"We are committed to achieving this in the right way for UK consumers and markets, so we won’t be rushing into any decisions. We want the right solutions, not the quickest ones."
- Therese Chambers, FCA
The FCA will shortly reveal more details of how its proposed 'name and shame' rules will work in practice.
Earlier this year, the regulator announced new proposals that would allow it to identify firms at the outset of an investigation, providing the firm with 24 hours’ notice that it is doing so.
The FCA said it wanted to be more transparent when an enforcement investigation is opened, including publishing updates on investigations where appropriate and being open about when cases have been closed with no enforcement outcome.
The moves are a step change from the current process where investigations are only announced in very limited circumstances.
During a speech this week, Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: "This autumn, we will intensify our engagement – meeting with trade associations, firms, those on all sides of the debate – exploring how we can develop our proposals. As part of this, we recognise the desire for greater definition on any new public interest test.
"Later this autumn we plan to provide greater detail on how it could work in practice. To bring this to life, we will publish case studies examining how the criteria might apply and what announcements could look like, as well as more information on the numbers of cases that might be affected."
The proposals were initially met with widespread criticism. Then-chancellor Jeremy Hunt said he hoped the regulator would “re-look” at the proposals, and a total of 16 trade associations signed a letter to the regulator saying that the plans "have an unduly negative impact on the reputation on firms".
In her speech, Therese Chambers noted: "While consumers groups, whistleblowers and some other regulators welcomed the prospect of greater transparency, the companies we regulate were overwhelmingly against.
"So first, let me assure you all: we are listening. We have analysed each and every one of the more than 130 responses to our consultation. And we are not going to rush this."
Chambers said that "appropriate openness" could support consumer protection by giving them information that may support their decision-making, improve the market by highlighting concerning conduct and allowing others to course correct risk, and assure those who have potentially vital evidence, including whistleblowers.
She added that it "could address the odd situation we find ourselves in, where a fellow UK regulator can announce an investigation, but we would be unlikely to be able to announce... that we too were running enquiries".
She noted the recent fine for PwC, where the FRC was able to announce an investigation running parallel to the FCA's, around two years before the FCA confirmed its findings (and that the investigation had existed at all).
However, she reassured the market that the proposals wouldn't indicate a "sudden switch to a blanket ‘computer says yes’ approach".
Chambers explained: "We are not proposing moving from publicity in zero cases now, to 100% of cases in the future. Rather, a case-by-case approach following assessment of clearly defined criteria - including consideration of the potential impact on the firm and market. But we heard loud and clear that the criteria we consulted on were too high level and lacked specificity."
She concluded: "We heard clearly too the concern that firms felt they would not have sufficient time to make representations, and will respond to the constructive feedback we’ve received on this point. Allowing firms time to provide their views on whether, what and when we announce, will be part of any proposal we take forward.
"We do think the case for a degree more transparency remains strong. But it needs to be seen within the vital context of a focused number of cases likely to deliver the greatest deterrent, and delivered much faster.
"We are committed to achieving this in the right way for UK consumers and markets, so we won’t be rushing into any decisions. We want the right solutions, not the quickest ones."
