Regulator will drop plans to ‘name and shame’ UK companies
The Financial Conduct Authority (FCA) is set to announce that it will shelve plans to “name and shame” companies accused of falling foul of its rules.
Following pressure to drop the controversial policy, the financial watchdog will U-turn on the new threshold for disclosing more public details on companies under investigation.
Announced back in February 2024, the proposal of the new “public interest framework” sparked a substantial backlash in the City.
FCA chief Nikhil Rathi has come under fire from the Square Mile and Westminster, with a House of Lords report in February slamming the plans as an “abject failure” – that risked denting the UK’s investment appeal and economic growth.
The framework was intended as a deterrence against financial misconduct, with a view to boosting transparency in the financial sector.
In an attempt to resurrect a policy under heavy siege, the FCA set out to “fundamentally reshape” the policy in November.
Following a consultation, the regulator was forced to clarify that it would “absolutely not be announcing every investigation”, according to Rathi.
Ashley Alder, the FCA chair, admitted at the time that the announcement had been botched, stating that it was “probably not” the regulator’s finest hour.
CityAM columnist Mark Kleinman wrote in February that the “FCA is naming and shaming itself, not the City”.
“It’s rare to get a consensus this strong – but then it’s rare to get a set of proposals as fundamentally misguided and cackhandedly communicated as the Financial Conduct Authority’s ‘name-and-shame’ rules,” he added.
The move comes amid a febrile time for UK regulators, who are under pressure from the government to innovate – at a time when the Treasury finds itself with a dwindling number of levers to stimulate growth.
On Tuesday, Sir Keir Starmer announced that the Payment Systems Regulator would be scrapped and rolled into the FCA.
Regulators are under increasing pressure to galvanise growth in the economy, the with then-CMA chief Marcus Bokkerink fired back in January by Rachel Reeves for a lack of focus on economic growth in a “clear message”.