The City watchdog yesterday abandoned plans to ‘name and shame’ firms under investigation following a City backlash and Government pressure.
In a major U-turn, the Financial Conduct Authority (FCA) scrapped a shake-up of enforcement policy after ‘considerable concerns’ were raised.
It was the latest in a series of reversals for regulators in recent days – after ministers demanded that they ease off from piling more red tape on businesses.
Yesterday, the competition watchdog also sketched out plans to respond less aggressively in policing takeover deals.
A day earlier, Prime Minister Sir Keir Starmer announced plans to abolish the Payment Systems Regulator and fold its responsibilities into the FCA.
The FCA and the Prudential Regulation Authority (PRA) yesterday also axed new diversity and inclusion (DEI) rules that would have required firms to set quotas based on race and gender.
U-turn: The Financial Conduct Authority scrapped a shake-up of its enforcement policy that would have seen it name companies under investigation
It comes after Chancellor Rachel Reeves said in January that Britain’s army of more than 100 regulators were hampering growth.
Ministers demanded that watchdogs devise ways to help deliver growth after businesses complained of delays.
The FCA revealed plans early last year to disclose the details of enforcement investigations into financial firms if it is in the public interest.
But, following an intense backlash, it will now keep its current policy, which is to only make the information public in exceptional circumstances.
Chief executive Nikhil Rathi said: ‘Considerable concerns remain about our proposals to change the way we publicise investigations into regulated firms, so we will stick to publicising in exceptional circumstances as we do today.’
Chris Cummings, chief executive of the Investment Association, said that the climbdown demonstrated its ‘willingness to deliver on its secondary objective to secure UK competitiveness’.
Miles Celic, chief executive of TheCityUK, welcomed the move, saying: ‘The decision gives firms and investors greater certainty and predictability, which is good for the UK’s international competitiveness and wider economic growth.’
In a further sign that regulators were heeding Reeves’ warning, the Competition and Markets Authority (CMA) yesterday launched a consultation into its proposal to speed up merger investigations and clear more deals.
‘Only a truly problematic merger, where the harm to businesses and consumers cannot be effectively addressed through remedies, should not proceed,’ chief executive Sarah Cardell said in a speech outlining the changes last year.
Announcing the plans to abolish the Payment Systems Regulator, which oversees systems including Visa and Mastercard, on Tuesday, the Prime Minister said: ‘For too long, the previous government hid behind regulators – deferring decisions and allowing regulations to bloat and block meaningful growth.’
The PRA’s chief executive Sam Woods said that the diversity proposals scrapped yesterday would have been ‘in tension’ with the ‘growing emphasis…on reducing regulatory burdens on firms’.
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