FCA Chief Signals Shift in Approach to ‘Name and Shame’ Policy Amid Backlash

The UK’s Financial Conduct Authority (FCA) is preparing to ease back on its controversial “name and shame” proposals for companies under investigation. Nikhil Rathi, the FCA's chief executive, has revealed that the regulator will be releasing an update on these proposals next week.

The original proposal aimed to publicly identify firms under investigation when it was deemed in the public interest to do so. However, the plan has attracted fierce opposition from businesses, particularly those concerned that publicizing investigations could unfairly damage reputations, even if companies are ultimately exonerated.

Addressing a House of Lords committee, Rathi acknowledged the feedback from businesses and emphasized that the FCA is now looking to “fundamentally reshape” the proposals. “This is not a case of us opening up the entire book of investigations, that was never our intention,” he stated. He further clarified that the FCA would “absolutely not be announcing every investigation,” suggesting a more restrained application of the policy.

Rathi noted that, under the revised plan, the FCA might publicize investigations in “two or three more cases of regulated firms a year.” He underscored that this limited approach would mean the policy would not represent a significant departure from current practices.

The statement is the latest signal that the FCA is rethinking its approach. In September, the regulator had already acknowledged the backlash, admitting that the “name and shame” proposal had become a “lightning rod” issue within the industry. This has led the FCA to reconsider the scale and scope of the policy.

The FCA has now committed to a more nuanced approach, with each investigation to be reviewed individually. Rathi emphasized that there would be “no presumption of publication,” aiming to address concerns raised by firms that could be negatively impacted by premature publicity of investigations that might later be resolved without findings of wrongdoing.

A final decision on the new rules is expected early in 2025, with Rathi’s comments suggesting a scaled-back policy that would balance public interest with corporate reputations.

By fLEXI tEAM