Last updated: 16 Dec 2024 02:00 Posted in:
The Financial Conduct Authority (FCA) has published the second phase of its consultation on proposals for increased enforcement transparency after ‘significant concerns’ were raised by financial firms.
New data released by the regulator shows the pace of investigations accelerating, including a number of investigations which took 16 months or less to complete. By providing data and case studies, as well as further detail on the public interest test, the regulator is proposing to share greater clarity on how decisions on announcing investigations could be made.
Four significant changes have been made to the FCA’s proposals in response to feedback:
• The potential negative impact on a firm would be explicitly considered as part of a public interest test – previously it wasn’t included as one of the factors.
• Firms would be given 10 days’ notice ahead of any announcement being made, rather than the 1 day originally consulted on. During this period, firms could make representations. If the FCA decides to announce, firms would then have an additional 48 hours’ notice before it is published.
• The potential for an announcement to seriously disrupt public confidence in the financial system or the market has also been included as a new factor in the public interest test.
• The FCA has clarified it won’t announce investigations which began before any changes to the policy come into effect. (Although it may reactively confirm investigations which are already in the public domain, where this is in the public interest).
Therese Chambers, joint executive director of enforcement and market oversight, said: “We have heard the strength of feedback to our original proposals, and we are making changes as a result. We hope the greater detail published today supports the further engagement we hope to have on the proposals, before we make any final decisions.”
Feedback to the first paper closed on 30 April. The FCA has continued to extensively engage with a wide range of stakeholders and is now seeking views on how the public interest test could work in practice, based on more detailed criteria and data.
It will continue to meet with firms, trade associations, consumer groups, the legal community and others. The FCA Board is then aiming to make a final decision in the first quarter of 2025.
“We have heard the strength of feedback to our original proposals, and we are making changes as a result. We hope the greater detail published today supports the further engagement we hope to have on the proposals, before we make any final decisions.”
Therese Chambers, Joint Executive Director of Enforcement & Market Oversight, FCA