House of Lords: Financial Services Regulation Committee report on FCA proposals to publicise enforcement investigations

On 6 February 2025, the House of Lords Financial Services Regulation Committee published a report (‘Naming and shaming: how not to regulate’) on the Financial Conduct Authority’s (FCA) proposals to publicise enforcement investigations.

These proposals were subject to an initial consultation in April 2024, and then, following stakeholder concerns, were revised in November 2024. Further information is in our briefing here.

The Committee found that the FCA had not made a convincing case for the proposed shift away from its current policy of publicly announcing enforcement investigations into firms before they have concluded only in ‘exceptional circumstances’. The report highlights that the FCA’s proposal to make such public announcements more frequently by means of a more flexible public interest framework affords the FCA considerable discretion and may expose firms to significant reputational damage before the facts of the case have been established.

The Committee states that, following its second consultation in November 2024, the FCA needs to be able to demonstrate that stakeholders’ concerns have been addressed by these new proposals and that the motivations behind the proposals have been clearly articulated and understood. This should include setting out the evidence to support this and, if necessary, additional amendments to its proposals to address any further concerns raised. It asks the FCA to report back to the Committee with its findings before the changes are implemented.

The Committee recommends, among other things, that the FCA should withdraw the proposals if it has not found an acceptable balance between realising the potential benefits for consumer protection and managing the potential risks to firms, individuals, and market stability. It should also publish further guidance on how the factors contained in the proposed public interest framework will work in practice to demonstrate that decisions on whether to publish enforcement investigations will be made according to a robust, fair and proportionate process.

(House of Lords, Financial Services Regulation Committee, Naming and shaming: how not to regulate, 06.02.2025)

(UK Parliament, Failings in FCA proposals to publish enforcement investigations highlighted by Committee report, 06.02.2025)