The Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) have announced they will withdraw proposed diversity and inclusion (D&I) regulations for the financial sector, opting instead for voluntary industry-led initiatives. The decision follows industry concerns over regulatory burdens and the need to align with existing frameworks.
Key Regulatory Decisions
D&I Regulations Withdrawn – Mandatory D&I reporting will no longer be introduced, with regulators encouraging firms to adopt their own strategies.
Bankers’ Bonus Cap Review Delayed – The reassessment of the bonus cap removal has been postponed until the 2026/27 financial year.
Transparency Rules Revised – Plans to introduce a “public interest” test for disclosing firm investigations have been scrapped, though the FCA will seek alternative ways to improve transparency.
Regulatory Priorities Shift
PRA CEO Sam Woods acknowledged the importance of diversity and inclusion but emphasized that regulators must balance priorities, particularly amid efforts to reduce regulatory complexity. The decision reflects a wider global trend, with financial firms in both the UK and US reassessing their D&I commitments against shifting political and economic landscapes.
While formal D&I rules will not be implemented, regulators are expected to continue monitoring the sector’s progress on diversity through other measures.
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