Emma RadmoreThe FCA has published a second consultation paper on its proposals for increasing transparency in its enforcement process. It has gone ahead with the consultation partly to help the ongoing parliamentary scrutiny of its original proposals. It says it listened to the strength of public feedback on the original proposals and says it will have further engagement with stakeholders before finalising its policy – which is still wants to do in the first quarter of 2025.
The FCA notes that investigations are already taking less time to complete on average, with some taking under 16 months.
Key changes the FCA now proposes include:
- that the potential negative impact of publicity on a firm will now be explicitly considered as part of the “public interest” test – whereas in the original consultation the FCA said it would not be a factor;
- firms will get 10 days’ notice of the announcement and be able to make representations to the FCA during that time – and, if the FCA decides to announce after that, the firm will get 48 hours’ notice before the FCA makes the announcement – the original proposal was that the firm would get only 1 day’s notice;
- an additional new factor in the public interest test is whether the announcement could seriously disrupt public confidence in the financial system or market; and
- the FCA will not announce any investigations that have begun before any policy change takes effect (although it may confirm investigations already in the public domain).
The FCA says that it believes the proposals would lead to announcements in only a very small number of cases.
Consultation closes on 17 February 2025.