E-Learning Login
Compliance Portal
February 12, 2025
The House of Lords Financial Services Regulation Committee has published its report on the FCA’s plans to publish details of enforcement investigations early (see its Consultation Paper CP24/2, Part 1 and Part 2).
The Committee’s report is titled “Naming and shaming: how not to regulate”!
The government is applying pressure on the FCA to prevent it from harming the UK’s international competitiveness and growth plans by publicising enforcement investigations before they’ve been concluded, which was its proposal in CP24/2. Some were “worried that the UK was at risk of becoming an international outlier”.
The Committee was concerned at how surprised the FCA was to the reaction its consultation generated and “how it perhaps demonstrated a disconnect between the FCA’s senior leadership and the sector it regulated.”
The FCA has since engaged with the industry and revised proposals were issued in November last year. The Treasury, however, remains concerned about 'what happened over the course of this process'.
The report summary concludes 'We are clear that after the current consultation closes, the FCA must be transparent about the feedback that the revised proposals receive. The FCA must be able to demonstrate that the sector has been reassured that its initial concerns have been addressed and that it is willing to set out additional amendments to its proposals if necessary. If the FCA is unable to find an acceptable balance in these proposals between increasing transparency to help prevent consumer harm, and managing the potential risks to firms, individuals, and market stability, it should not proceed with these proposed changes'.
