In a significant policy reversal, the UK’s Financial Conduct Authority (FCA) has scrapped its controversial proposal to routinely “name and shame” firms under investigation.
In the US, it is common for regulators to name the firms or individuals under investigation. If a case is settled or won by the agency another announcement is made but when a case is dropped or lost, the news may not be widely revealed.
The decision was announced on March 12, 2025, as the FCA stated, “they will not take forward our proposal to shift from an exceptional circumstances test to a public interest test for announcing investigations into regulated firms.” The FCA forwarded a letter to the Treasury Select Committee at the House of Commons updating on how they would handle investigations going forward.
The FCA first unveiled the plan in February 2024, aiming to enhance overall transparency by applying a “public interest test” to disclose the identities of firms facing enforcement probes.
At the time, the regulator argued that greater openness would deter misconduct and bolster public trust in the financial system.
Currently, the FCA only names firms in exceptional cases, typically after investigations conclude or when public warnings are deemed urgent.
The proposed shift would have marked a dramatic departure from this cautious approach, aligning with broader calls for accountability in the wake of high-profile financial scandals.
Some industry leaders, including the Investment Association, had decried it as a threat to firms’ reputations and market stability, arguing that premature disclosure could unfairly damage businesses before guilt was established.
Chris Cummings, the Association’s chief executive, hailed the FCA’s U-turn as a victory for fairness, reflecting widespread relief within the City.
“We are extremely pleased the FCA has listened to industry concerns and agreed to drop the proposed changes to when regulated firms under investigation are named, instead refining the exceptional circumstances test as we recommended. It is vital that the UK remains globally competitive and attractive for investors and today’s decision from the FCA demonstrates its willingness to deliver on its secondary objective to secure UK competitiveness.”
Legal experts, such as Jill Lorimer from Kingsley Napley, went further, calling the original proposal “deeply flawed” for its potential to undermine due process.
Political pressure also played a pivotal role.
Both the previous Conservative government and the current Labour administration expressed skepticism, with figures like Jeremy Hunt reportedly urging the FCA to reconsider.
The regulator’s decision to abandon the plan underscores the delicate balance it must strike between transparency and the economic growth agenda championed by successive governments.
Beyond the “name and shame” reversal, the FCA also shelved rules mandating diversity and inclusion targets for regulated firms, citing a desire to avoid “additional burdens.” It’s also worth noting that so-called diversity and inclusion targets can be quite subjective in nature and their might not even be an objective or unbiased way to uphold such guidelines.
Instead, it pledged to focus on non-financial misconduct in a “proportionate” manner, with further details promised by June 2025.
The FCA outlined how it intends to proceed going forward:
• Reactively confirming investigations which are officially announced by others, typically market announcements or other disclosures made by firms themselves or sometimes announcements by a partner regulator. Of our 37 open investigations into regulated or listed firms, 22 are already public. But our current approach means that, even when the investigation is already known, we are generally not able to confirm or deny its existence.
• Public notifications which focus on the potentially unlawful activities of unregulated firms and regulated firms operating outside the regulatory perimeter, where doing so protects consumers or furthers the investigation. Around 60% of our investigations into firms relate to activities of unregulated firms, which are often frauds involving significant consumer harm, where we have no supervisory tools available.
• Publishing greater detail of issues under investigation on an anonymous basis, perhaps via a regular bulletin such as Enforcement Watch. This may help highlight more quickly significant areas of concern and where firms may consider making improvements.