Stay informed with free updates
Simply sign up to the UK financial regulation myFT Digest — delivered directly to your inbox.
City minister Tulip Siddiq has signalled the UK financial watchdog needs to do more to address industry fears about its plan to name more of the companies it investigates even after limiting the proposals.
The Financial Conduct Authority last week presented watered down proposals to identify more companies that are under investigation before it has made a decision on whether any wrongdoing has occurred.
The plans, which the FCA argues will bring it in line with other UK regulators, protect consumers and reassure whistleblowers, have infuriated many financial executives and drawn criticism from both Labour and Conservative politicians since they were first presented in March.
Siddiq indicated the FCA should consider rowing back further on its plan, saying she was “not sure it has satisfied everyone who was very unhappy with it when it was first announced”.
“I don’t think this is the end of the matter,” she told the Financial Times global banking summit on Wednesday. “It does feel like there is still a lot of discontent from the sector.”
Siddiq added the FCA and other independent regulators “need to be held to account to parliament and to government”.
The City minister said she had made it “very clear” to the FCA that its initial proposals had “not landed well”. Many in the City have called for the regulator to completely abandon its plan.
The FCA’s revised proposals raised the bar for naming a company under investigation. The regulator said it would only announce an investigation after weighing the impact on the company being probed — including on its share price, customers and wider financial stability.
Companies would also get at least 10 working days to respond to its plan to name them, instead of only one day as the FCA initially proposed. Companies would then be given an additional two days after a final decision is made to bring a legal challenge against being named.
The proposals are likely to affect only a very small number of firms each year, according to the FCA. It currently publicly discloses one or two investigations a year and expects that number to double with the changes.
The FCA already has the power to name the companies it investigates, but only in “exceptional circumstances”. Its consultation closes in February with a final decision expected later in the first quarter of 2025.
The City minister also said she wanted to encourage “cultural change” at the financial regulator, adding it had been “very difficult to read” a recent report from MPs and peers that accused the FCA of being “incompetent at best, dishonest at worst”.
The report from an all-party parliamentary group listed several cases in which consumers and whistleblowers felt the FCA let them down. Siddiq said she had “a lot of sympathy” with the people who “clearly suffered huge losses and they went through horrible experiences.”
But she added that “a lot of the incidents that were mentioned in the report were from a very long time ago” and the regulators had assured her that they had “changed their ways”. She expressed “confidence that the FCA have learnt lessons”.
