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Open and transparent: Protect welcomes new enforcement rules from the FCA

Recently, the Chancellor made it known that he was not happy with the Financial Conduct Authority. Politicians are generally hesitant to comment publicly on the decisions of independent public bodies, but the FCA’s recent proposed changes to its enforcement strategy pushed Jeremy Hunt to issue a polite condemnation of the policy: “I hope the FCA re-look at their decision”. 

Under the proposals, the regulator would publicly announce when they open an investigation into a firm –  if they decided it was in the public interest to do so. They already have powers to do so, but only in exceptional circumstances. In pursuit of their statutory obligation to “exercise our functions as transparently as possible”, the FCA propose to make more of these announcements, and at an earlier stage.  The presumption against disclosure will be replaced by a “public interest framework” for determining whether a firm should be named during the investigation process.   

The proposals have been greeted with outraged opposition: denounced as “name and shame” by firms, and as ‘disproportionate’ by members of the House of Lords.   Such outrage has not accompanied announcements of investigations by other regulators such as OFGEM or the CMA, nor do the FCA say that they will make an announcement in every case.  

However, as Protect outlined in our response to the consultation on the proposals, the policy could be a game-changer for whistleblowers and help improve public confidence in the regulator. 

Publicising investigations may help deter wrongdoing as well as serve as a catalyst for further disclosures. When individuals witness tangible evidence of regulatory action being taken, it instils confidence in their own potential to make a difference. This ripple effect can uncover systemic wrongdoing, ultimately strengthening the integrity of the entire financial sector.   

Whistleblowers are essential to the detection and prevention of wrongdoing and economic crime. However, one of the most profound obstacles to speaking up is the persistent impression that nothing is done with the information. Analysis of callers to Protect’s advice line in 2023 found that 33% of those who raised concerns to a regulator reported that their concerns had been ignored.  The FCA’s own survey of whistleblowers in 2022 identified a perception that they were reluctant to act. 

By openly acknowledging investigations, the FCA will send a clear message to potential whistleblowers: your concerns matter, and we are committed to addressing them. This reassurance is pivotal in overcoming the fear of reprisal or dismissal that often plagues those contemplating whistleblowing. 

The road to effective whistleblowing is fraught with challenges. Many who speak out face victimisation and ostracisation, but the proposal to publicise FCA investigations is a step in the right direction. It will give them the confidence to speak out, knowing that action can and will be taken. It signals a commitment to accountability and integrity, laying the groundwork for a financial landscape where wrongdoing is swiftly addressed and trust is preserved.  

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