A House of Lords committee has hit back at a Financial Conduct Authority response to concerns about the regulator's name and shame proposals.
The financial services regulation committee has written to the regulator, the latest in a back and forth between the parties on proposed new enforcement plans.
The committee has today (May 2) invited the FCA's chief executive Nikhil Rathi to appear in front of the committee.
It is unhappy the regulator did not pause plans to name firms under investigation at an earlier stage.
Consultation on the proposals closed on Tuesday (April 30) and the FCA said it was “important and timely to open the debate”.
Committee chair, Lord Forsyth of Drumlean, said: “The FCA response failed to directly address our concerns and did not commit to pausing implementation until after our committee had properly scrutinised its proposal. This isn’t acceptable.”
The committee has plans to launch a “short inquiry” into the FCA’s proposal and is expected to invite written evidence.
In a response to the committee on Friday (April 29( the FCA disputed its approach would amount to 'naming and shaming' firms.
It added the numbers of firms which could be named are relatively small and said, in general, it had not seen evidence of share prices being impacted by being named as being investigated.
The regulator wrote: "We recognise these proposals represent a change in our established practice. We think it is important and timely to open the debate.
"We know that firms benefit hugely from understanding the issues that lead us to investigate and that they use that understanding to drive higher standards of conduct.
"We know that consumers benefit significantly from knowing when the regulator is on the case. And we know that a number of those to whom we are accountable have frequently and forcefully expressed their frustration at our lack of transparency hitherto."
Earlier this week, FT Adviser reported 16 trade associations asked chancellor Jeremy Hunt to intervene over the FCA's 'name and shame' proposals, saying they would "have an unduly negative impact on the reputation on firms".
tara.o'connor@ft.com
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