"While transparency remains crucial, it is equally important to safeguard the integrity of businesses, and action like this could in fact be deemed counterproductive"
- Henry Balani, global head of industry and regulatory affairs at Encompass Corporation
Chancellor Jeremy Hunt has become the latest person to issue a warning to the FCA over its plans to name firms under investigation.
Speaking to the Financial Times, Hunt said he hoped the regulator would “re-look” at its ‘name and shame’ proposals, which would enable it to name firms it is investigating at the outset of the investigation.
A total of 16 trade associations, including UK Finance and the City of London Corporation, have signed a letter to the regulator saying that the plans "have an unduly negative impact on the reputation on firms".
According to UK Finance’s chief executive, the plans would “undermine our financial services industry and leave us as an outlier internationally.”
However, the FCA remains firm in arguing that transparency is paramount and emphasises that not all firms will be named.
Henry Balani, global head of industry and regulatory affairs at Encompass Corporation, commented: "It's is no surprise that there have been concerns raised about the regulator's plans to publicly name firms under investigation. Such a move has the potential to significantly impact reputation, regardless of the outcome of investigations, with it being found that there are widespread impacts on banks linked to probes, including on areas such as business valuations.
"With a growth focus for the UK's financial services sector, it is imperative that all parties work together to boost trust and make positive progress. While transparency remains crucial, it is equally important to safeguard the integrity of businesses, and action like this could in fact be deemed counterproductive, when the focus should be on boosting services and the landscape for the better, by developing and leveraging best-of-breed innovation, for example."
