Financial services regulators in the UK publish consultation papers to boost diversity and inclusion across the financial services sector

In consultation papers published on 25 September 2023, the UK’s financial regulators have set out proposals to boost diversity and inclusion across the sector. A link to the FCA’s press release and consultation can be found here, along with the PRA’s consultation here. The long-awaited consultations follow the regulators’ discussion paper published in 2021.

The regulators recognise that firms with increased diversity and inclusive cultures can deliver better internal governance, decision-making and risk management, and there is a role for the regulators to play in this space. They also highlight the role of healthy workplace environments in attracting and retaining talent in a competitive global market.

The proposals outlined in the consultations include new rules and guidance which focus on misconduct, such as bullying and sexual harassment, posing a risk to healthy firm culture, and how firms should take action against employees for such behaviour. The proposals also look at requiring firms to develop diversity and inclusion strategies, collect, report and disclose diversity data, and to set targets to address under-representation.

The consultations welcome comments on the proposals and will close on 18 December 2023. The regulators have committed to develop final rules on the proposals to be published in 2024.

For more detail on these proposals, please read our note.

We would be very happy to have a more detailed discussion with you about the proposals – it might be useful to structure this as two separate sessions – one focused on “non-financial misconduct” and the other focused on the D&I strategies, targets and disclosure/reporting aspects. Please get in touch with your usual Linklaters contact, or one of the contacts listed on the last page of our client note if you’d like to set that conversation up.