The Financial Conduct Authority has rowed back on plans to improve diversity and inclusion at regulated firms, while also scrapping proposals to ‘name and shame’ businesses at an earlier stage of enforcement investigations.
Both decisions follow wider consultations and engagement with the industry.
The proposals on diversity followed a joint FCA and Prudential Regulation Authority consultation. Initially this had proposed minimum standards for larger firms, which would require them to outline diversity strategies, which would involve setting targets to address under-representation, and then reporting on progress towards these goals.
The FCA said that in light of the broad range of feedback received, expected legislative developments and to avoid additional burdens on firms at this time, the two regulators had no plans to take these proposals further.
When it comes to enforcement activity the FCA had previously proposed shifting from an ‘exceptional circumstances test’ to a public interest test for announcing investigations into regulated firms.
But it said there was a lack of consensus on this approach, which would not now be introduced. However the FCA said there was support for public notifications which focus on the potentially unlawful activities of unregulated firms and regulated firms operating outside the regulatory perimeter, as well as publishing greater detail of issues under investigation on an anonymous basis.
The FCA said it will take forward these proposals, publishing final policy by the end of June.
FCA chief executive officer Nikhil Rathi says: “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 which have commanded wider support and which we believe will help support our efforts to protect consumers from harm.”
