FCA softens ‘name and shame’ plans after City backlash
The Financial Conduct Authority (FCA) has softened its controversial ‘name and shame’ plans and will take into account the damaging impact the proposals could have on companies, after furious backlash from the City and Westminster.
In a statement today, the watchdog said it would set out plans for “further engagement” after its initial plans triggered “significant concerns” when they were announced in April.
Under its new proposals, companies will be given a ten day notice period that they are facing investigation – rather than the one day previously proposed – as well as an extra 48 hours’ notice should the regulator decide to announce an investigation.
The potential negative impact on a firm would also be “explicitly considered” as part of a public interest test, the FCA said. Previously it was not included as a factor.
“We have heard the strength of feedback to our original proposals, and we are making changes as a result,” said Therese Chambers, joint executive director of enforcement and market oversight. “We hope the greater detail published today supports the further engagement we hope to have on the proposals, before we make any final decisions.”
The revised plans mark a major climbdown for the regulator after its unexpected plans sparked fury earlier this year.
Trade groups and ministers in the previous government mounted a major lobbying effort against the regulator to force it to row back on the measures.
In an unprecedented intervention, then Chancellor Jeremy Hunt called on the watchdog to “re-look” at the proposals and the former City minister, Bim Afolami, was said to be privately seething.
While the FCA typically plots its regulatory initiatives in a grid to give companies foresight of changes, City groups also slammed the watchdog for failing to give them any heads up over the proposals.
The FCA has now admitted companies should have been warned.
“We welcome the FCA acknowledging that the proposals should have been in the Regulatory Initiatives Grid and also the constructive engagement we have had with them in recent meetings,” David Postings, chief executive of lobby group UK Finance, said.
“It is important to consider the impact on individual firms and the wider market before making any public announcement.”
The FCA said today that should its plans come into effect, they would only lead to public announcements “in a very small number of cases”. The FCA’s board is expected to announce final plans in 2025.