Context
The FCA has published what it is referring to as the second phase of its consultation on its enforcement transparency proposals. When it published its plans earlier in the year to increase the focus, pace and transparency of its enforcement investigations, it was the last of those which received the most feedback (and about which it received the most public criticism). The FCA has listened to the feedback and is making significant changes to its proposals in response.
Key points to note and next actions
- The FCA is providing data, case-studies and more detail on the public interest test. All this should give firms greater clarity on how the FCA would decide to announce an investigation.
- Among the changes proposed is to ensure that the public interest test the FCA would use (to weigh up whether to announce) now includes an explicit consideration of the potential negative impact on a firm, as well as the potential to seriously disrupt public confidence in the market.
- The FCA has also proposed giving firms 10 business days’ notice to make representations ahead of any announcement, rather than the 1 day as initially consulted. If the FCA does decide to announce, firms will then have an additional 48 hours’ notice before publication.
- The FCA want industry’s views on how transparency could work in practice. It will continue to meet with firms, trade associations, consumer groups and the legal community, and only once it has heard all views will it decide whether to implement these proposals.
- The FCA’s Board hopes to make a final decision on the proposals in the first three months of next year.