'A setback' | City watchdog drops DEI 'name & shame' transparency plans amid industry pushback

The Financial Conduct Authority (FCA) has scrapped proposed diversity and inclusion regulations for financial firms, citing industry concerns and the evolving legislative landscape. 

The decision, confirmed in a letter from FCA Chief Executive Nikhil Rathi to the Treasury Select Committee, marks a significant shift in the regulator’s approach to promoting workplace diversity in the financial sector.

A reversal on DEI transparency

The FCA, alongside the Prudential Regulation Authority (PRA), had initially consulted in September 2023 on new D&I expectations for regulated firms, arguing that greater diversity improves governance, decision-making, and risk management. 

However, Rathi’s letter to the committee explains that, while the majority of respondents supported the FCA’s role in promoting diversity, concerns about compliance costs and alignment with other government initiatives ultimately led to the proposals being shelved.