After much speculation regarding the fate of various outstanding Financial Conduct Authority (FCA) initiatives in relation to investigation announcements, diversity and inclusion (D&I) and non-financial misconduct, this week the FCA has confirmed that:

1. it will no longer take forward the following proposals: 
   a. to implement a new public interest test for announcing investigations into regulated firms (known as the ‘name and shame’ proposals); 
   b. to introduce new rules aimed at improving D&I in regulated firms; and
2. it will take some further time to consider its approach to non-financial misconduct in order ‘to get this right’. 

We set out below our key takeaways on these recent developments. 

‘Name and shame’

The name and shame announcement follows significant industry engagement following the proposals which were originally published on 27 February 2024 in Consultation Paper CP24/2. The plans included a proposal to publish an announcement that it had opened an enforcement investigation, including the identity of the firm subject to the investigation, if the FCA assessed that it was in the public interest to do so (see our briefing here). The FCA’s rationale was that publishing such information would increase the effectiveness and accountability of its enforcement activities; decrease the likelihood of harm to consumers and markets; and increase public confidence in the FCA. 

The proposals were strongly criticised by the industry and government, with involvement by both the Treasury Sub-Committee on Financial Services Regulations and the House of Lords Financial Services Regulation Committee. In light of this, in November 2024, the FCA published redrafted proposals which went some way towards addressing concerns but did not entirely remove them (see our briefings here and here). 

In a reversal of approach, on 12 March 2025, the FCA has confirmed that, given the lack of consensus, it has decided to drop its plans to publish the identity of firms under investigation, stating in a letter to Dame Meg Hiller MP of the Treasury Select Committee that it will instead stick with its existing exceptional circumstances test to determine if it should publicise investigations into regulated firms. However, the FCA will proceed with its proposals to publish information concerning investigations in the following circumstances: 

1. reactive announcements: confirming investigations which are officially announced by others, such as through market announcements, disclosures made by firms themselves or in some instances announcements by a partner regulator; 
2. unauthorised activity: public notifications which focus on the potentially unlawful activities of unregulated firms and regulated firms operating outside the regulatory perimeter, where doing so protects consumers or furthers the investigation; and
3. anonymous publication: publishing greater detail of issues under investigation on an anonymous basis, for example via a regular bulletin such as Enforcement Watch.

The FCA plans to continue to engage actively with stakeholders before publishing a final policy statement by the end of June, alongside an updated copy of the FCA’s Enforcement Guide.

D&I and non-financial misconduct

In September 2023, the FCA consulted jointly with the PRA on proposals aimed at improving diversity and inclusion in firms such as requiring firms to collect, report and disclose certain D&I data and set diversity targets. The FCA has now confirmed that, in light of the broad range of feedback received, expected legislative developments and to avoid additional burden on firms, the FCA and PRA have no plans to take this work further. The FCA has stated that it will instead continue to support voluntary industry initiatives.

The consultation also included proposals to clarify and strengthen the FCA’s expectations with regards to non-financial misconduct and the publication of a Policy Statement on this was expected imminently. The FCA has now announced that it remains committed to this focus area but that it will take some further time to consider its position, setting out next steps by the end of June this year. 

What does this mean for firms? 

Many will see the ‘name and shame’ reversal in position as a rare success story for industry push-back which may embolden future challenge. However, it remains to be seen whether the FCA will in future stretch the existing provision for investigation announcements to be made in “exceptional circumstances”, given its clear desire to publicise action being taken in particular cases. 

Obtaining further details of investigations on an anonymous basis could be helpful to firms in avoiding pitfalls, assuming sufficient information is provided, but a balance will have to be achieved here so as not to give away the identity of the subjects and lead to unhelpful speculation. Senior managers will need a process for identifying lessons learned and any action needed within their areas of the business, as failing do so will no doubt be treated as an aggravating factor if any similar issues are identified in the future.

Although the FCA is dropping its previous plans on D&I and will be taking more time to think about its approach to non-financial misconduct, individual cases of bad behaviour and associated firm-related failings will still be on its agenda for investigation and potential enforcement action, particularly if it is speeding the process up and making inroads on the backlog of historic cases.