The FCA's Proposal to Publish Enforcement Investigations: A Risk to Market Stability?

The Financial Conduct Authority's (FCA) recent proposal to routinely publish details of enforcement investigations has sparked widespread debate within the UK's financial sector.

A Fundamental Shift in FCA Enforcement Policy

Historically, the FCA has only made enforcement investigations public under 'exceptional circumstances'. However, under the new proposal outlined in CP24/2, the regulator aims to enhance transparency by disclosing more information early.

Key Concerns

Damage to Reputations: Publishing the names of firms under investigation could have immediate and lasting reputational consequences, even if the firm is ultimately cleared.

Investor Confidence and Market Stability: Publicising investigations could trigger unnecessary panic. Investors may react hastily, pulling funds from firms simply because they are under regulatory scrutiny.

Impact on Regulatory Effectiveness: Firms may become defensive rather than cooperative, prioritising public relations damage control over genuine engagement with regulators.

The Broader Implications

The UK has long been regarded as a leader in financial services, but this proposed change risks undermining its global competitiveness.

What Should Firms Do?

Firms must take proactive steps to strengthen their compliance frameworks. Ensuring that internal policies, controls, and governance structures are robust will be key to avoiding regulatory scrutiny in the first place. Fenchurch One helps you keep that evidence in order: its FCA attestations map each obligation to the Handbook and record how you meet it, its register suite captures breaches, complaints and conflicts as dated entries, and the AI Compliance Report reads your own records to show where you stand.