UK Parliament Calls On FCA Head To Discuss ‘Naming And Shaming’ Strategy

The Chief of the Financial Conduct Authority (FCA) has been called to parliament to provide reasons why progress on the watchdog’s ‘naming and shaming’ project hasn’t been suspended.

To act as a deterrent, the UK’s financial regulatory body recently suggested disclosing the names of the companies it is inspecting. This marks a departure from existing practice, which is to announce the name of the firm as soon as an inspection is done.

The FCA Plans To Continue Working On The Project

The House of Lords’ financial services regulation committee replied by requesting the Chief Executive Officer of FCA, Nikhil Rathi, to suspend work on the projects. This is due to concerns that it may damage the reputation of companies that are found to be authorized.

Last week, the FCA provided a comprehensive 29-page explanation of its ‘naming and shaming’ initiative, stating its plans to keep on working on it.

The chairman of the committee, Michael Forsyth noted that the FCA’s reply did not directly address worries. He added that it did not promise to suspend implementation until the committee had thoroughly examined its proposal.

In an unusual public involvement, Britain’s chancellor Jeremy Hunt has urged the FCA to reassess. The Labour Party stated that the financial regulator should consider feedback from its public consultation and the industry’s opinions on the proposals.

FCA Seeks To Ensure The Integrity And Fairness Of Financial Markets

The Financial Conduct Authority (FCA) is a UK-based regulatory authority in the financial sector. It works separately from the United Kingdom Government and gets its funding by charging fees to the financial services industry members.

The FCA monitors financial companies that serve consumers and ensures the fairness of the financial markets in the United Kingdom.

It concentrates on overseeing the behavior of both wholesale and retail financial services companies. Similar to its predecessor the FSA, the FCA is organized as a firm restricted by guarantee.

The Financial Services Act 2012 got royal approval on 19 December 2012, and it started on 1 April 2013. The Act set up new rules for financial services and got rid of the Financial Services Authority. Particularly, the Act put the Bank of England in charge of financial stability. It combines micro and macro regulation.

The Act established a new regulatory setup that includes the Financial Conduct Authority, the Prudential Regulation Authority, and the Bank of England’s Financial Policy Committee.

The FCA, along with the Financial Policy Committee and the Prudential Regulation Authority, establishes rules for the financial sector. It oversees about 58,000 enterprises that contribute approximately £65.6 billion in annual tax revenue to the UK economy and employ 2.2 million individuals.