A watchdog has said it will name and shame firms who are under investigation in the name of ‘public interest’, which has been met with furious backlash.
The Financial Conduct Authority (FCA) outlined proposals to release the names of firms who are being investigated for financial breaches.
Despite fierce opposition the joint executive director of enforcement and market oversight Therese Chambers said the regulator would press ahead with its plans over the coming months.
“We do think the case for a degree more transparency remains strong”, said Chambers in a speech at the AFME Annual European Compliance and Legal Conference in London on Tuesday.
“But it needs to be seen within the vital context of a focused number of cases likely to deliver the greatest deterrent, and delivered much faster.”
The Mortgage Finance Gazette reported that the director of enforcement said the body had received more than 130 responses to its first consultation on the plan, which closed in April.
She said: “While consumer groups, whistleblowers and some other regulators welcomed the prospect of greater transparency, the companies we regulate were overwhelmingly against.”
But Chambers said greater openness over its investigations would bring “Support consumer protection by giving them information that may support their decision-making and improve the market by highlighting concerning conduct, allowing others to course correct sooner, lessening risk, assuring those who have potentially vital evidence, including whistleblowers, that we’re looking into concerns and our door is open.”
They said: “This autumn, we will intensify our engagement – meeting with trade associations, firms, those on all sides of the debate – exploring how we can develop our proposals.
“As part of this, we recognise the desire for greater definition on any new public interest test.
“Later this autumn we plan to provide greater detail on how it could work in practice.”
Earlier this year it was reported that 16 finance trade bodies — including UK Finance, The Investment Association and TheCityUK — had written to then Chancellor Jeremy Hunt asking him to intervene.
The letter had read:“Firms believe that the proposals will have a negative impact on their valuation, could put at risk the wellbeing of individuals, and have the potential to destabilise financial markets.”
New Chancellor Rachel Reeves’ views are at present, opaque on this policy, but in general terms, she has said that she is in favour of less financial red tape to “turbo-charge” UK firms to drive for growth.
There is also an increased emergence in regulators calling for transparency. With CILEx now saying that legal services must be transparent for it’s 60 plus member firms.
