By Kirstin Ridley
LONDON (Reuters) – Britain’s Financial Conduct Authority (FCA) on Wednesday softened proposals to publicly name some companies under investigation after a backlash from industry and politicians, agreeing the original plan was “overcooked”.
FCA Chief Executive Nikhil Rathi said the markets regulator planned to name only around one or two firms under investigation per year, conceding this was among details that had not been properly conveyed to the industry initially.
“We are talking about one to two regulated firms a year,” he told a House of Lords parliamentary committee. “Not about opening up the entire book of investigations.”
He also said the FCA would take account of the impact on firms facing public disclosure of regulatory investigations and allow them 10 days’ notice to make representations, rather than the one day initially proposed.
The FCA in February published proposals to publicly name some companies under investigation in an effort to deter wrongdoing and encourage whistleblowing and transparency, if it believed this would be in the public interest.
But lawyers told Reuters they expected the watchdog to narrow plans after lawmakers joined a fierce corporate backlash, labelling the proposals misjudged and harmful to London’s competitive ranking.
They argued that publicly shaming companies before innocence or guilt was established risked dealing irreparable and unjustified damage to companies and to the finance industry.
The FCA will next week set out in more detail how it is casting the proposals and a final decision on them is expected in the first quarter of next year.
The committee asked Rathi and Chair Ashley Alder whether they believed the FCA had merely “messed up” how it handled the proposal or whether, with hindsight, it had been “overcooked”.
“Between those two – the latter,” Alder said.