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FCA will not name and shame poor firms uncovered by thematic reviews

FSA Front 480

The FSA has ruled out the prospect of the Financial Conduct Authority naming and shaming firms where thematic reviews expose poor practice.

The regulator has published a discussion paper on how the FCA could improve on transparency and accountability under the FSA, and also ideas for making the financial services industry as a whole more accountable to consumers and provide information that could inform their financial decisions.

The FSA has come up with a range of proposals that could improve transparency through internal discussions, and in consultation with trade bodies and regulatory panels including the Consumer Panel, the Practitioners Panel, and the Smaller Businesses Practitioners Panel.

Consumer bodies lobbied for the FCA to disclose firm-specific results of thematic work. The FSA has rejected this idea, saying it is legally bound by confidentiality restrictions and its public censure process under the Financial Services and Markets Act.

But the FSA admits failing to name poorly performing firms can mean consumers are “kept in the dark”.

Instead it proposes publishing results of thematic reviews on an anonymous basis.

The FSA says: “Publishing thematic work on anonymous, aggregated basis would put the industry ‘on notice’ that we are constantly reviewing and exploring sectors. This may act as an incentive for firms to act without the need for more robust supervisory or enforcement action.”

The regulator has also proposed providing more detail about the average length of time it takes for firms to become authorised, and the broad reasons why applications are refused.

It has also suggested revealing more information about compensation to be paid to consumers where redress has been agreed as part of the settlement of an enforcement case.

Other ideas to boost regulatory transparency that have been put forward by the FCA include:

  • Giving more detail to whistle-blowers about action that has been taken after they have contacted the FCA

  • Publishing data in an aggregate form about the number of whistleblowing incidents and any action taken with the information that has been received

  • Expanding the amount of information that is published in the enforcement annual performance account, which could include average length and cost of investigations

  • Publishing aggregated information about supervisory activity, which could include the number of planned and unplanned supervisory visits that have taken place across different sectors

FCA chief executive designate Martin Wheatley says:“Transparency cannot be an end in itself. We want to make sure disclosure helps customers make the right decisions when purchasing products and helps the market function more efficiently.  We are open to hearing from all interested parties about their views on this paper and their ideas about how the FCA and firms could be more transparent.

“This is not a one-off exercise. As the FCA develops, we will continue to identify additional ways to increase transparency and will be open to feedback from our stakeholders about how this can be achieved.”


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