The Financial Conduct Authority (FCA) has gone back on plans to announce enforcement investigations early to increase transparency due to a “lack of consensus”.
The regulator will no longer move forward with proposed plans to publicly announce enforcement investigations into regulated firms in the public interest, and will continue with its practice of announcing exceptional circumstances.
Last month, the House of Lords Financial Services Regulation Committee published a report saying the regulator had not “made a convincing case” to change its rules and argued this could harm the reputation of firms.
The FCA has since written to the Treasury Select Committee to detail plans for improving the pace of investigations. It said that, following “extensive engagement”, there was support for “reactively” announcing investigations that were already public.
It said there was also support for public notifications regarding potentially unlawful activities of regulated firms and regulated firms acting outside regulatory perimeters, and publishing more details on issues under investigation anonymously.
The FCA will publish its final policy including these proposals by the end of June.
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Nikhil Rathi, chief executive of the FCA, said: “We are speeding up our enforcement work. On our enforcement transparency proposals, we have always aimed to build a broad consensus. Considerable concerns remain about our proposal to change the way we publicise investigations into regulated firms, so we will stick to publicising in exceptional circumstances as we do today.
“We will implement changes [that] have commanded wider support and [that] we believe will help support our efforts to protect consumers from harm.”
Drawing back from diversity and inclusion plans
The FCA will also not proceed with plans to introduce rules aimed at improving diversity and inclusion in regulated firms.
This was part of the FCA and Prudential Regulation Authority’s (PRA’s) announcement to bring in such measures.
The regulator said based on feedback, expected legislative changes and to avoid additional burdens on firms, it would drop these plans.
Separately, the FCA said it would be prioritising work to tackle non-financial misconduct to improve outcomes for markets and consumers while reducing harm.
It said it was important for its approach to be “proportionate and aligned with planned legislation”, so would take more time to refine its approach and announce plans by the end of June.
