The UK Financial Conduct Authority (FCA) has proposed updated rules to boost transparency in its enforcement and investigation processes. Feedback played a key role in shaping the new rules, resulting in four major changes, according to the FCA.
One change requires the FCA to consider the potential negative impact an investigation might have on a firm as part of a public interest test. Previously, this factor was not included in the proposed rules.
Another update adds the potential for an announcement to significantly disrupt public confidence in the financial system or market as a factor in the public interest test.
The FCA also extended the notice period for firms. Companies will now receive a 10-day advance notice before any announcement is made, up from the previous one-day period. If the FCA decides to proceed with an announcement, firms will receive an additional 48 hours of notice before publication.
The FCA clarified that investigations launched before the policy change would not be publicly announced. However, the FCA may “reactively” confirm investigations that are already known to the public and where public interest exists.
The FCA stated that the proposed rules would result in only a small increase in proactive announcements of investigations.
We have made good progress in increasing the focus and pace of our enforcement work — so that we can prioritize the investigations most likely to drive meaningful deterrence across industry and deliver more timely outcomes
Steve Smart, FCA joint executive director of enforcement and market oversight
“We want to hear further views on whether some increased transparency could work in practice,” said Steve Smart.
The regulator is accepting further comments on the updated proposal until February 17, with its board set to make a decision in the first quarter of 2025.
The FCA also released data showing that its investigations are moving faster, with several now concluding within 16 months or less.
