Joint FCA and PRA proposals on diversity and inclusion in regulated firms are shelved

In September 2023, we reported on proposals published jointly by the PRA and FCA aimed at boosting diversity and inclusion in financial services.  These proposals, particularly on data reporting, received some criticism from the Treasury Select Committee's Sexism in the City inquiry.  The FCA has also acknowledged that there is an active policy agenda addressing gender action plans and disability and ethnicity pay gap reporting. 

As a result, and with a view to limiting burdens on regulated firms, the FCA has confirmed in a letter to the Treasury Select Committee on 12 March 2025 that they do not currently plan to publish new rules on diversity and inclusion.  The PRA has also given a similar indication.

We await further proposals from the Labour government on their own plans for ethnicity and disability pay gap reporting, with a draft Equality (Race and Disability) Bill expected in the coming months.

In the same communication the FCA has stressed that they continue to prioritise their work to tackle non-financial misconduct, whilst acknowledging that it is important that their approach is proportionate and aligned with planned legislation.   

The proposal is now that they will set out next steps by the end of June 2025.