The Financial Conduct Authority (FCA) has scrapped its “name and shame” proposals following widespread criticism from the financial services industry.

Under the plans, the regulator would have named the firms it is investigating at the outset of the investigation.

The regulator proposed using a “public interest” framework, which would have seen the FCA provide the firm with 24 hours’ notice that it was to identify them at the outset of an investigation, shifting its approach from “exceptional circumstances”.

However, these proposals have faced a significant response, with letters signed by several trade associations across the financial services industry, including UK Finance and the City of London Corporation, suggesting these plans would “have an unduly negative impact on the reputation on firms”.

Today, the FCA said that given a lack of consensus, it would not be taking forward the plans.

“On our enforcement transparency proposals, we have always aimed to build a broad consensus,” CEO at the FCA, Nikhil Rathi, said.

“Considerable concerns remain about our proposal to change the way we publicise investigations into regulated firms, so we will stick to publicising in exceptional circumstances as we do today. We will implement changes which have commanded wider support and which we believe will help support our efforts to protect consumers from harm.”

The move has been welcomed by industry figures, including Association of British Insurers director General Hannah Gurga, who said: “The FCA’s decision to not take forward its proposals to publicise enforcement investigations is extremely welcome.

“We’ve consistently stressed that this would have had detrimental impacts on consumers, firms, and the reputation of the UK’s regulatory system. So, we fully support its decision to drop this approach.”

Counsel at law firm WilmerHale, Imogen Makin, added: “This is a welcome acknowledgement of the concerns raised by the industry and its advisers. The FCA will need to keep responses to the consultation in mind when finalising the policy statement.

“Particular attention is needed around the publication of greater detail about the issues under investigation. For example, despite the FCA’s statement that this will be on an anonymised basis, care is needed to ensure that neither firms nor individuals can be identified by the details published.”

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