The Financial Conduct Authority (FCA) is taking steps to create a safer work environment for women in the finance industry. The City watchdog plans to tighten its “fit and proper persons” test to crack down on workplace misconduct, particularly in response to sexual harassment allegations.
The FCA will release a consultation paper on Monday, outlining stricter rules against abusers and regulated firms that have failed to take action against offenders. This move comes after a series of sexual harassment claims emerged in the City, including allegations against hedge fund tycoon Crispin Odey.
The proposed rule change raises questions about whether the previous regulatory regime has been strong enough and effectively implemented. In June, the Treasury select committee questioned the FCA’s supervision of Odey and his firm. In response, the regulator stated that it was investigating Odey’s fitness to work in financial services.
The potential new rules are expected to include guidance on how City workers can be removed from their positions if they fail to meet the “fit and proper” test for non-financial misconduct offenses. Many City workers and firms require FCA authorization to operate.
Nikhil Rathi, CEO of the FCA, emphasized the importance of safe workplaces for women in the financial services industry. He stated, “Companies that do not address serious issues like [sexual harassment] are unlikely to have a healthy risk management perspective. We want to be proactive in ensuring safe environments.”
The move by the FCA comes after 13 women accused Crispin Odey of abuse or harassment over several decades, as highlighted in a detailed investigation by the Financial Times. Odey denies the allegations. Following the claims, Odey Asset Management (OAM), Odey’s firm, announced its dissolution as investors rushed to withdraw their funds.
The FCA’s jurisdiction allows it to set rules in specific areas for regulated businesses and workers. The upcoming consultation will present potential new rules and guidance on their implementation. The consultation will be open to firms, trade associations, and the public.
The proposed changes to the “fit and proper persons” test demonstrate the FCA’s commitment to addressing misconduct in the finance industry. By tightening regulations and providing clearer guidelines, the FCA aims to create a safer and more inclusive work environment for women. The move is a significant step towards promoting gender equality and accountability within the industry.