MFA submitted a comment letter to the FCA in response to its revised Consultation regarding the publication of pending (not resolved) investigations, including potentially naming individuals that are subject to investigation.
MFA’s letter again urges the FCA to withdraw the proposal, with our high-level comments as follows:
- The additional considerations listed in the supplemental consultation leave unchanged the fact that the criteria are subjective, undefined, and left solely to the FCA Staff to define, implement, and interpret.
- The additional criteria listed in the supplemental consultation do not amend or limit the proposed amendments to the FCA’s Enforcement Guide in the original consultation and therefore the supplemental consultation retains the flaws of the original:
- Consideration of impact of an announcement on the relevant firm does not address the shortcomings of the original consultation and would require considerable speculation on the FCA Staff’s part;
- Providing firms a copy of the draft announcement, and then ten business days for the target firm to respond to the FCA, similarly does not remedy the negative (and potentially fatal) impact of the naming of an investigation and is likely to create a cascade of redemptions as first movers seek an exit before publication;
- Similar to the above new consideration of potential impact on the firm, including as a consideration the potential of an announcement to “seriously disrupt” public confidence as a new factor is equally subjective and exceedingly difficult for the FCA or anyone else to quantify before an investigation announcement is made; and
- In what should be a moot point if the FCA withdraws both consultations, we are supportive of the FCA not applying any new investigation publication criteria to investigations that are pending should the original consultation’s revisions to the Enforcement Guide become effective.
- MFA continues to believe that a cost-benefit analysis is necessary (despite the FCA’s view to the contrary).
