Following on from our previous blog in relation to FCA CP24/2 (Our Enforcement Guide and publicising enforcement investigations – a new approach), the House of Lords Financial Services Regulation Committee has closed its call for evidence following the prorogation of Parliament on 24 May 2024. When committees are reappointed in the new Parliament following the general election on 4 July 2024 they may consider whether to reopen previous calls for evidence.

In addition, the Treasury Sub-Committee on Financial Services Regulations has written to Nikhil Rathi, Chief Executive of the FCA, in advance of Parliament being dissolved on 30 May 2024. The letter highlights that the Committee took evidence from Mr Rathi and the Chair of the FCA, Ashley Alder, on 8 May. During that session different members of the Committee each raised the following concerns:

  1. The approach the FCA has set out appears to be different to those of financial conduct regulators in other similar economies, such as the US, France or Switzerland.
  1. If the bar is set too low when assessing the public interest of publicising an investigation, and large numbers of investigations are published, the consequences could be a loss of investor confidence in UK financial services markets.
  1. Investigations undertaken by the FCA can take many years, and during this time companies who have been named will have an allegation hanging over them for long periods of time. The FCA must prioritise reducing the time it takes to conclude investigations.
  1. Publicising enforcement investigations appeared to be an FCA priority, compared to other work that might have been undertaken to increase international competitiveness.
  1. The FCA already has the power in exceptional circumstances to publicise an enforcement investigation.

In addition, the letter confirms that the Committee has been sent the views of organisations who do support the measures on the grounds of better protection for consumers, deterring poor conduct from firms, and increasing trust in enforcement against wrongdoing among the public. This matter may now be for a future Committee to consider.