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FCA Receives Backlash Over Plan to ‘Name and Shame’ Companies Under Investigation

FCA backlash over name and shame policy

The UK’s top financial regulator is encountering substantial resistance from the government and City executives regarding its proposal to increase the frequency and timing of “naming and shaming” companies under investigation.

This initiative has sparked frustration within ministerial circles, raising concerns that the Financial Conduct Authority’s regulatory approach is detrimental to the City of London and could drive businesses overseas.

One prominent government official remarked: “The FCA claims to consider competitiveness, yet frequently makes decisions that undermine the UK’s competitiveness. They need to cease this behavior. Our country cannot afford it any longer.”

The FCA’s proposed shift, outlined in a consultation paper in February, seeks to enhance transparency regarding the watchdog’s enforcement activities and amplify the deterrent effect of such investigations on the market.

However, this move has been met with resistance from City lawyers who argue that it could severely harm their clients both in terms of reputation and finances. They point out that approximately 65 percent of the agency’s investigations conclude without taking any action.

Miles Celic, CEO of TheCityUK, stated: “The industry opposes the FCA’s proposal to name and shame financial services firms before the conclusion of enforcement investigations. This contradicts the fundamental legal principle of ‘innocent until proven guilty’ and risks eroding trust and confidence in the broader industry and the UK’s competitiveness. It would significantly and unnecessarily tarnish a firm’s reputation and value, particularly considering that FCA investigations typically last four years and many conclude without any action being taken.”

Read more: Forex News Live

Despite these objections, the FCA asserts that the proposed change would align its practices with those of other UK regulators and emphasizes the importance of early disclosure in the public interest. The consultation period has been extended to allow for more comprehensive feedback on the potential ramifications of the policy.

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