The FCA has dropped three of its top regulatory initiatives, responding to industry criticism and government pressure to boost competitiveness and economic growth. The announcement was made in a letter to the influential House of Commons Treasury Committee amid mounting pressure on the regulator to ensure that its rules do not stifle U.K. economic growth.
Nikhil Rathi, Chief Executive Officer of the FCA, commented: “We are speeding up our enforcement work. 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."
Regulatory plans to "name-and-shame" companies under investigation and scrutinise the diversity and inclusion practices of businesses have been dropped, which lawyers see as a major retreat. Proposals to crack down on non-financial misconduct were also put on hold.
In relation to this, Ritwick commented: "The City will welcome this significant reversal from the FCA, which comes in response to pressure from the regulated community and public officials."
"The government's pro-growth agenda is already having a substantial impact on the FCA's decision-making but it remains to be seen how it will affect ongoing enforcement cases in the short-to-medium term."