Chancellor Warns Against Impacts of Naming and Shaming Firms Under Investigation on Economy
Chancellor Jeremy Hunt expressed his thoughts as the Financial Conduct Authority looks to increase transparency by sharing more details about enforcement investigations.
Hunt suggested that revealing the names of companies early in the investigation process by the UK financial regulator could impede economic growth if approved. The proposed plans aim to provide the public with updates on investigations, including their initiation and progress, as well as the identification of the entity under scrutiny, deviating from the current limited disclosure practice.
Hunt voiced concerns about the potential negative impact of the FCA’s “naming and shaming” initiatives on the financial services sector. The FCA functions independently from the government and regulates approximately 50,000 financial services firms and markets in the UK. Recently, the FCA and the Prudential Regulation Authority were tasked with new competitiveness and growth objectives by ministers.
While the Treasury criticizes the new approach, the FCA’s executive director of enforcement and market oversight, Therese Chambers, believes it will enhance transparency and public trust in the regulatory process.
The decision to publicly name a company under investigation will be made case by case, focusing on its relevance to the public. The FCA emphasized that an investigation announcement does not indicate a confirmed breach or misconduct. In response to Hunt’s input, the FCA stated that it will consider feedback, including from the government, during the consultation process.
Overall, the FCA aims to maintain the competitiveness and growth of the UK’s financial markets by strengthening regulation and ensuring accountability through a transparent enforcement approach.
