The FCA has confirmed that it will partially axe its 'name and shame' proposals for firms under investigation.

Advance public alerts on firms under FCA investigation will be dropped.

The regulator will also drop plans to introduce new rules on diversity and inclusion as it moves to scale back over-burdensome regulation, it said.

The FCA said joint FCA and PRA proposed rules aimed at improving diversity and inclusion in regulated firms would not go ahead. The FCA said it wanted to avoid additional regulatory burdens on firms at this time and would not be taking the work forward.

On naming and shaming firms, the FCA had been considering revealing investigations at an earlier stage to alert the public, the so-called ‘name and shame’ plan.

Critics had called the plans excessive and potentially damaging to firms' reputations if investigations proved no harm had been done.

In a letter today to Treasury Select Committee chair Dame Meg Hillier, FCA CEO Nikhil Rathi said it was right to review the plans following engagement with the industry.

While the FCA will not go ahead with naming and shaming firms before investigations had concluded, Mr Rathi said the FCA would go ahead with plans to step up the pace of investigations and may also publish ‘anonymous’ details of "issues" under investigation.

The FCA may also still provide details of investigations under way in “exceptional circumstances” but would not generally make investigations public at an early stage prior to their completion.

In a statement today, Mr Rathi said: “On our enforcement transparency proposals, we have always aimed to build a broad consensus.

“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." 

Mr Rathi said that following consultation with the industry, the FCA would reactively confirm investigations already in the public domain and provide public notifications on the potentially unlawful activities of unregulated firms and regulated firms operating outside the regulatory perimeter. It may also publish greater detail of issues under investigation on an anonymous basis.

The FCA plans to publish its final policy on enforcement transparency by the end of June. 

Wealth manager trade body PIMFA today welcomed the FCA's "more balanced and proportionate solutions" on enforcement.

Liz Field, chief executive at PIMFA, said: "The FCA has recognised the concerns of PIMFA and other industry bodies regarding its enforcement proposals. We welcome their decision to instead deliver a balanced and proportionate solution.

"The approach put forward today aligns with their regulatory objectives while also considering the needs of businesses and supporting the UK’s competitiveness and economic growth. We particularly commend the FCA’s constructive engagement with us and the wider sector in recent months and its responsiveness in demonstrating flexibility and incorporating industry feedback."