House of Lords Committee report on proposal to publicise enforcement investigations

The House of Lords Financial Services Regulation Committee (FSR Committee) published a report on the Financial Conduct Authority's (FCA's) proposal to publicise enforcement investigations, in the spirit of "naming and shaming". This report follows the FCA's consultation on 27 February 2024 (CP 24/2), which set out its proposed new approach, and its revised proposals published in November 2024 (CP 24/2, Part 2), following engagement with industry.

The FSR Committee report finds that the FCA did not make a convincing case for why a change to its existing powers is required, nor did it convincingly show the proposed new public interest framework struck a balance between benefits to consumer protection and managing potential risks to firms, individuals and market stability. The FSR Committee stresses that, after the current consultation closes (on 17 February 2025), the FCA should be transparent about the feedback received and be able to demonstrate that industry concerns have been addressed, or otherwise should not proceed with the changes. The report also makes a series of recommendations, including that the FCA:

• ensures, going forward, consultations are properly registered on the Regulatory Initiatives Grid and carries out earlier engagement with the sector where appropriate.
• publishes a 'lessons learnt' document setting out where it went wrong and how to prevent similar mistakes.
• engages with HM Treasury over any future developments relating to its enforcement investigations.
• provides a detailed analysis of the direct costs to the sector as part of its proposals.

[View source.]