Regulator's plan could have a negative effect on the reputation of firms, it claims
The Association of Short Term Lenders (ASTL) has expressed opposition to new proposals by the Financial Conduct Authority (FCA) which would allow the regulator to disclose the names of firms under investigation from the start.
“The ASTL would like to add its voice to the growing number of trade associations and businesses that oppose the name and shame proposals, which were recently announced by the FCA,” stated Vic Jannels (pictured), ASTL chief executive.
The statement was made in response to the FCA’s consultation paper, CP24/2, titled “Our Enforcement Guide and publicising enforcement investigations – a new approach.” The proposals suggest using a ‘public interest’ framework to identify firms with just 24 hours’ notice before making the information public.
ASTL said the move by the FCA has drawn considerable backlash from the business community, evidenced by a letter signed by 16 trade associations, including UK Finance and the City of London Corporation, arguing that the proposals could have an unduly negative effect on the reputation of firms.
“It’s often the case that an FCA investigation results in the regulator finding nothing untoward with the firm that it is investigating,” Jannels said. “However, if that firm is named at the outset, it will undoubtedly suffer reputational, and probable commercial, damage while the investigation is taking place and possibly beyond even if it results in no disciplinary action.
“This is a guilty until proven innocent approach that would significantly negatively impact investigated financial services providers and ultimately their customers.”
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