The FCA has published the second phase of its consultation on proposals for increased enforcement transparency after ‘significant concerns’ were raised by financial firms.

New data released by the regulator shows the pace of investigations accelerating, including a number of investigations which took 16 months or less to complete. By providing data and case studies, as well as further detail on the public interest test, the regulator is proposing to share greater clarity on how decisions on announcing investigations could be made.

As a result of consultation responses to what have been dubbed the ‘naming and shaming’ proposals, some significant changes have been made. The potential negative impact on a firm would be explicitly considered as part of a public interest test – previously it wasn’t included as one of the factors. The potential for an announcement to seriously disrupt public confidence in the financial system or the market has also been included as a new factor in the public interest test.

Firms would be given 10 days’ notice ahead of any announcement being made, rather than the single day originally put forward. During this period, firms could make representations and, if the FCA decides to announce, firms would then have an additional 48 hours’ notice before it is published.

The FCA has also clarified that it will not announce investigations which began before any changes to the policy come into effect, although it could reactively confirm investigations which are already in the public domain, where this is in the public interest.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: “We have heard the strength of feedback to our original proposals, and we are making changes as a result. We hope the greater detail supports the further engagement we hope to have on the proposals, before we make any final decisions.”

---