Transparent, or injurious? Proposals to publicise investigations

A radical shake-up to enforcement procedure is being consulted on by the regulator, which could see probes into firms regularly made public at an early stage. Michael Lewis and Emma Radmore look at the drivers, the proposals, safeguards and possible consequences.

Michael Lewis is a partner and head of the UK Financial Regulation team at Womble Bond Dickinson, where Emma Radmoreis legal director. Contact them on michael.lewis@wbd-uk.com andemma.radmore@wbd-uk.com.

At the end of February 2024, the Financial Conduct Authority published a consultation paper proposing significant changes to its approach to publicising enforcement investigations. Up to now, publicly available information on ongoing investigations is minimal. Usually, the public would know about an investigation only when the FCA publishes the final notice relating to it, or sometimes, where appropriate, a warning or decision notice. Now, in the interests of transparency, the FCA proposes proactively to publish more information about its enforcement investigations including their opening and progress as well as the identity of the subject of the investigation. Crucially, this means the public will know that some firms are under investigation well before the FCA decides whether the firm in question has in fact breached any rules. Would this transparency come at too much of a cost to regulated firms?