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The financial surveillance dog of Great Britain should largely abandon its controversial plan to “name and shame” more companies than it investigates, marking a major reversal after the regulator’s growing pressure to abandon politics.
The Financial Conduct Authority plans to announce Wednesday that its proposal to apply a new public interest test on the advisability of disclosing more companies under survey has been abandoned, according to people familiar with the issue. Instead, he sticks to his existing “exceptional circumstances” test.
This is an important reversal for the British regulator, which sparked a major reaction from the city and criticism from government representatives when it announced the plans in February 2024.
Nikhil Rathi, CEO of the FCA, was criticized for the proposal in the midst of increasing concerns according to which regulator’s proposals conduct affairs abroad at a time when the government tries to strengthen growth.
The government has prompted many regulators of the country to present more pro-growth proposals. On Tuesday, Sir Keir Starmer said that he had decided to chop the payment systems regulator by merging it with the FCA.
This comes from weeks after the ministers pushed the chair of competition and market authority after having decided that it was insufficiently concentrated on growth.
The U-turn intervenes despite the FCA insurance that it would apply close parameters on which it would announce the surveys by weighing the impact on the company under control.
In November, the FCA responded to the criticisms of its proposals to disclose more the companies it investigates by saying that it would give companies a 10 -day notice instead of a single one and to take into account the impact on a company, its course in action and its broader financial stability.
He also declared that the new policy would not lead to one or two other surveys on regulated companies disclosed each year, in addition to one or two which are already.
The FCA organized an appeal Tuesday with industry organizations to inform them of its plans and declared that it would inform in writing the selective committee of the Treasury of the House of Commons and the Regulatory Committee for Financial Services of the Chamber of Lords, according to people informed of the conversation.
The FCA refused to comment.
The Lord Committee last month criticized the plan, calling it “abject failure” in a deadly episode for the FCA. Lord Michael Forsyth, conservative president of the committee, said that the regulator had not pleaded for “such a fundamental change”.
The FCA will continue with the plans to publicly appoint the unregulated companies which he investigates, for which he declared that there was a large support in the financial services, as well as to confirm the surveys if they had already been disclosed by other public organizations, the people familiar with the case said.
The senior FCA officials previously said they wanted to be able to appoint companies that are the subject of a survey to prevent more difficulty in doing customers while the investigation is underway, as has happened in cases such as the scandal of the sale of British steel retirement councils.
Two -thirds of the FCA surveys ended without any application measure, which makes it fear that this would derive the reputation of companies by disclosing their identity even if the investigation has found no reprehensible act.
But the regulators sought to raise the bar necessary to open an investigation. Since April 2023, the number of surveys open to the FCA has decreased by 35%, while none of those opened since then has been closed without it taking other measures.
