The FCA chair acknowledges internal shortcomings in proposal communication.
- The upcoming update on ‘name and shame’ was not well-publicised.
- Ashley Alder criticises the absence from the regulatory grid.
- Misinterpretation led to confusion about the proposal’s intentions.
- FCA CEO also expressed regret over the handling of this process.
The Financial Conduct Authority (FCA) has faced criticism for its handling of the communication process regarding its ‘name and shame’ proposals. FCA chair Ashley Alder recognised that the organisation could have improved its efforts in informing businesses about the expected update. The update, set to be released next week, was not adequately publicised as it did not appear on the FCA’s usual regulatory grid, which is a platform for forthcoming consultations and proposals. This shortcoming in dissemination has been openly acknowledged within the FCA, highlighting a gap in transparency and stakeholder engagement.
Alder explained that many interpreted the consultation inaccurately, believing that the FCA intended to implement naming practices in all or most cases, which was not the organisation’s intention. This misconception arose partly due to the lack of clear communication and the absence of the proposals from the regulatory grid. The chair’s remarks came during an evidence session before the House of Lords Financial Services Regulation Committee, where the FCA’s internal processes and decision-making were scrutinised.
In light of the miscommunication, FCA CEO Nikhil Rathi also admitted to shortcomings. While the details of his admissions were not publicly available, the shared sentiment between Alder and Rathi points towards an organisational recognition of the need for more robust communication strategies to prevent such misinterpretations in the future. The incident underscores the need for regulatory bodies to maintain clear and open channels of communication with their stakeholders to avoid misinformation and ensure understanding of regulatory intents.
This situation stresses the crucial need for clear and proactive communication in regulatory practices.
