FCA gives update on a number of key proposals

The FCA has given an update on three important, and much discussed, proposals:

Diversity and inclusion proposals

The PRA and FCA consulted at the end of 2023 on proposals relating to diversity and inclusion targets and reporting¹. The FCA has indicated that in light of the broad range of feedback received (including criticism of the proposals in the Sexism and the City report), expected legislative developments, and to avoid additional burdens on firms at this time, there are no plans to take these further. The FCA says it will continue to support voluntary industry initiatives.

Non-financial misconduct

At the same time as the D&I proposals, the FCA consulted on amending the rules around non-financial misconduct² (i.e. relating to conduct such as bullying and harassment). Despite the time that has passed since the consultation, and the fact that the FCA has said a number of times it is prioritising this work, the FCA states that it needs further time to get its approach right and to ensure it is proportionate and aligned with planned legislation. Therefore, the FCA will set out its next steps by the end of June.

Publication of details of enforcement investigations

The FCA is no longer to take forward its proposals to amend the circumstances in which it publishes details of investigations into firms, and to apply a public interest test³. Instead, it will take forward work to confirm reactively investigations already in the public domain; to give public notifications of potentially unlawful activities of unregulated firms and regulated firms outside the regulatory perimeter if necessary to protect consumers or further investigation; and to publish more details of issues under investigation on an anonymous basis to highlight issues of concern. More detail will be published by the end of June. 

One of the concerns about the proposals was the length of time that FCA investigations take to complete. In an update to the Treasury Select Committee the FCA has indicated that the pace and focus of its enforcement work has increased.

Footnote

1. More detail about these is available here: Diversity and inclusion in the financial sector: Regulators consult on important changes – HFW
2. More detail about these is available here: 005451-HFW-Diversity-and-Inclusion-in-the-Financial-Sector.pdf and here: Insurance Bulletin, March 2024 – HFW
3. More detail about these is available here: FCA proposals for publication of investigations have merit in some circumstances but there are serious concerns – HFW and here: The FCA rows back on publication of investigations, but criticism continues – HFW