MFA, a representative body for the global alternative asset management industry, has submitted a comment letter to the FCA urging the authority to withdraw its proposal to publicly name financial firms under investigation.
The letter, which highlights the damaging consequences of publicly shaming financial firms before an investigation is complete, is in response to FCA’s consultation paper 24/2 on the Enforcement Guide and Publicising Enforcement Investigations.
According to MFA, the proposal would fundamentally undermine the economic competitiveness of the UK and jeopardise the UK’s position as a global financial centre. MFA’s view is that naming a firm before any facts have been established or conclusions have been drawn is “unjust, particularly given that a majority of FCA investigations end with no action taken. Any firm FCA publicly names before the conclusion of an investigation would suffer severe harm—most importantly, to its reputation. These consequences may be irreversible even when the FCA eventually concludes that there was no wrongdoing”.
In a press statement, Bryan Corbett, President and CEO of MFA, said: “The FCA’s proposal to publicly name firms before any wrongdoing is established will undermine the economic competitiveness of the UK. The proposal introduces a host of new risks for alternative asset managers. As a result, many firms may leave or never enter the UK. This will harm markets, reduce investment choices for sophisticated investors, including pensions, and increase volatility, damaging the UK’s position as a global financial centre.”
