FCA drops contentious proposals on enforcement publication

The Financial Conduct Authority (FCA) has published a letter (dated 11 March) to the Treasury Select Committee providing an update on the FCA's approach to enforcement and diversity and inclusion proposals.

Following the FCA's second consultation on proposals for publication of enforcement measures, the FCA has decided not to proceed with all of its proposals. In particular, the FCA will not be publicising its investigations of firms at an earlier stage if there is a public interest. The FCA has taken this decision in response to the significant concerns raised by industry and the government. The FCA will be taking forward other proposed changes to its approach to enforcement, including reactively confirming investigations officially announced by firms or other regulators, issuing public notices on possible unlawful activities of unregulated and regulated firms, which should improve consumer protection, and publishing more detail of issues under investigation in anonymised form, potentially introducing an "Enforcement Watch" bulletin. The FCA intends to publish its final policy by the end of June.

The FCA also confirms that the Prudential Regulation Authority (PRA) and the FCA will not be taking forward at this time their plans to bring in final rules on diversity and inclusion in the financial sector (in response to their 2023 consultations). As noted in the FCA's related statement, this decision has been taken in response to the feedback the regulators have received, expected legislative developments in the area and so as to avoid imposing additional burdens on firms.

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