By PAUL O’DONOGHUE, Senior Correspondent
THE UK’s Financial Conduct Authority (FCA) has abandoned its plan to publicly ‘name and shame’ certain firms under investigation.
The regulator is expected to announce today that it will not introduce a public interest test for disclosing company names. It will instead maintain its policy of naming firms only in exceptional cases.
The FCA had already softened its stance on the ‘name and shame’ policy in November. It revised its proposal to give firms ten days to respond to a draft announcement before disclosure. If the FCA proceeded, companies would get an extra two days’ notice.
Despite these changes, the plan remained controversial. Last month, a House of Lords committee urged the FCA to drop the initiative, calling it an “abject failure” and criticizing the consultation process.
FCA statement
Confirming the decision, the FCA said in a statement: “Given the lack of consensus, we will not take forward our proposal to shift from an exceptional circumstances test to a public interest test for announcing investigations into regulated firms.”
Nikhil Rathi, the FCA’s chief executive, said: “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.”
The regulator said it was considering similar issues, such as public notifications which “focus on the potentially unlawful activities of unregulated firms”. It also said it may and look at publishing “greater detail of issues under investigation on an anonymous basis”.
Origin of FCA ‘name and shame’ proposal
The FCA unveiled its ‘name and shame’ proposal in February 2024. The initiative would have meant identifying financial companies under inquiry more frequently – and at a much earlier stage in the FCA’s investigations. The regulator said the move was an effort to increase the deterrence of effect FCA probes.
The plan would have been a major change from the normal process, where investigations are only announced in very limited circumstances.
However, the announcement received fierce pushback from the finance industry. Companies argued that the approach is unfair, particularly for firms ultimately found innocent. Many politicians also said the move was anti-business and would make UK finance firms less competitive.
In September, the FCA admitted the plan had become a “lightning rod”, acknowledging significant opposition from financial institutions.
Despite proposing a watered down version of the initiative, the move still faced major opposition. Last month, the UK’s House of Lords publicly called on the (FCA) to abandon the plan.
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