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Southwood Group

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FCA reviews early warning approach due to reputational damage concerns-Southwood Group


The Financial Conduct Authority may revisit the way it publishes early warning notices about firms or individuals who are subject to an ongoing enforcement investigation due to concerns about reputational damage.

The FSA first set out how regulation would work under the new regulatory structure with its Journey to the FCA document in October 2012.

Last week, it published a response to industry feedback, based on 52 written responses from regulated firms, industry bodies, providers and consumer groups. The FSA also collected feedback from national roundtable events with a total of around 1,400 regulated firms.

In its response statement, the FCA notes the industry’s concern that publishing warning notices at an earlier stage risks reputational damage to those who may later be proved innocent.

The FCA says: “Since publishing the Journey to the FCA, we consulted on and confirmed the process we will follow when deciding whether to publish details of warning notices. Decisions to publish information about a warning notice will be taken by our Regulatory Decisions Committee, which is independent of our enforcement investigation team.

“Following a further consultation from March to June 2013, we are currently considering whether to amend our approach to publishing information about warning notices. We expect to publish our final policy later this year.”

The regulator published a consultation in March setting out its policy for publishing warning notices.

The publication stage of possible regulatory action was brought forward in 2010 from when an enforcement case was concluded to the decision notice stage, after the firm or individual has had an opportunity to respond to the warning notice.

The FCA has the power to publish at the earlier warning notice stage.

Under the plans for how it uses this power, the FCA has proposed it will publish that it is taking action, but will not specify the level of any proposed fine.

Those who want to argue against publication on the grounds of unfairness would have to prove publication could materially affect their health, result in a disproportionate loss of income or livelihood, prejudice criminal proceedings to which they are a party or give rise to some other equal degree of harm.



  • hunisheichan
    reat post! I also believe in writing for a specific type of person in mind.

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