On 7 July 2021, the PRA, FCA and the Bank of England in its capacity of supervising financial market infrastructure firms (together the regulators) issued a joint Discussion Paper on diversity and inclusion in the financial sector.

In the Discussion Paper the regulators begin by setting out their role including how improving diversity and inclusion links to their objectives and their public sector equality duty. The regulators also cover the steps they have taken to improve diversity and inclusion within their own organizations.  The regulators then summarise current expectations and requirements on diversity for UK-regulated firms. The regulators believe that many of the existing policies have been driven by sector-specific developments which have resulted in fragmented requirements for different types of firms. The regulators also discuss why good data is critical and discuss the importance of measuring progress and reporting in order to improve progress on diversity and inclusion. They also suggest developing metrics to monitor progress. Finally, the regulators outline different policy initiatives that they think could be effective for driving and supporting change. These generally build on existing requirements, and the regulators’ wider policy and supervisory frameworks. Some of the proposals are better suited to larger firms and the regulators are conscious of the need for proportionality, as well as taking into account the differences in the existing legal and regulatory framework for different categories of firm as future policy is developed.

The Discussion Paper is open until 30 September 2021. The feedback and data received will be used to develop detailed proposals, with a joint consultation planned for Q1 2022.