FIA and FIA European Principal Traders Association have responded to the UK Financial Conduct Authority’s public consultation on changes to its approach to enforcement investigations.
The proposed changes include the FCA publicly announcing the opening of an investigation and disclosing the identity of the subject of the investigation where it considers this to be in the public interest.
While the associations support the FCA’s commitment to making its activities more transparent, they are concerned that the proposed approach will be detrimental to the orderly functioning of UK capital markets with limited value to public interest.
In particular, a lack of concrete evidence upon opening an investigation could mean that an announcement will increase speculation in the market, prematurely impacting a firm's reputation before the investigation concludes. This is especially concerning given that 65% of FCA investigations close without further action. The associations strongly recommend the FCA reconsiders its proposed approach and contemplates alternative methods already available to it.
"The FCA’s objectives can be achieved through existing means, which will allow it to publish timely information about investigations in a robust and effective way in order to raise consumer awareness, maintain market confidence, educate the market and deter future misconduct," the response says.
Read the response in full.
