Many across the financial and regulatory space will feel that the inevitable has happened – the Financial Conduct Authority (FCA) confirmed that it has axed controversial plans to “name and shame” firms under investigation after months of criticism and speculation around the future of the proposal.
An expected U-turn of events
On March 12, 2025, the FCA issued an update on its “enforcement transparency proposals,” known across the industry as “name and shame.” The update centred on a letter sent by the regulator to the Treasury Select Committee that outlined improvements made to the regulator’s pace of investigations, and its next steps on a range of enforcement proposals.
The update summarized that:
“Given the lack of consensus, we will not take forward our proposal to shift from an exceptional circumstances test to a public interest test for announcing investigations into regulated firms.”
Describing the amount of criticism and discussion the proposals have generated since their initial announcement as a “lack of consensus” feels like the regulator putting things very mildly. In a comment included in the update, FCA Chief Executive Nikhil Rathi said:
“On our enforcement transparency proposals, we have always aimed to build a broad consensus. Considerable concerns remain about our proposal to change the way we publicise investigations into regulated firms, so we will stick to publicising in exceptional circumstances as we do today. We will implement changes which have commanded wider support and which we believe will help support our efforts to protect consumers from harm.”
The “concerns” that Rathi alludes to include the significant pushback the proposals have received, including being deemed “an abject failure” by the House of Lords Financial Regulation Committee. In the comments section of a Financial Times article on the announcement, those within the industry shared their strong feelings on the announcement to axe the proposal, with one commentor describing it as “the first common sense action from the FCA in years,” and another that the proposals had been “a shambles from start to finish” and that “heads need to roll.”
What were the FCA’s name and shame proposals?
A consultation document circulated in February 2024 outlined the FCA’s plans to announce when investigations would be launched into firms or individuals. In the words of Therese Chambers, joint Executive Director of Enforcement and Market Oversight, this would “amplify the deterrent impact … by enabling firms to understand the types of serious failings that can lead to an investigation, helping them to change their own behaviour more quickly.”
However, after substantial questioning and pushback from the industry, the FCA revised these proposals several times, firstly by lengthening the notice period given before conducting investigations and introducing a “looser” public interest test when considering naming firms that would take their interests into account.
Then, in November 2024, the regulator further clarified the proposals by declaring that it would not be announcing every investigation, would be introducing a more “stringent” public interest test to establish when to announce investigations, and would ensure that any and all tests would “look carefully at the impact on the firm and be particularly mindful of small firms.” The FCA also expected that the “name and shame” proposals would only lead to “two or three” more cases a year being publicized compared to current figures.
You win some, you lose some
In the Treasury Select Committee letter, Rathi pointed out that, although the FCA’s proposals around increased transparency would go no further, its work around increasing the pace of enforcement outcomes has seen results:
“We have significantly increased the pace and focus of our enforcement work and will continue to do so. Five recent investigations closed with a public outcome in less than 16 months, compared to an average length of 42 months in 2023/24 … These improvements have been widely welcomed … We can provide reassurance that our plan is so far delivering at least the same number of, if not more, enforcement outcomes, more quickly.”
The pace – or lack thereof – of investigations by the FCA has been a sore point for the industry, so these improvements will be well received. Prior to sharing the update and Treasury Select Committee Letter, it was reported that the FCA “organized a call … with industry bodies to inform them of its plans” – a clear sign that the regulator understands the need to engage the industry in discussions around policies and proposals, and hold itself to high levels of transparency to avoid further scrutiny.
The update saw the FCA commit to “reactively confirming investigations already in the public domain, public notifications which focus on the potentially unlawful activities of unregulated firms … and publishing greater detail of issues under investigation on an anonymous basis,” with the regulator set to publish a final policy by the end of June. By focusing on more well received proposals that still work to increase transparency, the FCA is making a hard-won compromise
What does this mean for the FCA’s future?
Alongside updating the industry on “name and shame” proposals, the FCA also discussed joint proposals with the Prudential Regulation Authority (PRA) first set out in 2023 around improving diversity and inclusion:
“In light of the broad range of feedback received, expected legislative developments and to avoid additional burdens on firms at this time, the FCA and PRA have no plans to take the work further.”
With diversity and inclusivity currently a hot topic due to movements in the U.S., the FCA’s decision not to progress its work in this area is likely related to its recent commitment to supporting the U.K. government’s growth agenda and reducing regulatory “burdens” on firms. This has also seen the regulator promising a “different relationship” and a more “hands off approach,” which includes outlining that it won’t be setting out specific rules around off-channel communication in the same way U.S. counterparts have.
The FCA also referenced future work on non-financial misconduct (NFM) following the results of its first survey into incidences of NFM in the financial industry, released in October 2024. While outlining that the FCA will “continue to prioritize” the topic, Rathi summarized:
“It is important that our approach is proportionate and aligned with planned legislation, so we are taking some further time to get this right and will set out next steps by the end of June this year.”
It seems that, burned by the overwhelming criticism it received for its “name and shame” proposals, other recent condemnation around its internal 12-month email deletion policy, and under pressure from the government to support growth, the FCA may well be much more cautious going forward.
