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The UK financial watchdog is seeking to address concerns about its plans to publicly name more companies it investigates, stating that the changes will only impact a small number of cases.
Nikhil Rathi, CEO of the Financial Conduct Authority, acknowledged the opposition to the proposals and promised to make adjustments, such as providing companies with more notice before disclosure.
This comes shortly after Sir Keir Starmer pledged to overhaul Britain’s bureaucracy and encouraged regulators to focus on promoting growth. The FCA is under pressure to demonstrate that it is fulfilling the additional objective of considering growth and competitiveness set by the government last year.
Rathi admitted that “the jury is still out on whether the FCA is contributing to growth,” noting that there is more work to be done.
The FCA faced backlash earlier this year when it suggested increasing transparency in its enforcement activities by introducing a “public interest test” to determine when to publicly reveal companies under investigation.
Currently, the FCA only discloses enforcement activities mid-investigation in exceptional circumstances. However, there have been calls for more transparency, including from the House of Commons public accounts committee regarding the British Steel workers’ pensions mis-selling scandal.
Rathi stated, “Our current approach is not effective. We believe greater transparency can reduce harm, boost whistleblower confidence, and benefit compliant firms.”
He reassured that only a few cases would be affected by the proposed changes, as many are already disclosed by firms themselves.
The FCA will provide more information and case studies on the practical implementation of the proposals next month, with a final decision expected early next year.
UK Finance welcomed the FCA’s willingness to listen to feedback but expressed caution about the potential impact on financial stability. The industry emphasized the importance of giving companies sufficient notice before disclosure.
At the same event, the head of the Bank of England’s Prudential Regulation Authority announced plans to shorten the bonus deferral period for bankers as part of efforts to support growth.
Sam Woods noted that the UK’s requirement for bankers to defer bonuses for up to eight years was excessive and announced a reduction to five years for senior bankers and four years for other executives. Additionally, bankers will have the option to receive a portion of their bonus in the first year instead of waiting three years.