UK watchdog reconsiders naming companies under investigation

The UK’s Financial Conduct Authority (FCA) is expected to revise its plans to publicly name companies under investigation, Reuters reported on Thursday.

The initial proposals, published in February, aimed to name companies during investigations as a deterrent against wrongdoing and to encourage transparency. However, these plans faced significant backlash from industry stakeholders, lawyers, and the Treasury.

During discussions with corporate clients, the FCA’s co-head of enforcement, Therese Chambers, made concessions. These included extending the notice period before investigation announcements, allowing companies more time to respond. However, concerns remain about due process and the lack of an appeal route.

The FCA also considered alternatives, such as publishing anonymized new investigations in its “enforcement watch” newsletter. Bank of England Governor Andrew Bailey supported the original plans, emphasising the need to protect consumers through transparency.

However, critics argue that publicly shaming companies prematurely could harm London’s attractiveness for investment, especially considering that most FCA investigations (65 per cent) end without any action taken.

The row over naming companies tests the mettle of the FCA’s relatively new leadership team. Balancing competitiveness with regulatory goals is crucial as London competes with other global financial centres for new stock market listings.

The proposal’s impact on London’s financial standing remains a point of contention.