Diversity & Inclusion Legislation
The UK Financial Conduct Authority (FCA) announces the cessation of diversity & inclusion legislation aimed at avoiding additional burdens on enterprises.
The UK Financial Conduct Authority released a consultation document in September 2023, seeking advice on the regulation of diversification and inclusivity in the financial industry, and formulated a framework for the implementation of diversification and inclusivity in financial enterprises in the consultation document.
Related Post: UK FCA Publishes Consultation Paper on Diversity and Inclusion
Stop Legislation on Diversity & Inclusion
In the consultation document for September 2023, the UK Financial Conduct Authority developed a diversity & inclusion framework for large financial enterprises with over 250 employees, which includes several parts such as strategy, goal setting, data reporting, information disclosure, and risk management. Small and medium-sized enterprises are encouraged to use this framework to improve their governance structure. This framework mainly regulates the diversified and inclusive development of the financial industry from the perspectives of work culture, talent standards, and employee participation.
The UK Financial Conduct Authority believes that diversity & inclusion can improve corporate governance, decision-making, and risk management, and attract talent in the medium to long term to enhance the competitiveness of the financial industry. Most respondents in the consultation document agree with this judgment but suggest that regulatory agencies align policies with existing voluntary industry organizations to reduce compliance costs.
The UK Financial Conduct Authority plans to stop diversity & inclusion legislation but will continue to support voluntary industry organizations. For example, the CFA Institute has issued relevant initiatives, and financial enterprises can join this initiative and disclose their implementation of diversity & inclusion. The initiative has been joined by dozens of asset management companies, with a total asset management scale exceeding $17 trillion.
The Prudential Regulation Authority of the Bank of England has also released a consultation document with the UK Financial Conduct Authority and announced that it will not advance diversity & inclusion legislation. Meanwhile, the Prudential Regulation Authority of the Bank of England will continue to monitor the development of voluntary industry organizations in this field.
Reference:
Update on the FCA’s Enforcement Transparency Proposals
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