Observations on the FCA’s controversial plans to name subjects of ongoing investigations

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Why the change?

In consultation paper 24/2, published at the end of February, the FCA set out proposals for changes to their enforcement guide, and how investigations are carried out. Since then, there has been considerable backlash against plans to publicly announce that firms and potentially some individuals, are under investigation, while the investigation is still ongoing. This is despite the FCA proposing to also provide updates as investigations progress. This differs to the current practise of naming those investigated only once it has been decided to take action against them.  On its current approach, the FCA states that:

“We rarely publish any information about the investigations we have opened and their progress, unless and until they result in actual or proposed outcomes such as censures or penalties. By that time, the reassurance, educational value, and effectiveness of that information, which benefits consumers and the industry, is often significantly reduced. Further, it is given too late to encourage witnesses and whistleblowers to inform our relevant enforcement and supervisory work.”[1]

The intention of the proposed changes is to ‘improve pace and transparency around enforcement cases’.[2] This aligns with the FCA’s core responsibility to help ensure the smooth running of the financial industry within the UK, and develop trust in financial institutions. The FCA already publishes data relating to various activities it performs, such as firm approvals, with the goal of being transparent about and accountable for its performance. Given FCA investigations take four years on average, it is understandable that the FCA is seeking to improve its pace in this area by similarly allowing scrutiny of its actions. [3]

The FCA notes that its approach to individuals will be different, taking into account GDPR and DPA 2018 rules. They would not usually announce investigations into individuals, however, could do so in some circumstances where it is both allowable by law and in the public interest, such as to encourage witnesses to come forward to assist in investigations, or fulfill its accountability to parliament.  


In response to the proposals, the has been widespread concern as to whether the proposed changes will result in the desired outcomes, in particular in relation to the proposal to name firms that are under investigation, before any findings have been made public. While the FCA have communicated that “Announcing an investigation does not mean that the FCA has decided whether there has been misconduct or breaches of its requirements”[4] it is clear that they expect such announcements to be taken into consideration by consumers, and so are aware that conclusions will be drawn even without further detail. There is a potential for the proposals to result in misleading consumers as to the risk a firm poses, for a weakening of the relationship between firms and the FCA, and for the UK market to become less desirable for international firms to operate in as a result of an unavoidable increase in reputational and economic risk – resulting in the UK becoming a less competitive market. This is particularly true when concerning firms with liquid financial products. The announcement effectively causing a ‘run on the bank’.

Potential unintended outcomes

A concern for firms is that unwarranted reputational harm to firms could be caused as a result of an investigation being opened, even in instances where the investigation later goes on to exonerate the firm. This could dangerously disincentive firms to work openly with the FCA, and instead the proposals may incentivise firms to focus on avoiding investigation rather than focussing on avoiding actual breaches.

There is a concern that the bar set out by the proposals for publishing that an investigation occurs is quite low, meaning that firms may be investigated and named, despite having done nothing wrong. Around 65 per cent of FCA investigations close without action.[5] This means creating a potential for reputational and economic risk that is completely outside of a firm’s control, and so cannot be mitigated. In a letter to the FCA Chief Executive Nikhil Rathi, the chair of the House of Lords Financial Services Regulation Committee suggested “this proposal risks having a disproportionate effect on firms named in investigations, where those firms are subsequently cleared of any wrongdoing, particularly given the length of many investigations”.[6] In extreme cases, there is a concern that firms may simply choose not to operate in the UK at all, in an effort to avoid the heightened risk of reputational damage the new proposals could cause. A recent Financial Times article covering the backlash to the proposals quoted a senior government figure as saying “The FCA says it’s thinking about competitiveness, but so often they take decisions that harm the competitiveness of the UK”.[7]

The FCA aims to increase transparency, which should create trust in financial institutions and provide additional information to consumers when deciding which firms to work with. Unfortunately, it is difficult to see how the FCA aims to provide true transparency before an investigation has been completed. When making decisions, it is important consumers have a comprehensive view of the facts rather than relying on a potentially misleading incomplete picture. Instead of increasing transparency, the proposals risk creating unhelpful translucency, where the impression of firms’ behaviour given to consumers is unrepresentative of their actual conduct. This could result in consumers avoiding the firms that are best suited for them, and it is therefore not certain that the proposals will result in better outcomes for consumers.

Finally, in an opinion piece published by the Financial Times, Nathalie Thomas suggests that the proposed approach by the FCA to decide on a case-by-case basis who to name could lead to legal action in order to examine their argument that it is in the public interest to do so, and notes that the real winners would be the law firms.[8] 


While in the standard legal process, a case may be public from the outset of any prosecution, and defendants are able to clear their name, there is still much damage that results from being prosecuted. Perhaps this is the parallel that the FCA wished to emulate, after all why should their investigations be secret. It is clear the FCA has good intentions with these proposals, however, it is not evident that they have yet been sufficiently developed to ensure the desired outcomes. We hope that the FCA will continue to engage with stakeholders, and proceed with an appropriate level of caution.

Update – 01/05/2024

On the morning of Monday 29th, FCA executive directors Therese Chambers and Steve Smart authored a City A.M. article titled ‘Why the FCA will name firms we are investigating’, acknowledging the backlash to the proposals.[9] The article’s title, along with their stated belief in the proposals, indicate the FCA will continue to advocate for the new proposals. They also clarified that they are not proposing to name every firm in every investigation, nor would there be a presumption of announcement.

Speaking on Tuesday, chancellor Jeremy hunt joined the conversation, warning the FCA to “re-look at their decision” while speaking to the Financial Times.[10] The chancellor highlighted the FCA’s secondary growth duty, and claimed he felt the new proposals were not consistent with that objective.

The consultation period set out in CP/24/2 has now ended, however Chambers and Smart stated that they we will not stop listening and engaging as they take forward the work.

[1] CP24/2: Our Enforcement Guide and publicising enforcement investigations – a new approach (fca.org.uk)

[2] FCA to improve pace and transparency around enforcement cases | FCA

[3] Miles Celic in FCA faces backlash over plan to ‘name and shame’ companies under investigation (ft.com), & Naming and shaming banks is a regulatory insight too far (ft.com)

[4] CP24/2: Our Enforcement Guide and publicising enforcement investigations – a new approach (fca.org.uk)

[5] FCA faces backlash over plan to ‘name and shame’ companies under investigation (ft.com)

[6] Letter from Lord Forsyth of Drumlean to Nikhil Rathi regarding the FCA’s consultation CP24-2 on publicising enforcement investigations (parliament.uk)

[7] FCA faces backlash over plan to ‘name and shame’ companies under investigation (ft.com)

[8] Naming and shaming banks is a regulatory insight too far (ft.com)

[9] Why the FCA will name firms we are investigating (cityam.com)

[10] Jeremy Hunt warns FCA against ‘naming and shaming’ businesses under investigation (ft.com)

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