The
UK’s
financial
watchdog
has
said
it
was
not
expecting
the
“stern
reaction”
to
its
plans
to
“name
and
shame”
firms
it
is
investigating,
after
facing
backlash
from
the
City
of
London
and
the
Government.
The
Financial
Conduct
Authority
defended
the
proposals
and
stressed
that
they
were
still
being
deliberated.
Nikhil
Rathi,
the
FCA’s
chief
executive,
and
chair
Ashley
Alder
were
quizzed
by
MPs
on
the
Treasury
Committee
on
Wednesday.
It
followed
the
regulator
revealing
it
was
considering
announcing
when
it
has
opened
enforcement
investigations
into
financial
firms,
which
it
currently
only
does
in
very
limited
cases.
It
would
mean
“naming
and
shaming”
the
companies
being
probed,
regardless
of
whether
or
not
it
decides
there
has
been
misconduct
or
a
breach
of
its
rules.
The
move
prompted
widespread
backlash,
including
from
chancellor
Jeremy
Hunt,
who
urged
the
watchdog
to
reconsider
its
plans
over
fears
it
could
stifle
growth
and
international
competitiveness.
Several
trade
bodies
including
the
City
of
London
Corporation
and
PIMFA
also
raised
concerns
that
making
investigations
public
could
have
a
damaging
impact
on
firms,
their
staff
and
customers,
before
any
conclusions
are
reached.
During
Wednesday’s
Treasury
Committee
hearing,
Alder
said:
“in
truth,
we
weren’t
at
the
time
we
put
this
out
expecting
such
a
stern
reaction
as
has
come
from
industry.
“It
is
important
that
no
decision
has
been
made
so
there
is
no
decision
to
reverse.”
Rathi
explained
that
there
were
issues
with
the
FCA’s
whistleblowing
service,
which
encourages
people
to
report
a
firm
or
individual
if
they
suspect
wrongdoing.
“There
are
two
issues
with
our
whistleblowing
function
at
the
moment:
awareness
and
confidence,”
he
said.
“We
don’t
tell
(whistleblowers),
because
we
aren’t
able
to
tell
them,
that
their
concern
is
being
formally
investigated
because
of
the
restrictions
we
operate
under.”
It
means
that
in
some
cases,
the
FCA
may
decide
to
announce
an
investigation
in
order
to
secure
more
witnesses.
The
boss
stressed
that
it
would
be
on
a
case-by-case
basis
should
the
plans
go
ahead.
“We
will
take
our
time
over
this
to
make
sure
we
get
it
right,”
Rathi
said,
adding
that
the
FCA
was
going
to
go
over
all
the
feedback
it
had
received
from
the
industry
over
the
next
few
months.
By
Anna
Wise,
PA
Business
Reporter
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