The House of Lords Financial Services Regulation Committee has published the oral evidence from its session on 13 November in which it interviewed Ashley Alder and Nikhil Rathi about the FCA’s enforcement proposals. Key evidence said:
- the initiative started because of the desire for increased pace and focus on enforcement investigations;
- the FCA was not surprised at the strong reaction, but was surprised at some of the statements – such as those that suggested they could lead to financial instability or bank runs;
- that the FCA could have trialled the publication better, and also could have done more about the “miscommunication” that all or most cases would be subject to publication, when the FCA’s intention was that is was “some” – but it failed to define what it meant by “some”;
- in response to a question on why the FCA didn’t take the advice of the Committee in April and await its report, Nikhil Rathi merely said that no decisions had been taken, nor would they be until Q1 2025;
- in response to a request as to why the FCA felt the need to publicise when (currently) over half of investigations result in no action, Nikhil Rathi said that the FCA believed that it could have delivered its primary objectives better by publicising what it was doing rather than staying silent. He said it absolutely would not be announcing every investigation. He said that of the approximately 47 investigations currently live, 27 are already in the public domain having been disclosed either by the FCA or the firms themselves. Around 6 would not be disclosed because of their sensitivity, and there are around 4 that could possibly benefit from being disclosed, but this would be done anonymously. So in fact, there would be very little incremental transparency; and
- that there is not yet a CBA to justify the proposals.