The UK’s financial regulator has had a rough ride over the past couple of years as its strategy to “name and shame” firms it opened investigations into was widely slammed by the industry and lawmakers over concerns that companies could be unfairly maligned.
In an apparent acknowledgement of the backlash, the Financial Conduct Authority (FCA) seems to have curbed its enthusiasm to routinely go public at an early stage of its investigations by publishing an updated Enforcement Guide on June 3, noting that it was limiting the circumstances in which it may do so. Even so, experts believe the regulator may have subtly gained an upper hand as it has retained the power to disclose that investigations are taking place if there is public interest in doing so. The regulator can also opt to anonymize firms’ details while highlighting alleged misconduct, which may prompt more players—and not just those under scrutiny—to review their operations. As a result, firms need to recognize that even though the FCA may not have the powers it initially wanted, its enforcement approach has become tougher.