The City minister has asked the financial watchdog to rethink plans to “name and shame” some firms it investigates, suggesting she could overrule them.
Speaking at the fringes of the Labour party conference on Tuesday, Tulip Siddiq said she has held several meetings with the regulator, the Financial Conduct Authority, to question it about its plans before determining if she will allow them to proceed.
“I didn’t think it was great in the way that it was done. I’ll see what they report back at the next meeting and make a decision,” she said.
Her remarks come after lobbying groups, including UK Finance, suggested the naming and shaming approach could be “harmful to wider financial stability”.
Siddiq’s position is similar to that of former chancellor Jeremy Hunt, who was criticised for pushing back against the FCA’s plans, due to its supposed independence from government.
The FCA has said its plans would only involve naming firms where there was a clear public interest to do so.
Speaking at a conference hosted by the Association for Financial Markets in Europe (AFME) in London on Tuesday, the FCA’s joint executive director of enforcement and market oversight said the regulator understood the City’s concerns.
“I want to reassure everyone … that we have heard the strength of feeling on this – from all sides – and that this is very much an ongoing conversation,” Therese Chambers said.
“Since the consultation closed in April, we have been reflecting on the range of serious concerns raised and working to build understanding. We do think the case for a degree more transparency remains strong. But it needs to be seen within the vital context of a focused number of cases likely to deliver the greatest deterrent, and delivered much faster.”
She said the FCA will “intensify our engagement” with the City, and meet with “trade associations, firms, those on all sides of the debate” to help develop its plans. It will then follow up with case studies and “greater detail on how it could work in practice”.
“We are committed to achieving this in the right way for UK consumers and markets, so we won’t be rushing into any decisions.”
Siddiq also singled out fintech company Revolut – with whose UK chief executive, Francesca Carlesi, she appeared on stage – for their research on economic crime, saying it was “forming some of the script” for her on the topic.
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Her remarks come after the company received a UK banking licence in July. The process took three years, far longer than the business had initially suggested.
This summer, the Financial Ombudsman Service revealed that Revolut topped the list for new fraud and scam complaints. The company has been on a recruitment drive to beef up its compliance teams.
When asked, Carlesi said there was “no trade off” with growth and that compliance was critical for the company’s growth plans.
“We employ almost 4,000 people in compliance and the company has invested a lot,” she said.
The FCA reportedly investigated the business in 2016 after a whistleblower claimed it was failing to conduct adequate money-laundering checks or properly flag suspect payments. The investigation was closed in 2017.
