as to where the bonds are trading. That said the FCA may end up with a magic mushroom session and release a multiverse type consultation paper.

Just my guesses, what do I know, do you own research.

Weekend popcorn indeed... munch... munch....

500p is being defended against a longer term rising trend and the two are seeminly at a point of battle. 502p (42% of volume) saw a number of trades (49) go through today that were on average (4.9k) a lot higher than the rest of the day with a 100k chunk in as well as a few 10k lots, which may look like short defense or volume of derivatives with a 500p strike.

Next few days will see if the rising trend is sustained or the shorts get to flush out some more retail and short term holders possibly on the back of hopes the redress consultation being totaly detached from law and reality.

Thinking back to the results and the kitchen sink being thrown in, it would appear that CBG are looking more and more cash/asset heavy and on a relative valuation (redress aside) they are looking like rich pickings for another bank or fund to buy out once any uncertainty subsides. They have afterall stripped themselves of most of the baggage that would otherwise look unappealing. The consultation process may well clarify that uncertainty very early on as the worst case scenario may well be highlighted in the consultation when it is released.

Going forwards I'm starting to struggle to see how CBG can avoid being taken over or growing at a much faster rate than they are indicating. Consolidation in the market would release a lot of excess capital and reduce costs far more, however some of that excess capital will shrink as it's distributed in redress. The CoCo bond poison pill of a cheap buy in could possibly be countered with delayed derivative expiries.

With the holding distribution and the ongoing short overhang it would be quite an interesting situation if a new holder stepped in with a fresh 5% (or more) aquisition, which is derivative derived (i.e. the holding aquired as the derivatives expire, comparable to BT and the recent run up as the 25% loaned shares was bought up / delivered). In the case of BT the 25% loaned shares ended up as an overhang on the price and BT bounced around 100p as a result.

I did wonder if derivative holdings are how the recent uptrend has been maintained and may well find an indication out in the next few days, or maybe longer when revealed. It would possibly explain the reason for the massive rebound after the results and large volume on the day.

Just some guesses and thoughts. Do your own research.

Rollercoaster popcorn again.... munch... munch...

The late story of the FCA watering down some consumer duty rules is quite interesting in the current moment in time.

https://www.telegraph.co.uk/business/2025/09/30/city-regulator-backs-consumer-rules-victory-rachel-reeves/

I had forgot to look at the shorts, it's been a while... 3% registered with Blackrock the last (new short 0.51%) change on the 10th Oct when the shares closed at 479.6p. If institutions own 88% and retail has 16m and the short is around 4.5m that's an interesting situation. The shorts may now be seemingly holding for a redress outcome or indication in their favour, however I'm not sure the DCA volumes may end up as large as the FCA are imagining based on one flaw in Clydesdale. The Clydesdale case does read like a back door FCA perspective (interpretation of thier own rules above the CCA for claims) of a fiduciary type (4.5.3R being met but not according to the FCA's supposed intent and the judges flawed perspective) duty. Asside from a separate issue implementing an override to the limitations act that the FCA may have relied upon, where possibly no deliberately concealed facts (in law not in regulatory intent) occured.

A rather interesting day with 439p (08:02:02) and 510p (14:35:03) traded to close only 2p down on the day with a hefty 1.9m shares traded on the back of results is quite something. The push down after the 510 traded was with only 108k shares for that 16p drop, however it may well have been some day traders and a last token effort to push the shares down after the results. The shorts who started the day off with 92k going through in the first 2 minutes to reach the 439p level but then may have faced a lot more buyers than expected. Two 100k trades went through holding the 500p level briefly, however at other times the price moved 8p on 1.3k in volume, pointing to a lot more going on off screen than on. 494p seeing the most volume with 70 trades on 255k total.

Either way, it feels like a step change in market reaction and behaviour to shorts. The shorts early today getting their positions well and truly run over in todays session. What a rollercoaster dip. All just my guesses, thoughts, etc. do your own research.

Popcorn moment over for now.... munch... munch...

Well, smuggled budgies aside, a few interesting events later... not a lot really changing.

The house of commons committee meeting was a bit stunning in terms of the near complete lack of any challenging questions. However, the interesting bit was on the commercial tie aspect relating to the manufacturers and new cars more than the used market. The FCA's perception that a significant portion of the DCA claims will get redress would appear to be a very clear contradiction to the SC ruling regarding Wrench. They would appear to be resting heavily on the Clydesdale ruling, which, given the SC ruling there is a significant portion of that ruling which would not hold up.

That brings the question back to why Barclays then backed out of the challenge in the CoA, so I went back to the ruling and had another read of the ruling and some more research. Few hours later some aspects stood out very problematic (SC ruling) and others were more arbitrary. One aspect that stood out was the judges argument that because the IDD contained the word "commission" and not the plural commissions the split parts of the commission were separate, even though they could not economically be separated (part of the overall commission) and that COCN 4.5.3R also contained the singular "commission" in conflict with the judges view. Something that given how the SC ruled on the commercial interests of the broker, that would get overruled at the SC level because it's clearly wrong when also looked at from a payment perspective (Clydesdale could only pay ArnoldClarke and not the broker who worked for ArnoldClarke - i.e. the commission was to a single commercial party and not parties in the plural).

Anyhow, the Clydesdale case (in it's uncontested form) is what the FOS and FCA would appear to be resting on to push forward with the DCA part of the redress, however it will be subject to a successful challenge on different parts if they ignore the SC ruling. The initial legal stages of a challenge can only follow the law and this is where the later SC ruling will clearly override aspects in the Clydesdale ruling. Barclays move was quite strategic and tactical. How much so will show in the consultation show.

The recent apparent auditor staffing issue (can't get the job done on time) with the drop in the share price is just an indication of nerves, uncertainty and the ongoing imbalance between buyers and sellers in the market (i.e. buyers held back due to the regulatory uncertainty). This may well just be a rinse repeat issue with the upcomming results, however positive they are the market may well just flush out short term limit longs. The main aspect will be what the longer term projections are given in relation to future earnings and how the business is going to be grown over the next few years.

Could say a lot more, but it's been quite nice just sitting back and watching the posts and the 500 level resistance.

Back to the popcorn.... munch... munch...

So, the FCA are basing the 2007 under "deliberately concealed" exemption of the 6 year time bar under the Limitations Act 1980 s.32(1)(b) "any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the defendant"

Which applied to the Johnson case because of the specifics of that case, for example with the faulty paperwork and the misleading situation around first refusal and the panel of lenders.

"We think this is likely to apply where there was inadequate or no disclosure of motor finance commission arrangements which may have prevented the consumer from making an informed decision" - contradicting or ignoring their own CONC rules.

PPI did not have a rule book (CONC) in place, which stipulated that the customer could ask for the commission. Nor within PPI was the customer presented with a pack that indicated the broker may recieve a commission (separate legal point even stated in CoA ruling that "may" in that instance is an indication that it will happen.)

Note the word "likely" above, because they are seemingly ignoring the specific legal points in the Potter case as to deliberately concealed (zero indication of a commission) and comparing them to the Johnson case.

Ignoring the FOS vs Clydesdale pending case implication on DCA's.

Ignoring the specifics of the Wrench case (DCA) which was not ruled unfair and undermines the work post the Oct flawed ruling.

"our estimates are highly indicative and susceptible to change"

"potentially hundreds of thousands/millions" - they have no idea of the scale - even with Supreme Court clarity on Potter and Hopcraft et.al..

"we expect that consumers will continue to want to access finance and lenders will still want to offer that finance" - a rather strange statement to make.

Summary would be where no "deliberately concealed" facts have been in play (Johnson) then no pre limitation act timeline case, regardless of commission level. Not "likely to apply where there was inadequate"

"inadequate" in English does not equite to "deliberately concealed" and to state the position this way is a very clear indication they are not going to follow Potter nor the law as stated in the Limitations Act 1980. Good luck with that approach.

Popcorn at the ready for the show... munch... munch...

The way that it seems to be worded is along the lines of a scheme that is across a group as a whole, regardless if they have paperwork and regardless if that paperwork is in alignment with say Hopcraft where no redress is due under a court.

The principle is that if you instigate a scheme and that is on the basis that companies, who no longer have paperwork have thier customers included regardless of legal state, all customers are treated as such even if they have paperwork, which clearly positions them as no redress due. It's the complexity of issuing redress where nobody can prove a contractual position, which in a court of law is completely untennable and would be thrown out immediately.

The FOS have rules in place, which are a contradiction to the legal position of contract law. Consider Company X, who throw's their contract documentation away after 7 years. Issue arrises under which FOS rules (in breach of time bar) allow that customer to make a claim from 12 years ago and the customers documents are cleverly fraudulent (completely valid prior contract with the financial figures changed). Who does the FOS believe and how do they prove that a customer is owed a sum of money ? Route to a bannana state and massive corruption.

The FCA may well try and push this route and in the short term they may appear to win out, however longer term they may well have to pay back a lot more after legal challenges run the course. The government position would then be, do they want this to be an election time overhang where the FCA are in the courts (under Labour) for acting beyond their guidance and legal grounds (s.404 court of law loophole avoidance abuse of power) ?

They can't instigate s.55 across the whole industry as it would be a clear breach of the intent of s.55 (company specific and not industry wide - as clearly stated and admitted by the FCA in the 4th Aug letter) and a very clear loophole avoidance of s.404, which would stand out as a potential abuse of power and a possible manipulation of original public intent.

There is also a potential far larger possible issue yet to become apparent (possible headlines), which may turn hugely embarrasing for the FCA and FOS as regulators of the market. Posible abuse or significant questions of a different kind going on under thier noses and possible judiciary / government ties. One to sit on for a bit more proof.

Just my guesses. Who am I to know. Do your own work and figure things out.

Now, where's that popcorn.... munch...munch...

The FCA Letter of the 4th August has a few interesting parts, with the initial one being "or that where there are records available from that

period, those consumers should be excluded", which points to a scheme contrary to the principles of s.404 alignment with awards coherent with what a court would award. i.e. they are going to try and award without basis and where it is 100% clear (via paperwork) that a consumer should not recieve compensation in alignment with a court. This will guarantee that the finance companies will push back very strongly.

Ignoring the bad gramatical english "And that failure to include these agreements in the scheme could prolong uncertainty on motor finance for several years." - where they recognise that the finance companies potentially have a very clear basis to challenge the FCA all the way to the Supreme Court and potentially end up with the government liable to compensate the finance companies for redress that is proven illegal.

"there are plausible scenarios... £18bn" - which go to the Supreme Court and find the FCA acted illegally, outside of the bound of thier role and very clearly contrary to FOS guidance to the FCA "(1)(d) the general principle that consumers should take responsibility for their decisions (24 Jan 2013)"

"and want commitment from industry and others not to seek to delay that" - Good luck with that if the intent is to make awards to people where paperwork exists that proves they do not have a right to legal compensation in a court of law. These will head directly to the courts in legal challenges under time bar, illegal awards contrary to the CCA, breach of FCA duty (1)(d), FCA sitting on hands, etc.

"Our detailed review of the past use of motor finance has shown that many firms were not complying with the law or our disclosure rules" - which was carried out before the Supreme Court ruling and likely had not been re-worked that weekend to re-evaluate possible liabilities, instead the magic finger in the air £9bn political guestimate.

I still think they will have to revert to 2013 at the earliest to avoid a couple of years of court cases and a liability overhang on the government.

Broke the short term wedge today....

Interesting times ahead, get the popcorn ready for the 9th.... munch... munch...

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