FCA enforcement “name and shame “proposals – the never-ending story?
Further to our earlier article on the subject in March 2024, September 2024 and October 2024, the Financial Conduct Authority ("FCA") will now be publishing an update on its “name and shame” enforcement proposals next week; we understand the updated proposals are likely to be different from those controversial proposals that were originally set out in Consultation Paper 24/2 that was published by the FCA back in June 2024.
The CEO of the FCA, Nikhil Rathi, gave evidence to the Financial Services Regulation Committee on 13 November 2024 and said that the regulator’s update would have been published that same day but that he wished to hear first from the Committee with its views.
It seems that next week’s update will see the FCA acknowledging that the manner in which they first communicated the proposals led to some misunderstanding, principally because of the vague nature of certain aspects of them (not least, the public interest framework to be applied by the FCA in deciding whether or not to publicise enforcement investigations).
Mr Rathi commented:
“We want to bring a lot more clarity…. including making clear that we would look carefully at the impact on the firm and be particularly mindful of small firms and give at least 10 business days for representations…. To makes sure there is a process whereby firms can properly engage with the potential of a formal announcement”.
So, the FCA is not now taking forward the name and shame proposals as originally designed however, as we previously predicted, they are not going away but are likely to be tweaked following industry stakeholder feedback over past months.
As well as clarifying the public interest framework, the FCA’s reframed proposals will include case studies of past enforcement actions which would be suitable for publication under the new proposals. The proposals will then be subject to an FCA board decision in Q1 2025.
In other enforcement news Mr Rathi said that, historically, enforcement investigations have taken 42 months to complete but are now in some cases taking 15 to 16 months, with the number of investigations resulting in no further FCA action coming down from 2/3 to ½ (with that number expected to drop further).
Please tune in next week for more news
